SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]     Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        For the quarterly period ended March 31, 2010
                                       OR
[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        For the transition period from           to
                                      ----------   ------------------

                          Commission File No. 001-52751

                         FSB Community Bankshares, Inc.
                         ------------------------------
             (Exact name of registrant as specified in its charter)

          United States                                   74-3164710
-------------------------------                     ---------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification Number)

        45 South Main Street, Fairport, New York                     14450
        -----------------------------------------                    -----
        (Address of Principal Executive Offices)                    Zip Code

                                 (585) 223-9080
                                 --------------
                         (Registrant's telephone number)



                                       N/A
             ------------------------------------------------------
          (Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days.
YES   X      NO        .
    ------      -------

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).
YES          NO        .
    ------      -------

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

        Large accelerated filer   |_|   Accelerated filer      |_|
        Non-accelerated filer     |_|   Smaller reporting company  |X|
(Do not check if smaller reporting company)

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


     As of May 14, 2010 there were 1,785,000 shares of the  Registrant's  common
stock, par value $0.10 per share, outstanding, 946,050 of which were held by FSB
Community Bankshares, MHC, the Registrant's mutual holding company.


<PAGE>


[PG NUMBER]




                         FSB Community Bankshares, Inc.
                                    FORM 10-Q

                                      Index
                                      -----

                                                                            Page
                                                                            ----

                          Part I. Financial Information


Item 1.         Consolidated Financial Statements (unaudited)

                Consolidated Balance Sheets as of March 31, 2010
                and December 31, 2009                                          1

                Consolidated Statements of Income for the Three Months Ended
                March 31, 2010 and 2009                                        2

                Consolidated Statements of Stockholders' Equity for the Three
                Months Ended March 31, 2010 and 2009                           3

                Consolidated Statements of Cash Flows for the Three Months Ended
                March 31, 2010 and 2009                                        4

                Notes to Consolidated Financial Statements                     6

Item 2.         Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                     15

Item 3.         Quantitative and Qualitative Disclosures about Market Risk    23

Item 4T.        Controls and Procedures                                       24

                           Part II. Other Information

Item 1.         Legal Proceedings                                             25

Item 1A.        Risk Factors                                                  25

Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds   25

Item 3.         Defaults upon Senior Securities                               25

Item 4.         [Reserved]                                                    25

Item 5.         Other Information                                             25

Item 6.         Exhibits                                                      26

                Signature Page                                                27



<PAGE>


                          Part I. Financial Information

Item 1.  Consolidated Financial Statements

                         FSB COMMUNITY BANKSHARES, INC.

                           Consolidated Balance Sheets
                March 31, 2010 and December 31, 2009 (unaudited)
                    (Dollars in thousands, except share data)

<TABLE>
<CAPTION>
<S>     <C>                                                                    <C>                          <C>


                                                                                March 31,               December 31,
                                 Assets                                           2010                    2009
                                                                          ------------------          ------------------

Cash and due from banks                                                   $     5,941                     $     3,385
Interest-earning demand deposits                                                5,502                           2,580
                                                                          ------------------          ------------------
Cash and Cash Equivalents                                                      11,443                           5,965
Securities available for sale                                                  77,861                          76,111
Securities held to maturity (fair value 2010 $5,391; 2009 $6,222)               5,295                           6,137
Investment in FHLB stock                                                        1,736                           1,886
Loans receivable, net of allowance for loan losses (2010 $371; 2009
     $368)                                                                    113,150                         116,372
Bank owned life insurance                                                       3,046                           3,013
Accrued interest receivable                                                     1,243                           1,156
Premises and equipment, net                                                     2,534                           2,556
Foreclosed real estate                                                             79                              79
Prepaid FDIC premium                                                              739                             793
Other assets                                                                      388                             375
                                                                          ------------------          ------------------
                     Total Assets                                         $   217,514                     $   214,443
                                                                          ==================          ==================


                       Liabilities & Stockholders' Equity

Deposits:
     Non-interest-bearing                                                 $     3,740                     $     3,955
     Interest-bearing                                                         159,450                         152,555
                                                                          ------------------          ------------------
                Total Deposits                                                163,190                         156,510

Long-term borrowings                                                           31,260                          34,590
Advances from borrowers for taxes and insurance                                 1,346                           2,012
Official bank checks                                                              470                             432
Other liabilities                                                                 592                             549
                                                                          ------------------          ------------------
                     Total Liabilities                                        196,858                         194,093
                                                                          ------------------          ------------------

                              Stockholders' Equity

Preferred Stock- no par- 1,000,000 shares authorized;                             --                              --
  no shares issued and outstanding
Common Stock- $0.10 par value - 10,000,000 shares authorized;
  1,785,000 shares issued and outstanding                                         179                             179
Additional paid-in-capital                                                      7,274                           7,275
Retained earnings                                                              13,350                          13,317
Accumulated other comprehensive income                                            439                             174
Unearned ESOP shares - at cost                                                   (586)                           (595)
                                                                          ------------------          ------------------
                     Total Stockholders' Equity                                20,656                          20,350
                                                                          ------------------          ------------------

                     Total Liabilities and Stockholders' Equity           $   217,514                 $       214,443
                                                                          ==================          ==================


See accompanying notes to consolidated financial statements
</TABLE>

                                       1
<PAGE>


                         FSB COMMUNITY BANKSHARES, INC.

                        Consolidated Statements of Income
             Three Months Ended March 31, 2010 and 2009 (unaudited)
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
<S>     <C>                                                                      <C>                     <C>

                                                                                2010                    2009
                                                                           ------------------       ------------------
Interest and Dividend Income
    Loans                                                                  $    1,593              $    1,907
    Securities - taxable                                                          447                     267
    Mortgage-backed securities                                                    217                     326
    Other                                                                           2                       1
                                                                           ------------------       ------------------
                 Total Interest and Dividend Income                             2,259                   2,501
                                                                           ------------------       ------------------
Interest expense
    Deposits                                                                      735                     879
    Borrowings:
          Short-term                                                                -                       1
          Long-term                                                               354                     424
                                                                           ------------------       ------------------
                Total Interest Expense                                          1,089                   1,304
                                                                           ------------------       ------------------
                Net Interest Income                                             1,170                   1,197
Provision for Loan Losses                                                           3                       6
                                                                           ------------------       ------------------
                Net Interest Income After Provision
                   for Loan Losses                                              1,167                   1,191
                                                                           ------------------       ------------------

Other Income
    Service fees                                                                   57                      49
    Fee income                                                                      6                      11
    Realized gain (loss) on sale of securities                                     (8)                      -
    Increase in cash surrender value of bank owned life insurance                  33                       -
    Realized gain on sale of  loans                                                14                      29
    Other                                                                          57                      45
               Total Other Income                                                 159                     134
                                                                           ------------------       ------------------

Other Expense
     Salaries and employee benefits                                               687                     693
     Occupancy expense                                                            150                     125
     Data processing costs                                                         17                      23
     Advertising                                                                   41                      32
     Equipment expense                                                            103                      90
     Electronic banking                                                            16                      20
     Directors' fees                                                               27                      28
     Mortgage fees and taxes                                                       30                      44
     FDIC premium expense                                                          57                      22
     Other expense                                                                175                     169
                                                                           ------------------       ------------------
               Total Other Expenses                                             1,303                   1,246
                                                                           -------------------     -------------------
               Income Before Income Taxes                                          23                      79

               Provision (Benefit) for Income Taxes                               (10)                     28
                                                                           -------------------     -------------------

               Net Income                                                  $       33              $       51
                                                                           ===================     ===================

               Earnings per common share                                   $     0.02              $     0.03
                                                                           ===================     ===================
</TABLE>

See accompanying notes to consolidated financial statements

                                       2
<PAGE>



                         FSB COMMUNITY BANKSHARES, INC.

                 Consolidated Statements of Stockholders' Equity
             Three Months Ended March 31, 2010 and 2009 (unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
<S>     <C>                                  <C>          <C>            <C>             <C>              <C>           <C>

                                                                                      Accumulated
                                                       Additional                      Other             Unearned
                                           Common       Paid in        Retained      Comprehensive        ESOP
                                            Stock       Capital        Earnings      Income (Loss)        Shares        Total
                                          --------   -----------     -----------   ----------------   ------------   -----------
Balance - January 1, 2009                 $   179    $     7,286     $    13,249   $          (43)    $     (630)    $    20,041
                                                                                                                     -----------
   Comprehensive income:
        Net income                             -            -                 51                -              -              51
        Change in net unrealized gain
              (loss) on securities
         available for sale, net of
         reclassification adjustment
         and taxes                             -            -                 -               291              -             291
                                                                                                                     -----------
       Total Comprehensive Income                                                                                            342

  ESOP shares committed to be
             released                          -             (3)              -                 -              9               6
                                          --------   -----------     -----------   ----------------   ------------   -----------
Balance - March 31, 2009                  $   179    $     7,283     $    13,300   $            248   $     (621)    $    20,389
                                          ========   ===========     ===========   ================   ============   ===========
Balance - January 1, 2010                 $   179    $     7,275     $    13,317   $            174   $     (595)    $    20,350
                                                                                                                     -----------
   Comprehensive income:
        Net income                             -            -                 33                -              -              33
        Change in net unrealized gain
         on securities available
         for sale, net of
         reclassification adjustment
         and taxes                             -            -                 -                 265            -             265
                                                                                                                     -----------
       Total Comprehensive Income                                                                                            298

  ESOP shares committed to be
       released                                -             (1)              -                 -              9               8
                                          --------   -----------     -----------   ----------------   ------------   -----------
Balance - March 31, 2010                  $    179   $     7,274     $    13,350   $            439   $     (586)    $    20,656
                                          ========   ===========     ===========   ================   ============   ===========

