----

----

|   | BROOKLYN FEDERAL BANCORP, INC. |   |
|--------|--------------------------------|--------|

|                            | Federal |                   |   |   | 20-2659598 |   |
|---------------------------------|---------|------------------------|--------|--------|------------|--------|
| (State or other jurisdiction of |    | (I.R.S. Employer       |
| incorporation or organization)  |    | Identification Number) |
| 81 Court Street, Brooklyn, New York      |   |       | 11201 |   |
|------------------------------------------|--------|------------|-------|--------|
| (Address of principal executive offices) |   | (Zip Code) |

| Large Accelerated Filer | o      | Accelerated Filer         | o      |
|-------------------------|--------|---------------------------|--------|
| Non-accelerated Filer   | o      | Smaller Reporting Company | x      |
|                    |   |                      |   |

| Common Stock, $.01 Par Value |   | 12,882,607                   |
|------------------------------|--------|------------------------------|
| Class                        |   | Outstanding at June 24, 2011 |

----

|           |                                                                                        | Page Number |
|----------------|---------------------------------------------------------------------------------------------|-------------|
|           |                                                                                        |        |
| Item 1.        | Financial Statements                                                                        | 1           |
| Item 2.        | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21          |
| Item 3.        | Quantitative and Qualitative Disclosures About Market Risk                                  | 33          |
| Item 4.        | Controls and Procedures                                                                     | 33          |
|           |                                                                                        |        |
| PART II.       |
|           |                                                                                        |        |
| Item 1.        | Legal Proceedings                                                                           | 34          |
| Item 1A.       | Risk Factors                                                                                | 34          |
| Item 2.        | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 34          |
| Item 3.        | Defaults Upon Senior Securities                                                             | 35          |
| Item 4.        | (Reserved)                                                                                  | 35          |
| Item 5.        | Other Information                                                                           | 35          |
| Item 6.        | Exhibits                                                                                    | 35          |
|           |                                                                                        |        |
| Signature Page | 36                                                                                          |

----

| ITEM 1. | FINANCIAL STATEMENTS |
|---------|----------------------|

|                                                                                                                                   |   | December 31, |    |   | September 30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|---------------|--------|
|                                                                                                                                   |   | 2010         |    |   | 2010          |   |
|                                                                                                                                   |   | (unaudited)  |    |   | (audited)     |   |
| Assets                                                                                                                                 |   |         |    |   |          |   |   |   |
| Cash and due from banks (including interest-earning balances of $25,537 and $9,555, respectively)                                      |   | $            | 27,291  |   |          | $      | 14,201 |   |
| Securities available-for-sale                                                                                                          |   |         | 71,214  |   |          |   | 69,107 |   |
| Loans receivable                                                                                                                       |   |         | 377,753 |   |          |   | 387,783 |   |
| Less: Allowance for loan losses                                                                                                        |   |         | 21,696  |   |          |   | 17,941 |   |
| Loans receivable, net                                                                                                                  |   |         | 356,057 |   |          |   | 369,842 |   |
| Federal Home Loan Bank of New York (“FHLB”) stock, at cost                                                                 |   |         | 1,804   |   |          |   | 1,803 |   |
| Bank owned life insurance                                                                                                              |   |         | 10,006  |   |          |   | 9,880 |   |
| Accrued interest receivable                                                                                                            |   |         | 1,659   |   |          |   | 2,061 |   |
| Premises and equipment, net                                                                                                            |   |         | 1,721   |   |          |   | 1,822 |   |
| Prepaid expenses and other assets                                                                                                      |   |         | 18,647  |   |          |   | 19,039 |   |
| Total assets                                                                                                                           |   | $            | 488,399 |   |          | $      | 487,755 |   |
|                                                                                                                                   |   |         |    |   |          |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                             |   |         |    |   |          |   |   |   |
| Liabilities:                                                                                                                           |   |         |    |   |          |   |   |   |
| Deposits:                                                                                                                              |   |         |    |   |          |   |   |   |
| Non-interest-bearing deposits                                                                                                          |   | $            | 16,337  |   |          | $      | 16,033 |   |
| Interest-bearing deposits                                                                                                              |   |         | 150,401 |   |          |   | 154,800 |   |
| Certificates of deposit                                                                                                                |   |         | 262,630 |   |          |   | 252,573 |   |
| Total deposits                                                                                                                         |   |         | 429,368 |   |          |   | 423,406 |   |
| Borrowings                                                                                                                             |   |         | 9,000   |   |          |   | 10,500 |   |
| Advance payments by borrowers for taxes and insurance                                                                                  |   |         | 1,897   |   |          |   | 2,576 |   |
| Accrued expenses and other liabilities                                                                                                 |   |         | 5,764   |   |          |   | 5,534 |   |
| Total liabilities                                                                                                                      |   |         | 446,029 |   |          |   | 442,016 |   |
| Stockholders’ equity:                                                                                                            |   |         |    |   |          |   |   |   |
| Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued                                                             |   |         | --      |   |          |   | -- |   |
| Common stock, $0.01 par value, 20,000,000 shares authorized; 13,484,210 issued and 12,889,344 and 12,889,344 outstanding, respectively |   |         | 135     |   |          |   | 135 |   |
| Additional paid-in capital                                                                                                             |   |         | 43,111  |   |          |   | 43,119 |   |
| Retained earnings - substantially restricted                                                                                           |   |         | 9,416   |   |          |   | 12,687 |   |
| Treasury shares - at cost, 594,866 shares and 594,866 shares, respectively                                                             |   |         | (7,720  | )      |          |   | (7,720 | ) |
| Unallocated common stock held by employee stock ownership plan (“ESOP”)                                                    |   |         | (2,195  | )      |          |   | (2,235 | ) |
| Unallocated shares of the stock-based incentive plan                                                                                   |   |         | (221    | )      |          |   | (259 | ) |
| Accumulated other comprehensive income (loss):                                                                                         |   |         |    |   |          |   |   |   |
| Net unrealized (loss) gain on securities, net of income tax benefit                                                                    |   |         | (156    | )      |          |   | 12 |   |
| Total stockholders’ equity                                                                                                       |   |         | 42,370  |   |          |   | 45,739 |   |
| Total liabilities and stockholders’ equity                                                                                       |   | $            | 488,399 |   |          | $      | 487,755 |   |
|                                                                                                                                   |   |         |    |   |          |   |   |   |
| See accompanying notes to consolidated financial statements.                                                                           |   |

