----

----

|   | 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, 2010 |

----

|           |                                                                                        | Page Number |
|----------------|---------------------------------------------------------------------------------------------|-------------|
|           |
|  PART I.  |
|           |                                                                                        |        |
| Item 1.        | Financial Statements                                                                        | 1           |
| Item 2.        | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22          |
| Item 3.        | Quantitative and Qualitative Disclosures About Market Risk                                  | 36          |
| Item 4.        | Controls and Procedures                                                                     | 36          |
|           |                                                                                        |        |
| PART II.       |
|           |                                                                                        |        |
| Item 1.        | Legal Proceedings                                                                           | 37          |
| Item 1A.       | Risk Factors                                                                                | 37          |
| Item 2.        | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 38          |
| Item 3.        | Defaults Upon Senior Securities                                                             | 38          |
| Item 4.        | (Reserved)                                                                                  | 38          |
| Item 5.        | Other Information                                                                           | 38          |
| Item 6.        | Exhibits                                                                                    | 38          |
|           |                                                                                        |        |
| Signature Page | 40                                                                                          |

----

|                                                                                                                                   |   | March 31,   |    |   | September 30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|---------------|--------|
|                                                                                                                                   |   | 2011        |    |   | 2010          |   |
|                                                                                                                                   |   | (unaudited) |    |   | (audited)     |   |
| Assets                                                                                                                                 |   |        |    |   |          |   |   |   |
| Cash and due from banks (including interest-earning balances of $28,712 and $9,555, respectively)                                      |   | $           | 30,215  |   |          | $      | 14,202 |   |
| Securities available-for-sale                                                                                                          |   |        | 95,506  |   |          |   | 69,107 |   |
| Loans receivable                                                                                                                       |   |        | 341,572 |   |          |   | 387,783 |   |
| Less: Allowance for loan losses                                                                                                        |   |        | 21,887  |   |          |   | 17,941 |   |
| Loans receivable, net                                                                                                                  |   |        | 319,685 |   |          |   | 369,842 |   |
| Federal Home Loan Bank of New York (“FHLB”) stock, at cost                                                                 |   |        | 1,766   |   |          |   | 1,803 |   |
| Bank owned life insurance                                                                                                              |   |        | 10,099  |   |          |   | 9,880 |   |
| Accrued interest receivable                                                                                                            |   |        | 1,656   |   |          |   | 2,061 |   |
| Premises and equipment, net                                                                                                            |   |        | 1,628   |   |          |   | 1,822 |   |
| Prepaid expenses and other assets                                                                                                      |   |        | 17,760  |   |          |   | 19,039 |   |
| Total assets                                                                                                                           |   | $           | 478,315 |   |          | $      | 487,756 |   |
|                                                                                                                                   |   |        |    |   |          |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                             |   |        |    |   |          |   |   |   |
| Liabilities:                                                                                                                           |   |        |    |   |          |   |   |   |
| Deposits:                                                                                                                              |   |        |    |   |          |   |   |   |
| Non-interest-bearing deposits                                                                                                          |   | $           | 16,138  |   |          | $      | 16,033 |   |
| Interest-bearing deposits                                                                                                              |   |        | 151,087 |   |          |   | 154,800 |   |
| Certificates of deposit                                                                                                                |   |        | 254,931 |   |          |   | 252,573 |   |
| Total deposits                                                                                                                         |   |        | 422,156 |   |          |   | 423,406 |   |
| Borrowings                                                                                                                             |   |        | 9,000   |   |          |   | 10,500 |   |
| Advance payments by borrowers for taxes and insurance                                                                                  |   |        | 2,002   |   |          |   | 2,577 |   |
| Accrued expenses and other liabilities                                                                                                 |   |        | 5,106   |   |          |   | 5,534 |   |
| Total liabilities                                                                                                                      |   |        | 438,264 |   |          |   | 442,017 |   |
| 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 12,882,607 and 12,889,344 outstanding, respectively |   |        | 135     |   |          |   | 135 |   |
| Additional paid-in capital                                                                                                             |   |        | 43,094  |   |          |   | 43,119 |   |
| Retained earnings - substantially restricted                                                                                           |   |        | 6,953   |   |          |   | 12,687 |   |
| Treasury shares - at cost, 601,603 shares and 594,866 shares, respectively                                                             |   |        | (7,728  | )      |          |   | (7,720 | ) |
| Unallocated common stock held by employee stock ownership plan (“ESOP”)                                                    |   |        | (2,156  | )      |          |   | (2,235 | ) |
| Unallocated shares of the stock-based incentive plan                                                                                   |   |        | (184    | )      |          |   | (259 | ) |
| Accumulated other comprehensive income (loss):                                                                                         |   |        |    |   |          |   |   |   |
| Net unrealized gain (loss) on securities, net of income tax benefit                                                                    |   |        | (63     | )      |          |   | 12 |   |
| Total stockholders’ equity                                                                                                       |   |        | 40,051  |   |          |   | 45,739 |   |
| Total liabilities and stockholders’ equity                                                                                       |   | $           | 478,315 |   |          | $      | 487,756 |   |
|                                                                                                                                   |   |        |    |   |          |   |   |   |
| See accompanying notes to consolidated financial statements.                                                                           |   |