See accompanying notes to consolidated financial statements

</TABLE>


                                       3
<PAGE>


                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Cash Flows
             Three Months Ended March 31, 2010 and 2009 (unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>
<S>     <C>                                                                         <C>                    <C>

                                                                                       2010                   2009
                                                                                ------------------      -----------------
Cash Flows From Operating Activities
     Net income                                                                 $            33         $          51
     Adjustments to reconcile net income to net cash used by operating
         activities:
         Net amortization of premiums and discounts on investments                           280                   59
         Net increase in principal receivable on mortgage backed securities                 (480)                (260)
            Gain on sale of securities available for sale                                     (2)                   -
            Loss on sale of securities held to maturity                                       10                    -
            Gain on sale of loans                                                            (14)                 (29)
            Proceeds from loans sold                                                       2,125                4,788
            Loans originated for sale                                                     (2,111)              (4,759)
            Amortization of net deferred loan origination costs                               15                    6
            Depreciation and amortization                                                     78                   67
            Provision for loan losses                                                          3                    6
            Expense related to ESOP                                                            8                    6
            Deferred income tax expense                                                      (16)                 (13)
            Earnings on investment in bank owned life insurance                              (33)                   -
            Decrease (increase) in accrued interest receivable                               (87)                  26
            Increase in prepaid FDIC premium and other assets                                 45                   (9)
            Decrease in other liabilities                                                    (81)                (173)
                                                                                ------------------      -----------------
                        Net Cash Used By Operating Activities                               (227)                (234)
                                                                                ------------------      -----------------
Cash Flows From Investing Activities
     Purchases of securities available for sale                                          (21,506)             (16,427)
     Proceeds from maturities and calls of securities available for sale                  17,000                8,835
     Proceeds from sales of securities available for sale                                     11                  -
     Proceeds from principal paydowns on securities available for sale                     3,380                  794
     Proceeds from principal paydowns on securities held to maturity                         114                  188
     Proceeds from sales of securities held to maturity                                      686                   -
     Net decrease in loans                                                                 3,204                7,061
     Redemption of Federal Home Loan Bank stock                                              150                  322
     Purchase of premises and equipment                                                      (56)                 (23)
                                                                                ------------------      -----------------
                        Net Cash Provided By Investing Activities                          2,983                  750
                                                                                ------------------      -----------------
Cash Flows From Financing Activities
     Net increase in deposits                                                              6,680               10,873
     Net decrease in short-term borrowings                                                     -               (3,850)
     Repayments on long-term borrowings                                                   (3,330)              (3,313)
     Net decrease in advances from borrowers for taxes and insurance                        (666)                (715)
     Net increase (decrease) in official bank checks                                          38                  (80)
                                                                                ------------------      -----------------
                        Net Cash Provided By Financing Activities                          2,722                 2,915
                                                                                ------------------      -----------------
                        Net Increase in Cash
                                and Cash Equivalents                                       5,478                 3,431
Cash and Cash Equivalents- Beginning                                                       5,965                 3,173
                                                                                ------------------      -----------------
Cash and Cash Equivalents- Ending                                               $        11,443         $        6,604
                                                                                ==================      =================

</TABLE>
                                       4
<PAGE>



                         FSB COMMUNITY BANKSHARES, INC.

               Consolidated Statements of Cash Flows, (Continued)


                                                     2010               2009
                                                --------------  ---------------
Supplementary Cash Flows Information

        Interest paid                           $     1,101      $        1,294
                                                ==============  ================
        Income taxes paid                       $       -        $           85
                                                ==============  ================





See accompanying notes to consolidated financial statements




                                       5
<PAGE>



Notes to Consolidated Financial Statements

Note 1-Basis of Presentation

The accompanying  unaudited  consolidated  financial statements of FSB Community
Bankshares,   Inc.  and  its  wholly  owned  subsidiary  Fairport  Savings  Bank
(collectively,  the "Company")  have been prepared in accordance with accounting
principles  generally  accepted  in the  United  States of America  for  interim
financial  information  and  the  applicable   instructions  to  Form  10-Q  and
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  necessary  for a  complete  presentation  of  consolidated  financial
position,  results of  operations,  and cash flows in conformity  with generally
accepted accounting principles.  In the opinion of management,  all adjustments,
consisting  of  normal  recurring  accruals,  considered  necessary  for a  fair
presentation have been included.

The  Company  follows  accounting  standards  set  by the  Financial  Accounting
Standards  Board,  commonly  referred to as the "FASB".  The FASB sets generally
accepted accounting principles ("GAAP") that the Company follows.  References to
GAAP issued by the FASB in these footnotes are to the FASB Accounting  Standards
Codification,  sometimes  referred  to as the  Codification  or  ASC.  The  FASB
finalized the  Codification  effective for periods ending on or after  September
15, 2009.

The unaudited consolidated financial statements and "Management's Discussion and
Analysis of Financial  Condition  and Results of  Operations"  should be read in
conjunction with the Company's audited consolidated financial statements for the
year ended  December 31, 2009,  included in the Annual Report filed on Form 10-K
with the Securities and Exchange Commission ("SEC") on March 29, 2010.

Operating  results for the three months ended March 31, 2010 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2010.

The  consolidated  financial  statements at March 31, 2010 and December 31, 2009
and for the three  months  ended March 31, 2010 and 2009 include the accounts of
the Company,  Fairport  Savings  Bank (the  "Bank") and the Bank's  wholly-owned
subsidiary, Oakleaf Services Corporation ("Oakleaf"). All inter-company balances
and  transactions  have been eliminated in  consolidation.  Certain amounts from
prior periods may have been reclassified,  when necessary, to conform to current
period presentation.

The Company has evaluated  subsequent  events through the date the  consolidated
financial statements were issued.


Note 2-Fair Value Measurement and Disclosure

Management  uses its best judgment in estimating the fair value of the Company's
financial instruments;  however, there are inherent weaknesses in any estimation
technique.  Therefore,  for  substantially all financial  instruments,  the fair
value estimates herein are not necessarily indicative of the amounts the Company
could have realized in a sale transaction on the dates indicated.  The estimated
fair value amounts have been measured as of their respective reporting dates and
have not  been  re-evaluated  or  updated  for  purposes  of these  consolidated
financial  statements  subsequent  to  those  respective  dates.  As  such,  the
estimated  fair  values  of  these  financial  instruments   subsequent  to  the
respective  reporting  dates may be different than the amounts  reported at each
reporting date.

The Company  follows ASC Topic 820,  Fair Value  Measurements  and  Disclosures,
which defines fair value, establishes a framework for measuring fair value under
GAAP,  and  expands  disclosures  about fair value  measurements.  ASC Topic 820
applies to other  accounting  pronouncements  that  require or permit fair value
measurements.
                                       6
<PAGE>
Note 2-Fair Value Accounting and Measurement (Continued)

     ASC Topic 820  establishes  a fair value  hierarchy  that  prioritizes  the
     inputs to valuation methods used to measure fair value. The hierarchy gives
     the highest  priority to  unadjusted  quoted  prices in active  markets for
     identical  assets or  liabilities  (Level 1  measurements)  and the  lowest
     priority to unobservable inputs (Level 3 measurements). The three levels of
     the fair value hierarchy under ASC Topic 820 are as follows:

          Level  1:  Unadjusted   quoted  prices  in  active  markets  that  are
          accessible at the measurement date for identical  unrestricted  assets
          or liabilities.

          Level 2: Quoted prices in markets that are not active,  or inputs that
          are observable  either directly or indirectly,  for  substantially the
          full term of the asset or liability.

          Level 3: Prices or valuation  techniques  that require inputs that are
          both significant to the fair value measurement and unobservable  (i.e.
          supported with little or no market activity).

     An asset or liability's  level within the fair value  hierarchy is based on
     the  lowest  level  of  input  that  is   significant  to  the  fair  value
     measurement.

     For assets  measured  at fair value on a  recurring  basis,  the fair value
     measurements  by level within the fair value  hierarchy used are as follows
     at March 31, 2010 and at December 31, 2009:


<TABLE>
<CAPTION>
<S>              <C>                             <C>              <C>                  <C>               <C>

                                 (In Thousands)
                  2010

     Securities Available for Sale:              Total            Level 1            Level 2            Level 3
                                                 ------           -------            -------            -------
       U.S. Government obligations              $56,794           $ 6,828            $49,966            $     -

       Mortgage-backed securities                21,067                -              21,067                  -
                                                 ------           -------            -------            -------
     Total Available for Sale Securities        $77,861          $  6,828            $71,033            $     -
                                                 ======           =======            =======            =======
                                 (In Thousands)
                  2009

     Securities Available for Sale:              Total            Level 1            Level 2            Level 3
                                                 ------           -------            -------            -------
              Equity securities                 $    12           $    12            $     -            $     -
       U.S. Government obligations               54,629             5,548             49,081                  -
       Mortgage-backed securities                21,470                 -             21,470                  -
                                                 ------           -------            -------            -------
   Total Available for Sale Securities          $76,111           $ 5,560            $70,551            $     -
                                                 ======           =======            =======            =======
</TABLE>


    There were no transfers between level 1 and level 2 during the quarter ended
    March 31, 2010. No assets or liabilities have been measured on a
    non-recurring basis at or for the quarter ended March 31, 2010 and at
    December 31, 2009.

                                       7
<PAGE>


Note 2-Fair Value Accounting and Measurement (Continued)

     FASB  ASC  Topic  825-10-50,  Disclosure  about  Fair  Value  of  Financial
     Instruments,  requires disclosure of fair value information about financial
     instruments,  whether or not recognized in the consolidated balance sheets,
     for which it is practicable  to estimate that value.  In cases where quoted
     market prices are not available,  fair values are based on estimates  using
     present  value  or  other  valuation   techniques.   Those  techniques  are
     significantly affected by the assumptions used, including the discount rate
     and estimates of future cash flows. In that regard,  the defined fair value
     estimates cannot be substantiated by comparison to independent markets and,
     in many  cases,  could  not be  realized  in  immediate  settlement  of the
     instrument.  ASC Topic 825-10-50 excludes certain financial instruments and
     all   non-financial   instruments   from   its   disclosure   requirements.
     Accordingly,  the aggregate  fair value amounts  presented do not represent
     the underlying value of the Company.