----

|                                                                             |   | For the Three Months Ended |       |
|----------------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                             |   | December 31,               |       |
|                                                                             |   | 2010                       |       |   | 2009 |   |
| Interest income:                                                                 |   |                       |       |   |   |   |
| First mortgage and other loans                                                   |   | $                          | 4,979      |   |   | $ | 7,188 |   |
| Mortgage-backed securities                                                       |   |                       | 588        |   |   |   | 910 |   |
| Other securities and interest-earning assets                                     |   |                       | 37         |   |   |   | 92 |   |
| Total interest income                                                            |   |                       | 5,604      |   |   |   | 8,190 |   |
|                                                                             |   |                       |       |   |   |   |   |   |
| Interest expense:                                                                |   |                       |       |   |   |   |   |   |
| Deposits                                                                         |   |                       | 1,522      |   |   |   | 2,065 |   |
| Borrowings                                                                       |   |                       | 66         |   |   |   | 54 |   |
| Total interest expense                                                           |   |                       | 1,588      |   |   |   | 2,119 |   |
|                                                                             |   |                       |       |   |   |   |   |   |
| Net interest income before provision for loan losses                             |   |                       | 4,016      |   |   |   | 6,071 |   |
| Provision for loan losses                                                        |   |                       | 3,704      |   |   |   | 11,794 |   |
| Net interest income after provision for loan losses                              |   |                       | 312        |   |   |   | (5,723 | ) |
|                                                                             |   |                       |       |   |   |   |   |   |
| Non-interest income:                                                             |   |                       |       |   |   |   |   |   |
| Total loss on OTTI of securities                                                 |   |                       | (8         | ) |   |   | (1,088 | ) |
| Less:                                                                            |   |                       |       |   |   |   |   |   |
| Non-credit portion of OTTI recorded in other comprehensive income (before taxes) |   |                       | -          |   |   |   | 776 |   |
| Net loss on OTTI recognized in earnings                                          |   |                       | (8         | ) |   |   | (312 | ) |
| Banking fees and service charges                                                 |   |                       | 129        |   |   |   | 333 |   |
| Net gain on sale of loans held-for-sale                                          |   |                       | 127        |   |   |   | 60 |   |
| Other                                                                            |   |                       | 174        |   |   |   | 94 |   |
| Total non-interest income                                                        |   |                       | 422        |   |   |   | 175 |   |
|                                                                             |   |                       |       |   |   |   |   |   |
| Non-interest expense:                                                            |   |                       |       |   |   |   |   |   |
| Compensation and benefits                                                        |   |                       | 2,171      |   |   |   | 2,026 |   |
| Occupancy and equipment                                                          |   |                       | 456        |   |   |   | 428 |   |
| FDIC Insurance                                                                   |   |                       | 256        |   |   |   | 148 |   |
| Professional fees                                                                |   |                       | 360        |   |   |   | 171 |   |
| Data processing fees                                                             |   |                       | 168        |   |   |   | 162 |   |
| Other                                                                            |   |                       | 465        |   |   |   | 364 |   |
| Total non-interest expense                                                       |   |                       | 3,876      |   |   |   | 3,299 |   |
|                                                                             |   |                       |       |   |   |   |   |   |
| Loss before income tax expense                                                   |   |                       | (3,142     | ) |   |   | (8,847 | ) |
| Income tax expense (benefit)                                                     |   |                       | 129        |   |   |   | (3,761 | ) |
| Net loss                                                                         |   | $                          | (3,271     | ) |   | $ | (5,086 | ) |
| Loss per common share:                                                           |   |                       |       |   |   |   |   |   |
|      Basic                                              |   | $                          | (0.26      | ) |   | $ | (0.40 | ) |
|      Diluted                                            |   | $                          | (0.26      | ) |   | $ | (0.40 | ) |
| Average common shares outstanding:                                               |   |                       |       |   |   |   |   |   |
|      Basic                                              |   |                       | 12,640,664 |   |   |   | 12,613,083 |   |
|      Diluted                                            |   |                       | 12,640,664 |   |   |   | 12,621,486 |   |
|                                                                             |   |                       |       |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                     |   |

----

|                                                                                    |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | RetainedEarnings-Substantially Restricted |   |   | TreasuryStock |   |   | Unallocated CommonStock Heldby ESOP |   |   | UnallocatedShares ofthe Stock-basedIncentivePlan |   |   | AccumulatedOther ComprehensiveIncome (Loss) |   |   | Total  |   |
|-----------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------------|--------|--------|-------------------------------------------|--------|--------|---------------|--------|--------|-------------------------------------|--------|--------|--------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|--------|--------|
|                                                                                    |   |        |   |   |                     |   |   |                                      |   |   |          |   |   |                                |   |   |                                             |   |   |                                        |   |   |   |   |
| Balance at October 1, 2010                                                              |   | $           | 135    |   |                     | $      | 43,119 |                                      |   | $      | 12,687        |   |   | $                                   | (7,720 | )      |                                             | $      | (2,235 | )                                           |   | $      | (259   | )      |   | $ | 12 |   |   | $ | 45,739 |   |
|                                                                                    |   |        |   |   |                     |   |   |                                      |   |   |          |   |   |                                |   |   |                                             |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                   |   |        |   |   |                     |   |   |                                      |   |   |          |   |   |                                |   |   |                                             |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   |        | --     |   |                     |   | --     |                                      |   |   | (3,271        | )      |   |                                | --     |   |                                             |   | --     |                                        |   |   | --     |   |   |   | -- |   |   |   | (3,271 | ) |
| Net unrealized loss on securities available-for-sale, net of income tax benefit of $132 |   |        | --     |   |                     |   | --     |                                      |   |   | --            |   |   |                                | --     |   |                                             |   | --     |                                        |   |   | --     |   |   |   | (168 | ) |   |   | (168 | ) |
| Total comprehensive loss                                                                |   |        |   |   |                     |   |   |                                      |   |   |          |   |   |                                |   |   |                                             |   |   |                                        |   |   |   |   |   |   |   |   |   |   | (3,439 | ) |
| Treasury stock purchased                                                                |   |        | --     |   |                     |   | --     |                                      |   |   | --            |   |   |                                | --     |   |                                             |   | --     |                                        |   |   | --     |   |   |   | -- |   |   |   | -- |   |
| Allocation of ESOP stock                                                                |   |        | --     |   |                     |   | (33    | )                                         |   |   | --            |   |   |                                | --     |   |                                             |   | 40     |                                        |   |   | --     |   |   |   | -- |   |   |   | 7 |   |
| Stock-based incentive plan expense                                                      |   |        | --     |   |                     |   | 25     |                                      |   |   | --            |   |   |                                | --     |   |                                             |   | --     |                                        |   |   | 38     |   |   |   | -- |   |   |   | 63 |   |
| Dividends paid on common stock                                                          |   |        | --     |   |                     |   | --     |                                      |   |   | --            |   |   |                                | --     |   |                                             |   | --     |                                        |   |   | --     |   |   |   | -- |   |   |   | -- |   |
| Balance at December 31, 2010                                                            |   | $           | 135    |   |                     | $      | 43,111 |                                      |   | $      | 9,416         |   |   | $                                   | (7,720 | )      |                                             | $      | (2,195 | )                                           |   | $      | (221   | )      |   | $ | (156 | ) |   | $ | 42,370 |   |
|                                                                                    |   |        |   |   |                     |   |   |                                      |   |   |          |   |   |                                |   |   |                                             |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                            |   |