----

|                                                                             |   | For the Three Months Ended |       |   | For the Six Months Ended |   |
|----------------------------------------------------------------------------------|--------|----------------------------|------------|--------|--------------------------|--------|
|                                                                             |   | March 31,                  |       |   | March 31,                |   |   | March 31, |   |   | March 31, |   |
|                                                                             |   | 2011                       |       |   | 2010                     |   |   | 2011 |   |   | 2010 |   |
| Interest income:                                                                 |   |                       |       |   |                     |   |   |   |   |   |   |   |
| First mortgage and other loans                                                   |   | $                          | 4,506      |   |                     | $      | 6,907 |   |   | $ | 9,485 |   |   | $ | 14,095 |   |
| Mortgage-backed securities                                                       |   |                       | 664        |   |                     |   | 862 |   |   |   | 1,252 |   |   |   | 1,772 |   |
| Other securities and interest-earning assets                                     |   |                       | 55         |   |                     |   | 82 |   |   |   | 92 |   |   |   | 174 |   |
| Total interest income                                                            |   |                       | 5,225      |   |                     |   | 7,851 |   |   |   | 10,829 |   |   |   | 16,041 |   |
|                                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                                |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                         |   |                       | 1,439      |   |                     |   | 1,950 |   |   |   | 2,961 |   |   |   | 4,015 |   |
| Borrowings                                                                       |   |                       | 63         |   |                     |   | 51 |   |   |   | 129 |   |   |   | 105 |   |
| Total interest expense                                                           |   |                       | 1,502      |   |                     |   | 2,001 |   |   |   | 3,090 |   |   |   | 4,120 |   |
|                                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income before provision for loan losses                             |   |                       | 3,723      |   |                     |   | 5,850 |   |   |   | 7,739 |   |   |   | 11,921 |   |
| Provision for loan losses                                                        |   |                       | 900        |   |                     |   | 12,082 |   |   |   | 4,604 |   |   |   | 23,877 |   |
| Net interest income (loss) after provision for loan losses                       |   |                       | 2,823      |   |                     |   | (6,232 | ) |   |   | 3,135 |   |   |   | (11,956 | ) |
|                                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income:                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Total loss on OTTI of securities                                                 |   |                       | -          |   |                     |   | (929 | ) |   |   | (8 | ) |   |   | (2,017 | ) |
| Less:                                                                            |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Non-credit portion of OTTI recorded in other comprehensive income (before taxes) |   |                       | -          |   |                     |   | - |   |   |   | - |   |   |   | 776 |   |
| Net loss on OTTI recognized in earnings                                          |   |                       | -          |   |                     |   | (929 | ) |   |   | (8 | ) |   |   | (1,241 | ) |
| Banking fees and service charges                                                 |   |                       | 96         |   |                     |   | 199 |   |   |   | 225 |   |   |   | 484 |   |
| Net loss on sale of securities available-for-sale                                |   |                       | (1,364     | )      |                     |   | - |   |   |   | (1,364 | ) |   |   | - |   |
| Net gain on sale of loans held-for-sale                                          |   |                       | 39         |   |                     |   | 34 |   |   |   | 166 |   |   |   | 94 |   |
| Other                                                                            |   |                       | 148        |   |                     |   | 148 |   |   |   | 322 |   |   |   | 290 |   |
| Total non-interest loss                                                          |   |                       | (1,081     | )      |                     |   | (548 | ) |   |   | (659 | ) |   |   | (373 | ) |
|                                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense:                                                            |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Compensation and employee benefits                                               |   |                       | 2,027      |   |                     |   | 2,027 |   |   |   | 4,198 |   |   |   | 4,059 |   |
| Occupancy and equipment                                                          |   |                       | 520        |   |                     |   | 468 |   |   |   | 976 |   |   |   | 896 |   |
| FDIC Insurance                                                                   |   |                       | 347        |   |                     |   | 154 |   |   |   | 603 |   |   |   | 302 |   |
| Professional fees                                                                |   |                       | 594        |   |                     |   | 423 |   |   |   | 954 |   |   |   | 594 |   |
| Data processing fees                                                             |   |                       | 177        |   |                     |   | 168 |   |   |   | 345 |   |   |   | 330 |   |
| Other                                                                            |   |                       | 575        |   |                     |   | 385 |   |   |   | 1,040 |   |   |   | 743 |   |
| Total non-interest expense                                                       |   |                       | 4,240      |   |                     |   | 3,625 |   |   |   | 8,116 |   |   |   | 6,924 |   |
|                                                                             |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income tax expense                                                   |   |                       | (2,498     | )      |                     |   | (10,405 | ) |   |   | (5,640 | ) |   |   | (19,253 | ) |
| Income tax (benefit) expense                                                     |   |                       | (35        | )      |                     |   | (4,454 | ) |   |   | 94 |   |   |   | (8,215 | ) |
| Net loss                                                                         |   | $                          | (2,463     | )      |                     | $      | (5,951 | ) |   | $ | (5,734 | ) |   | $ | (11,038 | ) |
| Loss per common share:                                                           |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                              |   | $                          | (0.19      | )      |                     | $      | (0.47 | ) |   | $ | (0.45 | ) |   | $ | (0.87 | ) |
|      Diluted                                            |   | $                          | (0.19      | )      |                     | $      | (0.47 | ) |   | $ | (0.45 | ) |   | $ | (0.87 | ) |
| Average common shares outstanding:                                               |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                              |   |                       | 12,653,133 |   |                     |   | 12,625,968 |   |   |   | 12,646,830 |   |   |   | 12,619,455 |   |
|      Diluted                                            |   |                       | 12,653,133 |   |                     |   | 12,625,968 |   |   |   | 12,646,830 |   |   |   | 12,622,373 |   |

----

|                                                                                   |   | Common Stock |   |   | Additional Paid-in Capital |   |   | Retained Earnings-Substantially Restricted |   |   | Treasury Stock |   |   | Unallocated Common Stock Held by ESOP |   |   | Unallocated Shares of the Stock-based Incentive Plan |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total  |   |
|----------------------------------------------------------------------------------------|--------|--------------|--------|--------|----------------------------|--------|--------|--------------------------------------------|--------|--------|----------------|--------|--------|---------------------------------------|--------|--------|------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|--------|--------|
|                                                                                   |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |
| Balance at October 1, 2010                                                             |   | $            | 135    |   |                       | $      | 43,119 |                                       |   | $      | 12,687         |   |   | $                                     | (7,720 | )      |                                                 | $      | (2,235 | )                                             |   | $      | (259   | )      |   | $ | 12 |   |   | $ | 45,739 |   |
|                                                                                   |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                  |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                               |   |         | --     |   |                       |   | --     |                                       |   |   | (5,734         | )      |   |                                  | --     |   |                                                 |   | --     |                                          |   |   | --     |   |   |   | -- |   |   |   | (5,734 | ) |
| Net unrealized loss on securities available-for-sale, net of income tax benefit of $69 |   |         | --     |   |                       |   | --     |                                       |   |   | --             |   |   |                                  | --     |   |                                                 |   | --     |                                          |   |   | --     |   |   |   | (75 | ) |   |   | (75 | ) |
| Total comprehensive loss                                                               |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |   |   |   |   |   |   | (5,809 | ) |
|                                                                                   |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury stock purchased (6,737 shares)                                           | --     |         |   |   | --                         |   |   |                                       | --     |   |           |   | (8     | )                                     |   |   | --                                                   |   |   |                                          | --     |   |   |   | -- |   |   |   | (8 | ) |
| Allocation of ESOP stock                                                               |   |         | --     |   |                       |   | (69    | )                                          |   |   | --             |   |   |                                  | --     |   |                                                 |   | 79     |                                          |   |   | --     |   |   |   | -- |   |   |   | 10 |   |
| Stock-based incentive plan expense                                                     |   |         | --     |   |                       |   | 44     |                                       |   |   | --             |   |   |                                  | --     |   |                                                 |   | --     |                                          |   |   | 75     |   |   |   | -- |   |   |   | 119 |   |
| Dividends paid on common stock                                                         |   |         | --     |   |                       |   | --     |                                       |   |   | --             |   |   |                                  | --     |   |                                                 |   | --     |                                          |   |   | --     |   |   |   | -- |   |   |   | -- |   |
| Balance at March 31, 2011                                                              |   | $            | 135    |   |                       | $      | 43,094 |                                       |   | $      | 6,953          |   |   | $                                     | (7,728 | )      |                                                 | $      | (2,156 | )                                             |   | $      | (184   | )      |   | $ | (63 | ) |   | $ | 40,051 |   |
|                                                                                   |   |         |   |   |                       |   |   |                                       |   |   |           |   |   |                                  |   |   |                                                 |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                           |   |