     The  following  methods  and  assumptions  were  used  by  the  Company  in
     estimating its fair value  disclosures  for financial  instruments at March
     31, 2010 and December 31, 2009:

Cash, Due from Banks, and Interest-Bearing Demand Deposits

     The carrying amounts of these assets approximate their fair values.

Investment Securities

     The fair value of securities available for sale (carried at fair value) and
     held to maturity  (carried at amortized  cost) are  determined by obtaining
     quoted market prices on nationally  recognized  securities exchanges (Level
     1), or matrix  pricing  (Level 2), which is a  mathematical  technique used
     widely in the industry to value debt securities without relying exclusively
     on quoted market prices for the specific  securities  but rather by relying
     on the  securities'  relationship  to other  benchmark  quoted prices.  For
     certain securities which are not traded in active markets or are subject to
     transfer  restrictions,  valuations  are  adjusted  to reflect  illiquidity
     and/or  non-transferability,  and such  adjustments  are generally based on
     available  market  evidence  (Level 3). In the  absence  of such  evidence,
     management's best estimate is used.  Management's best estimate consists of
     both internal and external support on certain Level 3 investments. Internal
     cash flow models using a present value  formula that  includes  assumptions
     market  participants  would use along with indicative exit pricing obtained
     from  broker/dealers  (where  available) are used to support fair values of
     certain  Level  3  investments.  The  Company  had no  Level  3  investment
     securities at March 31, 2010 or December 31, 2009.

Investment in FHLB Stock

     The carrying value of FHLB stock  approximates  its fair value based on the
     restricted nature of the FHLB stock.

Loans

     The fair values of loans held for investment are estimated using discounted
     cash flow  analyses,  using  market  rates at the  balance  sheet date that
     reflect the credit and interest rate-risk inherent in the loans.  Projected
     future cash flows are calculated  based upon  contractual  maturity or call
     dates,  projected repayments and prepayments of principal.  Generally,  for
     variable rate loans that reprice  frequently and with no significant change
     in credit risk, fair values are based on carrying values.

     There were no loans  held for sale at March 31,  2010 and at  December  31,
     2009.

Accrued Interest Receivable and Payable

     The carrying amount of accrued interest receivable and payable approximates
     fair value.
                                       8
<PAGE>

Deposits

     The  fair  values  disclosed  for  demand  deposits  (e.g.,  NOW  accounts,
     non-interest  checking,  regular  savings and certain types of money market
     accounts) are, by definition,  equal to the amount payable on demand at the
     reporting date (i.e.,  their carrying  amounts).  The carrying  amounts for
     variable-rate  certificates of deposit approximate their fair values at the
     reporting  date.  Fair  values for fixed rate  certificates  of deposit are
     estimated  using a discounted  cash flow  calculation  that applies  market
     interest rates  currently  being offered on  certificates  to a schedule of
     aggregated expected monthly maturities on time deposits.

Borrowings

     The fair values of FHLB long-term borrowings are estimated using discounted
     cash flow  analyses,  based on the quoted rates for new FHLB  advances with
     similar credit risk characteristics, terms and remaining maturity.

Off-Balance Sheet Instruments

     The fair  values  for  off-balance  sheet  financial  instruments  (lending
     commitments  and lines of credit) are  estimated  using the fees  currently
     charged  to enter into  similar  agreements,  taking  into  account  market
     interest rates,  the remaining  terms and present credit  worthiness of the
     counterparties.

The  carrying  amounts  and  estimated  fair values of the  Company's  financial
instruments at March 31, 2010 and December 31, 2009 are as follows:

<TABLE>
<CAPTION>
<S>     <C>                                             <C>                  <C>                 <C>                 <C>

                                                             March 31, 2010                      December 31, 2009
                                                   -----------------------------------    -----------------------------------
                                                      Carrying                 Fair           Carrying                Fair
                                                       Amount                  Value           Amount                Value
                                                   ----------------     --------------    -----------------    --------------
                                                                                (In Thousands)

Financial assets:
     Cash and due from banks                             $   5,941          $   5,941          $   3,385           $   3,385
     Interest bearing demand deposits                        5,502              5,502              2,580               2,580
     Securities available for sale                          77,861             77,861             76,111              76,111
     Securities held to maturity                             5,295              5,391              6,137               6,222
     FHLB stock                                              1,736              1,736              1,886               1,886
     Loans, net                                            113,150            116,451            116,372             118,883
     Accrued interest receivable                             1,243              1,243              1,156               1,156

Financial liabilities:
     Deposits                                              163,190            162,434            156,510             155,606
     Long-term borrowings                                   31,260             29,418             34,590              32,579
     Accrued interest payable                                  117                117                129                 129

Off-balance sheet instruments:
     Commitments to extend credit                                -                  -                  -                   -


</TABLE>
                                       9
<PAGE>

Note 3 - Securities

The amortized cost and estimated fair value of securities with gross  unrealized
gains and losses at March 31, 2010 and December 31, 2009 are as follows:

<TABLE>
<CAPTION>
<S>     <C>                                            <C>                  <C>                <C>                <C>

                                                                           Gross              Gross
                                                     Amortized          Unrealized         Unrealized             Fair
                                                        Cost               Gains             Losses              Value
                                                   ----------------   --------------    -----------------    --------------
                                                                                (In Thousands)
March 31, 2010:
     Available for Sale:
             U.S. Government obligations           $        56,534    $         261     $             (1)    $      56,794
             Mortgage-backed securities -
             residential                                    20,662              409                   (4)           21,067
                                                   ----------------   --------------    -----------------    --------------
                                                       $    77,196    $         670     $             (5)    $      77,861
                                                   ===============    ==============    =================     =============
     Held to Maturity:
         Mortgage-backed securities -
         residential                                  $      5,295    $          96     $              -      $      5,391
                                                   ===============    ==============    =================     =============
December 31, 2009:
     Available for Sale:
         Equity securities                         $             9    $           3     $              -      $         12
             U.S. Government obligations                    54,842              100                 (313)           54,629
             Mortgage-backed securities -
             residential                                    20,997              473                    -            21,470
                                                   ----------------   --------------    -----------------    --------------
                                                       $    75,848    $         576     $           (313)     $     76,111
                                                   ===============    ==============    =================     =============
     Held to Maturity:
         Mortgage-backed securities -
         residential                                  $      6,137    $          86     $             (1)     $       6,222
                                                   ===============    ==============    =================     =============
</TABLE>

Mortgage-backed  securities  consist of securities issued by FNMA, FHLMC,  GNMA,
and FFCB  (Federal  Farm Credit  Bank) that are  collateralized  by  residential
mortgages.

The amortized  cost and  estimated  fair value by  contractual  maturity of debt
securities at March 31, 2010 are shown below.  Actual maturities may differ from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations.
                                       10
<PAGE>

Note 3 - Securities (continued)
<TABLE>
<CAPTION>
<S>     <C>                                 <C>                  <C>                  <C>                   <C>

                                                    Available for Sale                     Held to Maturity
                                        ---------------------------------------   ------------------------------------
                                            Amortized           Estimated            Amortized            Estimated
                                              Cost             Fair Value               Cost             Fair Value
                                        ---------------   ---------------------   ----------------   -----------------
                                                      (In Thousands)                        (In Thousands)

Due in one year or less                 $          -      $               -       $            -     $              -
Due after one year through five years           8,849                   8,866                  -                    -
Due after five years through ten years         16,062                  16,114                  -                    -
Due after ten years                            31,623                  31,814                  -                    -
Mortgage-backed securities -
residential                                    20,662                  21,067              5,295                5,391
                                        ---------------   ---------------------   ----------------   -----------------
                                        $      77,196     $            77,861     $        5,295     $          5,391
                                        ===============   =====================   ================   =================
</TABLE>

For the three  months  ended March 31, 2010 there was a $10,573  gross  realized
loss on sale of  mortgage-backed  securities  held to  maturity  resulting  from
proceeds of $686,000,  and a $2,120 gross  realized gain on sale of FHLMC common
stock available for sale resulting from proceeds of $11,000.  In accordance with
accounting guidance,  the Company was able to sell securities classified as held
to maturity  after the Company had already  collected a substantial  portion (at
least 85%) of the principal outstanding at acquisition due either to prepayments
or to scheduled  principal and interest  payments on the debt securities.  There
were no sales of securities for the three months ended March 31, 2009.

No securities  were pledged to secure  public  deposits or for any other purpose
required or permitted by law at March 31, 2010 and December 31, 2009.

