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, 2009
                                       OR
[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the transition period from _______________ to ______________________

                          Commission File No. 001-52751

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

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

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

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



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

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

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

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

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

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

     As of November  13, 2009 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>
<TABLE>
<CAPTION>

                         FSB Community Bankshares, Inc.
                                    FORM 10-Q

                                      Index
                                      -----
                                                                                                   Page
                                                                                                   ----
                          Part I. Financial Information


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

             Consolidated Balance Sheets as of September 30, 2009
             and December 31, 2008                                                                   1

             Consolidated Statements of Operations for the Three Months Ended
             September 30, 2009 and 2008                                                             2

             Consolidated Statements of Operations for the Nine Months Ended
             September 30, 2009 and 2008                                                             3

             Consolidated Statements of Stockholders' Equity for the Nine Months Ended
             September 30, 2009 and 2008                                                             4

             Consolidated Statements of Cash Flows for the Nine Months Ended
             September 30, 2009 and 2008                                                             5

             Notes to Consolidated Financial Statements                                              7

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

Item 3.      Quantitative and Qualitative Disclosures about Market Risk                              27

Item 4T.     Controls and Procedures                                                                 27

                           Part II. Other Information

Item 1.      Legal Proceedings                                                                       27

Item 1A.     Risk Factors                                                                            27

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds                             28

Item 3.      Defaults upon Senior Securities                                                         28

Item 4.      Submission of Matters to a Vote of Security Holders                                     28

Item 5.      Other Information                                                                       28

Item 6.      Exhibits                                                                                29

             Signature Page                                                                          30
</TABLE>

<PAGE>

                          Part I. Financial Information

Item 1.  Consolidated Financial Statements

                         FSB COMMUNITY BANKSHARES, INC.

                           Consolidated Balance Sheets
              September 30, 2009 and December 31, 2008 (unaudited)
                  (Dollars in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                              September 30,       December 31,
                                   Assets                                        2009                2008
                                                                             ----------------    ---------------
<S>                                                                          <C>                 <C>
Cash and due from banks                                                      $   7,472           $    2,154
Interest-earning demand deposits                                                 2,571                1,019
                                                                             ----------------    ---------------
     Cash and Cash Equivalents                                                  10,043                3,173

Securities available for sale                                                   81,638               43,925
Securities held to maturity (fair value 2009 -$6,500, 2008- $7,091)              6,433                7,289
Investment in FHLB stock                                                         2,002                2,312
Loans receivable, net of allowance for loan losses of: 2009 - $360,
     2008 - $345                                                               116,963              135,713
Accrued interest receivable                                                      1,353                1,032
Premises and equipment, net                                                      2,582                2,308
Other assets                                                                       665                  383
                    Total Assets                                             $ 221,679            $ 196,135
                                                                             ================     ==============


                       Liabilities & Stockholders' Equity

Deposits:
     Non-interest-bearing                                                    $   3,906            $   3,487
     Interest-bearing                                                          156,241              124,035
                                                                             ----------------     --------------
                Total Deposits                                                 160,147              127,522

Short-term borrowings                                                                -                3,850
Long-term borrowings                                                            37,172               41,631
Advances from borrowers for taxes and insurance                                    942                2,152
Official bank checks                                                             2,340                  348
Other liabilities                                                                  604                  591
                                                                             ---------------      --------------
                    Total Liabilities                                          201,205              176,094
                                                                             ---------------      --------------

                              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                                                       7,276                7,286
Retained earnings                                                               13,293               13,249
Accumulated other comprehensive income (loss)                                      330                  (43)
Unearned ESOP shares - at cost                                                    (604)                (630)
                                                                             ---------------      --------------
                    Total Stockholders' Equity                                  20,474               20,041
                                                                             ---------------      --------------
                    Total Liabilities and Stockholders' Equity               $ 221,679            $ 196,135
                                                                             ===============      ==============

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

<PAGE>



                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Operations
           Three Months Ended September 30, 2009 and 2008 (unaudited)
                 (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                             2009                2008
                                                                        ---------------   ------------------
<S>                                                                     <C>               <C>
Interest and Dividend Income
    Loans                                                               $    1,669        $       1,962
    Securities - taxable                                                       415                  350
    Mortgage-backed securities                                                 264                  288
    Other                                                                        2                   14
                                                                        ---------------   ------------------
          Total Interest and Dividend Income                                 2,350                2,614

Interest expense
    Deposits                                                                   844                  998
    Borrowings:
          Short-term                                                             -                     1
          Long-term                                                            404                   464
                                                                        ---------------   ------------------
          Total Interest Expense                                             1,248                 1,463
                                                                        ---------------   ------------------
          Net Interest Income                                                1,102                 1,151
Provision for Loan Losses                                                        7                     8
                                                                        ---------------   ------------------
          Net Interest Income After Provision
            for Loan Losses                                                  1,095                 1,143
                                                                        ---------------   ------------------
Other Income
    Service fees                                                                73                    57
    Fee income                                                                   5                    53
    Impairment loss on securities available for sale                             -                   (57)
    Gain on sale of  loans                                                       4                     2
    Other                                                                       51                    34
                                                                        ---------------   ------------------
          Total Other Income                                                   133                    89
                                                                        ---------------   ------------------
Other Expense
     Salaries and employee benefits                                            613                   655
     Occupancy expense                                                         130                   118
     Data processing costs                                                      25                    22
     Advertising                                                                76                    54
     Equipment expense                                                          92                    84
     Electronic banking                                                         21                    15
     Directors' fees                                                            25                    28
     Mortgage fees and taxes                                                    71                    86
     FDIC Premium expense                                                       80                     6
     Other expense                                                             152                   129
                                                                        ---------------   ------------------
          Total Other Expenses                                               1,285                 1,197
                                                                        ---------------   ------------------
          Income (Loss) Before Income Taxes                                    (57)                   35

