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 September 30, 2008
                                       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                               4-3164710
          -------------------------------                 ----------------------
          (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 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   [ ]
(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 November  14, 2008 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>




                         FSB Community Bankshares, Inc.
                                    FORM 10-Q

                                      Index
                                      -----
 <TABLE>
<CAPTION>
                                                                                                     Page
                                                                                                     ----


                          Part I. Financial Information


<S>               <C>                                                                                     <C>
Item 1.           Consolidated Financial Statements (unaudited)

                  Consolidated Balance Sheets as of September 30, 2008
                  and December 31, 2007                                                                  1

                  Consolidated Statements of Operations for the Three Months Ended
                  September 30, 2008 and 2007                                                            2

                  Consolidated Statements of Operations for the Nine Months Ended
                  September 30, 2008 and 2007                                                            3

                  Consolidated Statements of Stockholders' Equity for the Nine Months Ended
                  September 30, 2008 and 2007                                                             4

                  Consolidated Statements of Cash Flows for the Nine Months Ended
                  September 30, 2008 and 2007                                                             5

                  Notes to Consolidated Financial Statements                                              7

Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                               10

Item 3.           Quantitative and Qualitative Disclosures about Market Risk                              20

Item 4.           Controls and Procedures                                                                 20

                           Part II. Other Information

Item 1.           Legal Proceedings                                                                       21

Item 1A.          Risk Factors                                                                            21

Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds                             21

Item 3.           Defaults upon Senior Securities                                                         21

Item 4.           Submission of Matters to a Vote of Security Holders                                     21

Item 5.           Other Information                                                                       21

Item 6.           Exhibits                                                                                21

                  Signature Page                                                                          23

</TABLE>
<PAGE>

                          Part I. Financial Information

Item 1. Consolidated Financial Statements

                         FSB COMMUNITY BANKSHARES, INC.

                           Consolidated Balance Sheets
              September 30, 2008 and December 31, 2007 (unaudited)
                  (Dollars in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                              September 30,       December 31,
                                       Assets                                      2008                2007
                                                                              ---------------    ---------------
<S>                                                                            <C>                 <C>
Cash and due from banks                                                        $    2,801          $    1,159
Interest-earning demand deposits                                                    3,796               8,285
                                                                              ---------------    ---------------
     Cash and Cash Equivalents                                                      6,597               9,444

Securities available for sale                                                      41,386                 244
Securities held to maturity (fair value 2008 - $8,603, 2007- $28,597)               8,566              28,550
Investment in FHLB stock                                                            2,184               1,405
Loans receivable, net of allowance for loan losses of: 2008 - $335,
     2007 - $319                                                                  136,963             124,326
Accrued interest receivable                                                           948                 872
Premises and equipment, net                                                         2,363               2,525
Other assets                                                                          513                 264
                                                                              ---------------    ---------------
                 Total Assets                                                  $  199,520          $  167,630
                                                                              ===============    ===============
                       Liabilities & Stockholders' Equity

Deposits:
     Non-interest-bearing                                                      $    3,147          $    3,169
     Interest-bearing                                                             129,217             115,989
                                                                              ---------------    ---------------
             Total Deposits                                                       132,364             119,158

Borrowings                                                                         42,622              25,581
Advances from borrowers for taxes and insurance                                       985               1,898
Official bank checks                                                                3,340                 513
Other liabilities                                                                     353                 331
                                                                              ---------------    ---------------
                 Total Liabilities                                                179,664             147,481
                                                                              ---------------    ---------------

                              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                                                          7,288               7,293
Retained earnings                                                                  13,129              13,224
Accumulated other comprehensive income (loss)                                        (102)                118
Unearned ESOP shares - at cost                                                       (638)               (665)
                                                                              ---------------    ---------------
                 Total Stockholders' Equity                                        19,856              20,149
                                                                              ---------------    ---------------
                 Total Liabilities and Stockholders' Equity                    $  199,520          $  167,630
                                                                              ===============    ===============

See accompanying notes to consolidated financial statements
</TABLE>
                                       1

<PAGE>

                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Operations
           Three Months Ended September 30, 2008 and 2007 (unaudited)
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                    2008               2007
                                                                             ----------------    ---------------
<S>                                                                            <C>              <C>
Interest and Dividend Income
    Loans                                                                      $     1,962       $      1,819
    Securities - taxable                                                               350                293
    Mortgage-backed securities                                                         288                 76
    Other                                                                               14                120
                                                                             ----------------    ---------------
                 Total Interest and Dividend Income                                  2,614              2,308
                                                                             ----------------    ---------------
Interest Expense
    Deposits                                                                           998              1,146
    Long Term Borrowings                                                               465                241
                                                                             ----------------    ---------------
                Total Interest Expense                                               1,463              1,387
                                                                             ----------------    ---------------

                Net Interest Income                                                  1,151                921
Provision for Loan Losses                                                                8                 --
                                                                             ----------------    ----------------
                Net Interest Income After Provision
                   for Loan Losses                                                   1,143                921
                                                                             ----------------    ----------------
Other Income
    Service fees                                                                        57                 31
    Fee income                                                                          53                 25
    Realized gain on sale of securities available for sale                              --                 81
    Impairment loss on securities available for sale                                   (57)                --
    Other                                                                               36                 32
                                                                             ----------------    ----------------
                Total Other Income                                                      89                169
                                                                             ----------------    ----------------

Other Expenses
    Salaries and employee benefits                                                     655                594
    Occupancy expense                                                                  118                109
    Data processing costs                                                               22                 15
    Advertising                                                                         54                 63
    Equipment expense                                                                   84                 77
    Electronic banking                                                                  15                 24
    Directors' fees                                                                     28                 24
    Mortgage fees and taxes                                                             86                 45
    Other expense                                                                      135                140
                                                                             ---------------     ----------------
                Total Other Expenses                                                 1,197               1,091
                                                                             ---------------     ----------------

                Income (Loss) Before Income Taxes                                       35                  (1)

                Provision  for Income Taxes                                             34                  --
                                                                             ---------------     ----------------

                Net Income (Loss)                                              $         1       $          (1)
                                                                             ===============     ================

                Earnings (Loss) per common share                               $      0.00       $       (0.00)
                                                                             ===============     ================


See accompanying notes to consolidated financial statements
</TABLE>
                                       2
<PAGE>
                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Operations
            Nine Months Ended September 30, 2008 and 2007 (unaudited)
                  (Dollars in thousands, except per share data)


