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                                                                    Exhibit 10.6

                              EMPLOYMENT AGREEMENT

     This Agreement is made effective as of the 12th day of September, 2006 by
and between Colonial Bank, F.S.B. (the "Bank"), a federally chartered stock
savings bank, with its principal administrative office at 85 West Broad Street,
Bridgeton, New Jersey 08302, and L. Joseph Stella, III ("Executive").

     WHEREAS, Executive is currently employed as the Executive Vice President
and Chief Financial Officer of the Bank and Colonial Bankshares, Inc. (the
"Company"), a federal mid-tier stock holding company which owns 100% of the
common stock of the Bank; and

     WHEREAS, the Bank desires to assure itself of the continued services of
Executive pursuant to the terms of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
Executive Vice President and Chief Financial Officer of the Bank and Executive
Vice President and Chief Financial Officer of the Company. During the period of
his employment hereunder, except for periods of absence occasioned by illness,
reasonable vacation periods and reasonable leaves of absence, Executive shall
faithfully perform his duties hereunder and shall perform the administrative and
management services for the Bank that are customarily performed by persons in a
similar executive officer capacity. Executive shall be responsible for
overseeing and managing the financial operations and functions of the Bank,
including participating in determining deposit and loan rates, providing
guidance regarding investment decisions, serving as a trustee of the Bank's
pension plan, assisting in negotiating leases and providing direction for the
development of the Bank's business plans. Executive shall also be responsible
for developing the fiscal plans and policies of the Bank, for preparing the
monthly, quarterly and annual financial statements of the Bank and the Company
and for reviewing such financial statements with the Board of Directors and
management of the Bank and the Company. Executive also agrees to serve, if
elected, as a director of the Company or the Bank, and as an officer and
director of the any subsidiary or affiliate of the Bank.

2.   TERM OF EMPLOYMENT

     The term of this Agreement and the period of Executive's employment
hereunder shall begin as of the date first above written and shall continue for
twenty-four (24) full calendar months thereafter. Commencing on January 1, 2007
and continuing on January 1 of each year thereafter (the "Anniversary Date"),
this Agreement shall renew for an additional year such that the remaining term
shall be two (2) years unless written notice of non-renewal ("Non-Renewal
Notice") is provided to Executive at least thirty (30) days and not more than
sixty (60) days prior to any such Anniversary Date. At least thirty (30) days
prior to each Anniversary Date, the President of the Bank or the Compensation
Committee of the Board will conduct a comprehensive performance evaluation and
review of Executive for purposes of determining

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whether to renew this Agreement and shall make a recommendation to the Board,
and the results thereof and the Board's decision shall be included in the
minutes of the Board's meeting.

3.   COMPENSATION AND REIMBURSEMENT

     (a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 1. The Bank shall
pay Executive as compensation a salary of not less than $126,036.20 per year
("Base Salary"). Such Base Salary shall be payable weekly. During the period of
this Agreement, Executive's Base Salary shall be reviewed at least annually; the
first such review will be made no later than January 31 of each year during the
term of this Agreement and shall be effective from the first day of said month
through the end of the calendar year. Such review shall be conducted by the
President or a committee designated by the President, and the President or the
committee may increase, but not decrease, Executive's Base Salary (any increase
in Base Salary shall become the "Base Salary" for purposes of this Agreement).
In addition to the Base Salary provided in this Section 3(a), the Bank shall
provide Executive with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank, on the same basis (including cost) as
such benefits are provided to other officers of the Bank.