----

|                                                                          |   | For the Three Months Ended |    |
|-------------------------------------------------------------------------------|--------|----------------------------|---------|
|                                                                          |   | December 31,               |    |
|                                                                          |   | 2010                       |    |   | 2009 |   |
| Cash flows from operating activities:                                         |   |                       |    |   |   |   |
| Net loss                                                                      |   | $                          | (3,271  | ) |   | $ | (5,086 | ) |
| Adjustments to reconcile net income to net cash used in operating activities: |   |                       |    |   |   |   |   |   |
| ESOP expense                                                                  |   |                       | 7       |   |   |   | 46 |   |
| Stock-based incentive plan expense                                            |   |                       | 63      |   |   |   | 78 |   |
| Depreciation and amortization                                                 |   |                       | 126     |   |   |   | 113 |   |
| Provision for loan losses                                                     |   |                       | 3,704   |   |   |   | 11,794 |   |
| Income from bank-owned life insurance                                         |   |                       | (110    | ) |   |   | (88 | ) |
| Gross loss on OTTI recognized in earnings                                     |   |                       | 8       |   |   |   | 312 |   |
| Amortization of servicing rights                                              |   |                       | 1       |   |   |   | 26 |   |
| Accretion of deferred loan fees, net                                          |   |                       | (105    | ) |   |   | (125 | ) |
| Accretion of discounts, net of amortization of premiums                       |   |                       | 378     |   |   |   | (87 | ) |
| Originations of loans held-for-sale                                           |   |                       | (3,177  | ) |   |   | (2,130 | ) |
| Proceeds from sales of loans held-for-sale                                    |   |                       | 3,256   |   |   |   | 1,853 |   |
| Principal repayments on loans held-for-sale                                   |   |                       | --      |   |   |   | 2 |   |
| Net gain on sales of loans held-for-sale                                      |   |                       | (79     | ) |   |   | (60 | ) |
| Decrease in accrued interest receivable                                       |   |                       | 402     |   |   |   | 82 |   |
| Deferred income tax expense (benefit)                                         |   |                       | 1,347   |   |   |   | (3,738 | ) |
| Increase in prepaid expenses and other assets                                 |   |                       | (827    | ) |   |   | (2,538 | ) |
| Increase in accrued expenses and other liabilities                            |   |                       | 230     |   |   |   | 526 |   |
| Net cash provided by operating activities                                     |   |                       | 1,953   |   |   |   | 980 |   |
| Cash flows from investing activities:                                         |   |                       |    |   |   |   |   |   |
| Repayments in excess of loan originations                                     |   |                       | 7,571   |   |   |   | (9,804 | ) |
| Proceeds from the sale of loan notes                                          |   |                       | 2,615   |   |   |   | -- |   |
| Principal repayments on mortgage-backed securities held-to-maturity           |   |                       | --      |   |   |   | 4,995 |   |
| Principal repayments on mortgage-backed securities available-for-sale         |   |                       | 9,120   |   |   |   | -- |   |
| Purchases of mortgage-backed securities held-to-maturity                      |   |                       | --      |   |   |   | (3,395 | ) |
| Purchases of securities available-for-sale                                    |   |                       | (11,910 | ) |   |   | -- |   |
| Net (purchases) redemptions of FHLB stock                                     |   |                       | (1      | ) |   |   | 659 |   |
| Purchases of bank-owned life insurance                                        |   |                       | (16     | ) |   |   | (15 | ) |
| Purchases of premises and equipment                                           |   |                       | (25     | ) |   |   | (20 | ) |
| Net cash provided by (used in) investing activities                           |   |                       | 7,354   |   |   |   | (7,580 | ) |
| Cash flows from financing activities:                                         |   |                       |    |   |   |   |   |   |
| Increase in deposits                                                          |   |                       | 5,962   |   |   |   | 24,283 |   |
| Net decrease in short term borrowings                                         |   |                       | (1,500  | ) |   |   | (17,200 | ) |
| Proceeds from long term borrowings                                            |   |                       | --      |   |   |   | 2,000 |   |
| Decrease in advance payments by borrowers for taxes and insurance             |   |                       | (679    | ) |   |   | (561 | ) |
| Payment of cash dividend                                                      |   |                       | --      |   |   |   | (399 | ) |
| Net cash provided by financing activities                                     |   |                       | 3,783   |   |   |   | 8,123 |   |
|                                                                          |   |                       |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                     |   |                       | 13,090  |   |   |   | 1,523 |   |
| Cash and cash equivalents at beginning of year                                |   |                       | 14,201  |   |   |   | 3,472 |   |
| Cash and cash equivalents at end of period                                    |   | $                          | 27,291  |   |   | $ | 4,995 |   |
|                                                                          |   |                       |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                             |   |                       |    |   |   |   |   |   |
| Cash paid during the period for:                                              |   |                       |    |   |   |   |   |   |
| Interest                                                                      |   | $                          | 1,592   |   |   | $ | 2,118 |   |
| Taxes                                                                         |   |                       | --      |   |   |   | 581 |   |
|                                                                          |   |                       |    |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                  |   |

----

----

----

| December 31, 2010                         |   | Amortizedcost  |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |
|-------------------------------------------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
|                                      |   | (In thousands) |   |
| Securities available-for-sale:            |   |           |   |   |                 |   |   |                  |   |   |                |   |
| Mortgage-backed securities - residential: |   |           |   |   |                 |   |   |                  |   |   |                |   |
| Government agency                         |   | $              | 11,589 |   |                 | $      | 29     |                  |   | $      | (32                 | )      |   | $ | 11,586 |   |
| Government-sponsored enterprises          |   |           | 34,115 |   |                 |   | 467    |                  |   |   | (154                | )      |   |   | 34,428 |   |
| Private issuers                           |   |           | 19,737 |   |                 |   | 537    |                  |   |   | (1,113              | )      |   |   | 19,161 |   |
| Government debentures                     |   |           | 2,990  |   |                 |   | -      |                  |   |   | (19                 | )      |   |   | 2,971 |   |
| Mutual funds                              |   |           | 3,059  |   |                 |   | 9      |                  |   |   | -                   |   |   |   | 3,068 |   |
| Total securities available-for-sale       |   | $              | 71,490 |   |                 | $      | 1,042  |                  |   | $      | (1,318              | )      |   | $ | 71,214 |   |
|                                      |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| September 30, 2010                        |   | Amortizedcost  |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |
|                                      |   | (In thousands) |   |
| Securities available-for-sale:            |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| Mortgage-backed securities - residential: |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| Government agency                         |   | $              | 16,522 |   |                 | $      | 217    |                  |   | $      | (2                  | )      |   | $ | 16,737 |   |
| Government-sponsored enterprises          |   |           | 24,440 |   |                 |   | 464    |                  |   |   | (15                 | )      |   |   | 24,889 |   |
| Private issuers                           |   |           | 22,055 |   |                 |   | 680    |                  |   |   | (1,383              | )      |   |   | 21,352 |   |
| Government debentures                     |   |           | 2,990  |   |                 |   | 39     |                  |   |   | -                   |   |   |   | 3,029 |   |
| Mutual funds                              |   |           | 3,079  |   |                 |   | 21     |                  |   |   | -                   |   |   |   | 3,100 |   |
| Total securities available-for-sale       |   | $              | 69,086 |   |                 | $      | 1,421  |                  |   | $      | (1,400              | )      |   | $ | 69,107 |   |

----

|                                     |   | Amortized      |   |   | Estimated  |   |
|------------------------------------------|--------|----------------|--------|--------|------------|--------|
|                                     |   | cost           |   |   | Fair Value |   |
|                                     |   | (In thousands) |   |
| Mortgage-backed securities:              |   |           |   |   |       |   |
| One year or less                         |   | $              | -      |   |       | $      | - |   |
| Over one year through five years         |   |           | 721    |   |       |   | 749 |   |
| Over five years through ten years        |   |           | 16,367 |   |       |   | 16,814 |   |
| More than ten years                      |   |           | 51,342 |   |       |   | 50,582 |   |
| Total debt securities available-for-sale |   | $              | 68,430 |   |       | $      | 68,145 |   |

|                                  |   | As of December 31, 2010  |   |
|---------------------------------------|--------|--------------------------|--------|
|                                  |   | Less than 12 months      |   |   | 12 months or more |   |   | Total |   |
|                                  |   | Estimatedfair value      |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |
|                                  |   | (In thousands)           |   |
|                                  |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government agency                     |   | $                        | 2,716  |   |   | $ | (30 | ) |   | $ | 71 |   |   | $ | (2 | ) |   | $ | 2,787 |   |   | $ | (32 | ) |
| Government-sponsored enterprises      |   |                     | 8,567  |   |   |   | (127 | ) |   |   | 2,780 |   |   |   | (27 | ) |   |   | 11,347 |   |   |   | (154 | ) |
| Government debentures                 |   |                     | 2,971  |   |   |   | (19 | ) |   |   | - |   |   |   | - |   |   |   | 2,971 |   |   |   | (19 | ) |
| Private issuers                       |   |                     | -      |   |   |   | - |   |   |   | 3,823 |   |   |   | (1,113 | ) |   |   | 3,823 |   |   |   | (1,113 | ) |
| Total temporarily impaired securities |   | $                        | 14,254 |   |   | $ | (176 | ) |   | $ | 6,674 |   |   | $ | (1,142 | ) |   | $ | 20,928 |   |   | $ | (1,318 | ) |
|                                  |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   | As of September 30, 2010 |   |
|                                  |   | Less than 12 months      |   |   | 12 months or more |   |   | Total |   |
|                                  |   | Estimatedfair value      |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |
|                                  |   | (In thousands)           |   |
|                                  |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government agency                     |   | $                        | 73     |   |   | $ | (2 | ) |   | $ | - |   |   | $ | - |   |   | $ | 73 |   |   | $ | (2 | ) |
| Government-sponsored enterprises      |   |                     | 2,899  |   |   |   | (15 | ) |   |   | - |   |   |   | - |   |   |   | 2,899 |   |   |   | (15 | ) |
| Government debentures                 |   |                     | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Private issuers                       |   |                     | -      |   |   |   | - |   |   |   | 5,316 |   |   |   | (1,383 | ) |   |   | 5,316 |   |   |   | (1,383 | ) |
| Total temporarily impaired securities |   | $                        | 2,972  |   |   | $ | (17 | ) |   | $ | 5,316 |   |   | $ | (1,383 | ) |   | $ | 8,288 |   |   | $ | (1,400 | ) |