<TABLE>
<CAPTION>

                                                                                    2008               2007
                                                                             ----------------    ---------------
<S>                                                                            <C>              <C>
Interest and Dividend Income
    Loans                                                                      $     5,626       $      5,394
    Securities - taxable                                                             1,033                770
    Mortgage-backed securities                                                         792                199
    Other                                                                              104                167
                                                                             ----------------    ---------------
                 Total Interest and Dividend Income                                  7,555              6,530
                                                                             ----------------    ---------------
Interest Expense
    Deposits                                                                         3,205              3,173
    Short Term Borrowings                                                               --                 29
    Long Term Borrowings                                                             1,274                757
                                                                             ----------------    ---------------
                Total Interest Expense                                               4,479              3,959
                                                                             ----------------    ---------------

                Net Interest Income                                                  3,076              2,571
Provision for Loan Losses                                                               14                 --
                                                                             ----------------    ----------------
                Net Interest Income After Provision
                   for Loan Losses                                                   3,062               2,571
                                                                             ----------------    ----------------
Other Income
    Service fees                                                                       146                 91
    Fee income                                                                         107                 67
    Realized gain on sale of securities available for sale                              --                 81
    Impairment loss on securities available for sale                                   (57)                --
    Other                                                                              118                 89
                                                                             ----------------    ----------------
                Total Other Income                                                     314                328
                                                                             ----------------    ----------------

Other Expenses
    Salaries and employee benefits                                                   1,839              1,767
    Occupancy expense                                                                  346                325
    Data processing costs                                                               63                 68
    Advertising                                                                        203                225
    Equipment expense                                                                  249                255
    Electronic banking                                                                  50                 45
    Directors' fees                                                                     85                 77
    Mortgage fees and taxes                                                            182                116
    Other expense                                                                      474                407
                                                                             ---------------     ----------------
                Total Other Expenses                                                 3,491              3,285
                                                                             ---------------     ----------------

                Loss Before Income Taxes                                              (115)              (386)

                Benefit for Income Taxes                                               (20)               138
                                                                             ---------------     ----------------

                Net Loss                                                       $       (95)       $      (248)
                                                                             ===============     ================

                Loss per common share                                          $     (0.06)       $     (0.23)
                                                                             ===============     ================


See accompanying notes to consolidated financial statements
</TABLE>
                                       3

<PAGE>
                         FSB COMMUNITY BANKSHARES, INC.

                 Consolidated Statements of Stockholders' Equity
                  Nine Months Ended September 30, 2008 and 2007
                       (unaudited) (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                     Accumulated
                                                       Additional                       Other            Unearned
                                           Common       Paid in        Retained      Comprehensive        ESOP
                                            Stock       Capital        Earnings      Income (Loss)       Shares        Total
                                         ------------  ------------  ------------  ----------------  -------------  ----------
<S>               <C>                    <C>           <C>            <C>          <C>                <C>           <C>
Balance - January 1, 2007                $         --  $        10    $   13,505   $         355      $        --   $   13,870

    Comprehensive loss:
        Net loss                                   --           --          (248)             --               --         (248)
        Change in net unrealized gain
           on securities available
           for sale, net of taxes                  --           --            --            (103)              --         (103)
                                                                                                                     ---------
        Total Comprehensive Loss                                                                                          (351)

Shares issued in public offering                  179        7,281            --              --               --        7,460
Shares Purchased by ESOP                           --           --            --              --             (700)        (700)
ESOP shares committed to be
           released                                --           --            --              --               26           26
                                         ------------  ------------  ------------  ----------------  -------------  ----------
Balance - September 30, 2007             $        179  $     7,291    $   13,257   $         252      $      (674)  $   20,305
                                         ============  ============  ============  ================  =============  ==========
Balance - January 1, 2008                $        179  $     7,293    $   13,224   $         118      $      (665)  $   20,149

        Comprehensive loss:
        Net loss                                   --           --           (95)             --               --          (95)
        Change in net unrealized
            gain (loss) on securities
            available for sale, net of
            taxes                                  --           --            --             (220)             --         (220)
                                                                                                                    ----------
        Total Comprehensive Loss                                                                                          (315)

ESOP shares committed to be
            released                               --           (5)           --               --              27           22
                                         ------------  ------------  ------------  ----------------  -------------  ----------
Balance - September 30, 2008             $        179  $     7,288    $   13,129   $         (102)    $      (638)  $   19,856
                                         ============  ============  ============  ================  =============  ==========


See accompanying notes to consolidated financial statements
</TABLE>
                                       4
<PAGE>

                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Cash Flows
            Nine Months Ended September 30, 2008 and 2007 (unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                                       2008                 2007
                                                                                -------------------  -------------------
<S>                                                                             <C>                  <C>
Cash Flows From Operating Activities
   Net Loss                                                                     $             (95)   $             (248)
   Adjustments to reconcile net loss to net cash  provided (used) by
    operating activities:
         Gain on sale of securities available for sale                                         --                   (81)
         Impairment loss on securities available-for-sale                                      57                    --
         Net amortization of premiums and discounts on investments                            233                    25
         Gain on sale of loans                                                                 (9)                   (2)
         Amortization of net deferred loan origination fees                                   (17)                  (42)
         Depreciation and amortization                                                        201                   224
         Provision for loan losses                                                             14                    --
         Expense related  to stock-based compensation plans                                    22                    26
         Deferred income tax benefit                                                          (36)                   (3)
         Decrease (increase) in accrued interest  receivable                                  (76)                   12
         Increase in other assets                                                            (258)                  (70)
         Increase in other liabilities                                                        153                  (108)
                                                                                -------------------  -------------------
              Net Cash Provided  (Used) By Operating Activities                               189                  (267)

Cash Flows From Investing Activities
   Purchase of securities held to maturity                                                 (3,001)              (12,366)
   Proceeds from maturities and calls of securities held to maturity                       20,999                 6,915
   Proceeds from principal paydowns of securities held to maturity                          1,970                    --
   Purchase of securities available for sale                                              (51,439)                   --
   Proceeds from maturities and calls of securities available for sale                      7,500                    --
   Proceeds from principal paydowns of securities available for sale                        2,206                    --
   Proceeds from sales of securities available for sale                                        --                    82
   Net increase in loans                                                                  (14,543)               (2,108)
   Proceeds from sales of loans                                                             1,918                   748
   Purchase (redemption) of Federal Home Loan Bank stock                                     (779)                  347
   Purchase of premises and equipment                                                         (28)                 (656)
                                                                                -------------------  -------------------
              Net Cash Used By Investing Activities                                       (35,197)               (7,038)

Cash Flows From Financing Activities
   Net increase in deposits                                                                13,206                12,616
   Net decrease in short term borrowings                                                       --                (4,200)
   Proceeds from borrowings                                                                21,500                    --
   Repayments on borrowings                                                                (4,459)               (4,054)
   Net increase (decrease)  in advances from borrowers
      for taxes and insurance                                                                (913)                  123
   Net increase in official bank checks                                                     2,827                 1,314
   Net proceeds from common stock offering                                                     --                 7,460
   Purchase of shares for employee stock ownership program                                     --                  (700)
                                                                                -------------------  -------------------
              Net Cash Provided By Financing Activities                                    32,161                12,559

              Net Increase (Decrease) in Cash
                   and Cash Equivalents                                                    (2,847)                5,254

Cash and Cash Equivalents- Beginning                                                        9,444                 2,698
                                                                                -------------------  -------------------
Cash Equivalents- End                                                           $           6,597    $            7,952
                                                                                ===================  ===================
</TABLE>
                                       5
<PAGE>

                         FSB COMMUNITY BANKSHARES, INC.