     (b) In addition to Base Salary provided for in Section 3(a) above, the Bank
will provide Executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving benefit from immediately prior to the beginning of the term
of this Agreement, and the Bank will not, without Executive's prior written
consent, make any changes in such plans, arrangements or perquisites which would
adversely affect Executive's rights or benefits thereunder. Without limiting the
generality of the foregoing provisions of this Section 3(b), Executive will be
entitled to participate in or receive benefits under any employee benefit plans
including but not limited to, retirement plans, supplemental retirement plans,
pension plans, profit-sharing plans, employee stock ownership plans, stock
plans, health-and-accident plans, medical coverage or any other employee benefit
plan or arrangement made available by the Bank in the future to its senior
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Executive will be entitled to incentive compensation and bonuses
as provided in any plan of the Bank in which Executive is eligible to
participate (and he shall be entitled to a pro rata distribution under any
incentive compensation or bonus plan as to any year in which a termination of
employment occurs, other than Termination for Cause). Nothing paid to Executive
under any such plan or arrangement will be deemed to be in lieu of other
compensation to which Executive is entitled under this Agreement.

     (c) Executive shall be entitled to paid time off in accordance with the
standard policies of the Bank for senior officers, but in no event less than
thirty (30) days paid time off during each year of employment. Executive shall
receive his Base Salary and other benefits during periods of paid time off.
Executive shall also be entitled to paid legal holidays in accordance with the
policies of the Bank. Executive shall also be entitled to sick leave in
accordance with the policies of the Bank, but in no event less than the number
of days of sick leave per year to which Executive was entitled at the Effective
Date of this Agreement.


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4.   OUTSIDE ACTIVITIES

     Executive may serve as an officer or member of the board of directors of
business, community and charitable organizations subject in each case to the
prior approval of the Board, provided that in each case such service shall not
materially interfere with the performance of his duties under this Agreement or
present any conflict of interest. Executive shall provide to the Board annually
a list of all organizations for which Executive serves as a director, officer or
in a similar capacity, for purposes of obtaining the Board's approval of
Executive's service to such organizations. Such service to and participation in
outside organizations shall be presumed for these purposes to be for the benefit
of the Bank, and the Bank shall reimburse Executive for his reasonable expenses
associated therewith, provided such expenses are consistent with and
reimbursement is made pursuant to the Bank's Expense Policy. Executive shall
provide to the Chairman of the Bank or a committee of the Board of Directors of
the Bank, at least quarterly, a list of expenses incurred by Executive pursuant
to this Section 4, for purposes of determining the reasonableness of such
expenses.

5.   WORKING FACILITIES AND EXPENSES

     Executive's principal place of employment shall be at the Bank's principal
executive offices. The Bank shall provide Executive, at his principal place of
employment, with a private office, stenographic services and other support
services and facilities suitable to his position with the Bank and necessary or
appropriate in connection with the performance of his duties under this
Agreement. The Bank shall reimburse Executive for his ordinary and necessary
business expenses incurred in connection with the performance of his duties
under this Agreement, including, without limitation, fees for memberships in
such clubs and organizations that Executive and the Board mutually agree are
necessary and appropriate to further the business of the Bank, and travel and
reasonable entertainment expenses, provided such expenses are consistent with
and reimbursement is made pursuant to the Bank's Expense Policy.

6.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

     (a) The provisions of this Section 6 shall apply upon the occurrence of an
Event of Termination (as herein defined) during Executive's term of employment
under this Agreement. As used in this Agreement, an "Event of Termination" shall
mean and include any one or more of the following:

     (i)   the termination by the Bank or the Company of Executive's full-time
           employment hereunder for any reason other than (A) Disability or
           Retirement, as defined in Section 7 below, or (B) Termination for
           Cause as defined in Section 8 hereof; or

     (ii)  Executive's resignation from the Bank's employ upon any:

           (A)  failure to elect or reelect or to appoint or reappoint Executive
                as Executive Vice President and Chief Financial Officer;

           (B)  material change in Executive's function, duties, or
                responsibilities, which change would cause Executive's position
                to become one of lesser responsibility, importance, or scope
                from the position and attributes thereof described in Section 1,
                above;


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           (C)  liquidation or dissolution of the Bank or Company other than
                liquidations or dissolutions that are caused by reorganizations
                that do not affect the status of Executive;

           (D)  reduction in Executive's annual compensation or benefits or
                relocation of Executive's principal place of employment by more
                than 25 miles from its location as of the date of this
                Agreement; or

           (E)  material breach of this Agreement by the Bank.