The following table shows gross unrealized losses and fair value,  aggregated by
investment category and length of time that individual securities have been in a
continuous unrealized loss position, at March 31, 2010 and December 31, 2009:
<TABLE>
<CAPTION>
<S>     <C>                         <C>           <C>              <C>              <C>           <C>             <C>

                                    Less than 12 Months               12 Months or More                    Total
                                -----------------------------   -----------------------------   ----------------------------
                                                   Gross                           Gross                          Gross
                                   Fair         Unrealized         Fair         Unrealized         Fair        Unrealized
                                   Value          Losses           Value          Losses           Value         Losses
                                -----------  ----------------   -------------  --------------   -----------  ----------------
                                                                      (In Thousands)

March 31, 2010:
     U.S. Government
         obligations            $     1,999   $            1    $          -   $           -    $     1,999  $          1
     Mortgaged-backed
         securities -
         residential                    980                4               -               -            980             4
                                -----------  ----------------   -------------  --------------   -----------  ----------------

                                $     2,979   $            5    $          -   $           -    $     2,979  $          5

                                ===========  ================   =============  ==============   ===========  =================

December 31, 2009:
     U.S. Government
         obligations            $    27,241  $           313    $          -               -    $    27,241   $       313
     Mortgaged-backed
         securities -
         residential                     442               1              18               -            460             1
                                -----------  ----------------   -------------  --------------   -----------  ----------------

                               $     27,683  $           314    $         18   $           -    $    27,701  $        314

                                ===========  ================   =============  ==============   ===========  =================
</TABLE>
                                       11
<PAGE>

Note 3 - Securities (continued)

Management evaluates securities for other-than-temporary  impairment at least on
a quarterly  basis, and more frequently when economic or market concerns warrant
such evaluation. Consideration is given to (1) the length of time and the extent
to which the fair value has been less than the  amortized  cost  basis,  (2) the
financial condition of the issuer (and guarantor, if any) and adverse conditions
specifically  related to the security,  industry or geographic area, (3) failure
of the issuer of the security to make scheduled interest or principal  payments,
(4) any  changes  to the rating of a security  by a rating  agency,  and (5) the
presence of credit enhancements,  if any, including the guarantee of the federal
government or any of its  agencies.  In 2009 and in the three month period ended
March 31, 2010,  the Company did not record an  other-than-temporary  impairment
charge.

At March 31, 2010,  two debt  securities and one  mortgage-backed  security have
been in a continuous  unrealized  loss position for less than twelve months.  No
debt  securities  or  mortgage-backed  securities  have  been  in  a  continuous
unrealized  loss position for more than twelve months.  The debt  securities and
mortgage-backed securities were issued by U.S. government sponsored agencies and
are paying in  accordance  with their  terms with no  deferrals  of  interest or
defaults.  As  management  believes the Company does not intend to sell and will
not be required to sell these  securities  prior to  recovery  or  maturity,  no
declines are deemed to be other than temporary.

Note 4 - Federal Home Loan Bank of New York Stock

Federal law requires a member  institution  of the Federal Home Loan Bank System
to hold stock of its  district  Federal Home Loan Bank  ("FHLB")  according to a
predetermined formula. This restricted stock is carried at cost.

Management  evaluates the FHLB stock for impairment in accordance  with FASB ASC
Topic  942-10-15,  Financial  Services - Depository  and  Lending.  Management's
determination  of whether this investment is impaired is based on its assessment
of the ultimate  recoverability of its cost rather than by recognizing temporary
declines in value.  The  determination of whether a decline affects the ultimate
recoverability of cost is influenced by criteria such as (1) the significance of
the decline in net assets of the FHLB as compared  to the capital  stock  amount
for  the  FHLB  and the  length  of  time  this  situation  has  persisted,  (2)
commitments  by the FHLB to make payments  required by law or regulation and the
level of such payments in relation to the operating performance of the FHLB, and
(3) the  impact of  legislative  and  regulatory  changes on  institutions  and,
accordingly, on the customer base of the FHLB.

No  impairment  charges  were  recorded  related to the FHLB stock for the three
month period ended March 31, 2010 and in 2009.

Note 5 - Comprehensive Income

Accounting  principles  generally  require that  recognized  revenue,  expenses,
gains, and losses be included in net income.  Although certain changes in assets
and  liabilities,  such as  unrealized  gains and losses on  available  for sale
securities,  are reported as a separate  component of the  stockholders'  equity
section of the consolidated  balance sheets,  such items, along with net income,
are components of comprehensive income.

The  components  of other  comprehensive  income and related tax effects for the
three months ended March 31, 2010 and 2009 are as follows:

                                       12
<PAGE>

Note 5 - Comprehensive Income (continued)


                                                      For the Three Months
                                                         Ended March 31,
                                                     2010              2009
                                                     ----              ----

Unrealized holding gain on available for sale
   securities                                   $      404       $        449
Reclassification adjustment for realized
   gain included in net income                          (2)                 -
                                                -------------    -------------
                 Net Unrealized Gain                   402                449

           Tax effect                                  137                158
                                                -------------    -------------
                  Net of tax amount             $      265       $        291
                                                =============    =============

Note 6 - Earnings Per Common Share

Basic earnings per common share are calculated by dividing the net income by the
weighted-average  number of common  shares  outstanding  during the period.  The
Company has not granted any restricted stock awards or stock options and, during
the three  months  ended March 31, 2010 and 2009,  had no  potentially  dilutive
common stock  equivalents.  Unallocated  common  shares held by the ESOP are not
included  in the  weighted-average  number  of  common  shares  outstanding  for
purposes of calculating earnings per common share until they are committed to be
released.  The weighted average common shares outstanding were 1,726,398 for the
three months ended March 31, 2010 and 1,722,900 for the three months ended March
31, 2009.

Note 7 - Recent Accounting Pronouncements

In January 2010,  the FASB issued  updated  guidance on "Equity,  Accounting for
Distributions to Stockholders with Components of Stock and Cash". The amendments
in this update clarify that the stock portion of a distribution  to stockholders
that allows them to elect to receive  cash or stock with a potential  limitation
on the total  amount of cash that all  stockholders  can elect to receive in the
aggregate is considered a share issuance that is reflected in earnings per share
prospectively  and is not a stock  dividend.  This update codifies the consensus
reached  in recent  accounting  guidance  for  Accounting  for Stock  Dividends,
Including  Distributions to Stockholders with Components of Stock and Cash. This
update is effective for interim and annual  periods  ending on or after December
15, 2009, and should be applied on a retrospective  basis.  The adoption of this
guidance did not have a material effect on the Company's consolidated results of
operations or financial position.

In January 2010, the FASB issued updated guidance on "Consolidation,  Accounting
and   Reporting   for   Decreases  in  Ownership  of  a  Subsidiary  -  A  Scope
Clarification".  This  update  clarifies  that  the  scope  of the  decrease  in
ownership  provisions  of  Subtopic  810-10 and  related  guidance  applies to a
subsidiary  or group of assets  that is a  business  or  nonprofit  activity;  a
subsidiary  that is a business or nonprofit  activity that is  transferred to an
equity method  investee or joint  venture;  and an exchange of a group of assets
that constitutes a business or nonprofit activity for a non-controlling interest
in an entity (including an equity method investee or joint venture). This update
also clarifies that the decrease in ownership  guidance in Subtopic  810-10 does
not apply to: (a) sales of in-substance real estate;  and (b) conveyances of oil
and gas  mineral  rights,  even  if  these  transfers  involve  businesses.  The
amendments in this update expand the

                                       13
<PAGE>
Note 7 - Recent Accounting Pronouncements (continued)

disclosure  requirements about deconsolidation of a subsidiary or de-recognition
of a group of assets to include  the  valuation  techniques  used to measure the
fair value of any retained investment;  the nature of any continuing involvement
with the  subsidiary or entity  acquiring  the group of assets;  and whether the
transaction that resulted in the deconsolidation or de-recognition was a related
party or whether  the former  subsidiary  or entity  acquiring  the assets  will
become a related party after the transaction. This update is effective beginning
in  the  period  that  the  entity   adopts  the   amendments   to  guidance  on
"Non-controlling  Interests in Consolidated  Financial Statements - an amendment
of ARB 51)". If an entity has previously  adopted this guidance,  the amendments
are effective  beginning in the first interim or annual  reporting period ending
on or after  December 15, 2009.  The amendments in this update should be applied
retrospectively  to  the  first  period  that  entity  adopts  the  guidance  on
"Non-controlling  Interests in Consolidated Financial  Statements".  The Company
does not believe that the adoption of this guidance will have a material  effect
on its consolidated results of operations or financial position.

The FASB has issued ASU 2010-06,  Fair Value Measurements and Disclosures (Topic
820):  Improving  Disclosures about Fair Value  Measurements.  This ASU requires
some new disclosures and clarifies some existing  disclosure  requirements about
fair  value  measurement  as set forth in  Codification  Subtopic  820-10 to now
require:

        o       A reporting  entity to disclose  separately the amounts of
                significant  transfers in and out of Level 1 and Level 2 fair
                value measurements and describe the reasons for the transfers;
                and

        o       In the reconciliation for fair value measurements using
                significant unobservable inputs, a reporting entity should
                present separately information about purchases, sales,
                issuances, and settlements.

In addition,  ASU 2010-06  clarifies the requirements of the following  existing
disclosures:

        o       For purposes of reporting fair value measurement for each class
                of assets and liabilities, a reporting entity needs to use
                judgment in determining the appropriate classes of assets and
                liabilities; and

        o       A reporting entity should provide disclosures about the
                valuation techniques and inputs used to measure fair value for
                both recurring and nonrecurring fair value measurements.

ASU 2010-06 is  effective  for interim and annual  reporting  periods  beginning
after December 15, 2009,  except for the  disclosures  about  purchases,  sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements.  Those  disclosures are effective for fiscal years beginning after
December 15, 2010,  and for interim  periods  within those fiscal  years.  Early
adoption is permitted.

The FASB has issued ASU 2010-09,  Subsequent  Events (Topic 855):  Amendments to
Certain  Recognition  and  Disclosure  Requirements.  The  amendments in the ASU
remove  the  requirement  for an SEC  filer to  disclose  a date  through  which
subsequent  events have been  evaluated  in both  issued and  revised  financial
statements. Revised financial statements include financial statements revised as
a result of either  correction of an error or retrospective  application of U.S.
GAAP.  The FASB  also  clarified  that if the  financial  statements  have  been
revised,  then an entity that is not an SEC filer should  disclose both the date
that the financial statements were issued or available to be issued and the date
the revised financial statements were issued or available to be issued.