                Consolidated Statements of Cash Flows, Continued

<TABLE>
<CAPTION>

                                                                                       2008                2007
                                                                                -------------------  -------------------

<S>                                                                             <C>                  <C>
Supplementary Cash Flows Information

        Interest paid                                                           $         4,536      $          3,954
                                                                                ===================  ===================
        Income taxes paid                                                       $             1      $             14
                                                                                ===================  ===================
Non-Cash Operating, Investing and Financing Activities

        Transfer of loans to foreclosed  assets                                 $             -      $             41
                                                                                ===================  ===================


See accompanying notes to consolidated financial statements
</TABLE>
                                       6
<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  (the  "Company")  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America for interim financial  information and the instructions
to Form  10-Q.  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 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 financial  statements for the years ended
December 31, 2007 and 2006,  included in the Annual  Report filed on Form 10-KSB
with the Securities and Exchange Commission ("SEC") on March 31, 2008.

Operating  results  for  the  nine  months  ended  September  30,  2008  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2008.

The  consolidated  financial  statements  at September 30, 2008 and December 31,
2007 and for the three and nine months ended September 30, 2008 and 2007 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 have been  reclassified,  when necessary,  to
conform to current period presentation.


Note 2-Fair Value Accounting

In  September  2006,  the FASB  issued  FASB  Statement  No.  157,  "Fair  Value
Measurements"  ("SFAS 157"),  which defines fair value,  establishes a framework
for measuring  fair value under GAAP, and expands  disclosures  about fair value
measurements.  SFAS 157 applies to other accounting  pronouncements that require
or permit fair value  measurements.  The Company  adopted SFAS 157 on January 1,
2008.

SFAS 157  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 SFAS 157 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.

                                       7
<PAGE>
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
September 30, 2008:
<TABLE>
<CAPTION>

            (Dollars in Thousands)                   Total           Level 1           Level 2           Level 3
                                                     -----           -------           -------           -------
        <S>                                        <C>               <C>               <C>               <C>
        Securities available for sale              $41,386           $    --           $41,386           $    --
                                                   =======           =======           =======           =======
</TABLE>

The fair values for available-for-sale  securities in the table above were based
upon a market  approach.  Securities that are fixed income  instruments that are
not  quoted on an  exchange,  but are  traded in active  markets,  are  obtained
through third party data service providers or dealer market  participants  which
the Company has  historically  transacted both purchases and sales of investment
securities. Prices obtained from these sources include market quotations.

Securities are evaluated  periodically  to determine  whether a decline in their
fair value is other than  temporary.  Management  utilizes  criteria such as the
magnitude and duration of the decline, in addition to the reasons underlying the
decline,  to determine  whether the loss in value is other than  temporary.  The
term  "other than  temporary"  is not  intended to indicate  that the decline is
permanent,  but indicates that the prospect for a near-term recovery of value is
not  necessarily  favorable.  Once a decline in fair value is  determined  to be
other than temporary the cost basis of the security is reduced  through a charge
to earnings in the consolidated statement of income.

At  September  30,  2008,  the Company  recorded a $57,000  other-than-temporary
impairment  charge  related  to its  investment  in Federal  Home Loan  Mortgage
Corporation  (Freddie Mac) common stock. The impairment  charge in the Company's
holdings of Freddie Mac common stock  resulted  from the decline in market value
of these shares in connection with the federal  government's  conservatorship of
Freddie Mac in September  2008.  The carrying  value of the Company's  remaining
Freddie Mac common  stock at September  30, 2008 after the  other-than-temporary
impairment  charge was $8,757.  The Company  does not have any  preferred  stock
issued by Freddie Mac or Fannie Mae.


Note 3-Recent Accounting Pronouncements


In October 2008, the FASB issued FSP SFAS No. 157-3, "Determining the Fair Value
of a Financial  Asset When The Market for That Asset Is Not Active" (FSP 157-3),
to clarify the  application of the provisions of SFAS 157 in an inactive  market
and how an entity would determine fair value in an inactive market. FSP 157-3 is
effective   immediately  and  applies  to  the  Company's   September  30,  2008
consolidated  financial  statements.  The  application  of the provisions of FSP
157-3 did not materially affect the Company's results of operations or financial
condition as of and for the period ended September 30, 2008.


In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally  Accepted
Accounting  Principles."  This  Statement  identifies  the sources of accounting
principles  and  the  framework  for  selecting  the  principles   used  in  the
preparation  of  financial  statements.  This  Statement  is  effective  60 days
following the SEC's approval of the Public Company  Accounting  Oversight  Board
amendments to AU Section 411, "The Meaning of Present Fairly in Conformity  with
Generally Accepted Accounting  Principles." The Company is currently  evaluating
the  potential  impact  the new  pronouncement  will  have  on its  consolidated
financial statements.

                                       8
<PAGE>
Note 4-Comprehensive Income (Loss)

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 (loss).

The components of other comprehensive loss and related tax effects for the three
and nine months ended September 30, 2008 and 2007 are as follows:
<TABLE>
<CAPTION>

                                                   For the Three Months Ended          For the Nine Months Ended
                                                          September 30,                      September 30,
                                                     2008              2007              2008             2007
                                                     ----              ----              ----             ----
<S>                                               <C>                <C>              <C>               <C>
Unrealized holding loss on securities
   available for sale                             $     (72)         $     (9)        $    (395)        $   (79)

Reclassification adjustment for realized
    gains included in net loss                           --               (81)               --             (81)
Reclassification adjustment for impairment
    loss on securities available-for-sale
    included in net loss                                 57                --                57              --
                                                  ------------       ------------     ------------      -----------
           Net unrealized loss                          (15)              (90)             (338)           (160)

           Tax effect                                     7                31               118              57

          Net of tax amount                       $      (8)         $    (59)        $    (220)        $  (103)
                                                  ============       ============     ============      ============
</TABLE>

Note 5- Earnings (Loss) Per Common Share

Basic earnings  (loss) per common share is calculated by dividing the net income
(loss) by the  weighted-average  number of common shares  outstanding during the
period. The common shares issued to FSB Community Bankshares, MHC of 946,050 are
assumed  to be  outstanding  for all  periods  presented,  consistent  with  the
provisions of SFAS No. 128, Earnings per Share, pertaining to changes in capital
structure.  The 838,950 shares issued to the public are included in the weighted
average  common shares  outstanding  calculation  only from the date such shares
were issued.  The Company has not granted any  restricted  stock awards or stock
options and,  during the nine months ended  September 30, 2008 and 2007,  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  basic earnings (loss) per common share
until they are  released.  The basic  average  common  shares  outstanding  were
1,718,526  for the three  months and nine months  ended  September  30, 2008 and
1,380,690  for the three months ended  September  30, 2007 and 1,092,522 for the
nine months ended September 30, 2007.