          Provision  (Benefit) for Income Taxes                                (23)                   34
                                                                        ---------------   ------------------
          Net Income (Loss)                                             $      (34)       $            1
                                                                        ===============   ==================
          Earnings (Loss) per common share                              $    (0.02)       $         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, 2009 and 2008 (unaudited) (
                  Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                             2009                2008
                                                                        ---------------   ------------------
<S>                                                                     <C>               <C>
Interest and Dividend Income
    Loans                                                               $    5,333        $       5,626
    Securities - taxable                                                       983                1,033
    Mortgage-backed securities                                                 889                  792
    Other                                                                        5                  104
                                                                        ---------------   ------------------
          Total Interest and Dividend Income                                 7,210                7,555

Interest expense
    Deposits                                                                 2,586                 3,205
    Borrowings:
          Short-term                                                             1                     1
          Long-term                                                          1,234                 1,273
                                                                        ---------------   ------------------
          Total Interest Expense                                             3,821                 4,479
                                                                        ---------------   ------------------
          Net Interest Income                                                3,389                 3,076
Provision for Loan Losses                                                       21                    14
                                                                        ---------------   ------------------
          Net Interest Income After Provision
            for Loan Losses                                                  3,368                 3,062
                                                                        ---------------   ------------------
Other Income
    Service fees                                                               188                   148
    Fee income                                                                  33                   107
    Gain on sale of securities available for sale                               92                     -
    Impairment loss on securities available for sale                             -                   (57)
    Gain on sale of loans                                                       49                     8
    Other                                                                      154                   108
                                                                        ---------------   ------------------
          Total Other Income                                                   516                   314
                                                                        ---------------   ------------------
Other Expense
     Salaries and employee benefits                                          1,862                 1,839
     Occupancy expense                                                         379                   346
     Data processing costs                                                      72                    63
     Advertising                                                               160                   203
     Equipment expense                                                         269                   249
     Electronic banking                                                         60                    50
     Directors' fees                                                            82                    85
     Mortgage fees and taxes                                                   187                   182
     FDIC Premium expense                                                      261                    13
     Other expense                                                             490                   461
                                                                        ---------------   ------------------
          Total Other Expenses                                               3,822                 3,491
                                                                        ---------------   ------------------
          Income (Loss) Before Income Taxes                                     62                  (115)

          Provision  (Benefit) for Income Taxes                                 18                   (20)
                                                                        ---------------   ------------------
          Net Income (Loss)                                             $       44       $           (95)
                                                                        ===============   ==================
          Earnings (Loss) per common share                              $     0.03       $          0.06
                                                                        ===============   ==================
See  accompanying  notes to  consolidated  financial  statements
</TABLE>
                                       3
<PAGE>



                         FSB COMMUNITY BANKSHARES, INC.

                 Consolidated Statements of Stockholders' Equity
            Nine Months Ended September 30, 2009 and 2008 (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>
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
                                              ========     ===========   =============   ===============   ============  ===========

Balance - January 1, 2009                     $    179     $    7,286    $    13,249     $        (43)     $     (630)   $   20,041
                                                                                                                         -----------
   Comprehensive income:
        Net income                                   -              -             44                -               -            44
        Change in net unrealized gain
             (loss) on securities available
             for sale, net of reclassification
             adjustment  and taxes                   -              -              -              373               -           373
                                                                                                                         -----------
       Total Comprehensive Income                                                                                                417

  ESOP shares committed to be released               -            (10)             -                -              26            16
                                              ---------    -----------   -------------   ---------------   ------------  -----------
Balance - September 30, 2009                  $    179     $    7,276    $    13,293     $        330      $     (604)   $   20,474
                                              ========     ===========   =============   ===============   ============  ===========


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



                         FSB COMMUNITY BANKSHARES, INC.

                      Consolidated Statements of Cash Flows
            Nine Months Ended September 30, 2009 and 2008 (unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                                         2009               2008
                                                                                 -----------------  ------------------
<S>                                                                              <C>                <C>
Cash Flows From Operating Activities
   Net Income (Loss)                                                             $            44    $           (95)
   Adjustments to reconcile net income (loss) to net cash  provided by (used
by)
    operating activities:
         Net amortization of premiums and discounts on investments                           479                233
         Gain on sale of securities available for sale                                       (92)                 -
         Impairment loss on securities available-for-sale                                      -                 57
         Gain on sale of loans to others                                                     (49)                (9)
         Proceeds from loans sold to others                                               12,709                  -
         Loans originated  for sale                                                      (12,660)                 -
         Amortization of net deferred loan origination fees and costs                         11                (17)
         Depreciation and amortization                                                       221                201
         Provision for loan losses                                                            21                 14
         Expense related  to ESOP                                                             16                 22
         Deferred income tax benefit                                                         (43)               (36)
         Increase in accrued  interest  receivable                                          (321)               (76)
         Increase in other assets                                                           (272)              (258)
         Increase (decrease) in other liabilities                                           (103)               153
                                                                                 -----------------  ------------------
                        Net Cash Provided by (Used By) Operating Activities                  (39)               189
                                                                                 -----------------  ------------------

Cash Flows From Investing Activities
   Purchase of securities held to maturity                                                    -              (3,001)
   Proceeds from maturities and calls of securities held to maturity                          -              20,999
   Proceeds from principal paydowns of securities held to maturity                           850              1,970
   Purchase of securities available for sale                                             (79,566)           (51,439)
   Proceeds from maturities and calls of securities available for sale                    33,037              7,500
   Proceeds from principal paydowns of securities available for sale                       3,602              2,206
   Proceeds from sales of securities available for sale                                    5,355                  -
   Net (increase) decrease in loans                                                       18,718            (14,543)
   Proceeds from loans sold to others                                                          -              1,918
   Redemption (purchase) of Federal Home Loan Bank stock                                     310               (779)
   Purchase of premises and equipment                                                       (495)               (28)
                                                                                 -----------------  ------------------
                        Net Cash Used By Investing Activities                            (18,189)           (35,197)
                                                                                 -----------------  ------------------

Cash Flows From Financing Activities
   Net increase in deposits                                                               32,625             13,206
   Net decrease in short-term borrowings                                                  (3,850)                 -
   Proceeds from long-term  borrowings                                                         -             21,500
   Repayments on long-term borrowings                                                     (4,459)            (4,459)
   Net decrease in advances from borrowers
      for taxes and insurance                                                             (1,210)              (913)
   Net increase in official bank checks                                                    1,992              2,827
                                                                                 -----------------  ------------------
                       Net Cash Provided By Financing Activities                         25,098             32,161
                                                                                 -----------------  ------------------

                        Net Increase (Decrease) in Cash
                                and Cash Equivalents                                       6,870             (2,847)

Cash and Cash Equivalents- Beginning                                                       3,173              9,444
                                                                                 -----------------  ------------------

Cash and Cash Equivalents- Ending                                                $        10,043    $         6,597
                                                                                 =================  ==================
</TABLE>


                                       5
<PAGE>



                         FSB COMMUNITY BANKSHARES, INC.