----

|                                                                                  |   | For the Six Months Ended |    |
|---------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                  |   | March 31,                |    |
|                                                                                  |   | 2011                     |    |   | 2010 |   |
| Cash flows from operating activities:                                                 |   |                     |    |   |   |   |
| Net loss                                                                              |   | $                        | (5,734  | ) |   | $ | (11,038 | ) |
| Adjustments to reconcile net income to net cash used in operating activities:         |   |                     |    |   |   |   |   |   |
| ESOP expense                                                                          |   |                     | 10      |   |   |   | 79 |   |
| Stock-based incentive plan expense                                                    |   |                     | 119     |   |   |   | 155 |   |
| Depreciation and amortization                                                         |   |                     | 251     |   |   |   | 226 |   |
| Provision for loan losses                                                             |   |                     | 4,604   |   |   |   | 23,877 |   |
| Income from bank-owned life insurance                                                 |   |                     | (204    | ) |   |   | (175 | ) |
| Gross loss on OTTI recognized in earnings                                             |   |                     | 8       |   |   |   | 1,241 |   |
| Amortization (accretion) of servicing rights                                          |   |                     | 32      |   |   |   | (29 | ) |
| Accretion of deferred loan fees, net                                                  |   |                     | (399    | ) |   |   | (288 | ) |
| Amortization (accretion) of premiums, net of premium (discounts)                      |   |                     | 3       |   |   |   | (205 | ) |
| Originations of loans held-for-sale                                                   |   |                     | (4,020  | ) |   |   | (3,022 | ) |
| Proceeds from sales of loans held-for-sale                                            |   |                     | 4,120   |   |   |   | 3,065 |   |
| Principal repayments on loans held-for-sale                                           |   |                     | --      |   |   |   | 2 |   |
| Net gain on sales of loans held-for-sale                                              |   |                     | (100    | ) |   |   | (94 | ) |
| Decrease in accrued interest receivable                                               |   |                     | 405     |   |   |   | 124 |   |
| Deferred income tax benefit                                                           |   |                     | 1,334   |   |   |   | (5,215 | ) |
| Net loss on sales of securities available-for-sale                                    |   |                     | 1,364   |   |   |   | -- |   |
| Decrease (increase) in prepaid expenses and other assets                              |   |                     | 178     |   |   |   | (7,377 | ) |
| Decrease in accrued expenses and other liabilities                                    |   |                     | (428    | ) |   |   | (1,947 | ) |
| Net cash provided by (used in) operating activities                                   |   |                     | 1,543   |   |   |   | (621 | ) |
| Cash flows from investing activities:                                                 |   |                     |    |   |   |   |   |   |
| Repayments in excess of loan originations (Loan originations in excess of repayments) |   |                     | 24,038  |   |   |   | (6,687 | ) |
| Proceeds from the sale of loan notes                                                  |   |                     | 21,708  |   |   |   | -- |   |
| Principal repayments on mortgage-backed securities held-to-maturity                   |   |                     | --      |   |   |   | 10,203 |   |
| Principal repayments on mortgage-backed securities available-for-sale                 |   |                     | 18,452  |   |   |   | -- |   |
| Purchases of mortgage-backed securities held-to-maturity                              |   |                     | --      |   |   |   | (6,462 | ) |
| Purchases of securities available-for-sale                                            |   |                     | (58,321 | ) |   |   | -- |   |
| Proceeds from the sale of securities available-for-sale                               |   |                     | 11,962  |   |   |   | -- |   |
| Net redemptions of FHLB stock                                                         |   |                     | 37      |   |   |   | 744 |   |
| Purchases of bank-owned life insurance                                                |   |                     | (15     | ) |   |   | (15 | ) |
| Purchases of premises and equipment                                                   |   |                     | (57     | ) |   |   | (134 | ) |
| Net cash provided by (used in) investing activities                                   |   |                     | 17,804  |   |   |   | (2,351 | ) |
| Cash flows from financing activities:                                                 |   |                     |    |   |   |   |   |   |
| (Decrease) increase in deposits                                                       |   |                     | (1,250  | ) |   |   | 28,313 |   |
| Net decrease in short term borrowings                                                 |   |                     | (1,500  | ) |   |   | (23,000 | ) |
| Proceeds from long term borrowings                                                    |   |                     | --      |   |   |   | 5,000 |   |
| (Decrease) increase in advance payments by borrowers for taxes and insurance          |   |                     | (575    | ) |   |   | 146 |   |
| Purchase of treasury shares                                                           |   |                     | (8      | ) |   |   | (12 | ) |
| Payment of cash dividend                                                              |   |                     | --      |   |   |   | (799 | ) |
| Net cash (used in) provided by financing activities                                   |   |                     | (3,333  | ) |   |   | 9,648 |   |
|                                                                                  |   |                     |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                             |   |                     | 16,014  |   |   |   | 6,676 |   |
| Cash and cash equivalents at beginning of year                                        |   |                     | 14,201  |   |   |   | 3,472 |   |
| Cash and cash equivalents at end of period                                            |   | $                        | 30,215  |   |   | $ | 10,148 |   |
|                                                                                  |   |                     |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                     |   |                     |    |   |   |   |   |   |
| Cash paid during the period for:                                                      |   |                     |    |   |   |   |   |   |
| Interest                                                                              |   | $                        | 3,094   |   |   | $ | 4,121 |   |
| Taxes                                                                                 |   |                     | --      |   |   |   | 4,122 |   |
|                                                                                  |   |                     |    |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                          |   |

----

----

----

|                                |   |           |   |   |                 |   |   |                  |   |   |                |   |
|-------------------------------------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
| March 31, 2011                      |   | Amortizedcost  |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |
|                                |   | (In thousands) |   |
| Securities available-for-sale:      |   |           |   |   |                 |   |   |                  |   |   |                |   |
| Mortgage-backed securities:         |   |           |   |   |                 |   |   |                  |   |   |                |   |
| Government agency                   |   | $              | 14,208 |   |                 | $      | 7      |                  |   | $      | (97                 | )      |   | $ | 14,118 |   |
| Government-sponsored enterprises    |   |           | 60,853 |   |                 |   | 320    |                  |   |   | (332                | )      |   |   | 60,841 |   |
| Private issuers                     |   |           | 6,080  |   |                 |   | 160    |                  |   |   | (36                 | )      |   |   | 6,204 |   |
| Government debentures               |   |           | 13,977 |   |                 |   | 11     |                  |   |   | (152                | )      |   |   | 13,836 |   |
| Mutual funds                        |   |           | 500    |   |                 |   | 7      |                  |   |   | -                   |   |   |   | 507 |   |
| Total securities available-for-sale |   | $              | 95,618 |   |                 | $      | 505    |                  |   | $      | (617                | )      |   | $ | 95,506 |   |
|                                |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| September 30, 2010                  |   | Amortizedcost  |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |
|                                |   | (In thousands) |   |
| Securities available-for-sale:      |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| Mortgage-backed securities:         |   |           |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| 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) |   |
| Securties available-for-sale:        |   |           |   |   |       |   |
| One year or less                     |   | $              | -      |   |       | $      | - |   |
| Over one year through five years     |   |           | 6,648  |   |       |   | 6,630 |   |
| Over five years through ten years    |   |           | 20,616 |   |       |   | 20,634 |   |
| More than ten years                  |   |           | 67,854 |   |       |   | 67,735 |   |
| Total securities available-for-sale: |   | $              | 95,118 |   |       | $      | 94,999 |   |

|                                 |   | As of March 31, 2011     |   |
|--------------------------------------|--------|--------------------------|--------|
|                                 |   | Less than 12 months      |   |   | 12 months or more |   |   | Total |   |
|                                 |   | Estimatedfair value      |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |   | Estimatedfair value |   |   | Grossunrealizedlosses |   |
|                                 |   | (In thousands)           |   |
|                                 |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government agency                    |   | $                        | 14,011 |   |   | $ | (96 | ) |   | $ | 68 |   |   | $ | (1 | ) |   | $ | 14,079 |   |   | $ | (97 | ) |
| Government-sponsored enterprises     |   |                     | 40,369 |   |   |   | (303 | ) |   |   | 1,635 |   |   |   | (29 | ) |   |   | 42,004 |   |   |   | (332 | ) |
| Government debentures                |   |                     | 10,825 |   |   |   | (152 | ) |   |   | - |   |   |   | - |   |   |   | 10,825 |   |   |   | (152 | ) |
| Private issuers                      |   |                     | -      |   |   |   | - |   |   |   | 1,071 |   |   |   | (36 | ) |   |   | 1,071 |   |   |   | (36 | ) |
| Total temporarily impaired secrities |   | $                        | 65,205 |   |   | $ | (551 | ) |   | $ | 2,774 |   |   | $ | (66 | ) |   | $ | 67,979 |   |   | $ | (617 | ) |
|                                 |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   | 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 secrities |   | $                        | 2,972  |   |   | $ | (17 | ) |   | $ | 5,316 |   |   | $ | (1,383 | ) |   | $ | 8,288 |   |   | $ | (1,400 | ) |