                                       9
<PAGE>
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 September  30, 2008,  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 economic  conditions  including  real estate  values in the Company's
market  area,  changes in  policies  by  regulatory  agencies,  fluctuations  in
interest rates,  demand for loans in the Company's market areas and competition,
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.

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 most significant  accounting  policies followed by the Company are presented
in Note 1 to the consolidated  financial statements ("the Consolidated Financial
Statements")  included in the Company's  Annual Report filed on Form 10-KSB with
the Securities and Exchange Commission on March 31, 2008. These policies,  along
with the  disclosures  presented in the other  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
financial statement amounts to the methods, assumptions and estimates underlying
those amounts,  management has identified the determination of the allowance for
loan losses and the evaluation of investment securities for other that temporary
impairment  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

                                       10
<PAGE>
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 allowance  consists of 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  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.

The Company  carries most of its  investments  at fair value with any unrealized
gains or losses on those  securities  reported  net of tax as an  adjustment  to
stockholders' equity, except for  other-than-temporary  impairment losses, which
are charged to  earnings.  All  securities  purchased  in 2008,  other than $3.0
million of United States Government agency securities purchased in January 2008,
have been classified as securities  available for sale. The Company's ability to
fully realize the value of its investments in various securities is dependent on
the underlying creditworthiness of the issuing organizations.  In evaluating the
security  portfolio  for  other-than-temporary   impairment  losses,  management
considers (1) the length of time and the extent to which the fair value has been
less than cost,  (2) the  financial  condition  and  near-term  prospects of the
issuer,  and (3) 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.

At  September  30,  2008,  the Company  recorded a $57,000  other-than-temporary
impairment  charge  related to it's  investment  in Federal  Home Loan  Mortgage
Corporation  (Freddie Mac) common stock. The impairment  charge in the Company's
holdings of Freddie Mac common stock  resulted  from the decline in market value
of these shares in connection with the federal  government's  conservatorship of
Freddie Mac in September  2008.  The carrying  value of the Company's  remaining
Freddie Mac common  stock at September  30, 2008 after the  other-than-temporary
impairment  charge was $8,757.  The Company  does not have any  preferred  stock
issued by Freddie Mac or Fannie Mae.


Comparison of Financial Condition at September 30, 2008 and December 31, 2007

     Total Assets.  Total assets increased by $31.9 million, or 19.0%, to $199.5
million at September  30, 2008 from $167.6  million at December  31,  2007.  The
primary  increase in total assets  reflected  increases in securities  and loans
receivable, partially offset with decreases in cash and cash equivalents.

Cash and cash equivalents decreased by $2.8 million, or 29.8% to $6.6 million on
September  30, 2008 from $9.4  million on December  31,  2007.  With the Federal
Reserve  decreasing  short term  interest  rates 325 basis  points from 5.25% to
2.00% since September 2007, management decided to invest excess interest earning
demand deposits in higher yielding securities and loans.

                                       11
<PAGE>
Securities  increased by $21.2 million,  or 73.6%, to $50.0 million at September
30, 2008 from $28.8 million at December 31, 2007. The increase was  attributable
to the purchase of $33.9 million of United States Government agency  securities,
purchases of $20.5 million of mortgage-backed securities,  partially offset with
maturities of $28.5 million of United States Government agency securities,  $4.2
million of principal payments received from  mortgage-backed  securities,  and a
$395,000  decrease  in the fair  value of  securities  available  for  sale.  In
February 2008, the Company executed a $14.6 million  mortgage-backed  securities
balance  sheet  leverage  strategy  in an effort to  increase  earnings  that is
performing as projected at the time of the transaction. All securities purchased
in 2008, other than $3.0 million of United States  Government  agency securities
purchased in January 2008,  have been  classified  as  securities  available for
sale.  Management  made the decision to increase the  securities  classified  as
available for sale providing a portfolio of marketable  securities for liquidity
as an alternative to borrowings.

Investment  in FHLB of New York stock  increased  by  $779,000  or 55.5% to $2.2
million at September 30, 2008,  from $1.4 million at December 31, 2007. The FHLB
of New York requires members to purchase stock based on the level of borrowings.

Loans  receivable  increased by $12.6  million,  or 10.2%,  to $136.9 million at
September  30, 2008 from $124.3  million at December 31,  2007.  The increase in
loans  receivable  was  primarily  the result of  increases  in net  residential
mortgage  loans  totaling  $13.2  million,  home equity loan and line  increases
totaling  $1.1  partially  offset  by sales of  fixed  rate 30 year  residential
mortgages totaling $1.7 million.  The Bank has never been involved with, and has
no direct  exposure to,  sub-prime  lending  activities.  The Bank  continues to
execute on its business plan of making high quality loans to existing  customers
and new customers in our market area with $5.1 million, or 15.3% annualized loan
growth  in the third  quarter  of 2008.  Our loan  strategy  continues  to be in
residential  mortgage,   home  equity  loan  and  home  equity  line  of  credit
originations  which provide a higher yield than alternative  investment  yields.
Credit quality,  proven by our lack of non-accruals  continues to be the highest
priority  when  underwriting  a loan.  Subjective  judgments  about a borrower's
ability to repay and the value of any  underlying  collateral  are made prior to
approving a loan.

     Deposits and  Borrowings.  Total deposits  increased by $13.2  million,  or
11.1%,  to $132.4  million at September 30, 2008 from $119.2 million at December
31, 2007.  Certificates of deposit,  including IRAs,  increased by $7.0 million.
Transaction  accounts,   including  checking,  NOW,  money  market  and  savings
accounts,  increased by $6.2 million. The net deposit growth was attributable to
the  Irondequoit  branch growth of $6.0 million,  Fairport branch growth of $3.6
million and Penfield branch growth of $3.6 million.

Borrowings  increased by $17.0 million,  or 66.4%, to $42.6 million at September
30, 2008 from $25.6  million on December  31, 2007.  The increase in  borrowings
included $14.6 million as part of the balance sheet leverage  strategy  executed
in February 2008.