               Consolidated Statements of Cash Flows, (Continued)


                                                    2009            2008
                                            --------------  -----------------
Supplementary Cash Flows Information

        Interest paid                       $        3,836  $           4,536
                                            ==============  =================
        Income taxes paid                   $          115  $               1
                                            ==============  =================






See accompanying notes to consolidated financial statements


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

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

The unaudited consolidated financial statements and "Management's Discussion and
Analysis of Financial  Condition  and Results of  Operations"  should be read in
conjunction with the Company's audited consolidated financial statements for the
year ended  December 31, 2008,  included in the Annual Report filed on Form 10-K
with the Securities and Exchange Commission ("SEC") on March 31, 2009.

Operating results for the three and nine months ended September 30, 2009 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2009.

The  consolidated  financial  statements  at September 30, 2009 and December 31,
2008 and for the three and nine months ended September 30, 2009 and 2008 include
the accounts of the Company,  Fairport  Savings Bank (the "Bank") and the Bank's
wholly-owned   subsidiary,   Oakleaf  Services  Corporation   ("Oakleaf").   All
inter-company  balances and transactions  have been eliminated in consolidation.
Certain amounts from prior periods may have been  reclassified,  when necessary,
to conform to current period presentation.

The Company has evaluated  subsequent  events through November 13, 2009 which is
the date the consolidated financial statements were issued.

Note 2-Fair Value Measurement and Disclosure

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

                                       7
<PAGE>
Note 2-Fair Value Accounting and Measurement (Continued)

In September 2006, the Financial  Accounting Standards Board ("FASB") issued ASC
Topic 820, Fair Value  Measurements and  Disclosures,  which defines fair value,
establishes  a  framework  for  measuring  fair value  under  GAAP,  and expands
disclosures  about  fair  value  measurements.  ASC Topic 820  applies  to other
accounting pronouncements that require or permit fair value measurements.

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

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

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

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

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

For  assets  measured  at fair  value  on a  recurring  basis,  the  fair  value
measurements  by level  within the fair value  hierarchy  used are as follows at
September 30, 2009 and at December 31, 2008:
<TABLE>
<CAPTION>

            (Dollars in Thousands)                   Total           Level 1           Level 2           Level 3
                                                     -----           -------           -------           -------
        <S>                                     <C>              <C>               <C>               <C>
              September 30, 2009
        Securities available for sale           $     81,638     $         13      $     81,625      $          -
                                                ============     ============      ============      ============
              December 31, 2008
        Securities available for sale           $      3,925     $          6      $     43,919      $          -
                                                ============     ============      ============      ============
</TABLE>

No  assets  or  liabilities  have  been  measured  on a  non-recurring  basis at
September 30, 2009 or December 31, 2008.

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

                                       8
<PAGE>
Note 2-Fair Value Accounting and Measurement (Continued)

The following methods and assumptions were used by the Company in estimating its
fair value  disclosures  for  financial  instruments  at September  30, 2009 and
December 31, 2008:

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

The carrying amounts of these assets approximate their fair values.

Investment Securities

The fair value of securities available for sale (carried at fair value) and held
to maturity  (carried at amortized  cost) are  determined  by  obtaining  quoted
market prices on nationally recognized securities exchanges (Level 1), or matrix
pricing (Level 2), which is a mathematical technique used widely in the industry
to value debt securities without relying exclusively on quoted market prices for
the specific securities but rather by relying on the securities' relationship to
other benchmark  quoted prices.  For certain  securities which are not traded in
active markets or are subject to transfer restrictions,  valuations are adjusted
to reflect  illiquidity  and/or  non-transferability,  and such  adjustments are
generally  based on available  market evidence (Level 3). In the absence of such
evidence,  management's  best  estimate  is  used.  Management's  best  estimate
consists of both internal and external  support on certain Level 3  investments.
Internal   cash  flow  models  using  a  present  value  formula  that  includes
assumptions  market  participants  would use along with  indicative exit pricing
obtained from  broker/dealers  (where available) are used to support fair values
of certain Level 3 investments. The Company had no Level 3 investment securities
at September 30, 2009 or December 31, 2008.

Investment in FHLB Stock

The  carrying  value of FHLB  stock  approximates  its fair  value  based on the
redemption provisions of the FHLB stock.

Loans

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

There  were no loans  held for  sale  during  the  three  or nine  months  ended
September 30, 2009 and September 30, 2008.

Accrued Interest Receivable and Payable

The carrying amount of accrued interest receivable and payable approximates fair
value.

                                       9
<PAGE>

Deposits

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

Borrowings

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

Off-Balance Sheet Instruments

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

The  carrying  amounts  and  estimated  fair values of the  Company's  financial
instruments at September 30, 2009 and December 31, 2008 are as follows:
<TABLE>
<CAPTION>


                                                           September 30, 2009                    December 31, 2008
                                                   -----------------------------------   -----------------------------------
                                                      Carrying             Fair             Carrying              Fair
                                                       Amount              Value             Amount              Value
                                                   ----------------  -----------------   ---------------  ------------------
                                                                                (In Thousands)
<S>                                                        <C>               <C>                <C>                <C>
Financial assets:
     Cash and due from banks                                $7,472             $7,472             $2,154              $2,154
     Interest bearing demand deposits                        2,571              2,571              1,019               1,019
     Securities available for sale                          81,638             81,638             43,925              43,925
     Securities held to maturity                             6,433              6,500              7,289               7,091
     FHLB stock                                              2,002              2,002              2,312               2,312
     Loans, net                                            116,963            119,092            135,713             136,610
     Accrued interest receivable                             1,353              1,353              1,032               1,032