----

----

----

----

| For the Three Months ended March 31, 2011                                          |   | Total Other-Than-TemporaryImpairmentLoss |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inEarnings |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inOtherComprehensiveIncome |   |
|------------------------------------------------------------------------------------|--------|------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------|--------|
|                                                                               |   | (in thousands)                           |   |
| Beginning balance as of January 31, 2011                                           |   | $                                        | 2,365  |   |                                                           | $      | 2,365  |                                                                           |   | $ | - |   |
| Add: Initial other-than-temporary credit losses                                    |   |                                     | -      |   |                                                           |   | -      |                                                                           |   |   | - |   |
| Additional other-than-temporary credit losses                                      |   |                                     | -      |   |                                                           |   | -      |                                                                           |   |   | - |   |
| Reduction for previous credit losses realized on securities sold during the period |   |                                     | (2,365 | )      |                                                           |   | (2,365 | )                                                                              |   |   | - |   |
| Ending balance as of March 31, 2011                                                |   | $                                        | -      |   |                                                           | $      | -      |                                                                           |   | $ | - |   |
|                                                                               |   |                                     |   |   |                                                           |   |   |                                                                           |   |   |   |   |
| For the Six Months ended March 31, 2011                                            |   | Total Other-Than-TemporaryImpairmentLoss |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inEarnings |   |   | Other-Than-TemporaryImpairmentCredit Lossesrecorded inOtherComprehensiveIncome |   |
|                                                                               |   | (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      |                                                                           |   |   | - |   |
| Reduction for previous credit losses realized on securities sold during the period |   |                                     | (2,365 | )      |                                                           |   | (2,365 | )                                                                              |   |   | - |   |
| Ending balance as of March 31, 2011                                                |   | $                                        | -      |   |                                                           | $      | -      |                                                                           |   | $ | - |   |

----

|                               |   | March 31,      |    |   | September 30, |   |
|------------------------------------|--------|----------------|---------|--------|---------------|--------|
|                               |   | 2011           |    |   | 2010          |   |
|                               |   | (In thousands) |    |
| Mortgage loans:                    |   |           |    |   |          |   |
| One- to four-family                |   | $              | 74,776  |   |          | $      | 73,457 |   |
| Multi-family                       |   |           | 48,579  |   |          |   | 65,209 |   |
| Commercial                         |   |           | 104,695 |   |          |   | 119,727 |   |
| Construction                       |   |           | 84,603  |   |          |   | 95,824 |   |
| Land                               |   |           | 29,157  |   |          |   | 34,084 |   |
|                               |   |           | 341,810 |   |          |   | 388,301 |   |
| Consumer and other loans:          |   |           |    |   |          |   |   |   |
| Personal loans                     |   |           | 248     |   |          |   | 331 |   |
| Loans secured by deposit accounts  |   |           | 137     |   |          |   | 118 |   |
|                               |   |           | 385     |   |          |   | 449 |   |
| Total loans receivable             |   |           | 342,195 |   |          |   | 388,750 |   |
|                               |   |           |    |   |          |   |   |   |
| Deferred net loan origination fees |   |           | (623    | )      |          |   | (967 | ) |
| Allowance for loan losses          |   |           | (21,887 | )      |          |   | (17,941 | ) |
| Total loans receivable, net        |   | $              | 319,685 |   |          | $      | 369,842 |   |
|                               |   |           |    |   |          |   |   |   |

|                         |   | For The Three Months Ended |   |
|------------------------------|--------|----------------------------|--------|
|                         |   | March                      |   |   | March |   |
|                         |   | 2011                       |   |   | 2010 |   |
|                         |   | (In thousands)             |   |
|                         |   |                       |   |   |   |   |
| Balance, beginning of period |   | $                          | 21,696 |   |   | $ | 19,878 |   |
| Charge-offs                  |   |                       | (1,261 | ) |   |   | (11,572 | ) |
| Recoveries/losses            |   |                       | 552    |   |   |   | - |   |
| Provision for loan losses    |   |                       | 900    |   |   |   | 12,083 |   |
| Balance, end of period       |   | $                          | 21,887 |   |   | $ | 20,389 |   |
|                         |   |                       |   |   |   |   |   |   |
|                         |   | For The Six Months Ended   |   |
|                         |   | March                      |   |   | March |   |
|                         |   | 2011                       |   |   | 2010 |   |
|                         |   | (In thousands)             |   |
|                         |   |                       |   |   |   |   |   |   |
| Balance, beginning of period |   | $                          | 17,941 |   |   | $ | 10,750 |   |
| Charge-offs                  |   |                       | (1,261 | ) |   |   | (14,238 | ) |
| Recoveries/losses            |   |                       | 603    |   |   |   | - |   |
| Provision for loan losses    |   |                       | 4,604  |   |   |   | 23,877 |   |
| Balance, end of period       |   | $                          | 21,887 |   |   | $ | 20,389 |   |
|                         |   |                       |   |   |   |   |   |   |

----

|                         |   | For the Six Months Ended March 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                  |   |                                    | (57    | ) |   |   | - |   |   |   | - |   |   |   | (1,073 | ) |   |   | (131 | ) |   |   | - |   |   |   | (1,261 | ) |
| Recoveries/losses            |   |                                    | 3      |   |   |   | 5 |   |   |   | 20 |   |   |   | 572 |   |   |   | 3 |   |   |   | - |   |   |   | 603 |   |
| Provision for loan losses    |   |                                    | (326   | ) |   |   | 663 |   |   |   | 577 |   |   |   | 1,370 |   |   |   | 2,329 |   |   |   | (9 | ) |   |   | 4,604 |   |
| Ending balance               |   | $                                       | 166    |   |   | $ | 3,793 |   |   | $ | 10,082 |   |   | $ | 2,534 |   |   | $ | 5,305 |   |   | $ | 7 |   |   | $ | 21,887 |   |
|                         |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $                                       | -      |   |   | $ | - |   |   | $ | 1,061 |   |   | $ | - |   |   | $ | 6 |   |   | $ | - |   |   | $ | 1,067 |   |
| Ending balance: collectively |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   |                                    | 166    |   |   |   | 3,793 |   |   |   | 9,021 |   |   |   | 2,534 |   |   |   | 5,299 |   |   |   | 7 |   |   |   | 20,820 |   |
| Ending balance               |   | $                                       | 166    |   |   | $ | 3,793 |   |   | $ | 10,082 |   |   | $ | 2,534 |   |   | $ | 5,305 |   |   | $ | 7 |   |   | $ | 21,887 |   |
|                         |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $                                       | 1,289  |   |   | $ | 29,189 |   |   | $ | 51,309 |   |   | $ | 54,325 |   |   | $ | 18,225 |   |   | $ | - |   |   | $ | 154,337 |   |
| Ending balance: collectively |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   |                                    | 73,487 |   |   |   | 19,391 |   |   |   | 53,385 |   |   |   | 30,278 |   |   |   | 10,932 |   |   |   | 385 |   |   |   | 187,858 |   |
| Ending balance               |   | $                                       | 74,776 |   |   | $ | 48,580 |   |   | $ | 104,694 |   |   | $ | 84,603 |   |   | $ | 29,157 |   |   | $ | 385 |   |   | $ | 342,195 |   |