----

----

----

----

| For theThree Months ended December 31, 2010               |   | Total Other-Than-TemporaryImpairmentLoss |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inEarnings |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inOther ComprehensiveIncome |   |
|-----------------------------------------------------------|--------|------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
|                                                      |   | (in thousands)                           |   |
| Beginning balance as of September 30, 2010                |   | $                                        | 2,357  |   |                                                           | $      | 2,357  |                                                                            |   | $ | - |   |
| Add: Initial other-than-temporary credit losses           |   |                                     | -      |   |                                                           |   | -      |                                                                            |   |   | - |   |
|   Additional other-than-temporary credit losses |   |                                     | 8      |   |                                                           |   | 8      |                                                                            |   |   | - |   |
| Ending balance as of December 31, 2010                    |   | $                                        | 2,365  |   |                                                           | $      | 2,365  |                                                                            |   | $ | - |   |
|                                                      |   |                                     |   |   |                                                           |   |   |                                                                            |   |   |   |   |
| For theThree Months ended December 31, 2009               |   | Total Other-Than-TemporaryImpairmentLoss |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inEarnings |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inOtherComprehensiveIncome  |   |
|                                                      |   | (in thousands)                           |   |
| Beginning balance as of September 30, 2009                |   | $                                        | 8,085  |   |                                                           | $      | 2,024  |                                                                            |   | $ | 6,061 |   |
| Add: Initial other-than-temporary credit losses           |   |                                     | 954    |   |                                                           |   | 178    |                                                                            |   |   | 776 |   |
|   Additional other-than-temporary credit losses |   |                                     | 54     |   |                                                           |   | 54     |                                                                            |   |   | - |   |
| Ending balance as of December 31, 2009                    |   | $                                        | 9,093  |   |                                                           | $      | 2,256  |                                                                            |   | $ | 6,837 |   |

----

|                               |   | December 31,   |    |   | September 30, |   |
|------------------------------------|--------|----------------|---------|--------|---------------|--------|
|                               |   | 2010           |    |   | 2010          |   |
|                               |   | (In thousands) |    |
| Mortgage loans:                    |   |           |    |   |          |   |
| One- to four-family                |   | $              | 72,840  |   |          | $      | 73,457 |   |
| Multi-family                       |   |           | 59,446  |   |          |   | 65,209 |   |
| Commercial                         |   |           | 113,496 |   |          |   | 119,727 |   |
| Construction                       |   |           | 100,916 |   |          |   | 95,824 |   |
| Land                               |   |           | 31,523  |   |          |   | 34,084 |   |
|                               |   |           | 378,221 |   |          |   | 388,301 |   |
| Consumer and other loans:          |   |           |    |   |          |   |   |   |
| Personal loans                     |   |           | 275     |   |          |   | 331 |   |
| Loans secured by deposit accounts  |   |           | 131     |   |          |   | 118 |   |
|                               |   |           | 406     |   |          |   | 449 |   |
| Total loans receivable             |   |           | 378,627 |   |          |   | 388,750 |   |
|                               |   |           |    |   |          |   |   |   |
| Deferred net loan origination fees |   |           | (874    | )      |          |   | (967 | ) |
| Allowance for loan losses          |   |           | (21,696 | )      |          |   | (17,941 | ) |
| Total loans receivable, net        |   | $              | 356,057 |   |          | $      | 369,842 |   |

|                       |   | December       |   |   | December |   |
|----------------------------|--------|----------------|--------|--------|----------|--------|
|                       |   | 2010           |   |   | 2009     |   |
|                       |   | (In thousands) |   |
|                       |   |           |   |   |     |   |
| Balance, beginning of year |   | $              | 17,941 |   |     | $      | 10,750 |   |
| Charge-offs                |   |           | -      |   |     |   | (2,666 | ) |
| Recoveries                 |   |           | 51     |   |     |   | - |   |
| Provision for loan losses  |   |           | 3,704  |   |     |   | 11,794 |   |
| Balance, end of year       |   | $              | 21,696 |   |     | $      | 19,878 |   |

----

|                         |   |  For the Three Months Ended December 31, 2011 |   |
|------------------------------|--------|----------------------------------------------------|--------|
|                         |   | One-to-Four                                        |   |   | Multi- |   |   | Commercial |   |   |   |   |   |   |   |   | Consumer |   |   |   |   |
|                         |   | Family                                             |   |   | Family |   |   | Real Estate |   |   | Construction |   |   | Land |   |   | and Other |   |   | Total |   |
| Allowance for loan losses:   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance            |   | $                                                  | 547    |   |   | $ | 3,125 |   |   | $ | 9,485 |   |   | $ | 1,664 |   |   | $ | 3,104 |   |   | $ | 16 |   |   | $ | 17,941 |   |
| Charge-offs                  |   |                                               | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Recoveries                   |   |                                               | 3      |   |   |   | 5 |   |   |   | 20 |   |   |   | 20 |   |   |   | 3 |   |   |   | - |   |   |   | 51 |   |
| Provision for loan losses    |   |                                               | (47    | ) |   |   | 860 |   |   |   | 1,407 |   |   |   | 2,428 |   |   |   | (938 | ) |   |   | (6 | ) |   |   | 3,704 |   |
| Ending balance               |   | $                                                  | 503    |   |   | $ | 3,990 |   |   | $ | 10,912 |   |   | $ | 4,112 |   |   | $ | 2,169 |   |   | $ | 10 |   |   | $ | 21,696 |   |
|                         |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $                                                  | -      |   |   | $ | - |   |   | $ | 1,061 |   |   | $ | - |   |   | $ | 6 |   |   | $ | - |   |   | $ | 1,067 |   |
| Ending balance: collectively |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   |                                               | 503    |   |   |   | 3,990 |   |   |   | 9,851 |   |   |   | 4,112 |   |   |   | 2,163 |   |   |   | 10 |   |   |   | 20,629 |   |
|                         |   | $                                                  | 503    |   |   | $ | 3,990 |   |   | $ | 10,912 |   |   | $ | 4,112 |   |   | $ | 2,169 |   |   | $ | 10 |   |   | $ | 21,696 |   |
|                         |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                       |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $                                                  | 940    |   |   | $ | 36,210 |   |   | $ | 50,922 |   |   | $ | 46,445 |   |   | $ | 18,401 |   |   | $ | - |   |   | $ | 152,918 |   |
| Ending balance: collectively |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   |                                               | 71,900 |   |   |   | 23,236 |   |   |   | 62,574 |   |   |   | 54,471 |   |   |   | 13,122 |   |   |   | 406 |   |   |   | 225,709 |   |
|                         |   | $                                                  | 72,840 |   |   | $ | 59,446 |   |   | $ | 113,496 |   |   | $ | 100,916 |   |   | $ | 31,523 |   |   | $ | 406 |   |   | $ | 378,627 |   |