Financial liabilities:
     Deposits                                              160,147            161,313            127,522             129,245
     Short-term borrowings                                       -                  -              3,850               3,850
     Long-term borrowings                                   37,172             37,460             41,631              41,899
     Accrued interest payable                                  138                138                153                 153

Off-balance sheet instruments:
     Commitments to extend credit                                -                  -                  -                   -
</TABLE>

                                       10
<PAGE>

Note 3 - Securities

The amortized cost and estimated fair value of securities with gross  unrealized
gains and losses at September 30, 2009 and December 31, 2008 are as follows:
<TABLE>
<CAPTION>

                                                                           Gross              Gross
                                                     Amortized          Unrealized         Unrealized             Fair
                                                        Cost               Gains             Losses              Value
                                                   ---------------    ----------------   ----------------    ---------------
                                                                                (In Thousands)
<S>                                                   <C>                 <C>                 <C>                <C>
September 30 2009:
     Available for Sale:
         Equity securities                             $         9        $         4         $        -         $        13
             U.S. Government obligations                    59,577                148                (80)             59,645
             Mortgage-backed securities -
             residential                                    21,597                387                 (4)             21,980
                                                   ---------------    ----------------   ----------------    ---------------
                                                       $    81,183        $       539         $      (84)        $    81,638
                                                   ===============    ================   ================    ===============
     Held to Maturity:
         Mortgage-backed securities -
         residential                                   $   6,433          $        90         $      (23)        $     6,500
                                                   ===============    ================   ================    ===============
December 31, 2008:
     Available for Sale:
         Equity securities                             $         9        $        -          $       (3)        $         6
             U.S. Government obligations                    22,196                82                 (49)             22,229
             Mortgage-backed securities -
         residential                                        21,785                38                (133)             21,690
                                                   ---------------    ----------------   ----------------    ---------------
                                                       $    43,990        $      120          $     (185)         $   43,925
                                                   ===============    ================   ================    ===============
     Held to Maturity:
         Mortgage-backed securities -
         residential                                   $     7,289        $        -          $     (198)         $    7,091
                                                   ===============    ================   ================    ===============
</TABLE>
Note 3 - Securities (continued)

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

The amortized  cost and  estimated  fair value by  contractual  maturity of debt
securities at September 30, 2009 are shown below.  Actual  maturities may differ
from  contractual  maturities  because  borrowers  may have the right to call or
prepay obligations.
<TABLE>
<CAPTION>

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

<S>                                              <C>                <C>                <C>                 <C>
Due in one year or less                          $        -         $        -         $        -          $        -
Due after one year through five years                 2,500              2,502                  -                   -
Due after five years through ten years               17,544             17,559                  -                   -
Due after ten years                                  39,533             39,584                  -                   -
Mortgage-backed securities -
residential                                          21,597             21,980              6,433               6,500
                                            ---------------    ----------------   ----------------    ---------------
                                                 $   81,174         $   81,625         $    6,433          $    6,500
                                            ===============   =================   ================    ===============
</TABLE>

There was a gross $92,000 gain on sale of available  for sale  securities in the
first nine months of 2009 resulting  from proceeds of $5,355,000.  There were no
sales of securities  available for sale for the nine months ended  September 30,
2008.

No securities  were pledged to secure  public  deposits or for any other purpose
required or permitted by law at September 30, 2009 and December 31, 2008.

The following table shows gross unrealized losses and fair value,  aggregated by
investment category and length of time that individual securities have been in a
continuous  unrealized  loss  position,  at September  30, 2009 and December 31,
2008:

                                       11
<PAGE>
Note 3 - Securities (continued)

<TABLE>
<CAPTION>

                                    Less than 12 Months              12 Months or More                    Total
                                                   Gross                           Gross                          Gross
                                   Fair         Unrealized         Fair         Unrealized         Fair        Unrealized
                                   Value          Losses           Value          Losses           Value         Losses
                               --------------  --------------  --------------  --------------  -------------- --------------
                                                                      (In Thousands)
<S>                                <C>                <C>            <C>             <C>           <C>              <C>
September 30, 2009:
     U.S. Government
         obligations               $   3,527          $   80         $     -         $     -       $  13,527        $    80
     mortgaged-backed
         securities -
         residential                   3,996              12           1,063              15           5,059             27
                               --------------  --------------  --------------  --------------  -------------- --------------
                                   $  17,523          $   92         $ 1,063         $    15       $  18,586        $   107
                               ==============  ==============  ==============  ==============  ============== ==============
December 31, 2008:
Equity securities                  $       6          $    3         $     -         $     -       $       6        $     3
     U.S. Government
         obligations                   3,354              49               -               -           3,354             49
     mortgaged-backed
         securities -
         residential                  22,556             268           1,335              63          23,891            331
                               --------------  --------------  --------------  --------------  -------------- --------------
                                   $  25,916          $  320         $ 1,335         $    63       $  27,251        $   383
                               ==============  ==============  ==============  ==============  ============== ==============
</TABLE>

Management evaluates securities for other-than-temporary  impairment at least on
a quarterly  basis, and more frequently when economic or market concerns warrant
such evaluation. Consideration is given to (1) the length of time and the extent
to which the fair value has been less than the  amortized  cost  basis,  (2) the
financial condition of the issuer (and guarantor, if any) and adverse conditions
specifically  related to the security,  industry or geographic area, (3) failure
of the issuer of the security to make scheduled interest or principal  payments,
(4) any  changes  to the rating of a security  by a rating  agency,  and (5) the
presence of credit enhancements,  if any, including the guarantee of the federal
government or any of its agencies.

At September 30, 2009, ten debt securities have been in a continuous  unrealized
loss  position  for  less  than  twelve  months.  No  debt  securities  and  two
mortgage-backed  securities  have been in a continuous  unrealized loss position
for more than twelve months. The debt securities and mortgage-backed  securities
were issued by U.S.  government  sponsored agencies and are paying in accordance
with their  terms with no  deferrals  of  interest or  defaults.  As  management
believes  the  Company  does not intend to sell and will not be required to sell
these  securities  prior to recovery or  maturity,  no declines are deemed to be
other than temporary.