----

|                                         |   | March                  |    |   | September |   |
|----------------------------------------------|--------|------------------------|---------|--------|-----------|--------|
|                                         |   | 2011                   |    |   | 2010      |   |
|                                         |   | (Dollars in thousands) |    |
| Non-accrual loans:                           |   |                   |    |   |      |   |
| One-to four-family                           |   | $                      | 1,289   |   |      | $      | - |   |
| Multi-family                                 |   |                   | 23,596  |   |      |   | 23,956 |   |
| Commercial real estate                       |   |                   | 39,508  |   |      |   | 34,908 |   |
| Construction                                 |   |                   | 35,913  |   |      |   | 7,890 |   |
| Land                                         |   |                   | 8,079   |   |      |   | 5,103 |   |
| Consumer                                     |   |                   | -       |   |      |   | - |   |
| Total non-accrual loans                      |   |                   | 108,385 |   |      |   | 71,857 |   |
|                                         |   |                   |    |   |      |   |   |   |
| Loans past maturity and still accruing:      |   |                   |    |   |      |   |   |   |
| Multi-family                                 |   |                   | 4,940   |   |      |   | 1,365 |   |
| Commercial real estate                       |   |                   | -       |   |      |   | 3,713 |   |
| Construction                                 |   |                   | 4,754   |   |      |   | 6,615 |   |
| Land                                         |   |                   | -       |   |      |   | 2,628 |   |
| Total loans past maturity and still accruing |   |                   | 9,694   |   |      |   | 14,321 |   |
|                                         |   |                   |    |   |      |   |   |   |
| Total non-performing loans                   |   | $                      | 118,079 |   |      | $      | 86,178 |   |

----

|                                       |   | One-to- |   |   |   |   |   |        |   |   |         |   |   |   |   |   |      |   |   |   |   |
|--------------------------------------------|--------|---------|--------|--------|--------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                                       |   | Four    |   |   | Multi- |   |   | Commercial  |   |   |         |   |   |   |   |   | Consumer  |   |   |   |   |
|                                       |   | Family  |   |   | Family |   |   | Real Estate |   |   | Construction |   |   | Land   |   |   | and Other |   |   | Total  |   |
| Credit Risk by Internally Assigned Rating: |   |    |   |   |   |   |   |        |   |   |         |   |   |   |   |   |      |   |   |   |   |
| Pass                                       |   | $       | 72,227 |   |   | $      | 13,325 |        |   | $      | 29,223       |   |   | $      | -      |   |      | $      | 2,092  |   |   | $ | 385 |   |   | $ | 117,252 |   |
| Watch                                      |   |    | 1,534  |   |   |   | 2,924  |        |   |   | 16,197       |   |   |   | 8,372  |   |      |   | 3,600  |   |   |   | - |   |   |   | 32,627 |   |
| Special Mention                            |   |    | 18     |   |   |   | 3,129  |        |   |   | 7,063        |   |   |   | 21,906 |   |      |   | 5,240  |   |   |   | - |   |   |   | 37,356 |   |
| Substandard                                |   |    | 1,289  |   |   |   | 29,189 |        |   |   | 47,596       |   |   |   | 54,325 |   |      |   | 18,225 |   |   |   | - |   |   |   | 150,624 |   |
| Doubtful                                   |   |    | -      |   |   |   | -      |        |   |   | 3,713        |   |   |   | -      |   |      |   | -      |   |   |   | - |   |   |   | 3,713 |   |
|                                       |   | $       | 75,068 |   |   | $      | 48,567 |        |   | $      | 103,792      |   |   | $      | 84,603 |   |      | $      | 29,157 |   |   | $ | 385 |   |   | $ | 341,572 |   |

|                   |   | 30-59 Days |   |   | 60-89 Days |   |   | Greater Than |   |   | Total Past |   |   |    |   |   |    |   |   | Total Loans |   |
|------------------------|--------|------------|--------|--------|------------|--------|--------|--------------|--------|--------|------------|--------|--------|---------|--------|--------|---------|--------|--------|-------------|--------|
|                   |   | Past Due   |   |   | Past Due   |   |   | 90 Days      |   |   | Due        |   |   | TDR (1) |   |   | Current |   |   | Receivable  |   |
| One-to-Four Family     |   | $          | 399    |   |       | $      | -      |         |   | $      | 943        |   |   | $       | 1,342  |   |    | $      | 392    |        |   | $ | 73,334 |   |   | $ | 75,068 |   |
| Multi-Family           |   |       | 6,515  |   |       |   | -      |         |   |   | 9,450      |   |   |    | 15,965 |   |    |   | 13,477 |        |   |   | 19,125 |   |   |   | 48,567 |   |
| Commercial Real Estate |   |       | 8,892  |   |       |   | -      |         |   |   | 28,912     |   |   |    | 37,804 |   |    |   | 10,681 |        |   |   | 55,307 |   |   |   | 103,792 |   |
| Construction           |   |       | 15,529 |   |       |   | 3,847  |         |   |   | 12,709     |   |   |    | 32,085 |   |    |   | 9,017  |        |   |   | 43,501 |   |   |   | 84,603 |   |
| Land                   |   |       | 900    |   |       |   | 223    |         |   |   | 5,905      |   |   |    | 7,028  |   |    |   | 1,977  |        |   |   | 20,152 |   |   |   | 29,157 |   |
| Consumer and Other     |   |       | 1      |   |       |   | 18     |         |   |   | -          |   |   |    | 19     |   |    |   | -      |        |   |   | 366 |   |   |   | 385 |   |
|                   |   | $          | 32,236 |   |       | $      | 4,088  |         |   | $      | 57,919     |   |   | $       | 94,243 |   |    | $      | 35,544 |        |   | $ | 211,785 |   |   | $ | 341,572 |   |

|   | (1)    | $0.4 million of TDR loans have performed in accordance with modified terms                                    |
|--------|--------|---------------------------------------------------------------------------------------------------------------|
|   |   | $35.1 million of TDR loans have not performed in accordance with modified terms and are in non-accrual status |