The FASB believes these  amendments  remove  potential  conflicts with the SEC's
literature.  In addition,  the amendments in the ASU require an entity that is a
conduit  bond obligor for conduit  debt  securities  that are traded in a public
market  to  evaluate  subsequent  events  through  the date of  issuance  of its
financial  statements  and must disclose such date.

                                       14
<PAGE>
Note 7 - Recent  Accounting Pronouncements (continued)

All of the  amendments in the ASU were  effective  upon  issuance  (February 24,
2010)  except for the use of the issued date for  conduit  debt  obligors.  That
amendment is effective for interim or annual periods ending after June 15, 2010.

Note 8 - Formation of Subsidiary

On  August  14,  2009  the  Board of  Directors  of the  Bank  approved  through
resolution  the formation of a  wholly-owned  subsidiary to be known as Fairport
Mortgage Corp. to engage in the activities of residential  lending. The Bank has
applied and received  approvals by both the Office of Thrift  Supervision  (OTS)
and the New York State Banking Department to establish the subsidiary.

In January of 2010,  the Bank hired six mortgage loan  originators,  two support
staff and opened three mortgage loan origination offices located in Canandaigua,
Pittsford, and Watertown, New York. These eight employees are currently employed
by  the  Bank  until  the  mortgage  subsidiary  is  approved  by  the  FHA as a
non-supervised  loan  correspondent.  The process for  approval is  currently in
progress with the  anticipation  for  completion by June 30, 2010. At that time,
Fairport Mortgage Corp. will begin operating as a wholly owned subsidiary of the
Bank to broker mortgages directly to correspondent investors.


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

General

Throughout  the  Management's  Discussion and Analysis  ("MD&A"),  the term "the
Company" refers to the consolidated  entity of FSB Community  Bankshares,  Inc.,
Fairport  Savings  Bank,  and  Oakleaf  Services  Corporation,  a  wholly  owned
subsidiary  of  Fairport   Savings  Bank.  At  March  31,  2010,  FSB  Community
Bankshares,  MHC the  Company's  mutual  holding  company  parent,  held 946,050
shares,  or 53.0%,  of the  Company's  common stock,  engaged in no  significant
activities, and was not included in the MD&A.

Forward Looking Statements

This Quarterly Report contains forward-looking statements, within the meaning of
the  Private  Securities  Litigation  Reform Act of 1995.  Such  statements  are
subject to certain  risks and  uncertainties,  including,  among  other  things,
changes in  general  economic  conditions,  either  nationally  or in our market
areas,  that are worse than  expected;  competition  among  depository and other
financial  institutions;  inflation and changes in the interest rate environment
that  reduce our  margins or reduce  the fair  value of  financial  instruments;
adverse  changes  in the  securities  markets;  changes  in laws  or  government
regulations or policies affecting financial  institutions,  including changes in
regulatory  fees and  capital  requirements;  our  ability to enter new  markets
successfully and capitalize on growth opportunities; our ability to successfully
integrate acquired entities, if any; changes in consumer spending, borrowing and
savings habits; changes in accounting policies and practices,  as may be adopted
by the bank regulatory  agencies,  the Financial Accounting Standards Board, the
Securities and Exchange  Commission and the Public Company Accounting  Oversight
Board;  changes in our organization,  compensation and benefit plans; changes in
our financial  condition or results of operations that reduce capital  available
to pay dividends;  and changes in the financial condition or future prospects of
issuers of  securities  that we own,  that could cause actual  results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company wishes to caution readers not to place undue reliance on
any such forward-looking  statements,  which speak only as of the date made. The
Company  wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with  respect  to future  periods in any  current  statements.

                                       15
<PAGE>

Forward  Looking Statements (continued)

The Company does not undertake,  and  specifically  declines any obligation,  to
publicly  release  the  results  of  any  revisions  that  may  be  made  to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

Critical Accounting Policies


The  Company  follows  accounting  standard  set  by  the  Financial  Accounting
Standards  Board,  commonly  referred to as the "FASB".  The FASB sets generally
accepted accounting principles ("GAAP") that the Company follows.  References to
GAAP issued by the FASB in these footnotes are to the FASB Accounting  Standards
Codification, sometimes referred to as the Codification or ASC.

The most significant  accounting  policies followed by the Company are presented
in Note 1 to the  consolidated  financial  statements  included in the Company's
Annual Report filed on Form 10-K with the Securities and Exchange  Commission on
March 29, 2010.  These  policies,  along with the  disclosures  presented in the
other  consolidated  financial  statement notes and in this discussion,  provide
information  on  how  significant  assets  and  liabilities  are  valued  in the
consolidated financial statements and how those values are determined.  Based on
the valuation  techniques  used and the  sensitivity of  consolidated  financial
statement  amounts to the methods,  assumptions and estimates  underlying  those
amounts,  management has identified the  determination of the allowance for loan
losses,  the  evaluation  of  investment  securities  for   other-than-temporary
impairment and the valuation and recoverability of deferred tax assets to be the
accounting areas that require the most subjective and complex judgments,  and as
such could be the most subject to revision as new information becomes available.

     Allowance  for Loan  Losses.  The  allowance  for loan losses is the amount
estimated by management  as necessary to absorb  credit  losses  incurred in the
loan portfolio  that are both probable and  reasonably  estimable at the balance
sheet date. The amount of the allowance is based on significant  estimates,  and
the ultimate  losses may vary from such  estimates as more  information  becomes
available or conditions  change.  The  methodology for determining the allowance
for loan losses is considered a critical  accounting policy by management due to
the high degree of judgment  involved,  the subjectivity of the assumptions used
and the potential for changes in the economic  environment  that could result in
changes to the amount of the recorded allowance for loan losses.

As a substantial  percentage  of our loan  portfolio is  collateralized  by real
estate,  appraisals  of the  underlying  value of  property  securing  loans are
critical in determining the amount of the allowance required for specific loans.
Assumptions  are  instrumental  in determining  the value of properties.  Overly
optimistic  assumptions or negative changes to assumptions  could  significantly
affect the  valuation  of a property  securing a loan and the related  allowance
determined.   Management  carefully  reviews  the  assumptions  supporting  such
appraisals to determine that the resulting  values  reasonably  reflect  amounts
realizable on the related loans.

Management performs a quarterly  evaluation of the adequacy of the allowance for
loan  losses.  We consider a variety of factors in  establishing  this  estimate
including,  but  not  limited  to,  current  economic  conditions,   delinquency
statistics,   geographic   concentrations,   the  adequacy  of  the   underlying
collateral,  the financial  strength of the  borrower,  results of internal loan
reviews, and other relevant factors. This evaluation is inherently subjective as
it  requires  material  estimates  by  management  that  may be  susceptible  to
significant  change  based  on  changes  in  economic  and  real  estate  market
conditions.

The evaluation has specific,  general, and unallocated components.  The specific
component  relates to loans that are  classified  as doubtful,  substandard,  or
special  mention.  For such  loans  that are also  classified  as  impaired,  an
allowance is generally  established  when the  collateral  value of the impaired
loan is lower than the carrying value of that loan. The general component covers
non-classified  loans and is based on historical  loss  experience  adjusted for
qualitative factors. An unallocated component is

                                       16
<PAGE>
Critical Accounting Policies (continued)

maintained to cover  uncertainties  that could affect  management's  estimate of
probable losses. The unallocated  component of the allowance reflects the margin
of imprecision inherent in the underlying  assumptions used in the methodologies
for estimating specific and general losses in the portfolio.

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

     Other than temporary impairment.  When the fair value of a held to maturity
or  available  for sale  security  is less than its  amortized  cost  basis,  an
assessment is made at the balance sheet date as to whether  other-than-temporary
impairment (OTTI) is present.

The Company considers numerous factors when determining whether a potential OTTI
exists and the period over which the debt  security is expected to recover.  The
principal factors  considered are (1) the length of time and the extent to which
the fair value has been less than the  amortized  cost basis,  (2) the financial
condition  of  the  issuer  (and  guarantor,  if  any)  and  adverse  conditions
specifically  related to the security,  industry or geographic area, (3) failure
of the issuer of the security to make scheduled interest or principal  payments,
(4) any  changes  to the rating of a security  by a rating  agency,  and (5) the
presence of credit enhancements,  if any, including the guarantee of the federal
government or any of its agencies.  For debt  securities,  OTTI is considered to
have occurred if (1) the Company  intends to sell the  security,  (2) it is more
likely  than  not the  Company  will be  required  to sell the  security  before
recovery of its  amortized  cost basis,  or (3) if the present value of expected
cash flows is not sufficient to recover the entire amortized cost basis.

In  determining  whether OTTI has occurred  for equity  securities,  the Company
considers the applicable  factors  described above and the intent and ability of
the  Company  to  retain  its  investment  in the  issuer  for a period  of time
sufficient to allow for any anticipated recovery in fair value.

For  debt  securities,   credit-related  OTTI  is  recognized  in  income  while
noncredit-related  OTTI on  securities  not expected to be sold is recognized in
other  comprehensive  income  (loss).  Credit-related  OTTI is  measured  as the
difference  between the present  value of an impaired  security's  expected cash
flows and its amortized  cost basis.  Noncredit-related  OTTI is measured as the
difference  between the fair value of the security and its amortized  costs less
any  credit-related  losses  recognized.  For  securities  classified as held to
maturity,  the amount of OTTI recognized in other comprehensive income (loss) is
accreted to the  credit-adjusted  expected  cash flow amounts of the  securities
over  future  periods.  For  equity  securities,  the  entire  amount of OTTI is
recognized in income.