Note 4 - Federal Home Loan Bank of New York Stock

Federal  Home Loan  Bank of New York  ("FHLB")  stock  represents  the  required
investment in the common stock of a correspondent bank.

                                       12
<PAGE>

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

Management  believes no impairment charge is necessary related to the FHLB stock
as of September 30, 2009.

Note 5 - 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 loss.

The components of other comprehensive  income (loss) and related tax effects for
the three and nine months ended September 30, 2009 and 2008 are as follows:

<TABLE>
<CAPTION>

                                                      For the Three Months               For the Nine Months Ended
                                                       Ended September 30,                     September 30,
                                                     2009              2008                 2009            2008
                                                     ----              ----                 ----            ----
                                                          (In Thousands)                       (In Thousands)

<S>                                               <C>              <C>                   <C>              <C>
Unrealized holding gain (loss) on available
   for sale securities                            $       768      $       (72)          $       429      $      (395)
Reclassification adjustment for realized
   gains included in net income                             -                -                   (92)               -
Reclassification   adjustment  for  impairment
   loss on available for sale securities                    -               57                     -               57
                                                  -----------      -------------         --------------   --------------
              Net Unrealized Gain (Loss)                  768              (15)                  521             (338)
                  Tax effect                              232               (7)                  148             (118)
                                                  -----------      -------------         --------------   --------------
                  Net of tax amount               $       536      $        (8)          $       373      $      (220)
                                                  ===========      =============         ==============   ==============
</TABLE>

                                       13
<PAGE>

Note 6 - Earnings (Loss) Per Common Share

Earnings  (loss) per common  share are  calculated  by  dividing  the net income
(loss) by the  weighted-average  number of common shares  outstanding during the
period. The Company has not granted any restricted stock awards or stock options
and,  during the three and nine months ended September 30, 2009 and 2008, had no
potentially dilutive common stock equivalents. Unallocated common shares held by
the ESOP are not  included  in the  weighted-average  number  of  common  shares
outstanding  for purposes of calculating  earnings (loss) per common share until
they  are  committed  to  be  released.   The  weighted  average  common  shares
outstanding  were  1,724,649  for the three months ended  September 30, 2009 and
1,723,781  for the nine months ended  September  30, 2009 and  1,718,526 for the
three and nine months ended September 30, 2008.

Note 7 - Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No.  168,  "The FASB  Accounting
Standards  Codification  TM and the Hierarchy of Generally  Accepted  Accounting
Principles - a replacement  of FASB  Statement No. 162," ("SFAS 168").  SFAS 168
establishes the FASB Accounting  Standards  Codification TM  ("Codification") as
the source of authoritative  generally accepted  accounting  principles ("GAAP")
for nongovernmental entities. The Codification does not change GAAP. Instead, it
takes the thousands of individual  pronouncements  that currently  comprise GAAP
and reorganizes them into  approximately 90 accounting  Topics, and displays all
Topics  using a  consistent  structure.  Contents  in  each  Topic  are  further
organized first by Subtopic,  then Section and finally Paragraph.  The Paragraph
level is the only level that contains  substantive  content.  Citing  particular
content in the Codification  involves  specifying the unique numeric path to the
content  through the Topic,  Subtopic,  Section and  Paragraph  structure.  FASB
suggests  that all  citations  begin  with  "FASB  ASC,"  where ASC  stands  for
Accounting  Standards  Codification.  Changes to the ASC  subsequent to June 30,
2009 are referred to as Accounting Standards Updates ("ASU").

In  conjunction  with the  issuance of SFAS 168,  the FASB also issued its first
Accounting   Standards  Update  No.  2009-1,   "Topic  105  -Generally  Accepted
Accounting Principles" ("ASU 2009-1") which includes SFAS 168 in its entirety as
a transition to the ASC. ASU 2009-1 is effective for interim and annual  periods
ending  after  September  15, 2009 and will not have an impact on the  Company's
financial  position or results of  operations  but will  change the  referencing
system for accounting standards.

Certain of the following pronouncements were issued prior to the issuance of the
ASC  and  adoption  of the  ASUs.  For  such  pronouncements,  citations  to the
applicable  Codification  by Topic,  Subtopic  and  Section are  provided  where
applicable in addition to the original standard type and number.

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

The FASB  issued  SFAS 166 (not yet  reflected  in FASB  ASC),  "Accounting  for
Transfers of Financial  Assets - an amendment of FASB Statement No. 140," ("SFAS
166") in June 2009. SFAS 166 limits the circumstances in which a financial asset
should be  derecognized  when the  transferor  has not  transferred  the  entire
financial  asset  by  taking  into  consideration  the  transferor's  continuing
involvement.  The standard  requires  that a transferor  recognize and initially
measure at fair value all assets obtained  (including a transferor's  beneficial
interest) and liabilities incurred as a result of a transfer of financial assets
accounted for as a sale. The concept of a qualifying  special-purpose  entity is
removed from SFAS 140 along with the  exception  from  applying  FIN 46(R).  The
standard is effective  for the first annual  reporting  period that begins after
November 15, 2009, for interim periods within the first annual reporting period,
and for interim and annual reporting periods thereafter.  Earlier application is
prohibited.  The Company  does not expect the standard to have any impact on the
Company's consolidated financial statements.

The FASB issued ASU 2009-05,  "Fair Value  Measurements  and Disclosures  (Topic
820) - Measuring  Liabilities at Fair Value" in August, 2009 to provide guidance
when estimating the fair value of a liability.  When a quoted price in an active
market for the  identical  liability  is not  available,  fair  value  should be
measured using (a) the quoted price of an identical  liability when traded as an
asset;  (b) quoted prices for similar  liabilities or similar  liabilities  when
traded  as  assets;  or (c)  another  valuation  technique  consistent  with the
principles of Topic 820 such as an income  approach or a market  approach.  If a
restriction  exists that  prevents  the  transfer of the  liability,  a separate
adjustment  related to the  restriction  is not required  when  estimating  fair
value.  The ASU was  effective  October 1, 2009 for the Company and will have no
impact on consolidated financial position or operations.