     Official Bank Checks.  Official bank checks  increased by $2.8 million,  or
551.1%,  to $3.3  million at  September  30, 2008 from  $513,000 at December 31,
2007. This increase was caused by the payment of property taxes due at September
30, 2008 from customer mortgage escrow accounts.

     Stockholders'  Equity.  Total stockholders' equity decreased by $293,000 or
1.5%,  to $19.9 million at September 30, 2008 from $20.1 million at December 31,
2007. The decrease resulted  principally from a net loss of $95,000 for the nine
months ended  September 30, 2008, and a $220,000  decrease in accumulated  other
comprehensive income (loss).

     Non-Performing   Assets.   At  September  30,  2008,  the  Company  had  no
non-performing  assets  compared  to $63,000 in  one-to-four-family  residential
mortgage loans classified as non-performing assets at December 31, 2007.

At  September  30,  2008,  there  were no  loans or  other  assets  that are not

                                       12
<PAGE>
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.

<TABLE>
<CAPTION>

                                                      For the Three Months Ended September 30,
                                      ---------------------------------------------------------------------
                                                      2008                                2007
                                      -----------------------------------  --------------------------------
                                                    Interest                             Interest
                                        Average      Income        Yield/    Average      Income    Yield/
                                        Balance     Expense        Cost      Balance      Expense   Cost
                                      -----------  -----------  ----------  ----------  ----------  -------
                                                                (Dollars in thousands)
<S>                                   <C>          <C>              <C>     <C>         <C>          <C>
Interest-earning assets:
Loans.........................        $  134,873   $    1,962       5.82%   $  121,315  $   1,819    6.00%
Securities....................            29,211          350       4.79        22,011        293    5.32
Mortgage-backed securities....            24,997          288       4.61         7,221         76    4.21
Other.........................             3,063           14       1.83         9,229        120    5.20
                                      -----------  -----------              ----------  ----------
   Total interest-earning assets         192,144        2,614       5.44%      159,776      2,308    5.78%
                                                   -----------   ---------              ----------  -------
Non-interest-earning assets...             5,554                                 7,242
                                      -----------                           ----------
   Total assets...............        $  197,698                            $  167,018
                                      ===========                           ==========
Interest-bearing liabilities:

NOW accounts..................        $    7,776   $       24       1.23%        6,336         10    0.63
Passbook savings..............            14,248           32        .90        17,913         56    1.25
Money market savings.........             11,860           57       1.92        10,681         79    2.96
Individual retirement accounts            16,339          177       4.33        16,021        181    4.52
Certificates of deposit.......            75,916          708       3.73        70,975        820    4.62
Borrowings....................            44,838          465       4.15%       19,838        241    4.86
                                      -----------  -----------              ----------  ----------
   Total interest-bearing
     liabilities..............           170,977        1,463       3.42%      141,764      1,387    3.91%
                                      -----------  -----------   ---------  ----------  ----------  -------
Non-interest-bearing liabilities:
Demand deposits...............             3,220                                 3,222
Other.........................             3,671                                 2,079
                                      -----------                           ----------
     Total liabilities........           177,868                               147,065
Stockholders' equity..........            19,830                                19,953
                                      -----------                           ----------
   Total liabilities and
     stockholders' equity.....        $  197,698                            $  167,018
                                      ===========                           ==========
Net interest income...........                     $    1,151                           $     921
                                                   ===========                          ==========
Interest rate spread (1)......                                      2.02%                            1.87%
                                                                 =========                          =======
Net interest-earning assets (2)       $   21,167                            $   18,012
                                      ===========                           ===========
Net interest margin (3).......                           2.40%                               2.31%
                                                   ============                          ==========
Average interest-earning assets
   to average interest-bearing
   liabilities................            112%                                  113%
                                      ===========                           ===========
   _____________________
(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.
</TABLE>
                                       13
<PAGE>
<TABLE>
<CAPTION>

                                                      For the Three Months Ended September 30,
                                      ---------------------------------------------------------------------
                                                      2008                                2007
                                      -----------------------------------  --------------------------------
                                                    Interest                             Interest
                                        Average      Income        Yield/    Average      Income    Yield/
                                        Balance     Expense        Cost      Balance      Expense   Cost
                                      -----------  -----------  ----------  ----------  ----------  -------
                                                                (Dollars in thousands)
<S>                                   <C>          <C>             <C>      <C>         <C>          <C>
Interest-earning assets:
Loans.........................        $  128,300   $   5,626       5.85%    $  120,622  $   5,394    5.96%
Securities....................            29,018       1,033       4.75         20,067        770    5.12
Mortgage-backed securities....            23,138         792       4.56          6,339        199    4.19
Other.........................             5,055         104       2.74          4,322        167    5.15
                                      -----------  -----------              ----------  ----------
   Total interest-earning assets         185,511       7,555       5.43%       151,350      6,530    5.75%
                                                   -----------   ---------              ----------  -------
Non-interest-earning assets...             5,122                                 5,636
                                      -----------                           -----------
   Total assets...............        $  190,633                            $  156,986
                                      ===========                           ============

Interest-bearing liabilities:

NOW accounts..................        $    6,733   $      51       1.01%    $    5,537  $      26    0.63
Passbook savings..............            13,984         103        .98         14,542        132    1.21
Money market savings.........             11,307         176       2.08         10,498        225    2.86
Individual retirement accounts            16,246         538       4.42         15,578        225    4.37
Certificates of deposit.......            75,456       2,337       4.13         68,234      2,279    4.45
Borrowings....................            40,774       1,274       4.17         21,519        786    4.87
                                      -----------  -----------              ----------  ----------
   Total interest-bearing
     liabilities..............           164,500       4,479       3.63%       135,908      3,959    3.88%
                                      -----------  -----------   --------   ----------  ---------- ---------
Non-interest-bearing liabilities:
Demand deposits.........                   3,202                                 3,197
Other.........................             2,904                                 2,294
                                      -----------                           -----------
     Total liabilities........           170,606                               141,399
Stockholders' equity..........            20,027                                15,587
                                      -----------                           -----------
   Total liabilities and
     stockholders' equity.....        $  190,633                            $  156,986
                                     ===========                           ============

Net interest income...........                     $   3,076                            $   2,571
                                                   ===========                          ===========
Interest rate spread (1)......                                     1.80%                             1.87%
                                                                 ========                          =========
Net interest-earning assets (2)       $   21,011                            $   15,442
                                     ============                          ============
Net interest margin (3).......                          2.21                                 2.26%
                                                   ===========                          ===========
Average interest-earning assets
   to average interest-bearing
   liabilities................             113%                                  111%
                                     ============                          ============

</TABLE>
                                       14
<PAGE>
Comparison of Operating Results for the Three Months Ended September 30, 2008
and September 30, 2007