----

|                                          |   | As of and for the six months ended March 31, 2011 |    |
|-----------------------------------------------|--------|---------------------------------------------------|---------|
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | Unpaid                                            |    |   |   |   |   |   |   |   | Average |   | Interest |
|                                          |   | Principal                                         |    |   | Recorded |   |   | Specific |   | Recorded |   | Income |
|                                          |   | Balance                                           |    |   | Balance |   |   | Allowance |   | Investment |   | Recognized |
| Loans without a specific valuation allowance: |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   | $                                                 | 1,347   |   |   | $ | 1,289 |   |   |   |   |   | $ | 645 |   |   | $ | 5 |   |
| Multi-Family                                  |   |                                              | 34,045  |   |   |   | 29,189 |   |   |   |   |   |   | 40,875 |   |   |   | 263 |   |
| Commercial Real Estate                        |   |                                              | 65,241  |   |   |   | 48,480 |   |   |   |   |   |   | 36,570 |   |   |   | 249 |   |
| Construction                                  |   |                                              | 55,727  |   |   |   | 54,325 |   |   |   |   |   |   | 35,350 |   |   |   | 318 |   |
| Land                                          |   |                                              | 21,275  |   |   |   | 17,788 |   |   |   |   |   |   | 8,894 |   |   |   | 36 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                                              | -       |   |   |   | - |   |   | $ | - |   |   |   | - |   |   |   | - |   |
| Multi-Family                                  |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial Real Estate                        |   |                                              | 2,829   |   |   |   | 2,829 |   |   |   | 1,061 |   |   |   | 4,122 |   |   |   | 12 |   |
| Construction                                  |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Land                                          |   |                                              | 437     |   |   |   | 437 |   |   |   | 6 |   |   |   | 437 |   |   |   | 10 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total:                                        |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                                              | 1,347   |   |   |   | 1,289 |   |   |   | - |   |   |   | 645 |   |   |   | 5 |   |
| Multi-Family                                  |   |                                              | 34,045  |   |   |   | 29,189 |   |   |   | - |   |   |   | 40,875 |   |   |   | 263 |   |
| Commercial Real Estate                        |   |                                              | 68,070  |   |   |   | 51,309 |   |   |   | 1,061 |   |   |   | 40,692 |   |   |   | 261 |   |
| Construction                                  |   |                                              | 55,727  |   |   |   | 54,325 |   |   |   | - |   |   |   | 35,350 |   |   |   | 318 |   |
| Land                                          |   |                                              | 21,712  |   |   |   | 18,225 |   |   |   | 6 |   |   |   | 9,331 |   |   |   | 46 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total substandard loans                       |   | $                                                 | 180,901 |   |   | $ | 154,337 |   |   | $ | 1,067 |   |   | $ | 126,893 |   |   | $ | 893 |   |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | As of and for the year ended September 30, 2010   |    |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | Unpaid                                            |    |   |   |   |   |   |   |   |   |   | Average |   | Interest |
|                                          |   | Principal                                         |    |   | Recorded |   |   | Specific |   | Recorded |   | Income |
|                                          |   | Balance                                           |    |   | Balance |   |   | Allowance |   | Investment |   | Recognized |
| Loans without a specific valuation allowance: |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   | $                                                 | -       |   |   | $ | - |   |   |   |   |   |   | $ | - |   |   | $ | 7 |   |
| Multi-Family                                  |   |                                              | 38,903  |   |   |   | 31,380 |   |   |   |   |   |   |   | 20,917 |   |   |   | 509 |   |
| Commercial Real Estate                        |   |                                              | 64,191  |   |   |   | 47,146 |   |   |   |   |   |   |   | 35,889 |   |   |   | 369 |   |
| Construction                                  |   |                                              | 25,726  |   |   |   | 24,660 |   |   |   |   |   |   |   | 18,882 |   |   |   | 92 |   |
| Land                                          |   |                                              | 22,582  |   |   |   | 15,938 |   |   |   |   |   |   |   | 15,206 |   |   |   | 15 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                                              | -       |   |   |   | - |   |   | $ | - |   |   |   | - |   |   |   | - |   |
| Multi-Family                                  |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial Real Estate                        |   |                                              | 5,414   |   |   |   | 5,414 |   |   |   | 1,081 |   |   |   | 3,976 |   |   |   | 27 |   |
| Construction                                  |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Land                                          |   |                                              | 437     |   |   |   | 437 |   |   |   | 6 |   |   |   | 437 |   |   |   | 8 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
|                                          |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total:                                        |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-Four Family                            |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7 |   |
| Multi-Family                                  |   |                                              | 38,903  |   |   |   | 31,380 |   |   |   | - |   |   |   | 20,917 |   |   |   | 509 |   |
| Commercial Real Estate                        |   |                                              | 69,605  |   |   |   | 52,560 |   |   |   | 1,081 |   |   |   | 39,865 |   |   |   | 396 |   |
| Construction                                  |   |                                              | 25,726  |   |   |   | 24,660 |   |   |   | - |   |   |   | 18,882 |   |   |   | 92 |   |
| Land                                          |   |                                              | 23,019  |   |   |   | 16,375 |   |   |   | 6 |   |   |   | 15,643 |   |   |   | 23 |   |
| Consumer and Other                            |   |                                              | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total impaired loans                          |   | $                                                 | 157,253 |   |   | $ | 124,975 |   |   | $ | 1,087 |   |   | $ | 95,307 |   |   | $ | 1,027 |   |

----

----

|                                |   |               |   |   | (Level 1)     |          |   |        |        |   |         |         |
|-------------------------------------|--------|--------------------|--------|--------|---------------|---------------|--------|-------------|-------------|--------|--------------|--------------|
|                                |   |               |   |   | Quoted Prices |          |   | (Level 2)   |        |   |         |         |
|                                |   |               |   |   | in Active     |          |   | Significant |        |   | (Level 3)    |         |
|                                |   |               |   |   | Markets for   |          |   | Other       |        |   | Significant  |         |
|                                |   |               |   |   | Identical     |          |   | Observable  |        |   | Unobservable |         |
| Description                         |   | March 31, 2011     |   |   | Assets        |          |   | Inputs      |        |   | Inputs       |         |
| Mortgage-backed securities:         |   |               |   |   |          |          |   |        |        |   |         |         |
| Government agency                   |   | $                  | 14,118 |   |          | $             | --     |        |        | $      | 14,118       |         |   | $ | -- |   |
| Government-sponsored enterprises    |   |               | 60,841 |   |          |          | --     |        |        |   | 60,841       |         |   |   | -- |   |
| Private issuers                     |   |               | 6,204  |   |          |          | --     |        |        |   | 6,204        |         |   |   | -- |   |
| Government debentures               |   |               | 13,836 |   |          |          | 13,836 |        |        |   | --           |         |   |   | -- |   |
| Mutual funds                        |   |               | 507    |   |          |          | 507    |        |        |   | --           |         |   |   | -- |   |
| Total securities available-for-sale |   | $                  | 95,506 |   |          | $             | 14,343 |        |        | $      | 81,163       |         |   | $ | -- |   |
|                                |   |               |   |   |          |          |   |        |        |   |         |         |   |   |   |   |
|                                |   |               |   |   |          | (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            |   | March 31, 2011     |    |   | 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 |   |
|                   |   |               |    |   |          |          |   |        |        |   |         |         |   |   |   |   |

----

|                          |   | March 31, 2011 |    |   | September 30, 2010  |   |
|-------------------------------|--------|----------------|---------|--------|---------------------|--------|
|                          |   | Carryingvalue  |    |   | Estimatedfair value |   |   | Carryingvalue |   |   | Estimatedfair value |   |
|                          |   | (In thousands) |    |
|                          |   |           |    |   |                |   |   |   |   |   |   |   |
| Financial assets:             |   |           |    |   |                |   |   |   |   |   |   |   |
| Cash and due from banks       |   | $              | 30,215  |   |                | $      | 30,215 |   |   | $ | 14,201 |   |   | $ | 14,201 |   |
| Securities available-for-sale |   |           | 95,506  |   |                |   | 95,506 |   |   |   | 69,107 |   |   |   | 69,107 |   |
| Securities held-to-maturity   |   |           | -       |   |                |   | - |   |   |   | - |   |   |   | - |   |
| Loans receivable, net         |   |           | 341,572 |   |                |   | 317,415 |   |   |   | 369,842 |   |   |   | 369,750 |   |
| FHLB stock                    |   |           | 1,766   |   |                |   | N/A |   |   |   | 1,803 |   |   |   | N/A |   |
| Accrued interest receivable   |   |           | 1,656   |   |                |   | 1,656 |   |   |   | 2,061 |   |   |   | 2,061 |   |
|                          |   |           |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:        |   |           |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   |           | 422,156 |   |                |   | 430,526 |   |   |   | 423,406 |   |   |   | 428,667 |   |
| Borrowings                    |   |           | 9,000   |   |                |   | 9,272 |   |   |   | 10,500 |   |   |   | 10,936 |   |
| Accrued interest payable      |   |           | 24      |   |                |   | 24 |   |   |   | 28 |   |   |   | 28 |   |