Note 8 - Formation of Subsidiary

On August 14, 2009 the Board of  Directors  of Fairport  Savings  Bank  approved
through resolution the formation of a wholly-owned subsidiary to be known as FSB
Mortgage Corp. to engage in the activities of residential lending.  Applications
have been  submitted  to the  appropriate  regulatory  agencies  and the bank is
awaiting approval.

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, 2009,  FSB  Community
Bankshares,  MHC the  Company's  mutual  holding  company  parent,  held 946,050
shares,  or 53.0%,  of the  Company's  common stock,  engaged in no  significant
activities, and was not included in the MD&A.

Forward Looking Statements

This Quarterly Report contains forward-looking statements, within the meaning of
the  Private  Securities  Litigation  Reform Act of 1995.  Such  statements  are
subject to certain  risks and  uncertainties,  including,  among  other  things,
changes in  general  economic  conditions,  either  nationally  or in our market
areas,  that are worse than  expected;  competition  among  depository and other
financial  institutions;  inflation and changes in the interest rate environment

                                       15
<PAGE>

that  reduce our  margins or reduce  the fair  value of  financial  instruments;
adverse  changes  in the  securities  markets;  changes  in laws  or  government
regulations or policies affecting financial  institutions,  including changes in
regulatory  fees and  capital  requirements;  our  ability to enter new  markets
successfully and capitalize on growth opportunities; our ability to successfully
integrate acquired entities, if any; changes in consumer spending, borrowing and
savings habits; changes in accounting policies and practices,  as may be adopted
by the bank regulatory  agencies,  the Financial Accounting Standards Board, the
Securities and Exchange  Commission and the Public Company Accounting  Oversight
Board;  changes in our organization,  compensation and benefit plans; changes in
our financial  condition or results of operations that reduce capital  available
to pay dividends;  and changes in the financial condition or future prospects of
issuers of  securities  that we own,  that could cause actual  results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company wishes to caution readers not to place undue reliance on
any such forward-looking  statements,  which speak only as of the date made. The
Company  wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with respect to future periods in any current statements.

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

Critical Accounting Policies

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

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-K with the
Securities and Exchange Commission on March 31, 2009. These policies, along with
the disclosures  presented in the other consolidated  financial  statement notes
and in this  discussion,  provide  information  on how  significant  assets  and
liabilities are valued in the  consolidated  financial  statements and how those
values  are  determined.   Based  on  the  valuation  techniques  used  and  the
sensitivity  of  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 than 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  established  as
losses are estimated to have occurred in the loan  portfolio.  The allowance for
loan losses is recorded through a provision for loan losses charged to earnings.
Loan losses are charged  against the  allowance  when  management  believes  the
un-collectability of a loan balance is confirmed. Subsequent recoveries, if any,
are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management  and
is based upon management's periodic review of the collectability of the loans in
light of  historical  experience,  the nature and volume of the loan  portfolio,
adverse  situations  that may  affect  the  borrower's  ability  to  repay,  the
estimated value of any underlying collateral and prevailing economic conditions.

                                       16
<PAGE>

This  evaluation is  inherently  subjective  as it requires  estimates  that are
susceptible to significant revision as more information becomes available.

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.

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

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

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

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

The Company considers numerous factors when determining whether a potential OTTI
exists and the period over which the debt  security is expected to recover.  The
principal factors  considered are (1) the length of time and the extent to which
the fair value has been less than the  amortized  cost basis,  (2) the financial
condition  of  the  issuer  (and  guarantor,  if  any)  and  adverse  conditions
specifically  related to the security,  industry or geographic area, (3) failure
of the issuer of the security to make scheduled interest or principal  payments,
(4) any  changes  to the rating of a security  by a rating  agency,  and (5) the
presence of credit enhancements,  if any, including the guarantee of the federal
government or any of its agencies.

For debt  securities,  OTTI is  considered  to have  occurred if (1) the Company
intends to sell the security, (2) it is more likely than not the Company will be
required to sell the security  before  recovery of its amortized cost basis,  or
(3) if the present value of expected cash flows is not sufficient to recover the
entire  amortized cost basis.  In determining the present value of expected cash
flows, the Company  discounts the expected cash flows at the effective  interest

                                       17
<PAGE>
Critical Accounting Policies (Continued)

rate implicit in the security at the date of acquisition or, for debt securities
that are beneficial  interests in securitized  financial  assets, at the current
rate used to accrete the beneficial interest.  In estimating cash flows expected
to be collected, the Company uses available information with respect to security
prepayment  speeds,  expected  deferral and default rates and severity,  whether
subordinated  interests,  if any, are capable of absorbing  estimated losses and
the value of any underlying collateral.

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

Comparison of Financial Condition at September 30, 2009 and December 31, 2008

     Total Assets.  Total assets increased by $25.5 million, or 13.0%, to $221.7
million at September  30, 2009 from $196.1  million at December  31,  2008.  The
increase in total assets primarily reflects  increases in securities  classified
as  available  for sale and cash and cash  equivalents,  partially  offset  by a
decrease in net loans receivable.

Cash and cash equivalents  increased by $6.9 million, or 216.5% to $10.0 million
at September 30, 2009 from $3.2 million at December 31, 2008.

Total  securities  increased by $36.9  million,  or 72.0%,  to $88.1  million at
September  30,  2009  from  $51.2  million  at  December  31,  2008.  Securities
classified  as available  for sale  increased  $37.7 million to $81.6 million at
September  30, 2009 from $43.9  million at December 31, 2008.  The $37.7 million
increase was  attributable  to the purchase of $70.8 million of U.S.  government
agency securities,  purchases of $8.8 million of mortgage-backed securities, and
a  $521,000  increase  in the  fair  value of  securities  available  for  sale,
partially  offset by maturities  and calls of $33.0  million of U.S.  government
agency securities  classified as available for sale, the sale of $5.3 million of
mortgage-backed securities classified as available for sale, and $4.1 million in
principal repayments received and amortization.

Securities  classified as held to maturity decreased $856,000 to $6.4 million at
September 30, 2009 from $7.3 million at December 31, 2008  primarily as a result
of principal repayments received from mortgage-backed securities. All securities
purchased  in 2009 have been  classified  as  securities  available  for sale to
provide a portfolio of marketable  securities for liquidity as an alternative to
borrowings.  The Company has reviewed  its  investment  securities  portfolio at
September 30, 2009, and has determined that no  other-than-temporary  impairment
exists in the portfolio.