     General.  We had net income of $1,000 for the three months ended  September
30, 2008  compared to a net loss of $1,000 for the three months ended  September
30,  2007.  The  increase of $2,000 in net income for the third  quarter of 2008
compared to the third quarter of 2007 resulted primarily from an increase in net
interest  income of $230,000,  partially  offset by an increase in provision for
loan losses of $8,000,  decrease in other  income of $80,000,  increase of other
expenses  of  $106,000,  and  increase  in income tax  expense of  $34,000.  The
increase in net interest  income was the result of a steepened  yield curve that
positively  impacted the net interest  margin  increasing  to 2.40% in the third
quarter of 2008 compared to a 2.31% net interest  margin in the third quarter of
2007. The improved net interest margin resulted primarily from an improved yield
from mortgage backed  securities,  the benefit of a higher percentage of earning
assets  deployed  in higher  yielding  loan  assets,  and lower  funding  costs.
Securities are evaluated  periodically  to determine  whether a decline in their
fair value is other than temporary.  At September 30, 2008, the Company recorded
a $57,000  other-than-temporary  impairment  loss related to its  investment  in
Freddie Mac common stock.

     Interest and Dividend  Income.  Interest and dividend  income  increased by
$306,000 or 13.3%, to $2.6 million for the three months ended September 30, 2008
from $2.3 million for the three months ended September 30, 2007. The increase in
interest  and  dividend  income  resulted  from a $143,000 or 7.9%,  increase in
interest income from loans, a $57,000 or 19.5%, increase in interest income from
securities,   a  $212,000   or  278.9%   increase   in   interest   income  from
mortgage-backed  securities,  offset by a $106,000  or 88.3%  decrease  in other
interest  income,   primarily   interest   earning  demand   accounts.   Average
interest-earning  assets increased by $32.3 million, or 20.2%, to $192.1 million
for the three months ended  September 30, 2008 from $159.8 million for the three
months ended September 30, 2007. The yield on interest-earning  assets decreased
by 34 basis  points to 5.44% for the  three  months  ended  September  30,  2008
compared to 5.78% for the three months ended September 30, 2007,  reflecting the
effect of the 325 basis  point drop in  interest  rates by the  Federal  Reserve
since September 2007.

     Interest  Expense.  Interest  expense  increased  $76,000 or 5.5%,  to $1.5
million for the three months ended  September 30, 2008 from $1.4 million for the
three months ended September 30, 2007. The increase in interest expense resulted
from an increase in the average balances in  interest-bearing  liabilities which
was mitigated by the lower rates paid on these liabilities.  The average balance
of  interest-bearing  liabilities  increased $29.2 million,  or 20.6%, to $171.0
million for the three months ended September 30, 2008 compared to $141.8 million
for  the  three  months  ended   September   30,  2007.   The  average  cost  of
interest-bearing liabilities decreased by 49 basis points to 3.42% for the three
months ended  September 30, 2008 from 3.91% for the three months ended September
30, 2007. The average cost of deposit  accounts  decreased by 60 basis points to
3.16% for the three months ended  September  30, 2008  compared to 3.76% for the
three months ended September 30, 2007. The average cost of borrowings  decreased
by 71 basis  points to 4.15% for the  three  months  ended  September  30,  2008
compared to 4.86% for the three months ended September 30, 2007. The increase in
interest expense reflects a higher volume of deposits and borrowings.

At  September  30,  2008,  we had $33.3  million  of  certificates  of  deposit,
including  individual  retirement  accounts  that will mature  during the fourth
quarter of 2008 with a weighted  average cost of 3.85%.  Based on current market
rates,  if these funds remain with Fairport  Savings  Bank,  the rates we pay on
these deposits will remain similar, depending on the maturity term.

     Net Interest Income.  Net interest income  increased  $230,000 or 25.0%, to
$1.2 million for the three months ended September 30, 2008 from $921,000 for the
three months ended  September 30, 2007. The increase in net interest  income was
due primarily to an increase in average  interest-earning assets of $3.2 million

                                       15
<PAGE>
more than interest-bearing liabilities, due to the investment of the proceeds of
the initial stock offering that closed in August 2007. The improved net interest
margin   resulted   primarily  from  an  improved  yield  from  mortgage  backed
securities,  the benefit of a higher  percentage of earning  assets  deployed in
higher yielding loan assets, and lower funding costs. The Company's net interest
margin  increased 9 basis points to 2.40% for the three  months ended  September
30, 2008 from 2.31% for the three months ended  September 30, 2007. The increase
in net  interest  margin was also  attributable  to the effect of a normal yield
curve in 2008  compared to the effect of the flat or  inverted  yield curve that
existed  for much of 2007.  If the current  interest  rate  environment  remains
relatively   stable  through  the  remainder  of  2008,  we  anticipate   modest
improvement in our net interest margin with  certificates  of deposits  maturing
and  renewing at similar  interest  rates,  and new loan volume  added at higher
interest rates.

     Provision for Loan Losses. Based on management's  evaluation of the factors
that determine the level of the allowance for loan losses, we recorded $8,000 in
provision  for loan losses for the three month period ended  September  30, 2008
compared to no provision  for loan losses for the three  months ended  September
30, 2007. The allowance for loan losses as of September 30, 2008 was $335,000 or
..24% of total loans, compared to $319,000 or .26% of total loans as of September
30, 2007.  We ended the quarter with no  non-accrual  loans as of September  30,
2008  compared  to $100,000  or .08% of loans in  non-accrual  loan status as of
September 30, 2007. We had $41,000 in foreclosed real estate as of September 30,
2007 and no foreclosed real estate as of September 30, 2008.

     Other Income. Total other income decreased $80,000 or 47.3%, to $89,000 for
the three months  ended  September  30, 2008  compared to $169,000 for the three
months ended September 30, 2007. In the three months ended September 2007, there
was an $81,000 gain on sale of available for sale securities compared to no gain
on sale of  available  for sale  securities  in 2008.  In the three months ended
September  30,  2008,  the  Company  recorded  a  $57,000   other-than-temporary
impairment  loss  related to its  investment  in Freddie Mac common  stock.  The
decrease was partially  offset by a $30,000 increase in checking account service
charge fees associated with the courtesy  overdraft  protection at point of sale
and ATM's,  and an  increase of $28,000 in  commissions  from  Oakleaf  Services
insurance/annuity and security sales.

     Other Expenses. Other expenses increased $106,000, or 9.7%, to $1.2 million
for the three months ended  September  30, 2008 compared to $1.1 million for the
three months ended September 30, 2007. The increase was the primary result of an
increase of $61,000 in salaries and  benefits  expense  primarily  due to annual
cost of living raises effective  January 1 of each year, and $41,000 in mortgage
fees and taxes with additional mortgage volume.