           Upon the occurrence of any event described in clauses (ii) (A), (B),
           (C), (D) or (E), above, Executive shall have the right to elect to
           terminate his employment under this Agreement by resignation upon
           sixty (60) days prior written notice given within a reasonable period
           of time not to exceed four (4) calendar months after the initial
           event giving rise to said right to elect. Notwithstanding the
           preceding sentence, in the event of a continuing breach of this
           Agreement by the Bank, Executive, after giving due notice within the
           prescribed time frame of an initial event specified above, shall not
           waive any of his rights solely under this Agreement and this Section
           6 by virtue of the fact that Executive has submitted his resignation
           but has remained in the employment of the Bank and is engaged in good
           faith discussions to resolve any occurrence of an event described in
           clauses (A), (B), (C), (D) or (E) above.

     (iii) Executive's involuntary termination by the Bank or the Company on the
           effective date of, or at any time following, a Change in Control, or
           (B) Executive's resignation from employment with the Bank or the
           Company following a Change in Control as a result of the Bank's (or
           any successor thereto) failure to renew or extend this Agreement, or
           (C) Executive's resignation from employment with the Bank or the
           Company (or any successor thereto) following a Change in Control as a
           result of any event described in Section 6(a)(ii)(A), (B), (C), (D)
           or (E) above. For these purposes, a Change in Control of the Bank or
           the Company shall mean a change in control of a nature that: (i)
           would be required to be reported in response to Item 5.01 of the
           current report on Form 8-K, as in effect on the date hereof, pursuant
           to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
           "Exchange Act"); or (ii) without limitation such a Change in Control
           shall be deemed to have occurred at such time as (a) any "person" (as
           the term is used in Sections 13(d) and 14(d) of the Exchange Act) is
           or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
           Exchange Act), directly or indirectly, of securities of the Company
           representing 25% or more of the combined voting power of Company's
           outstanding securities, except for any securities purchased by the
           Bank's employee stock ownership plan or trust; or (b) individuals who
           constitute the Board on the date hereof (the "Incumbent Board") cease
           for any reason to constitute at least a majority thereof, PROVIDED
           that any person becoming a director subsequent to the date hereof
           whose election was approved by a vote of at least three-quarters of
           the directors comprising the Incumbent Board, or whose nomination for
           election by the Company's stockholders was approved by the same
           Nominating Committee serving under an Incumbent Board, shall be, for
           purposes of this clause (b), considered as though he were a member of
           the Incumbent Board; or (c) a plan of reorganization, merger,
           consolidation, sale of


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           all or substantially all the assets of the Bank or the Company or
           similar transaction in which the Bank or Company is not the surviving
           institution occurs or is effected; or (d) a tender offer is made for
           25% or more of the voting securities of the Company and the
           shareholders owning beneficially or of record 25% or more of the
           outstanding securities of the Company have tendered or offered to
           sell their shares pursuant to such tender offer and such tendered
           shares have been accepted by the tender offeror. Notwithstanding
           anything in this subsection to the contrary, a Change in Control
           shall not be deemed to have occurred upon the conversion of the
           Company's mutual holding company parent to stock form, or in
           connection with any reorganization used to effect such a conversion.

     (b) Upon the occurrence of an Event of Termination, as defined in Section
6(a)(i), (ii) or (iii), on the Date of Termination, as defined in Section 9(b),
the Bank shall pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, his earned but unpaid salary as of the Date
of Termination of employment with the Bank and a sum equal to two (2) times the
sum of (i) Executive's Base Salary and (ii) the highest rate of bonus awarded to
Executive during the prior three years. Any payments hereunder shall be made in
a lump sum, within thirty (30) days after the Date of Termination, or in the
event Section 409A of the Internal Revenue Code (the "Code") applies, no later
than the first day of the seventh month following the Date of Termination. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment.

     (c) Upon the occurrence of an Event of Termination, the Bank will cause to
be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Bank for Executive prior to his
termination. Such coverage shall continue at the Bank's expense for twenty-four
(24) months from the Date of Termination.