Investment in FHLB of New York stock  decreased by $310,000,  or 13.4%,  to $2.0
million at  September  30,  2009,  from $2.3 million at December 31, 2008 due to
stock redemptions.  The FHLB of New York requires members to purchase and redeem
stock based on the level of borrowings.

Net loans receivable  decreased by $18.7 million, or 13.8%, to $117.0 million at
September  30, 2009 from $135.7  million at December 31,  2008.  The decrease in
loans  receivable  was primarily  the result of sales of fixed rate  residential
mortgages  totaling  $12.7  million in the first nine  months of 2009 and normal
amortization.  Total loans sold and  serviced as of  September  30, 2009 totaled
$15.9 million compared to $5.1 million as of December 31, 2008.  Management made
the  decision  to sell long  term,  fixed rate  loans in this  historically  low
interest rate environment. The Bank sold these loans at gains which are recorded
in other  income,  and will realize  servicing  income on these loans as long as
these loans are outstanding.  Management believes that selling these loans was a
prudent  interest  rate decision in order to position the  consolidated  balance
sheet for higher interest rates in the future.  The Company continues to execute
its business  plan of making high quality  loans to existing  customers  and new

                                       18
<PAGE>

Comparison  of Financial  Condition at September  30, 2009 and December 31, 2008
(continued)

customers in our market area with $20.1  million of  residential  mortgage  loan
originations  in the  first  nine  months  of 2009.  We may  experience  further
declines in our total  residential  mortgages  loan  portfolio  with  additional
mortgage  loan sales based on the current  economic  conditions  and our desired
interest rate sensitivity  position. In the current interest rate environment we
intend to  continue  to sell a portion of our  existing  fixed-rate  residential
mortgage  loans on a servicing  retained  basis,  resulting in  additional  loan
servicing income.

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

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

     Deposits and  Borrowings.  Total deposits  increased by $32.6  million,  or
25.6%,  to $160.1  million at September 30, 2009 from $127.5 million at December
31, 2008.  Certificates of deposit,  including IRAs, increased by $22.4 million.
Transaction  accounts,   including  checking,  NOW,  money  market  and  savings
accounts, increased by $10.2 million. The net deposit growth was attributable to
the Webster  branch growth of $14.1 million,  Irondequoit  branch growth of $6.7
million,  Penfield  branch growth of $7.9 million and Fairport  branch growth of
$3.9 million. We continue to promote core customer  relationship  banking,  with
bonus rates and incentive offerings.

Combined short and long term borrowings  decreased by $8.3 million, or 18.3%, to
$37.2 million at September 30, 2009 from $45.5 million on December 31, 2008. The
decrease in borrowings  included $3.9 million in short term  borrowings and $4.4
million in long term  borrowings.  We repaid these  borrowings in the first nine
months of 2009 using increased deposits.

     Stockholders'  Equity.  Total stockholders' equity increased by $433,000 or
2.2%,  to $20.5 million at September 30, 2009 from $20.0 million at December 31,
2008.  The  increase   resulted   principally  from  increases  of  $373,000  in
accumulated  other  comprehensive  income and $44,000 in net income for the nine
months ended September 30, 2009.

     Non-Performing  Assets.  At September 30, 2009,  the Company had $93,000 in
loans  classified  as  non-performing  assets  compared  to  $146,000  in  loans
classified  as  non-performing  at December  31,  2008.  At  September  30, 2009
management  has  evaluated  the Bank's  loan loss  reserve  and  believes  it is
adequately  funded  based on the  quality  of the  current  loan  portfolio.  At
September  30, 2009,  there were no loans or other assets that are not disclosed
or disclosed as classified or special  mention,  where known  information  about
possible credit problems of borrowers caused us to have serious doubts as to the
ability of the  borrowers  to comply with the present loan  repayment  terms and
which may result in disclosure of such loans in the future.

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

                                       19
<PAGE>
<TABLE>
<CAPTION>





                                                  For the Three Months Ended September 30,
                                    -------------------------------------------------------------------
                                                  2009                                2008
                                    -------------------------------  ----------------------------------
                                                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.........................      $  117,379  $    1,669    5.69%    $  134,873  $    1,962     5.82%
Securities....................          52,972         415    3.13         29,211         350     4.79
Mortgage-backed securities....          27,468         264    3.84         24,997         288     4.61
Other.........................           5,335           2    0.15          3,063          14     1.83
                                    ----------  ----------             ----------  ----------
   Total interest-earning assets       203,154       2,350    4.63%       192,144       2,614     5.44%
                                                ----------             ----------  ----------
Non-interest-earning assets...           4,625                              5,554
                                    ----------                         ----------
   Total assets...............      $  207,779                         $  197,698
                                    ==========                         ==========

Interest-bearing liabilities:
NOW accounts..................      $    8,627  $       13    0.60%    $    7,776  $       24     1.23%
Passbook savings..............          15,827          26    0.66         14,248          32     0.90
Money market savings..........          22,787          88    1.54         11,860          57     1.92
Individual retirement accounts          17,857         161    3.61         16,339         177     4.33
Certificates of deposit.......          77,475         556    2.87         75,916         708     3.73
Borrowings....................          37,426         404    4.32%        44,838         465     4.15%
                                    ----------  ----------             ----------  ----------
   Total interest-bearing
     liabilities..............         179,999       1,248    2.77%       170,977       1,463     3.42%
                                    ----------  ----------             ----------  ----------
Non-interest-bearing liabilities:
Demand deposits.........                 3,763                              3,220
Other.........................           3,877                              3,671
                                    ----------                         ----------
     Total liabilities........         187,639                            177,868
Stockholders' equity..........          20,140                             19,830
                                    ----------                         ----------
   Total liabilities and
     stockholders' equity.....      $  207,779                         $  197,698
                                    ===========                        ==========

Net interest income...........                  $    1,102                         $    1,151
                                                ==========                         ==========
Interest rate spread (1)......                                1.86%                               2.02%
Net interest-earning assets (2)     $   23,155                         $   21,167
                                    ===========                        ==========
                                                      2.17%
Net interest margin (3).......                                                            2.40%
Average interest-earning assets
   to average interest-bearing
   liabilities................             113%                               112%
---------------------