The Federal Deposit Insurance Corporation ("FDIC") imposes an assessment against
institutions  for  deposit  insurance.  This  assessment  is  based  on the risk
category  of the  institution  and  ranges  from  5 to 43  basis  points  of the
institution's  deposits.  Federal law requires that the designated reserve ratio
for the deposit  insurance  fund be established by the FDIC at 1.15% to 1.50% of
estimated insured deposits.  If this reserve ratio drops below 1.15% or the FDIC
expects it to do so within six months, the FDIC must, within 90 days,  establish
and  implement  a plan to  restore  the  designated  reserve  ratio  to 1.15% of
estimated   insured   deposits   within   five   years   (absent   extraordinary
circumstances).

Recent  bank  failures  coupled  with  deteriorating  economic  conditions  have
significantly reduced the deposit insurance fund's reserve ratio. As of June 30,
2008, the designated  reserve ratio was 1.01% of estimated  insured  deposits at
March 31, 2008. As a result of this reduced  reserve ratio, on October 16, 2008,
the FDIC  published a proposed rule that would restore the reserve ratios to its
required  level.  The proposed  rule would raise the current  deposit  insurance
assessment  rates  uniformly for all  institutions by 7 basis points (to a range
from 12 to 50 basis  points) for the first  quarter of 2009.  The proposed  rule
would  also  alter  the  way  the  FDIC  calculates  federal  deposit  insurance
assessment rates beginning in the second quarter of 2009 and thereafter.

                                       16
<PAGE>
Under the proposed rule, the FDIC would first establish an institution's initial
base assessment  rate. This initial base assessment rate would range,  depending
on the risk category of the  institution,  from 10 to 45 basis points.  The FDIC
would then adjust the initial  base  assessment  (higher or lower) to obtain the
total base assessment  rate. The adjustments to the initial base assessment rate
would  be  based  upon  an  institution's  levels  of  unsecured  debt,  secured
liabilities,  and brokered deposits.  The total base assessment rate would range
from 8 to 77.5  basis  points  of the  institution's  deposits.  There can be no
assurance  that the proposed rule will be implemented by the FDIC or implemented
in its proposed form.

In addition, the Emergency Economic Stabilization Act of 2008 (EESA) temporarily
increased the limit on FDIC insurance  coverage for deposits to $250,000 through
December 31, 2009, and the FDIC took action to provide coverage for newly issued
senior unsecured debt and non-interest bearing transaction accounts in excess of
the $250,000 limit, for which institutions will be assessed additional premiums.

These actions will increase the  Company's  non-interest  expense in 2009 and in
future years as long as the increased premiums are in place.

     Income Tax Expense/Benefit.  We had pre-tax income of $35,000 for the three
months  ended  September  30, 2008 versus a pre-tax loss of $1,000 for the three
months ended September 30, 2007, which resulted in a $34,000 tax expense for the
three months ended  September 30, 2008,  versus no taxes  recorded for the three
months ended September 30, 2007, a change of $34,000. The effective tax rate was
97.1% for the three months ended September 30, 2008 compared to no taxes for the
three months ended September 30, 2007. There was no tax benefit  recognized as a
result of the $57,000 other-than-temporary impairment loss recorded on September
30, 2008. For tax purposes,  this loss is considered to be a capital loss. Given
the  Company's  lack of current and  expected  capital  income,  the Company has
concluded that it is unlikely the tax benefit of the loss will be utilized.

Comparison of Operating Results for the Nine Months Ended September 30, 2008
and September 30, 2007

     General.  We had a net loss of $95,000 for the nine months ended  September
30, 2008 compared to a net loss of $248,000 for the nine months ended  September
30, 2007. The improvement was attributable to an increase in net interest income
of $505,000,  partially  offset by an increase in other expenses of $206,000,  a
decrease in other income of $14,000, a provision for loan losses of $14,000, and
a  decrease  in  income  tax  benefit  of  $118,000.  The  net  interest  income
improvement  for the nine months ended  September  30, 2008 was  generated by an
increase in interest-earning assets due to the investment of the proceeds of our
initial  stock  offering that closed in August 2007,  the $14.6 million  balance
sheet leverage  transaction in February 2008, the benefit of a higher percentage
of earning  assets  deployed in higher  yielding loan assets,  and lower funding
costs due to a steepened yield curve.

     Interest and Dividend  Income.  Interest and dividend  income  increased by
$1.1 million,  or 16.9% to $7.6 million for the nine months ended  September 30,
2008 from $6.5  million  for the nine  months  ended  September  30,  2007.  The
increase in interest and dividend income  resulted  primarily from a $232,000 or
4.3%,  increase in interest income from loans, a $263,000 or 34.2%,  increase in
interest  income  from  securities,  a $593,000  or 298.0%  increase in interest
income from mortgage-backed securities, offset by a $63,000 or 37.7% decrease in
interest income from other sources. Average interest-earning assets increased by
$34.2 million,  or 22.6%,  to $185.5 million for the nine months ended September
30, 2008 from $151.3  million for the nine months ended  September 30, 2007. The
yield on interest  earning assets  decreased by 32 basis points to 5.43% for the
nine months ended September 30, 2008 compared to 5.75% for the nine months ended
September  30,  2007,  reflecting  the  effect  of the 325 basis  point  drop in
interest rates by the Federal Reserve since September 2007.

     Interest  Expense.  Interest expense  increased  $520,000 or 13.1%, to $4.5
million for the nine months ended  September  30, 2008 from $4.0 million for the
nine months ended September 30, 2007. The increase in interest  expense resulted
from an increase in average  balances in  interest-bearing  liabilities of $28.6

                                       17
<PAGE>
million,  or 21.0%,  to $164.5  million for the nine months ended  September 30,
2008  compared to $135.9  million for the nine months ended  September 30, 2007.
The average cost of interest-bearing liabilities decreased by 25 basis points to
3.63% for the nine  months  ended  September  30,  2008 from  3.88% for the nine
months ended September 30, 2007. The average cost of deposit accounts  decreased
by 25 basis  points  to 3.45%  for the nine  months  ended  September  30,  2008
compared to 3.70% for the nine months ended September 30, 2007. In addition, the
average  cost of  borrowings  decreased by 70 basis points to 4.17% for the nine
months  ended  September  30, 2008  compared to 4.87% for the nine months  ended
September 30, 2007.  The interest  expense  increase was the result of increased
volume in both deposits and borrowings.