     Deferred Tax Assets. The deferred tax assets and liabilities  represent the
future tax return consequences of the temporary  differences,  which will either
be  taxable or  deductible  when the assets and  liabilities  are  recovered  or
settled.  Deferred tax assets are reduced by a valuation  allowance when, in the
opinion  of  management,  it is more  likely  than not that some  portion of the
deferred  tax assets will not be realized.  Deferred tax assets and  liabilities
are reflected at income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or settled. As changes in
tax laws or rates are enacted,  deferred tax assets and liabilities are adjusted
through the provision for income taxes.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

     Total Assets.  Total assets  increased by $3.1 million,  or 1.4%, to $217.5
million at March 31, 2010 from $214.4 million at December 31, 2009. The increase
in total assets primarily reflects  increases in cash and cash equivalents,  and
securities  available  for  sale,  partially  offset by  decreases  in net loans
receivable and securities held to maturity.

                                       17
<PAGE>

Comparison  of  Financial  Condition  at March 31,  2010 and  December  31, 2009
(continued)

Cash and cash equivalents  increased by $5.5 million,  or 91.8% to $11.4 million
at March 31, 2010 from $6.0 million at December 31, 2009.

Total securities  increased by $908,000,  or 1.1%, to $83.2 million at March 31,
2010 from $82.2 million at December 31, 2009. Securities classified as available
for sale  increased  $1.8 million to $77.9  million at March 31, 2010 from $76.1
million at December 31, 2009. The $1.8 million  increase was attributable to the
purchase of $20.4 million of U.S.  government  agency  securities,  purchases of
$1.1 million of  mortgage-backed  securities,  a $510,000  increase in principal
receivable,  and a $402,000  increase in the fair value of securities  available
for sale,  partially  offset by  maturities  and calls of $17.0  million of U.S.
government agency securities  classified as available for sale, and $3.7 million
in principal repayments received and amortization.  We sold the remaining $8,750
of amortized  cost of FHLMC common stock held in available  for sale  securities
for a realized gain on sale of $2,120.

Securities  classified as held to maturity decreased $842,000 to $5.3 million at
March 31, 2010 from $6.1 million at December  31, 2009  primarily as a result of
the sale of  $691,000  of  mortgage-backed  securities  with a realized  loss of
$10,573 and $121,000 in principal  repayments  and  amortization.  In accordance
with accounting guidance,  the sale of securities classified as held to maturity
occurred  after  the  Company  received  a  minimum  of  85%  of  the  principal
outstanding at acquisition  due either to prepayments or to scheduled  principal
and interest payments on the debt securities.  All securities  purchased in 2010
have been  classified as available for sale to provide a portfolio of marketable
securities  for  liquidity  as an  alternative  to  borrowings.  The Company has
reviewed its  investment  securities  portfolio  for the quarter ended March 31,
2010, and has determined that no  other-than-temporary  impairment exists in the
portfolio.

Investment  in FHLB of New York stock  decreased by $150,000,  or 8.0%,  to $1.7
million at March 31,  2010,  from $1.9 million at December 31, 2009 due to stock
redemptions.  The FHLB of New York requires members to purchase and redeem stock
based on the level of borrowings.

Net loans  receivable  decreased by $3.2 million,  or 2.8%, to $113.2 million at
March 31, 2010 from $116.4 million at December 31, 2009.  The Company  continues
to execute its business  plan of making high  quality  loans to existing and new
customers in our market area with $5.5 million of fixed-rate loan refinances and
home purchase originations in the first three months of 2010. The Bank sold $2.1
million in residential mortgage loans in the first quarter of 2010 as management
made the decision to sell long term,  fixed-rate loans in this  historically low
interest rate environment.  The Bank sold these loans at a gain of $14,000 which
was recorded in other income,  and will realize  servicing income on these loans
as long as they have  outstanding  balances.  Management felt that selling these
loans was a prudent interest rate risk decision in order to position the balance
sheet for higher interest rates in the future.  Total loans sold and serviced as
of March 31, 2010 totaled $18.3 million compared to $16.8 million as of December
31, 2009. We may experience further declines in our total residential  mortgages
loan portfolio with additional mortgage loan sales based on the current economic
conditions and our desired  interest rate sensitivity  position.  In the current
interest  rate  environment  we intend  to  continue  to sell a  portion  of our
existing  fixed-rate  residential  mortgage loans on a servicing retained basis,
resulting in additional loan servicing income.

The Bank  opened  three  mortgage  loan  origination  offices in January of 2010
located in  Canandaigua,  Pittsford,  and  Watertown,  New York.  Six additional
mortgage  loan  originators  and two support  staff  members were hired at these
locations.  The Bank  intends to continue to emphasize  aggressive,  yet prudent
originations of loans secured by one-to-four  family residential real estate. As
previously discussed,  Fairport Mortgage Corp., a wholly owned subsidiary of the
Bank, will begin  operations to broker mortgage loans directly to  correspondent
investors upon approval by the FHA as a non-supervised correspondent.

                                       18
<PAGE>

Comparison  of  Financial  Condition  at March 31,  2010 and  December  31, 2009
(continued)

The  Company  has never  been  involved  with,  and has no direct  exposure  to,
sub-prime  lending  activities.  Credit  quality  continues  to be  the  highest
priority  when  underwriting  loans.  Subjective  judgments  about a  borrower's
ability to repay and the value of any  underlying  collateral  are made prior to
approving a loan.

We believe our stringent  underwriting  standards have directly  resulted in our
low level of non-accruing loans.

     Deposits and Borrowings. Total deposits increased by $6.7 million, or 4.3%,
to $163.2  million at March 31, 2010 from $156.5  million at December  31, 2009.
Certificates of deposit, including IRAs, increased by $4.5 million for the first
three months of 2010. During the same timeframe, transaction accounts, including
checking, NOW, money market and savings accounts, increased by $2.2 million. The
significant deposit growth demonstrates our competitive  strength in our market.
The net deposit growth was primarily  attributable  to the Webster branch growth
of $3.9 million and the  Irondequoit  branch growth of $2.8 million.  The branch
staff has done an excellent job in attracting  new clients and  increasing  core
deposits, which has had a positive impact on the Bank's balance sheet.

Long term  borrowings  decreased by $3.3  million,  or 9.6%, to $31.3 million at
March 31,  2010 from  $34.6  million  on  December  31,  2009.  We repaid  these
borrowings in the first three months of 2010 using increased deposits.

     Stockholders'  Equity.  Total stockholders' equity increased by $306,000 or
1.5%,  to $20.7  million at March 31, 2010 from $20.4  million at  December  31,
2009. The increase  resulted from $33,000 in net income, an increase of $265,000
in accumulated other comprehensive income, and an $8,000 increase from committed
ESOP shares.  The Bank's capital ratios  continue to classify  Fairport  Savings
Bank as a well  capitalized  bank,  the highest  standard  of capital  rating as
defined by the Bank's regulators.

     Non-Performing  Assets.  At March 31, 2010 and at December  31,  2009,  the
Company had one loan for $23,000 classified as non-performing and one foreclosed
asset for $79,000. At March 31, 2010 and December 31, 2009 non-performing assets
as a percent  of total  assets  was  0.05%,  significantly  below  the  industry
average.  At March 31,  2010,  management  has  evaluated  the Bank's  loan loss
reserve and believes it is adequately funded based on the quality of the current
loan  portfolio.  At March 31,  2010,  there were no other  assets  that are not
disclosed or disclosed as classified or special mention, where known information
about possible credit problems of borrowers  caused us to have serious doubts as
to the ability of the borrowers to comply with the present loan repayment  terms
and which may result in disclosure of such loans in the future.

     Average balances and yields. The following tables set forth average balance
sheets,  average yields and costs, and certain other  information at and for the
periods indicated. All average balances are daily average balances.  Non-accrual
loans were included in the computation of average  balances,  where  applicable,
but have been reflected in the table as loans carrying a zero yield.  The yields
set forth below include the effect of deferred fees, discounts and premiums that
are amortized or accreted to interest income. Yields have been annualized.

                                       19
<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                          <C>           <C>        <C>          <C>          <C>              <C>

                                                     For the Three Months Ended March 31,
                                ------------------------------------------------------------------------------
                                                  2010                                2009
                                -------------------------------------    -------------------------------------
                                                Interest                                Interest
                                Average         Income/     Yield/       Average        Income/         Yield/
                                Balance         Expense     Cost         Balance        Expense         Cost
                                ----------  -------------  ----------    ---------  ---------------  ---------
                                                            (Dollars in thousands)
Interest-earning assets:
Loans.........................  $  114,369  $     1,593       5.57%      $ 133,281  $       1,907      5.72%
Securities....................      59,222          447       3.02          24,528            267      4.35
Mortgage-backed securities....      25,700          217       3.38          28,905            326      4.51
Other.........................      6,206             2       0.13           2,232              1      0.18
                                ----------  -------------  ----------    ---------  ---------------  ---------
   Total interest-earning assets   205,497        2,259       4.40         188,946          2,501      5.29
                                            -------------                           ---------------
Non-interest-earning assets...       9,577                                   6,407
                                ----------                               ---------
   Total assets...............  $  215,074                               $ 195,353
                                ==========                               =========
Interest-bearing liabilities:
NOW accounts..................  $    9,014  $        16       0.71%      $   7,517  $          15      0.80%
Passbook savings..............      26,887           73       1.09          13,467             26      0.77
Money market savings.........       23,422           65       1.11          17,363             94      2.17
Individual retirement accounts      18,072          141       3.12          16,989            166      3.91
Certificates of deposit.......      77,485          440       2.27          73,059            578      3.16
Borrowings....................      33,060          354       4.28          40,782            425      4.17
                                ----------  -------------  ----------    ---------  ---------------  ---------
   Total interest-bearing
     liabilities..............     187,940        1,089       2.32         169,177          1,304      3.08
                                ----------  -------------                ---------  ---------------
Non-interest-bearing liabilities:
Demand deposits.........             3,940                                   3,422
Other.........................       2,646                                   2,531
                                ----------                               ---------
     Total liabilities........     194,526                                 175,130
Stockholders' equity..........      20,548                                  20,223
                                ----------                               ---------
   Total liabilities and
     stockholders' equity.....  $  215,074                               $ 195,353
                                ==========                               =========
Net interest income...........              $     1,170                             $       1,197
                                            =============                           ===============
Interest rate spread (1)......                                2.08%                                    2.21%
Net interest-earning assets (2) $   17,557                               $  19,769
                                ==========                               =========
Net interest margin (3).......                    2.28%                                      2.53%
Average interest-earning assets
   to average interest-bearing
   liabilities................         109%                                    112%

</TABLE>

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

(2)  Net interest-earning assets represent total interest-earning assets less
     total interest-bearing liabilities.