     (d) Notwithstanding the preceding paragraphs of this Section, in the event
that the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the "Termination Benefits") would be deemed to include an
"excess parachute payment" under Section 280G of the Code or any successor
thereto, then such Termination Benefits will be reduced to an amount (the
"Non-Triggering Amount"), the value of which is one dollar ($1.00) less than an
amount equal to the total amount of payments permissible under Section 280G of
the Code or any successor thereto.

7.   TERMINATION UPON RETIREMENT, DISABILITY OR DEATH

     For purposes of this Agreement, termination by the Bank of Executive's
employment based on "Retirement" shall mean termination of Executive's
employment by the Board of Directors of the Bank and the Board of Directors of
the Company upon Executive's attainment of age 65, or such later date as
determined by the Board of Directors of the Bank. Upon termination of
Executive's employment because of Retirement, Executive shall be entitled to all
benefits under any retirement plan of the Bank and other plans to which
Executive is a party, but Executive shall not be entitled to the Termination
Benefits specified in Sections 6(b) and 6(c) hereof.


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     In the event Executive suffers a "Disability" rendering him unable to
perform his duties under this Agreement on a full time basis for a period of six
(6) consecutive months by reason of illness or other physical or mental
disability, the Bank may terminate this Agreement and Executive shall receive
the benefits provided under any disability program sponsored by the Company or
the Bank. To the extent such benefits are less than Executive's Base Salary as
defined in Section 3(a) hereof on the Date of Termination, the Bank shall: (i)
continue to pay Executive the difference between (x) the benefits provided under
any disability program sponsored by the Company or the Bank and (y) his Base
Salary as defined in Section 3(a), for a period of one (1) year following the
Date of Termination by reason of Disability; and (ii) cause to be continued
life, medical and dental coverage substantially comparable, as reasonably or
customarily available, to the coverage maintained by the Bank for Executive
prior to the Date of Termination due to Executive's Disability (except to the
extent such coverage may be changed in its application to all Bank employees or
is not available on an individual basis to an employee terminated for
Disability), for the remaining term of the Agreement or one (1) year, whichever
is the longer period of time.

     In the event of Executive's death during the term of the Agreement, his
estate, legal representatives or named beneficiaries (as directed by Executive
in writing) shall be paid Executive's Base Salary as defined in Paragraph 3(a)
at the rate in effect at the time Executive's death for a period of one (1) year
from the date of Executive's death, and the Bank will continue to provide
medical, dental and other insurance benefits normally provided to Executive's
family for one (1) year after Executive's death.

8.   TERMINATION FOR CAUSE

     (a) The term "Termination for Cause" shall mean termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than minor
traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement. In determining incompetence,
the acts or omissions shall be measured against standards generally prevailing
in the savings institutions industry.

     (b) The Bank may not terminate Executive for Cause unless and until there
shall have been delivered to him a Notice of Termination which shall include a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the Board, finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. Notwithstanding anything in this Agreement to
the contrary, Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause. Any stock options
granted to Executive under any stock option plan of the Bank, the Company or any
subsidiary or affiliate thereof, shall become null and void effective upon
Executive's receipt of Notice of Termination for Cause pursuant to Section 9
hereof, and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause. Any unvested stock awards granted to Executive under any
stock incentive plan of the Bank or the Company shall be forfeited. In the event
of Executive's Termination for Cause, if Executive is a director of the Company,
the Bank or any affiliate thereof, Executive shall resign as a director of each
such entity effective upon the date of Termination for Cause.


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9.   NOTICE

     (a) Any termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.

     (b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that he shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period), and (B) if his
employment is terminated for any other reason, the date specified in the Notice
of Termination.