----

|                                    |   | December               |    |   | September |   |
|-----------------------------------------|--------|------------------------|---------|--------|-----------|--------|
|                                    |   | 2010                   |    |   | 2010      |   |
|                                    |   | (Dollars in thousands) |    |
| Non-accrual loans:                      |   |                   |    |   |      |   |
| One-to four-family                      |   | $                      | 940     |   |      | $      | - |   |
| Multi-family                            |   |                   | 30,615  |   |      |   | 23,956 |   |
| Commercial real estate                  |   |                   | 38,366  |   |      |   | 34,908 |   |
| Construction                            |   |                   | 28,433  |   |      |   | 7,890 |   |
| Land                                    |   |                   | 8,246   |   |      |   | 5,103 |   |
| Consumer                                |   |                   | -       |   |      |   | - |   |
| Total non-accrual loans                 |   |                   | 106,600 |   |      |   | 71,857 |   |
|                                    |   |                   |    |   |      |   |   |   |
| Loans past maturity and still accruing: |   |                   |    |   |      |   |   |   |
| Multi-family                            |   |                   | -       |   |      |   | 1,365 |   |
| Commercial real estate                  |   |                   | -       |   |      |   | 3,713 |   |
| Construction                            |   |                   | 1,233   |   |      |   | 6,615 |   |
| Land                                    |   |                   | -       |   |      |   | 2,628 |   |
|                                    |   |                   | 1,233   |   |      |   | 14,321 |   |
|                                    |   |                   |    |   |      |   |   |   |
| Total non-performing loans              |   | $                      | 107,833 |   |      | $      | 86,178 |   |

----

|                                       |   | One-to- |   |   |   |   |   |        |   |   |         |   |   |   |    |   |      |   |   |   |   |
|--------------------------------------------|--------|---------|--------|--------|--------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------|---------|--------|-----------|--------|--------|--------|--------|
|                                       |   | Four    |   |   | Multi- |   |   | Commercial  |   |   |         |   |   |   |    |   | Consumer  |   |   |   |   |
|                                       |   | Family  |   |   | Family |   |   | Real Estate |   |   | Construction |   |   | Land   |    |   | and Other |   |   | Total  |   |
| Credit Risk by Internally Assigned Rating: |   |    |   |   |   |   |   |        |   |   |         |   |   |   |    |   |      |   |   |   |   |
| Pass                                       |   | $       | 71,614 |   |   | $      | 16,536 |        |   | $      | 37,848       |   |   | $      | 5,742   |   |      | $      | 3,730  |   |   | $ | 406 |   |   | $ | 135,876 |   |
| Watch                                      |   |    | 487    |   |   |   | 4,370  |        |   |   | 17,205       |   |   |   | 21,575  |   |      |   | 4,152  |   |   |   | - |   |   |   | 47,789 |   |
| Special Mention                            |   |    | 76     |   |   |   | 2,330  |        |   |   | 6,854        |   |   |   | 26,670  |   |      |   | 5,240  |   |   |   | - |   |   |   | 41,170 |   |
| Substandard                                |   |    | 940    |   |   |   | 36,210 |        |   |   | 47,209       |   |   |   | 46,445  |   |      |   | 18,401 |   |   |   | - |   |   |   | 149,205 |   |
| Doubtful                                   |   |    | -      |   |   |   | -      |        |   |   | 3,713        |   |   |   | -       |   |      |   | -      |   |   |   | - |   |   |   | 3,713 |   |
|                                       |   | $       | 73,117 |   |   | $      | 59,446 |        |   | $      | 112,829      |   |   | $      | 100,432 |   |      | $      | 31,523 |   |   | $ | 406 |   |   | $ | 377,753 |   |

|                   |   | 30-59 Days |   |   | 60-89 Days |   |   | Greater Than |   |   |                |   |   |    |   |   |    |   |   | Total Loans |   |
|------------------------|--------|------------|--------|--------|------------|--------|--------|--------------|--------|--------|---------------------|--------|--------|---------|--------|--------|---------|--------|--------|-------------|--------|
|                   |   | Past Due   |   |   | Past Due   |   |   | 90 Days      |   |   | Total Past Due |   |   | TDR (1) |   |   | Current |   |   | Receivable  |   |
| One-to-Four Family     |   | $          | 1,879  |   |       | $      | -      |         |   | $      | 943                 |   |   | $       | 2,822  |   |    | $      | 393    |        |   | $ | 69,902 |   |   | $ | 73,117 |   |
| Multi-Family           |   |       | 4,454  |   |       |   | -      |         |   |   | 10,800              |   |   |    | 15,254 |   |    |   | 14,004 |        |   |   | 30,188 |   |   |   | 59,446 |   |
| Commercial Real Estate |   |       | 317    |   |       |   | -      |         |   |   | 29,481              |   |   |    | 29,798 |   |    |   | 10,745 |        |   |   | 72,286 |   |   |   | 112,829 |   |
| Construction           |   |       | 13,165 |   |       |   | 228    |         |   |   | 3,426               |   |   |    | 16,819 |   |    |   | 8,485  |        |   |   | 75,128 |   |   |   | 100,432 |   |
| Land                   |   |       | 3,510  |   |       |   | 282    |         |   |   | 2,372               |   |   |    | 6,164  |   |    |   | 2,109  |        |   |   | 23,250 |   |   |   | 31,523 |   |
| Consumer and Other     |   |       | 7      |   |       |   | -      |         |   |   | -                   |   |   |    | 7      |   |    |   | -      |        |   |   | 399 |   |   |   | 406 |   |
|                   |   | $          | 23,332 |   |       | $      | 510    |         |   | $      | 47,022              |   |   | $       | 70,864 |   |    | $      | 35,736 |        |   | $ | 271,153 |   |   | $ | 377,753 |   |