----

----

----

----

----

|                                                      |   | March                  |   |   | March  |   |
|-----------------------------------------------------------|--------|------------------------|--------|--------|--------|--------|
|                                                      |   | 2011                   |   |   | 2010   |   |
|                                                      |   | (Dollars in thousands) |   |
|                                                      |   |                   |   |   |   |   |
| Balance at beginning of period                            |   | $                      | 17,941 |   |   | $      | 10,750 |   |
|                                                      |   |                   |   |   |   |   |   |   |
| Charge-offs:                                              |   |                   |   |   |   |   |   |   |
| One-to-four-family                                        |   |                   | (58    | )      |   |   | (170 | ) |
| Multi-family                                              |   |                   | -      |   |   |   | (2,692 | ) |
| Commercial real estate                                    |   |                   | -      |   |   |   | (9,956 | ) |
| Construction                                              |   |                   | (1,073 | )      |   |   | (255 | ) |
| Land                                                      |   |                   | (131   | )      |   |   | (1,130 | ) |
| Consumer and other                                        |   |                   | -      |   |   |   | (35 | ) |
| Recoveries                                                |   |                   | 603    |   |   |   | - |   |
| Net charge-offs                                           |   |                   | (658   | )      |   |   | (14,238 | ) |
|                                                      |   |                   |   |   |   |   |   |   |
| Provision for loan losses                                 |   |                   | 4,604  |   |   |   | 23,877 |   |
|                                                      |   |                   |   |   |   |   |   |   |
| Balance at end of period                                  |   | $                      | 21,887 |   |   | $      | 20,389 |   |
|                                                      |   |                   |   |   |   |   |   |   |
| Ratios:                                                   |   |                   |   |   |   |   |   |   |
| Net charge-offs to average loans outstanding              |   |                   | 0.18   | %      |   |   | 3.27 | % |
| Allowance for loan losses to total loans at end of period |   |                   | 6.41   | %      |   |   | 4.82 | % |

----

|                                         |   | March                  |    |   | September |   |
|----------------------------------------------|--------|------------------------|---------|--------|-----------|--------|
|                                         |   | 2011                   |    |   | 2010      |   |
|                                         |   | (Dollars in thousands) |    |
| Non-accrual loans:                           |   |                   |    |   |      |   |
| One-to four-family                           |   | $                      | 1,289   |   |      | $      | - |   |
| Multi-family                                 |   |                   | 23,596  |   |      |   | 23,956 |   |
| Commercial real estate                       |   |                   | 39,508  |   |      |   | 34,908 |   |
| Construction                                 |   |                   | 35,913  |   |      |   | 7,890 |   |
| Land                                         |   |                   | 8,079   |   |      |   | 5,103 |   |
| Consumer                                     |   |                   | -       |   |      |   | - |   |
| Total non-accrual loans                      |   |                   | 108,385 |   |      |   | 71,857 |   |
|                                         |   |                   |    |   |      |   |   |   |
| Loans past maturity and still accruing:      |   |                   |    |   |      |   |   |   |
| Multi-family                                 |   |                   | 4,940   |   |      |   | 1,365 |   |
| Commercial real estate                       |   |                   | -       |   |      |   | 3,713 |   |
| Construction                                 |   |                   | 4,754   |   |      |   | 6,615 |   |
| Land                                         |   |                   | -       |   |      |   | 2,628 |   |
| Total loans past maturity and still accruing |   |                   | 9,694   |   |      |   | 14,321 |   |
|                                         |   |                   |    |   |      |   |   |   |
| Past due over 90 days and still accruing     |   |                   | -       |   |      |   | - |   |
| Real estate owned                            |   |                   | -       |   |      |   | - |   |
| Total non-performing loans                   |   | $                      | 118,079 |   |      | $      | 86,178 |   |

----

----

|                                                         |   | Actual                 |   |   | For capital adequacy purposes |   |
|--------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------------|--------|
|                                                         |   | Amount                 |   |   | Ratio                         |   |   | Amount |   |   | Ratio |   |
|                                                         |   | (Dollars in thousands) |   |
| At March 31, 2011:                                           |   |                   |   |   |                          |   |   |   |   |   |   |   |
| Total risk-based capital (to risk weighted assets)           |   | $                      | 39,977 |   |                          |   | 11.1 | % |   | $ | 28,897 |   |   |   | 8.0 | % |
| Tier I risk-based capital (to risk weighted assets)          |   |                   | 35,153 |   |                          |   | 9.7 | % |   |   | 14,449 |   |   |   | 4.0 | % |
| Tangible capital (to tangible assets)                        |   |                   | 35,153 |   |                          |   | 7.4 | % |   |   | 7,167 |   |   |   | 1.5 | % |
| Tier I leverage (core) capital (to adjusted tangible assets) |   |                   | 35,153 |   |                          |   | 7.4 | % |   |   | 14,335 |   |   |   | 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                                                      |   | $      | 9,665  |   |   | $ | 9,665 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Unused lines of credit, including undisbursed construction loans        |   |   | 28,151 |   |   |   | 9,313 |   |   |   | 12,513 |   |   |   | 1,476 |   |   |   | 4,849 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $      | 37,816 |   |   | $ | 18,978 |   |   | $ | 12,513 |   |   | $ | 1,476 |   |   | $ | 4,849 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                                     |   | Three months ended March 31, |    |
|--------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                     |   |                         |    |   | 2011 |   |   |   |   |   |   |   |   | 2010 |   |   |   |   |
| Interest Earning Assets:                                                 |   | Average Balance              |    |   | Interest |   |   | Average Yield/Cost |   |   | Average Balance |   |   | Interest |   |   | Average Yield/Cost |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                    |   | $                            | 356,167 |   |   | $ | 4,506 |   |   |   | 5.06 | % |   | $ | 435,643 |   |   | $ | 6,907 |   |   |   | 6.34 | % |
| Mortgage-backed securities                                               |   |                         | 75,918  |   |   |   | 621 |   |   |   | 3.27 | % |   |   | 68,347 |   | (1) |   | 862 |   |   |   | 5.04 | % |
| Investments securities and other interest-earning assets                 |   |                         | 43,857  |   |   |   | 98 |   |   |   | 91.00 | % |   |   | 9,705 |   | (1) |   | 82 |   |   |   | 3.43 | % |
|   Total interest earning assets                                |   |                         | 475,942 |   |   |   | 5,225 |   |   |   | 4.39 | % |   |   | 513,695 |   |   |   | 7,851 |   |   |   | 6.10 | % |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest earning assets                                              |   |                         | 9,463   |   |   |   |   |   |   |   |   |   |   |   | 12,893 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                             |   | $                            | 485,405 |   |   |   |   |   |   |   |   |   |   | $ | 526,588 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Bearing Liabilities:                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                         |   | $                            | 66,705  |   |   |   | 66 |   |   |   | 0.40 | % |   | $ | 63,111 |   |   |   | 92 |   |   |   | 0.59 | % |
| Money market/NOW accounts                                                |   |                         | 84,558  |   |   |   | 136 |   |   |   | 0.65 | % |   |   | 85,232 |   |   |   | 250 |   |   |   | 1.19 | % |
| Certificates of deposits                                                 |   |                         | 259,063 |   |   |   | 1,236 |   |   |   | 1.93 | % |   |   | 262,158 |   |   |   | 1,608 |   |   |   | 2.49 | % |
|   Total interest-bearing deposits                              |   |                         | 410,326 |   |   |   | 1,438 |   |   |   | 1.42 | % |   |   | 410,501 |   |   |   | 1,950 |   |   |   | 1.93 | % |
| Borrowings                                                               |   |                         | 9,000   |   |   |   | 63 |   |   |   | 2.88 | % |   |   | 8,868 |   |   |   | 51 |   |   |   | 2.33 | % |
|   Total interest bearing liabilities                           |   |                         | 419,326 |   |   |   | 1,501 |   |   |   | 1.45 | % |   |   | 419,369 |   |   |   | 2,001 |   |   |   | 1.94 | % |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing liabilities:                                        |   |                         | 24,869  |   |   |   |   |   |   |   |   |   |   |   | 28,426 |   |   |   |   |   |   |   |   |   |
|   Total liabilities                                            |   |                         | 444,195 |   |   |   |   |   |   |   |   |   |   |   | 447,795 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholder’s equity                                               |   |                         | 41,210  |   |   |   |   |   |   |   |   |   |   |   | 78,793 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total liabilities & stockholder’s equity           |   |                         | 485,405 |   |   |   |   |   |   |   |   |   |   | $ | 526,588 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                      |   |                         |    |   |   | $ | 3,724 |   |   |   |   |   |   |   |   |   |   | $ | 5,850 |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average interest rate spread                                             |   |                         |    |   |   |   |   |   |   |   | 2.94 | % |   |   |   |   |   |   |   |   |   |   | 4.16 | % |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest-earning assets                                              |   |                         | 56,616  |   |   |   |   |   |   |   |   |   |   |   | 94,326 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin                                                      |   |                         |    |   |   |   |   |   |   |   | 3.11 | % |   |   |   |   |   |   |   |   |   |   | 4.56 | % |
|                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average interest earning assets to interest bearing liabilities |   |                         |    |   |   |   |   |   |   |   | 113.50 | % |   |   |   |   |   |   |   |   |   |   | 122.49 | % |