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

Comparison  of  Operating  Results for the Three Months Ended March 31, 2010 and
March 31, 2009

     General.  We had net income of $33,000 for the three months ended March 31,
2010  compared  to net income of $51,000  for the three  months  ended March 31,
2009.  The  decrease  of $18,000  in net  income  for the first  quarter of 2010
compared to the first quarter of 2009 resulted  primarily from a decrease in net
interest income of $27,000,  an increase in other expense of $57,000,  partially
offset by an increase in other  income of $25,000,  and  decreases in income tax
expense of $38,000, and the provision for loan losses of $3,000. The decrease in
net  interest  income was the result of a volume  reduction  in higher  yielding
assets,  mainly  mortgages,  being  replaced  by an  increased  volume  of lower
yielding  assets,  primarily  investment  securities,  partially  offset  by the
Company's   ability  to  reduce  the  deposit  costs  in  a  low  interest  rate
environment.  The net interest margin  decreased 25 basis points to 2.28% in the
first  quarter of 2010 from 2.53% in the first  quarter of 2009.  The decline in
net interest margin is a reflection of a balance sheet repositioning of the loan
portfolio  out of longer term assets into  shorter term  investments.  Accepting
margin  compression  in the  short  term in order to reduce  interest  rate risk
exposure was decided as a prudent measure in an unprecedented  low interest rate
environment.  The increase in non-interest  expense that negatively affected the
first  quarter of 2010  compared to the first quarter of 2009 was an increase in
FDIC premium expense, and additional occupancy and equipment expenses related to
our  Webster  branch  that  opened  in  September  2009 and our  three  mortgage
origination offices that opened in January 2010.

                                       20
<PAGE>
Comparison of Operating Results for the Three Months Ended March 31, 2010 and
March 31, 2009 (continued)

     Interest and Dividend  Income.  Interest and dividend  income  decreased by
$242,000 or 9.7%, to $2.3 million for the three months ended March 31, 2010 from
$2.5 million for the three months ended March 31, 2009. The decrease in interest
and  dividend  income  resulted  from a $314,000  or 16.5%  decrease in interest
income  from  loans,  a $109,000  or 33.4%  decrease  in  interest  income  from
mortgage-backed securities,  partially offset by a $180,000 or 67.4% increase in
securities  income,  and a $1,000 or 100.0%  increase in other  interest  income
primarily  interest earning demand  accounts.  Average  interest-earning  assets
increased  by $16.6  million,  or 8.8%,  to $205.5  million for the three months
ended March 31, 2010 from $188.9  million for the three  months  ended March 31,
2009. The yield on interest-earning assets decreased by 89 basis points to 4.40%
for the three months ended March 31, 2010 compared to 5.29% for the three months
ended March 31, 2009,  reflecting a yield decrease in all interest earning asset
categories as a result of the repositioning of assets into lower yielding assets
and a lower market interest rate environment at March 31, 2010.

     Interest  Expense.  Interest expense  decreased  $215,000 or 16.5%, to $1.1
million for the three  months  ended  March 31,  2010 from $1.3  million for the
three  months ended March 31, 2009.  The decrease in interest  expense  resulted
from lower average  rates paid on deposits  despite an increase in average rates
paid on borrowings and higher total aggregate average  liabilities.  The average
balance of  interest-bearing  liabilities  increased $18.8 million, or 11.1%, to
$187.9  million for the three  months  ended  March 31, 2010  compared to $169.2
million  for the  three  months  ended  March  31,  2009.  The  average  cost of
interest-bearing liabilities decreased by 76 basis points to 2.32% for the three
months  ended  March 31,  2010 from 3.08% for the three  months  ended March 31,
2009. The average cost of deposit accounts decreased by 84 basis points to 1.90%
for the three months ended March 31, 2010 compared to 2.74% for the three months
ended March 31, 2009.  However,  the average cost of Passbook  savings  accounts
increased  by 32 basis points to 1.09% for the three months ended March 31, 2010
from 0.77% for the three months ended March 31, 2009 as a result of a high yield
savings  account  promotion  for the  grand  opening  of the  Webster  branch in
September  2009. The average cost of borrowings  increased by 11 basis points to
4.28% for the three months ended March 31, 2010  compared to 4.17% for the three
months  ended  March  31,  2009,  reflective  of  maturities  of lower  yielding
borrowings  despite a decrease  in expense of $71,000.  The  average  balance of
borrowings  decreased  $7.7  million or 18.9%,  to $33.1  million  for the three
months ended March 31, 2010 compared to $40.8 million for the three months ended
March 31, 2009. The decrease in interest expense reflects the Bank's  management
of lower deposit costs in a historically low interest rate environment. The Bank
has  continued to respond to the lower  interest rate  environment  allowing for
deposit  re-pricing  in a downward  fashion of higher cost CDs and Money  market
savings accounts, decreasing our overall cost of funds.

At March 31, 2010, we had $23.7 million of  certificates  of deposit,  including
IRAs, that will mature during the second quarter of 2010 with a weighted average
cost of 2.60%.  Based on  current  market  rates,  if these  funds  remain  with
Fairport Savings Bank with similar maturities,  the rates paid on these deposits
will decrease.

     Net Interest Income. Net interest income decreased $27,000 or 2.3%, to $1.2
million for the three  months  ended  March 31,  2010 from $1.2  million for the
three months ended March 31, 2009.  The decrease in net interest  income was due
primarily to an increase in lower yielding earning assets, partially offset by a
lower  average cost of deposits  lowering  the overall cost of interest  bearing
liabilities.  The  Company's  net interest  margin  decreased 25 basis points to
2.28% for the three  months ended March 31, 2010 from 2.53% for the three months
ended March 31, 2009.

     Provision for Loan Losses. Based on management's  evaluation of the factors
that determine the level of the allowance for loan losses, we recorded $3,000 in
provision  for loan  losses for the three  month  period  ended  March 31,  2010
compared to a $6,000  provision for loan losses for the three months ended March
31,  2009.  The  allowance  for loan losses as of March 31, 2010 was $371,000 or
0.33% of total

                                       21
<PAGE>
Comparison of Operating Results for the Three Months Ended March 31, 2010 and
March 31, 2009 (continued)

loans,  compared to $350,000  or 0.27% of total loans as of March 31,  2009.  We
ended the  quarter  with  $23,000  in  non-accrual  loans as of March  31,  2010
compared to $133,000 in  non-accrual  loans as of March 31, 2009. We recorded no
charge offs in the first quarter of 2010 or 2009. We had one foreclosed asset of
$79,000 at March 31, 2010 and no foreclosed real estate at March 31, 2009.

     Other Income.  Total other income  increased  $25,000 or 18.7%, to $159,000
for the three  months  ended March 31, 2010  compared to $134,000  for the three
months ended March 31, 2009. In the three months ended March 31, 2010 versus the
three  months  ended  March 31,  2009,  there was an increase of $33,000 in BOLI
income,  an $8,000 increase in service fee income primarily from deposit account
service  charge  fees,  and a $12,000  increase in other income  primarily  from
mortgage  fees,  partially  offset by a decrease of $5,000 in  commissions  from
Oakleaf Services  insurance/annuity  and security sales, $15,000 less in gain on
sale of mortgage loans in the secondary market and an $8,000 net loss on sale of
available  for sale  securities,  reflecting a $10,000  loss on mortgage  backed
securities  held to maturity,  as previously  discussed,  partially  offset by a
$2,000 gain on sale of FHLMC common stock available for sale.

     Other  Expense.  Total other expense  increased  $57,000,  or 4.6%, to $1.3
million for the three months  ended March 31, 2010  compared to $1.2 million for
the three months ended March 31, 2009.  The increase was primarily the result of
a $35,000  increase in FDIC insurance  premium  expense to $57,000 for the three
months  ended March 31,  2010,  compared to $22,000 for the three  months  ended
March 31, 2009.  Occupancy  expense  increased by $25,000 and equipment  expense
increased by $13,000 with additional occupancy and equipment expenses related to
our  Webster  branch  that  opened  in  September  2009 and our  three  mortgage
origination  offices that opened in January 2010.  Advertising expense increased
by $9,000 and other expense increased by $6,000.  These increases were partially
offset by a decrease in salaries and benefits  expense of $6,000  reflecting the
Bank's  continued  expense  reductions  initiatives in the first quarter of 2010
compared to the first quarter of 2009,  $14,000 less in mortgage fees and taxes,
$6,000 less in data processing  expense,  and $4,000 less in electronic  banking
expense.