----

|                                          |   |  December 31, 2010 |    |
|-----------------------------------------------|--------|-------------------------|---------|
|                                          |   | Unpaid                  |    |   |   |   |   |   |   |
|                                          |   | Principal               |    |   | Recorded |   |   | Specific |   |
|                                          |   | Balance                 |    |   | Balance |   |   | Allowance |   |
| Loans without a specific valuation allowance: |   |                    |    |   |   |   |   |   |   |
| One-to-Four Family                            |   | $                       | 940     |   |   | $ | 940 |   |   |   |   |
| Multi-Family                                  |   |                    | 43,733  |   |   |   | 36,210 |   |   |   |   |
| Commercial Real Estate                        |   |                    | 65,138  |   |   |   | 48,093 |   |   |   |   |
| Construction                                  |   |                    | 47,466  |   |   |   | 46,445 |   |   |   |   |
| Land                                          |   |                    | 21,320  |   |   |   | 17,964 |   |   |   |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   |   |
|                                          |   |                    |    |   |   |   |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |                    |    |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                    | -       |   |   |   | - |   |   | $ | - |   |
| Multi-Family                                  |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Commercial Real Estate                        |   |                    | 2,829   |   |   |   | 2,829 |   |   |   | 1,061 |   |
| Construction                                  |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Land                                          |   |                    | 437     |   |   |   | 437 |   |   |   | 6 |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   | - |   |
|                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Total:                                        |   |                    |    |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                    | 940     |   |   |   | 940 |   |   |   | - |   |
| Multi-Family                                  |   |                    | 43,733  |   |   |   | 36,210 |   |   |   | - |   |
| Commercial Real Estate                        |   |                    | 67,967  |   |   |   | 50,922 |   |   |   | 1,061 |   |
| Construction                                  |   |                    | 47,466  |   |   |   | 46,445 |   |   |   | - |   |
| Land                                          |   |                    | 21,757  |   |   |   | 18,401 |   |   |   | 6 |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Total impaired loans                          |   | $                       | 181,863 |   |   | $ | 152,918 |   |   | $ | 1,067 |   |
|                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
|                                          |   | September 30, 2010      |    |
|                                          |   | Unpaid                  |    |   |   |   |   |   |   |   |   |
|                                          |   | Principal               |    |   | Recorded |   |   | Specific |   |
|                                          |   | Balance                 |    |   | Balance |   |   | Allowance |   |
| Loans without a specific valuation allowance: |   |                    |    |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   | $                       | -       |   |   | $ | - |   |   |   |   |   |
| Multi-Family                                  |   |                    | 38,903  |   |   |   | 31,380 |   |   |   |   |   |
| Commercial Real Estate                        |   |                    | 64,191  |   |   |   | 47,146 |   |   |   |   |   |
| Construction                                  |   |                    | 25,726  |   |   |   | 24,660 |   |   |   |   |   |
| Land                                          |   |                    | 22,582  |   |   |   | 15,938 |   |   |   |   |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   |   |   |
|                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |                    |    |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                    | -       |   |   |   | - |   |   | $ | - |   |
| Multi-Family                                  |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Commercial Real Estate                        |   |                    | 5,414   |   |   |   | 5,414 |   |   |   | 1,081 |   |
| Construction                                  |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Land                                          |   |                    | 437     |   |   |   | 437 |   |   |   | 6 |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   | - |   |
|                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Total:                                        |   |                    |    |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Multi-Family                                  |   |                    | 38,903  |   |   |   | 31,380 |   |   |   | - |   |
| Commercial Real Estate                        |   |                    | 69,605  |   |   |   | 52,560 |   |   |   | 1,081 |   |
| Construction                                  |   |                    | 25,726  |   |   |   | 24,660 |   |   |   | - |   |
| Land                                          |   |                    | 23,019  |   |   |   | 16,375 |   |   |   | 6 |   |
| Consumer and Other                            |   |                    | -       |   |   |   | - |   |   |   | - |   |
| Total impaired loans                          |   | $                       | 157,253 |   |   | $ | 124,975 |   |   | $ | 1,087 |   |

----

----

|                                |   |               |   |   | (Level 1)     |          |   |        |        |   |         |         |
|-------------------------------------|--------|--------------------|--------|--------|---------------|---------------|--------|-------------|-------------|--------|--------------|--------------|
|                                |   |               |   |   | Quoted Prices |          |   | (Level 2)   |        |   |         |         |
|                                |   |               |   |   | in Active     |          |   | Significant |        |   | (Level 3)    |         |
|                                |   |               |   |   | Markets for   |          |   | Other       |        |   | Significant  |         |
|                                |   |               |   |   | Identical     |          |   | Observable  |        |   | Unobservable |         |
| Description                         |   | December 31, 2010  |   |   | Assets        |          |   | Inputs      |        |   | Inputs       |         |
| Mortgage-backed securities:         |   |               |   |   |          |          |   |        |        |   |         |         |
| Government agency                   |   | $                  | 11,586 |   |          | $             | --     |        |        | $      | 11,586       |         |   | $ | -- |   |
| Government-sponsored enterprises    |   |               | 34,429 |   |          |          | --     |        |        |   | 34,429       |         |   |   | -- |   |
| Private issuers                     |   |               | 19,161 |   |          |          | --     |        |        |   | 19,161       |         |   |   | -- |   |
| Government debentures               |   |               | 2,970  |   |          |          | 2,970  |        |        |   | --           |         |   |   | -- |   |
| Mutual funds                        |   |               | 3,068  |   |          |          | 3,068  |        |        |   | --           |         |   |   | -- |   |
| Total securities available-for-sale |   | $                  | 71,214 |   |          | $             | 6,038  |        |        | $      | 65,176       |         |   | $ | -- |   |
|                                |   |               |   |   |          |          |   |        |        |   |         |         |   |   |   |   |
|                                |   |               |   |   |          | (Level 1)     |   |        |        |   |         |         |   |   |   |
|                                |   |               |   |   |          | Quoted Prices |   |        | (Level 2)   |   |         |         |   |   |
|                                |   |               |   |   |          | in Active     |   |        | Significant |   |         | (Level 3)    |   |
|                                |   |               |   |   |          | Markets for   |   |        | Other       |   |         | Significant  |   |
|                                |   |               |   |   |          | Identical     |   |        | Observable  |   |         | Unobservable |   |
| Description                         |   | September 30, 2010 |   |   | Assets        |          |   | Inputs      |        |   | Inputs       |         |
| Mortgage-backed securities:         |   |               |   |   |          |          |   |        |        |   |         |         |   |   |   |   |
| Government agency                   |   | $                  | 16,737 |   |          | $             | --     |        |        | $      | 16,737       |         |   | $ | -- |   |
| Government-sponsored enterprises    |   |               | 24,889 |   |          |          | --     |        |        |   | 24,889       |         |   |   | -- |   |
| Private issuers                     |   |               | 21,352 |   |          |          | --     |        |        |   | 21,352       |         |   |   | -- |   |
| Government debentures               |   |               | 3,029  |   |          |          | 3,029  |        |        |   | --           |         |   |   | -- |   |
| Mutual funds                        |   |               | 3,100  |   |          |          | 3,100  |        |        |   | --           |         |   |   | -- |   |
| Total securities available-for-sale |   | $                  | 69,107 |   |          | $             | 6,129  |        |        | $      | 62,978       |         |   | $ | -- |   |

|                                    |   |              |    |   | (Level 1)     |   |   |        |   |   |         |   |
|-----------------------------------------|--------|-------------------|---------|--------|---------------|--------|--------|-------------|--------|--------|--------------|--------|
|                                    |   |              |    |   | Quoted Prices |   |   | (Level 2)   |   |   |         |   |
|                                    |   |              |    |   | in Active     |   |   | Significant |   |   | (Level 3)    |   |
|                                    |   |              |    |   | Markets for   |   |   | Other       |   |   | Significant  |   |
|                                    |   |              |    |   | Identical     |   |   | Observable  |   |   | Unobservable |   |
| Description                             |   | December 31, 2010 |    |   | Assets        |   |   | Inputs      |   |   | Inputs       |   |
| One-to-Four Family                      |   | $                 | 1,289   |   |          | $      | -      |        |   | $      | -            |   |   | $ | 1,289 |   |
| Multi-Family                            |   |              | 29,189  |   |          |   | -      |        |   |   | -            |   |   |   | 29,189 |   |
| Commercial Real Estate                  |   |              | 50,248  |   |          |   | -      |        |   |   | -            |   |   |   | 50,248 |   |
| Construction                            |   |              | 54,325  |   |          |   | -      |        |   |   | -            |   |   |   | 54,325 |   |
| Land                                    |   |              | 18,219  |   |          |   | -      |        |   |   | -            |   |   |   | 18,219 |   |
| Consumer and Other                      |   |              | -       |   |          |   | -      |        |   |   | -            |   |   |   | - |   |
|     Total Impaired loans |   | $                 | 153,270 |   |          | $      | -      |        |   | $      | -            |   |   | $ | 153,270 |   |