     Net Interest Income.  Net interest income  increased  $505,000 or 19.6%, to
$3.1 million for the nine months ended  September 30, 2008 from $2.6 million for
the nine months ended  September 30, 2007.  The increase in net interest  income
was due primarily to an increase of interest bearing assets of $5.6 million more
than  interest  bearing  liabilities.  The average cost of our  interest-bearing
liabilities  decreased  by 25  basis  points,  while  the  average  yield on our
interest-earning  assets decreased by 32 basis points,  as the deposit growth of
the Bank has  primarily  been in time  deposits,  which carry  higher costs than
other deposit alternatives.  Our net interest margin decreased by 5 basis points
to 2.21% for the nine months  ended  September  30, 2008 from 2.26% for the nine
months ended September 30, 2007.

     Provision for Loan Losses. Based on management's  evaluation of the factors
that determine the level of the allowance for loan losses, we recorded a $14,000
provision  for loan losses for the nine month  period ended  September  30, 2008
compared  to no  provision  for loan  losses  for the nine  month  period  ended
September 30, 2007. We continue to maintain  exceptional  credit  quality within
our loan portfolio with no charge-offs recorded within the reporting period. The
allowance for loan losses as of September 30, 2008 was $335,000 or .24% of total
loans,  compared to $319,000 or .26% of total loans as of September 30, 2007. We
had no  non-accrual  loans as of September 30, 2008 compared to $100,000 or .08%
of loans in non-accrual status as of September 30, 2007.

     Other Income.  Other income decreased  $14,000 or 4.3%, to $314,000 for the
nine months ended  September  30, 2008  compared to $328,000 for the nine months
ended  September 30, 2007. The decrease in other income was primarily the result
of the  impairment  loss on securities  available for sale recorded in the third
quarter of 2008 of $57,000  and an $81,000  gain on sale of  available  for sale
securities  in the  third  quarter  of  2007  compared  to no  gain  on  sale of
securities  available  for sale in 2008.  The  decrease  is  offset by a $40,000
increase in our  Oakleaf  subsidiary  revenue and a $55,000  increase in Service
fees from an increase in checking  account  service charge fees  associated with
the courtesy overdraft protection at point of sale and ATM's.

     Other Expenses.  Other expenses increased $206,000 or 6.3%, to $3.5 million
for the nine months ended  September  30, 2008  compared to $3.3 million for the
nine months ended  September 30, 2007.  The increase was mainly the result of an
additional $72,000 in salaries and benefits expense primarily due to annual cost
of living  raises  effective  January 1 of each  year,  a  $66,000  increase  in
mortgage  fees and taxes due to  increased  loan volume,  a $21,000  increase in
occupancy  expense  due to  property  taxes,  an  increase  of  $67,000 in other
expenses, including legal fees, primarily due to increased costs associated with
being a newly registered public company.

     Income Tax  Benefit.  We had a pre-tax loss of $115,000 for the nine months
ended  September  30, 2008 versus a pre-tax loss of $386,000 for the nine months
ended  September 30, 2007,  which resulted in a $20,000 tax benefit for the nine
months  ended  September  30,  2008,  versus a $138,000 tax benefit for the nine
months ended  September  30, 2007, a change of $118,000.  The effective tax rate
was (17.4%) for the nine months ended September 30, 2008 compared to (35.8%) for
the nine months ended September 30, 2007. There was no tax benefit recognized as
a  result  of the  $57,000  other-than-temporary  impairment  loss  recorded  on
September 30, 2008.  For tax  purposes,  this loss is considered to be a capital
loss.  Given the  Company's  lack of current and expected  capital  income,  the
Company has  concluded  that it is unlikely  the tax benefit of the loss will be
utilized.

                                       18
<PAGE>
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 September
30, 2008,  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
September 30, 2008.


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

         (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  September  30,  2008,  cash and cash  equivalents
totaled $6.6 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 September 30, 2008, we had $3.6 million in loan commitments  outstanding.  In
addition to commitments to originate  loans, we had $7.7 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
September  30, 2008  totaled  $58.3  million,  or 62.6% of our  certificates  of
deposit and 44.1% 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  September 30, 2009. 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 nine months ended September 30, 2008, we originated  $26.6 million of
loans.

                                       19
<PAGE>
Financing  activities  consist  primarily  of activity in deposit  accounts  and
Federal  Home Loan Bank  borrowings.  We  experienced  a net  increase  in total
deposits of $3.2 million for the quarter ended September 30, 2008. 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
increased by $17.0 million to $42.6 million for the nine months ended  September
30, 2008,  compared to a net  decrease of $8.2 million to $19.8  million for the
nine months ended  September 30, 2007.  Federal Home Loan Bank  borrowings  have
primarily been used to fund loan demand;  however $14.6 million of advances were
used to fund the balance sheet leverage  transaction.  At September 30, 2008, we
had the ability to borrow  approximately  $103.3  million  from the Federal Home
Loan Bank of New York, of which $42.6 million had been advanced.

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 September 30, 2008,  Fairport  Savings Bank
exceeded  all  regulatory  capital   requirements,   and  was  considered  "well
capitalized" under regulatory guidelines.

The net proceeds from our 2007 minority stock offering  significantly  increased
our liquidity and capital  resources.  Over time, the initial level of liquidity
will be reduced as net  proceeds  from the stock  offering  are used for general
corporate purposes,  including the funding of loans. Our financial condition and
results  of  operations  will be  enhanced  by the net  proceeds  from the stock
offering,  resulting in increased net  interest-earning  assets and net interest
income.  However,  due to the increase in equity resulting from the net proceeds
raised in the stock  offering,  our  return on  equity  was  adversely  affected
following the stock offering.

Off-Balance Sheet Arrangements

In the  ordinary  course  of  business,  the Bank 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  September  30,  2008  and  2007,  we had  $3.6  million  and  $2.9  million,
respectively,  of commitments to grant loans, and $7.7 million and $7.7 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 4. 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

                                       20
<PAGE>
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.


                           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

     Not applicable since the Company is a smaller reporting company.


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. Submission of Matters to a Vote of Security Holders

     Not applicable


Item 5. Other Information

     Not applicable


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.*

                                       21
<PAGE>
     4      Form of Common Stock Certificate of FSB Community Bankshares, Inc.*
     10.1   Amended and Restated Employment Agreement between FSB Community
            Bankshares, Inc. and Dana C. Gavenda**
     10.2   Supplemental Executive Retirement Plan*
     10.3   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).
     **  Filed as an exhibit to the Company's Current Report on form 8-K filed
         with the Securities and Exchange Commission on September 25, 2008.

                                       22
  <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:    November 13, 2008                 /s/ Dana C. Gavenda
                                           -----------------------------------
                                           Dana C. Gavenda
                                           President and Chief Executive Officer


Date:    November 13, 2008                 /s/ Kevin D. Maroney
                                           -----------------------------------
                                           Kevin D. Maroney
                                           Executive Vice President and Chief
                                           Financial Officer

                                       23