     Income Tax Expense.  We had pre-tax  income of $23,000 for the three months
ended March 31, 2010 versus pre-tax income of $79,000 for the three months ended
March 31,  2009,  which  resulted in a $10,000 tax benefit for the three  months
ended March 31,  2010,  versus a $28,000 tax expense for the three  months ended
March 31, 2009, a change in taxes of $38,000. The effective tax benefit rate was
(43.5)% for the three months ended March 31, 2010 compared to a tax expense rate
of 35.4% for the three  months  ended March 31,  2009.  The high  effective  tax
benefit rate in the quarter ended March 31, 2010 was a result of the utilization
of New York State mortgage  recording tax credits in the current period that had
been previously subject to a valuation  allowance.  The New York State franchise
tax  recorded  on taxable  assets for the  current  quarter  2010  exceeded  the
mortgage tax generated in its current period.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future  financial  obligations of a
short-term nature. Our primary sources of funds consist of deposit inflows, loan
repayments, advances from the Federal Home Loan Bank of New York, maturities and
principal repayments of securities,  and recently,  but to a lesser extent, loan
sales.  While maturities and scheduled  amortization of loans and securities are
predictable sources of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates,  economic conditions and competition.  Our
asset/liability   management  committee  is  responsible  for  establishing  and
monitoring  our  liquidity  targets  and  strategies  in  order to  ensure  that
sufficient  liquidity  exists  for  meeting  the  borrowing  needs  and  deposit
withdrawals of our customers as well as unanticipated contingencies.  We seek to
maintain a liquidity ratio of 10.0% or greater.  For the quarter ended March 31,
2010, our liquidity ratio averaged 19.6%. We believe that we have enough sources
of liquidity to satisfy our short and long-term  liquidity needs as of March 31,
2010.

We regularly  adjust our  investments in liquid assets based upon our assessment
of:

                                       22
<PAGE>
Liquidity and Capital Resources (continued)

          (i) expected loan demand;

         (ii) expected deposit flows;

         (iii) yields available on interest-earning deposits and securities; and

         (iv) the objectives of our asset/liability management program.

Excess  liquid  assets are  invested  generally  in  interest-earning  deposits,
short-term and intermediate-term securities and federal funds sold.

Our most liquid assets are cash and cash equivalents. The levels of these assets
are dependent on our  operating,  financing,  lending and  investing  activities
during any given period.  At March 31, 2010, cash and cash  equivalents  totaled
$11.4 million.

Our cash flows are derived from operating  activities,  investing activities and
financing  activities as reported in our  Consolidated  Statements of Cash Flows
included in our Consolidated Financial Statements.

At March 31,  2010,  we had $3.9  million in loan  commitments  outstanding.  In
addition to commitments to originate  loans, we had $9.0 million in unused lines
of credit to borrowers. Certificates of deposit, including individual retirement
accounts  comprised  solely of certificates of deposits,  due within one year of
March 31, 2010 totaled $59.5 million,  or 60.3% of our  certificates  of deposit
and 36.5% of total deposits. If these deposits do not remain with us, we will be
required to seek other  sources of funds  including  loan sales,  other  deposit
products,  including  certificates  of  deposit,  and  Federal  Home  Loan  Bank
advances. Depending on market conditions, we may be required to pay higher rates
on such deposits or other  borrowings than we currently pay on the  certificates
of deposit due on or before March 31, 2010. We believe,  however,  based on past
experience  that a significant  portion of such deposits will remain with us. We
have the ability to attract and retain  deposits by adjusting the interest rates
offered.

Our primary  investing  activity is and will continue to be  originating  loans.
During the three  months  ended March 31, 2010,  we  originated  $5.5 million of
loans.

Financing  activities  consist  primarily  of activity in deposit  accounts  and
Federal  Home Loan Bank  borrowings.  We  experienced  a net  increase  in total
deposits of $6.7 million for the quarter ended March 31, 2010. Deposit flows are
affected by the overall level of interest rates, the interest rates and products
offered by us and our local competitors, and by other factors.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.  If we require funds beyond our ability to generate them internally,
borrowing  agreements  exist with the Federal Home Loan Bank of New York,  which
provides  an  additional  source of  funds.  Federal  Home Loan Bank  borrowings
decreased by $3.3 million to $31.3  million for the three months ended March 31,
2010,  compared to a net decrease of $7.2 million to $38.3 million for the three
months ended March 31,  2009.  Historically,  Federal Home Loan Bank  borrowings
have  primarily  been used to fund loan  demand  and  expanding  the  investment
portfolio.  At March 31, 2010, we had the ability to borrow  approximately $85.0
million from the Federal Home Loan Bank of New York,  of which $31.3 million had
been advanced.

The Bank  also has a  repurchase  agreement  with  Morgan  Keegan  providing  an
additional  $10.0  million in liquidity.  Funds  obtained  under the  repurchase
agreement are secured by the Bank's U.S Government and agency obligations. There
were no advances outstanding under the repurchase agreement at March 31, 2010 or
December 31, 2009.

                                       23
<PAGE>
Liquidity and Capital Resources (continued)

Fairport  Savings Bank is subject to various  regulatory  capital  requirements,
including a  risk-based  capital  measure.  The  risk-based  capital  guidelines
include  both  a  definition  of  capital  and  a  framework   for   calculating
risk-weighted  assets by assigning  balance sheet assets and  off-balance  sheet
items to broad  risk  categories.  At March  31,  2010,  Fairport  Savings  Bank
exceeded  all  regulatory  capital   requirements,   and  was  considered  "well
capitalized" under regulatory guidelines.

Off-Balance Sheet Arrangements

In the  ordinary  course of business,  the Company is a party to  credit-related
financial instruments with off-balance sheet risk to meet the financing needs of
our customers. These financial instruments include commitments to extend credit.
We follow the same credit policies in making commitments as we do for on-balance
sheet instruments.

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. The commitments for equity lines of credit may expire
without  being  drawn  upon.  Therefore,  the total  commitment  amounts  do not
necessarily  represent  future  cash  requirements.  The  amount  of  collateral
obtained,  if it is deemed necessary by us, is based on our credit evaluation of
the customer.

At March 31, 2010 and 2009, we had $3.9 million and $4.5 million,  respectively,
of commitments to grant loans, and $9.0 million and $7.5 million,  respectively,
of unfunded commitments under lines of credit.


Item 3.   Quantitative and Qualitative Disclosures About Market Risk

     Not applicable since the Company is a smaller reporting company.

Item 4T. Controls and Procedures

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

There were no significant  changes made in the Company's  internal  control over
financial  reporting  or in other  factors that could  significantly  affect the
Company's internal control over financial reporting during the period covered by
this report that has materially affected,  or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

                                       24
<PAGE>

                           Part II - Other Information

Item 1. Legal Proceedings

     The  Company and its  subsidiaries  are  subject to various  legal  actions
arising in the normal  course of  business.  In the opinion of  management,  the
resolution  of these legal  actions is not  expected to have a material  adverse
effect on the Company's financial condition or results of operations.


Item 1A. Risk Factors

     In addition to the other  information  contained this  Quarterly  Report on
Form 10-Q, the following risk factors  represent  material updates and additions
to the risk factors previously  disclosed in the Company's Annual Report on Form
10-K for the Year Ended  December 31,  2009,  as filed with the  Securities  and
Exchange  Commission.  Additional  risks not  presently  known to us, or that we
currently deem  immaterial,  may also adversely  affect our business,  financial
condition  or  results of  operations.  Further,  to the extent  that any of the
information  contained  in  this  Quarterly  Report  on  Form  10-Q  constitutes
forward-looking statements, the risk factors set forth below also are cautionary
statements  identifying important factors that could cause our actual results to
differ materially from those expressed in any forward-looking statements made by
or on behalf of us.

Legislative  proposals have been  introduced  that would eliminate the Office of
Thrift  Supervision  and would require  Fairport  Savings Bank and FSB Community
Bankshares, Inc. to become regulated by other federal regulatory agencies.

     Legislation has been proposed that would implement  sweeping changes to the
current bank regulatory structure.  The most recent proposal would eliminate our
current primary federal regulator, the Office of Thrift Supervision, and require
both Fairport Savings Bank and FSB Community Bankshares, Inc. to be regulated by
the Office of the Comptroller of the Currency (the primary federal regulator for
national banks). The proposed  legislation  provides that the Board of Governors
of the Federal Reserve System would be responsible for promulgating  regulations
for holding companies (like FSB Community  Bankshares,  Inc.) with the Office of
the  Comptroller  of the Currency  being  responsible  for the  application  and
enforcement of such  regulations.  In addition,  compliance with new regulations
and being  supervised by one or more new regulatory  agencies could increase our
expenses.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
        (a) There were no sales of unregistered securities during the period
            covered by this Report.

        (b) Not applicable.

        (c) There were no issuer repurchases of securities during the period
            covered by this Report.

Item 3. Defaults Upon Senior Securities

        Not applicable.

Item 4. [Reserved]

Item 5. Other Information

         None.
                                       25
<PAGE>

Item 6. Exhibits

        The following exhibits are either filed as part of this report or are
        incorporated herein by reference:
3.1     Charter of FSB Community Bankshares, Inc.*
3.2     Bylaws of FSB Community Bankshares, Inc.*
4       Form of Common Stock Certificate of FSB Community Bankshares, Inc.*
10.1    Supplemental Executive Retirement Plan*
10.2    Form of Employee Stock Ownership Plan*
31.1    Certification of Chief Executive Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002
31.2    Certification of Chief Financial Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002
32      Certification of Chief Executive Officer and Chief Financial Officer
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
---------------
     *  Filed as exhibits to the Company's Registration Statement on Form SB-2,
        and any amendments thereto, with the Securities and Exchange Commission
        (Registration No. 333-141380) on March 16, 2007.

                                       26
<PAGE>



                                   SIGNATURES
                                   ----------

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

                                           FSB COMMUNITY BANKSHARES, INC.


Date:    May 14, 2010                      /s/ Dana C. Gavenda
                                           -------------------------------------
                                           Dana C. Gavenda
                                           President and Chief Executive Officer


Date:    May 14, 2010                      /s/ Kevin D. Maroney
                                           -------------------------------------
                                           Kevin D. Maroney
                                           Executive Vice President and Chief





                                       27
                                           Financial Officer