|                                    |   |               |    |   |          |   |   |        |   |   |         |   |
|-----------------------------------------|--------|--------------------|---------|--------|---------------|--------|--------|-------------|--------|--------|--------------|--------|
|                                    |   |               |    |   | (Level 1)     |   |   |        |   |   |         |   |
|                                    |   |               |    |   | Quoted Prices |   |   | (Level 2)   |   |   |         |   |
|                                    |   |               |    |   | in Active     |   |   | Significant |   |   | (Level 3)    |   |
|                                    |   |               |    |   | Markets for   |   |   | Other       |   |   | Significant  |   |
|                                    |   |               |    |   | Identical     |   |   | Observable  |   |   | Unobservable |   |
| Description                             |   | September 30, 2010 |    |   | Assets        |   |   | Inputs      |   |   | Inputs       |   |
| One-to-Four Family                      |   | $                  | -       |   |          | $      | -      |        |   | $      | -            |   |   | $ | - |   |
| Multi-Family                            |   |               | 31,380  |   |          |   | -      |        |   |   | -            |   |   |   | 31,380 |   |
| Commercial Real Estate                  |   |               | 51,479  |   |          |   | -      |        |   |   | -            |   |   |   | 51,479 |   |
| Construction                            |   |               | 24,660  |   |          |   | -      |        |   |   | -            |   |   |   | 24,660 |   |
| Land                                    |   |               | 16,369  |   |          |   | -      |        |   |   | -            |   |   |   | 16,369 |   |
| Consumer and Other                      |   |               | -       |   |          |   | -      |        |   |   | -            |   |   |   | - |   |
|     Total Impaired loans |   | $                  | 123,888 |   |          | $      | -      |        |   | $      | -            |   |   | $ | 123,888 |   |
|                                    |   |               |    |   |          |   |   |        |   |   |         |   |   |   |   |   |

----

|                          |   | December 31, 2010    |    |   | September 30, 2010  |   |
|-------------------------------|--------|----------------------|---------|--------|---------------------|--------|
|                          |   | Carryingvalue        |    |   | Estimatedfair value |   |   | Carryingvalue |   |   | Estimatedfair value |   |
|                          |   |  (In thousands) |    |
|                          |   |                 |    |   |                |   |   |   |   |   |   |   |
| Financial assets:             |   |                 |    |   |                |   |   |   |   |   |   |   |
| Cash and due from banks       |   | $                    | 27,291  |   |                | $      | 27,291 |   |   | $ | 14,201 |   |   | $ | 14,201 |   |
| Securities available-for-sale |   |                 | 71,214  |   |                |   | 71,214 |   |   |   | 69,107 |   |   |   | 69,107 |   |
| Securities held-to-maturity   |   |                 | -       |   |                |   | - |   |   |   | - |   |   |   | - |   |
| Loans receivable, net         |   |                 | 356,057 |   |                |   | 356,338 |   |   |   | 369,842 |   |   |   | 369,750 |   |
| FHLB stock                    |   |                 | 1,804   |   |                |   | N/A |   |   |   | 1,803 |   |   |   | N/A |   |
| Accrued interest receivable   |   |                 | 1,659   |   |                |   | 1,659 |   |   |   | 2,061 |   |   |   | 2,061 |   |
|                          |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:        |   |                 |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   |                 | 429,368 |   |                |   | 434,105 |   |   |   | 423,406 |   |   |   | 428,667 |   |
| Borrowings                    |   |                 | 9,000   |   |                |   | 9,297 |   |   |   | 10,500 |   |   |   | 10,936 |   |
| Accrued interest payable      |   |                 | 24      |   |                |   | 24 |   |   |   | 28 |   |   |   | 28 |   |

----

----

----

----

----

|   |                                                      |   | December               |   |   | December        |   |
|--------|-----------------------------------------------------------|--------|------------------------|--------|--------|-----------------|--------|
|   |                                                      |   | 2010                   |   |   | 2009            |   |
|   |                                                      |   | (Dollars in thousands) |   |
|   |                                                      |   |                   |   |   |            |   |
|   | Balance at beginning of period                            |   | $                      | 17,941 |   |            | $      | 10,750 |   |
|   |                                                      |   |                   |   |   |            |   |   |   |
|   | Charge-offs:                                              |   |                   |   |   |            |   |   |   |
|   | Multi-family                                              |   |                   | -      |   |            |   | (300 | ) |
|   | Commercial real estate                                    |   |                   | -      |   |            |   | (2,331 | ) |
|   | Construction                                              |   |                   | -      |   |            |   | (35 | ) |
|   | Recoveries                                                |   |                   | 51     |   |            |   | - |   |
|   | Net charge-offs                                           |   |                   | 51     |   |            |   | (2,666 | ) |
|   |                                                      |   |                   |   |   |            |   |   |   |
|   | Provision for loan losses                                 |   |                   | 3,704  |   |            |   | 11,794 |   |
|   |                                                      |   |                   |   |   |            |   |   |   |
|   | Balance at end of period                                  |   | $                      | 21,696 |   |            | $      | 19,878 |   |
|   |                                                      |   |                   |   |   |            |   |   |   |
|   | Ratios:                                                   |   |                   |   |   |            |   |   |   |
|   | Net charge-offs to average loans outstanding              |   |                   | 0.00   | %      |  (1)  |   | 0.06 | % |
|   | Allowance for loan losses to total loans at end of period |   |                   | 5.74   | %      |            |   | 4.53 | % |
|   |                                                      |   |                   |   |   |            |   |   |   |
|   | (1)Percentage is less than 0.01%                          |   |                   |   |   |            |   |   |   |

----

|                                          |   | December               |    |   | September |   |
|-----------------------------------------------|--------|------------------------|---------|--------|-----------|--------|
|                                          |   | 2010                   |    |   | 2010      |   |
|                                          |   | (Dollars in thousands) |    |
| Non-accrual loans:                            |   |                   |    |   |      |   |
| One-to four-family                            |   | $                      | 940     |   |      | $      | - |   |
| Multi-family                                  |   |                   | 30,615  |   |      |   | 23,956 |   |
| Commercial real estate                        |   |                   | 38,366  |   |      |   | 34,908 |   |
| Construction                                  |   |                   | 28,433  |   |      |   | 7,890 |   |
| Land                                          |   |                   | 8,246   |   |      |   | 5,103 |   |
| Consumer                                      |   |                   | -       |   |      |   | - |   |
| Total non-accrual loans                       |   |                   | 106,600 |   |      |   | 71,857 |   |
|                                          |   |                   |    |   |      |   |   |   |
| Loans past maturity and still accruing:       |   |                   |    |   |      |   |   |   |
| Multi-family                                  |   |                   | -       |   |      |   | 1,365 |   |
| Commercial real estate                        |   |                   | -       |   |      |   | 3,713 |   |
| Construction                                  |   |                   | 1,233   |   |      |   | 6,615 |   |
| Land                                          |   |                   | -       |   |      |   | 2,628 |   |
| Total loans past maturity and still accruing: |   |                   | 1,233   |   |      |   | 14,321 |   |
|                                          |   |                   |    |   |      |   |   |   |
| Past due over 90 days and still accruing      |   |                   | -       |   |      |   | - |   |
| Real estate owned                             |   |                   | -       |   |      |   | - |   |
| Total non-performing loans                    |   | $                      | 107,833 |   |      | $      | 86,178 |   |