     (c) If the party receiving a Notice of Termination desires to dispute or
contest the basis or reasons for termination, the party receiving the Notice of
Termination must notify the other party within thirty (30) days after receiving
the Notice of Termination that such a dispute exists, and shall pursue the
resolution of such dispute in good faith and with reasonable diligence pursuant
to Section 20 of this Agreement. During the pendency of any such dispute,
neither the Company nor the Bank shall be obligated to pay Executive
compensation or other payments beyond the Date of Termination. Any amounts paid
to Executive upon resolution of such dispute under this Section shall be offset
against or reduce any other amounts due under this Agreement.

10.  POST-TERMINATION OBLIGATIONS

     (a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section during the
term of this Agreement and for one (1) full year after the expiration or
termination hereof.

     (b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party.

11.  NON-COMPETITION

     (a) Upon any termination of Executive's employment hereunder, other than a
termination, (whether by resignation, voluntary or involuntary) in connection
with a Change in Control, as a result of which the Bank is paying Executive
benefits under Section 6 of this Agreement, Executive agrees not to compete with
the Bank and/or the Company for a period of one (1) year following such
termination within twenty-five (25) miles of any existing branch of the Bank or
any subsidiary of the Company or within twenty-five (25) miles of any office for
which the Bank, the Company or a Bank subsidiary of the Company has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board. Executive agrees that during such period and within
said area, cities, towns and counties, Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the depository, lending or other business
activities of the Bank and/or the Company. The parties hereto, recognizing that
irreparable injury will result to the


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Bank and/or the Company, its business and property in the event of Executive's
breach of this Subsection 11(a) agree that in the event of any such breach by
Executive, the Bank and/or the Company will be entitled, in addition to any
other remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employers,
employees and all persons acting for or with Executive. Executive represents and
admits that Executive's experience and capabilities are such that Executive can
obtain employment in a business engaged in other lines and/or of a different
nature than the Bank and/or the Company, and that the enforcement of a remedy by
way of injunction will not prevent Executive from earning a livelihood. Nothing
herein will be construed as prohibiting the Bank and/or the Company from
pursuing any other remedies available to the Bank and/or the Company for such
breach or threatened breach, including the recovery of damages from Executive.

     (b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever (except
for such disclosure as may be required to be provided to any federal banking
agency with jurisdiction over the Bank or Executive). Notwithstanding the
foregoing, Executive may disclose any knowledge of banking, financial and/or
economic principles, concepts or ideas which are not solely and exclusively
derived from the business plans and activities of the Bank, and Executive may
disclose any information regarding the Bank or the Company which is otherwise
publicly available. In the event of a breach or threatened breach by Executive
of the provisions of this Section, the Bank will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, the knowledge of the
past, present, planned or considered business activities of the Bank or
affiliates thereof, or from rendering any services to any person, firm,
corporation, other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.

12.  SOURCE OF PAYMENTS

     (a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive
and, if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

     (b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under an Employment Agreement with the Company, if any,
such compensation payments and benefits paid the Company will be subtracted from
any amounts due simultaneously to Executive under similar provisions of this
Agreement. Payments pursuant to this Agreement and a Company Employment
Agreement, if any, shall be allocated in proportion to the level of activity and
the time expended on such activities by Executive as determined by the Company
and the Bank on a quarterly basis.


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13.  EFFECT ON EMPLOYEE BENEFITS PLANS OR PROGRAMS

     The Bank's or the Company's Board of Directors may terminate Executive's
employment at any time, but any termination of Executive's employment, other
than a Termination for Cause, shall have no effect on or prejudice the vested
rights of Executive under the Company's or the Bank's qualified or non-qualified
retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group
life, health (including hospitalization, medical and major medical), dental,
accident and long term disability insurance plans or other employee benefit
plans or programs, or compensation plans or programs in which Executive was a
participant. Executive shall not have the right to receive any compensation or
other benefits for any period after Termination for Cause as defined in Section
8 hereinabove, except as otherwise required by applicable law.