----

|                                                                     |   | Six months ended March 31, |    |   |     |   |
|--------------------------------------------------------------------------|--------|----------------------------|---------|--------|----------|--------|
|                                                                     |   |                       |    |   | 2011     |   |   |   |   |   |   |   |   | 2010 |   |   |   |   |
| Interest Earning Assets:                                                 |   | Average Balance            |    |   | Interest |   |   | Average Yield/Cost |   |   | Average Balance |   |   | Interest |   |   | Average Yield/Cost |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                    |   | $                          | 341,273 |   |     | $      | 9,485 |   |   |   | 5.56 | % |   | $ | 434,442 |   |   | $ | 14,095 |   |   |   | 6.49 | % |
| Mortgage-backed securities                                               |   |                       | 85,533  |   |     |   | 1,194 |   |   |   | 2.79 | % |   |   | 70,664 |   | (1) |   | 1,772 |   |   |   | 5.02 | % |
| Investments securities and other interest-earning assets                 |   |                       | 43,570  |   |     |   | 150 |   |   |   | 0.69 | % |   |   | 8,996 |   | (1) |   | 174 |   |   |   | 3.88 | % |
|   Total interest earning assets                                |   |                       | 470,376 |   |     |   | 10,829 |   |   |   | 4.60 | % |   |   | 514,102 |   |   |   | 16,041 |   |   |   | 6.24 | % |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest earning assets                                              |   |                       | 14,743  |   |     |   |   |   |   |   |   |   |   |   | 12,016 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                             |   | $                          | 485,119 |   |     |   |   |   |   |   |   |   |   | $ | 526,118 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Bearing Liabilities:                                            |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                         |   | $                          | 67,496  |   |     |   | 132 |   |   |   | 0.39 | % |   | $ | 62,189 |   |   |   | 193 |   |   |   | 0.62 | % |
| Money market/NOW accounts                                                |   |                       | 86,103  |   |     |   | 280 |   |   |   | 0.65 | % |   |   | 81,960 |   |   |   | 512 |   |   |   | 1.25 | % |
| Certificates of deposits                                                 |   |                       | 255,857 |   |     |   | 2,549 |   |   |   | 1.99 | % |   |   | 258,847 |   |   |   | 3,310 |   |   |   | 2.56 | % |
|   Total interest-bearing deposits                              |   |                       | 409,456 |   |     |   | 2,961 |   |   |   | 1.45 | % |   |   | 402,996 |   |   |   | 4,015 |   |   |   | 2.00 | % |
| Borrowings                                                               |   |                       | 9,000   |   |     |   | 129 |   |   |   | 2.87 | % |   |   | 13,543 |   |   |   | 105 |   |   |   | 1.55 | % |
|   Total interest bearing liabilities                           |   |                       | 418,456 |   |     |   | 3,090 |   |   |   | 1.48 | % |   |   | 416,539 |   |   |   | 4,120 |   |   |   | 1.98 | % |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing liabilities:                                        |   |                       | 23,768  |   |     |   |   |   |   |   |   |   |   |   | 28,567 |   |   |   |   |   |   |   |   |   |
|   Total liabilities                                            |   |                       | 442,224 |   |     |   |   |   |   |   |   |   |   |   | 445,106 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholder’s equity                                               |   |                       | 42,895  |   |     |   |   |   |   |   |   |   |   |   | 81,012 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total liabilities & stockholder’s equity           |   | $                          | 485,119 |   |     |   |   |   |   |   |   |   |   | $ | 526,118 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                      |   |                       |    |   |     | $      | 7,739 |   |   |   |   |   |   |   |   |   |   | $ | 11,921 |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average interest rate spread                                             |   |                       |    |   |     |   |   |   |   |   | 3.12 | % |   |   |   |   |   |   |   |   |   |   | 4.26 | % |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest-earning assets                                              |   | $                          | 51,920  |   |     |   |   |   |   |   |   |   |   | $ | 97,563 |   |   |   |   |   |   |   |   |   |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin                                                      |   |                       |    |   |     |   |   |   |   |   | 3.29 | % |   |   |   |   |   |   |   |   |   |   | 4.63 | % |
|                                                                     |   |                       |    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average interest earning assets to interest bearing liabilities |   |                       |    |   |     |   |   |   |   |   | 112.41 | % |   |   |   |   |   |   |   |   |   |   | 123.42 | % |

----

----

----

----

| 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 |
|---------|-------------------------------------------------------------|

| Company Purchases of Common Stock          |   |
|--------------------------------------------|--------|
| Period                                     |   | Totalnumber ofsharespurchased |   |   | Averagepricepaid pershare |   |   | Totalnumber ofsharespurchasedas part ofpubliclyannouncedplans orprograms |   |   | Approximatedollar value ofshares thatmay yet bepurchasedunder theplans orprograms |   |
| January 1, 2011 through January 31, 2011   |   |   | 6,737 |   |   | $ | 1.16 |   |   |   | 601,603 |   |   | $ | 772,409 |   |
| February 1, 2011 through February 28, 2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| March 1, 2011 through March 31, 2011       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                      |   |   | 6,737 |   |   | $ | 1.16 |   |   |   | 601,603 |   |   | $ | 772,409 |   |

| 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              |   |
|                           | Gregg J. Wagner                       |   |
|                           | President and Chief Executive Officer |   |

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