----

----

|                                                         |   | Actual                 |   |   | For capital adequacypurposes |   |
|--------------------------------------------------------------|--------|------------------------|--------|--------|------------------------------|--------|
|                                                         |   | Amount                 |   |   | Ratio                        |   |   | Amount |   |   | Ratio |   |
|                                                         |   | (Dollars in thousands) |   |
| At December 31, 2010:                                        |   |                   |   |   |                         |   |   |   |   |   |   |   |
| Total risk-based capital (to risk weighted assets)           |   | $                      | 42,562 |   |                         |   | 10.4 | % |   | $ | 32,658 |   |   |   | 8.0 | % |
| Tier I risk-based capital (to risk weighted assets)          |   |                   | 37,147 |   |                         |   | 9.1 | % |   |   | 16,329 |   |   |   | 4.0 | % |
| Tangible capital (to tangible assets)                        |   |                   | 37,147 |   |                         |   | 7.6 | % |   |   | 7,318 |   |   |   | 1.5 | % |
| Tier I leverage (core) capital (to adjusted tangible assets) |   |                   | 37,147 |   |                         |   | 7.6 | % |   |   | 14,636 |   |   |   | 3.0 | % |
|                                                         |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| At September 30, 2010:                                       |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital (to risk weighted assets)           |   | $                      | 45,912 |   |                         |   | 10.9 | % |   | $ | 33,603 |   |   |   | 8.0 | % |
| Tier I risk-based capital (to risk weighted assets)          |   |                   | 39,094 |   |                         |   | 9.3 | % |   |   | 16,802 |   |   |   | 4.0 | % |
| Tangible capital (to tangible assets)                        |   |                   | 39,094 |   |                         |   | 8.0 | % |   |   | 7,289 |   |   |   | 1.5 | % |
| Tier I leverage (core) capital (to adjusted tangible assets) |   |                   | 39,094 |   |                         |   | 8.0 | % |   |   | 14,577 |   |   |   | 3.0 | % |

|                                                                    |   | Commitment Expiration by Period |   |   |     |   |   |        |   |
|-------------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------|--------|--------|-------------|--------|
|                                                                    |   |                            |   |   |     |   |   | More than   |   |   | More Than |   |   |   |   |
|                                                                    |   |                            |   |   |     |   |   | One Year    |   |   | Three Years |   |   |   |   |
|                                                                    |   |                            |   |   | One Year |   |   | Through     |   |   | Through |   |   | More Than |   |
| Off-Balance Sheet Arrangements                                          |   | Total                           |   |   | or Less  |   |   | Three Years |   |   | Five Years |   |   | Five Years |   |
| To originate loans                                                      |   | $                               | 1,598  |   |     | $      | 1,598  |        |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Unused lines of credit, including undisbursed construction loans        |   |                            | 44,063 |   |     |   | 26,273 |        |   |   | 8,705 |   |   |   | 5,031 |   |   |   | 4,054 |   |
|                                                                    |   |                            |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $                               | 45,661 |   |     | $      | 27,871 |        |   | $ | 8,705 |   |   | $ | 5,031 |   |   | $ | 4,054 |   |

----

----

|                                                                     |   | Three months ended December 31, |    |
|--------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                     |   | 2010                            |    |   | 2009 |   |
| Interest Earning Assets:                                                 |   | Average Balance                 |    |   | Interest |   |   | Average Yield/Cost |   |   | Average Balance |   |   | Interest |   |   | Average Yield/Cost |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                    |   | $                               | 383,473 |   |   | $ | 4,979 |   |   |   | 5.19 | % |   | $ | 433,297 |   |   | $ | 7,188 |   |   |   | 6.64 | % |
| Mortgage-backed securities                                               |   |                            | 68,467  |   |   |   | 588 |   |   |   | 3.44 | % |   |   | 72,931 |   | (1) |   | 910 |   |   |   | 4.99 | % |
| Investments securities and other interest-earning assets                 |   |                            | 6,509   |   |   |   | 37 |   |   |   | 2.26 | % |   |   | 6,505 |   | (1) |   | 92 |   |   |   | 5.67 | % |
|   Total interest earning assets                                |   |                            | 458,449 |   |   |   | 5,604 |   |   |   | 4.89 | % |   |   | 512,733 |   |   |   | 8,190 |   |   |   | 6.39 | % |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest earning assets                                              |   |                            | 22,902  |   |   |   |   |   |   |   |   |   |   |   | 17,400 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                             |   | $                               | 481,351 |   |   |   |   |   |   |   |   |   |   | $ | 530,133 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Bearing Liabilities:                                            |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                         |   | $                               | 65,513  |   |   |   | 66 |   |   |   | 0.40 | % |   | $ | 61,287 |   |   |   | 101 |   |   |   | 0.66 | % |
| Money market/NOW accounts                                                |   |                            | 91,559  |   |   |   | 144 |   |   |   | 0.62 | % |   |   | 83,617 |   |   |   | 262 |   |   |   | 1.26 | % |
| Certificates of deposits                                                 |   |                            | 253,768 |   |   |   | 1,312 |   |   |   | 2.05 | % |   |   | 255,609 |   |   |   | 1,702 |   |   |   | 2.67 | % |
|   Total interest-bearing deposits                              |   |                            | 410,840 |   |   |   | 1,522 |   |   |   | 1.47 | % |   |   | 400,513 |   |   |   | 2,065 |   |   |   | 2.06 | % |
| Borrowings                                                               |   |                            | 9,760   |   |   |   | 66 |   |   |   | 2.68 | % |   |   | 18,116 |   |   |   | 54 |   |   |   | 1.20 | % |
|   Total interest bearing liabilities                           |   |                            | 420,600 |   |   |   | 1,588 |   |   |   | 1.50 | % |   |   | 418,629 |   |   |   | 2,119 |   |   |   | 2.03 | % |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing liabilities:                                        |   |                            | 24,575  |   |   |   |   |   |   |   |   |   |   |   | 28,567 |   |   |   |   |   |   |   |   |   |
|   Total liabilities                                            |   |                            | 445,175 |   |   |   |   |   |   |   |   |   |   |   | 447,196 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholder’s equity                                               |   |                            | 36,176  |   |   |   |   |   |   |   |   |   |   |   | 82,937 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total liabilities & stockholder’s equity           |   |                            | 481,351 |   |   |   |   |   |   |   |   |   |   | $ | 530,133 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                      |   |                            |    |   |   | $ | 4,016 |   |   |   |   |   |   |   |   |   |   | $ | 6,071 |   |   |   |   |   |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average interest rate spread                                             |   |                            |    |   |   |   |   |   |   |   | 3.39 | % |   |   |   |   |   |   |   |   |   |   | 4.36 | % |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin                                                      |   |                            |    |   |   |   |   |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   |   |   | 4.75 | % |
|                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average interest earning assets to interest bearing liabilities |   |                            |    |   |   |   |   |   |   |   | 109.00 | % |   |   |   |   |   |   |   |   |   |   | 122.48 | % |

----

----

----

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

----

| ITEM 1. | LEGAL PROCEEDINGS |
|---------|-------------------|

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

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|---------|-------------------------------------------------------------|

----

| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
|---------|---------------------------------|

| ITEM 4. | (RESERVED) |
|---------|------------|

| ITEM 5. | OTHER INFORMATION |
|---------|-------------------|

| ITEM 6. | EXHIBITS |
|---------|----------|

|   | 3.1 | Certificate of Incorporation of Brooklyn Federal Bancorp, Inc. 1 |
|--------|-----|------------------------------------------------------------------|

|   | 3.2 | Bylaws of Brooklyn Federal Bancorp, Inc. 1 |
|--------|-----|--------------------------------------------|

|   | 4 | Form of Common Stock of Brooklyn Federal Bancorp, Inc. 1 |
|--------|---|----------------------------------------------------------|

|   | 11 | Computation of Earnings Per Share |
|--------|----|-----------------------------------|

|   | 31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
|--------|------|-------------------------------------------------------------------------------|

|   | 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
|--------|------|-------------------------------------------------------------------------------|

|   | 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           | BROOKLYN FEDERAL BANCORP, INC.        |   |
|--------------------------------|---------------------------------------|--------|
|                           | (Registrant)                          |   |
|                           |                                  |   |
| Date:  June 29, 2011 | /s/ Gregg J. Wagner              |   |
|                           | President and Chief Executive Officer |   |

| Date:  June 29, 2011 | /s/ Michael A. Trinidad                      |   |
|--------------------------------|---------------------------------------------------|--------|
|                           | Senior Vice President and Chief Financial Officer |   |