14.  REQUIRED REGULATORY PROVISIONS

     (a) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 USC Section 1818(e)(3)) or 8(g)(1) (12 USC Section
1818(g)(1)) of the Federal Deposit Insurance Act ("FDIA"), as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay Executive all or part of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

     (b) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) (12 USC Section 1818(e)(4)) or 8(g)(1) (12 USC Section
1818(g)(1)) of FDIA, all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

     (c) If the Bank is in default as defined in Section 3(x)(1) (12 USC Section
1813(x)(1)) of FDIA, all obligations under this Agreement shall terminate as of
the date of default, but this paragraph shall not affect any vested rights of
the contracting parties.

     (d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank, (i) by the Director of OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) (12 USC
Section 1823(c)) of FDIA; or (ii) by the Director of OTS or his or her designee
at the time the Director of OTS or his or her designee approves a supervisory
merger to resolve problems related to operations of the Bank or when the Bank is
determined by the Director of OTS or his or her designee to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

     (e) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Company, whether pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with Section 18(k) of FDIA,
12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12
C.F.R. Part 359.


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15.  NO ATTACHMENT

     (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank and the Company and their respective successors and assigns.

16.  ENTIRE AGREEMENT; MODIFICATION AND WAIVER

     (a) This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supercedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof, except that the parties acknowledge that this Agreement shall not affect
any of the rights and obligations of the parties under any agreement or plan
entered into with or by the Company pursuant to which the Executive may receive
compensation or benefits except as set forth in Section 12(b) hereof.

     (b) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

     (c) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

17.  SEVERABILITY

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

18.  HEADINGS FOR REFERENCE ONLY

     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

19.  GOVERNING LAW

     This Agreement shall be governed by the laws of the State of New Jersey but
only to the extent not superseded by federal law.


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20.  ARBITRATION

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted by one
arbitrator mutually agreed upon by the Executive and the Bank. The arbitration
shall occur in a location in Cumberland County, New Jersey, in accordance with
the American Arbitration Association's National Rules for the Resolution of
Employment Disputes then in effect. Judgment may be entered on the arbitrator's
award in any court having jurisdiction.

21.  PAYMENT OF LEGAL FEES

     All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in Executive's favor.

22.  INDEMNIFICATION

     During the term of this Agreement and for a period of six (6) years
thereafter, the Bank or the Company shall provide Executive (including his
heirs, executors and administrators) with coverage under a standard directors
and officers liability insurance policy at its expense. Subject to 12 C.F.R.
Section 545.121, the Bank or the Company shall indemnify Executive (and his
heirs, executors and administrators) to the fullest extent permitted under
federal law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the Bank or
the Company (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys fees and
the cost of reasonable settlements (such settlements must be approved by the
Board of Directors of the Bank or the Company). If such action, suit or
proceeding is brought against Executive in his capacity as an officer or
director of the Bank, however, such indemnification shall not extend to matters
as to which Executive is finally adjudged to be liable for willful misconduct in
the performance of his duties.

23.  SUCCESSOR AND ASSIGNS

     The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Bank's and the Company's
obligations under this Agreement, in the same manner and to the same extent that
the Bank and/or the Company would be required to perform if no such succession
or assignment had taken place.


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<PAGE>

SIGNATURES

     IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by
its duly authorized officer, and Executive has signed this Agreement, on the day
and date first above written.

ATTEST:                                 COLONIAL BANK, F.S.B.


/s/ Marie E. Davis                      By: /s/ Frank M. Hankins
-------------------------------------       ------------------------------------
Secretary                                   Frank M. Hankins
                                            Chairman


WITNESS:                                EXECUTIVE


/s/ Richard D. Peale                    By: /s/ L. Joseph Stella, III
-------------------------------------       ------------------------------------
                                            L. Joseph Stella, III
                                            Executive Vice President and Chief
                                            Financial Officer


ATTEST:                                 COLONIAL BANKSHARES, INC.
                                        (The Company is executing this Agreement
                                        only for the purpose of acknowledging
                                        the obligations of the Company
                                        hereunder.)


/s/ Marie E. Davis                      By: /s/ Frank M. Hankins
-------------------------------------       ------------------------------------
Secretary                                   Frank M. Hankins
                                            Chairman


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