(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>

                                       20
<PAGE>

<TABLE>
<CAPTION>


                                                 For the Nine Months Ended September 30,
                                    -------------------------------------------------------------------
                                                  2009                                2008
                                    -------------------------------  ----------------------------------
                                                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.........................      $  124,995  $    5,333    5.69 %    $  28,300  $    5,626     5.85%
Securities....................          37,676         983    3.48          9,018       1,033     4.75
Mortgage-backed securities....          28,386         889    4.18          3,138         792     4.56
Other.........................           5,771           5    0.12          5,055         104     2.74
                                    ----------  ----------             ----------  ----------
   Total interest-earning assets       196,828       7,210    4.88%       185,511       7,555     5.43%
                                                ----------                         ----------
Non-interest-earning assets...           4,513                              5,122
                                    ----------                         ----------
   Total assets...............      $  201,341                         $  190,633
                                    ==========                         ==========

Interest-bearing liabilities:
NOW accounts..................      $    8,118  $       41    0.67%     $   6,733  $       51     1.01%
Passbook savings..............          14,476          76    0.70         13,984         103      .98
Money market savings.........           20,182         267    1.76         11,307         176     2.08
Individual retirement accounts          17,519         494    3.76         16,246         538     4.42
Certificates of deposit.......          75,369       1,708    3.02         75,456       2,337     4.13
Borrowings....................          38,703       1,235    4.25         40,774       1,274     4.17
                                    ----------  ----------             ----------  ----------
   Total interest-bearing
      liabilities..............         174,367       3,821   2.92%       164,500       4,479     3.63%
                                    ----------  -----------             ---------  ----------
Non-interest-bearing liabilities:
Demand deposits.........                 3,580                              3,202
Other.........................           3,154                              2,904
                                    ----------                         ----------
     Total liabilities........         181,101                            170,606
Stockholders' equity..........          20,240                             20,027
                                    ----------                         ----------
   Total liabilities and
     stockholders' equity.....      $  201,341                         $  190,633
                                    ===========                        ==========

Net interest income...........                  $    3,389                         $    3,076
                                                ==========                         ==========
Interest rate spread (1)......                                1.96%                               1.80%
Net interest-earning assets (2)     $   22,461                         $   21,011
                                    ===========                        ==========

Net interest margin (3).......                        2.30%                              2.21%
Average interest-earning assets
   to average interest-bearing
   liabilities................             113%                               113%

</TABLE>

Comparison  of Operating  Results for the Three Months Ended  September 30, 2009
and September 30, 2008

     General.  We had a net loss of $34,000 for the three months ended September
30, 2009  compared to net income of $1,000 for the three months ended  September
30, 2008.  The  decrease of $35,000 in net income for the third  quarter of 2009
compared to the third quarter of 2008 resulted  primarily from a decrease in net
interest income of $49,000,  an increase in other expense of $88,000,  partially
offset by an increase in other  income of $44,000,  and a decrease in income tax
expense of  $57,000.  The  decrease in net  interest  income was the result of a
volume reduction in higher yielding assets, mainly mortgages,  being replaced by
an increased volume of lower yielding assets,  primarily investment  securities,
partially  offset by the Company's  ability to reduce the deposit costs in a low
interest rate  environment.  The net interest  margin  decreased to 2.17% in the
third  quarter of 2009 from 2.40% in the third quarter of 2008.  Another  factor
that negatively affected the third quarter of 2009 compared to the third quarter
of 2008 was an  additional  $74,000 in FDIC  premium  expense  recorded in other
expense.

                                       21
<PAGE>

     Interest and Dividend  Income.  Interest and dividend  income  decreased by
$264,000 or 10.1%, to $2.3 million for the three months ended September 30, 2009
from $2.6 million for the three months ended September 30, 2008. The decrease in
interest  and  dividend  income  resulted  from a $293,000 or 14.9%  decrease in
interest  income from loans, a $24,000 or 8.3% decrease in interest  income from
mortgage-backed securities, a $12,000 or 85.7% decrease in other interest income
primarily  interest  earning demand  accounts,  partially offset by a $65,000 or
18.6% increase in securities income. Average  interest-earning  assets increased
by $11.0  million,  or 5.7%,  to  $203.2  million  for the  three  months  ended
September 30, 2009 from $192.1 million for the three months ended  September 30,
2008. The yield on interest-earning assets decreased by 81 basis points to 4.63%
for the three months ended  September  30, 2009  compared to 5.44% for the three
months ended  September  30, 2008,  reflecting a yield  decrease in all interest
earning  asset  categories  as a result of a decrease in  interest  rates by the
Federal  Reserve from a Federal  Fund rate of 2.00% at  September  30, 2008 to a
targeted Federal Fund rate range of 0.00% - 0.25% at September 30, 2009.

     Interest  Expense.  Interest expense  decreased  $215,000 or 14.7%, to $1.2
million for the three months ended  September 30, 2009 from $1.5 million for the
three months ended September 30, 2008. The decrease in interest expense resulted
from lower  average rates paid on these  liabilities  despite an increase in the
aggregate average balance.  The average balance of interest-bearing  liabilities
increased  $9.0 million,  or 5.3%, to $180.0  million for the three months ended
September  30,  2009  compared  to $171.0  million  for the three  months  ended
September 30, 2008. The average cost of interest-bearing  liabilities  decreased
by 65 basis points to 2.77% for the three months ended  September  30, 2009 from
3.42% for the three months ended September 30, 2008. The average cost of deposit
accounts  decreased  by 79 basis  points  to 2.37% for the  three  months  ended
September  30, 2009  compared to 3.16% for the three months ended  September 30,
2008.  The average cost of borrowings  increased by 17 basis points to 4.32% for
the three months ended September 30, 2009 compared to 4.15% for the three months
ended September 30, 2008. The decrease in interest  expense  reflects the Bank's
management  of  lower  deposit  costs  in  a  historically   low  interest  rate
environment.

At  September  30,  2009,  we had $27.1  million  of  certificates  of  deposit,
including  IRAs  that will  mature  during  the  fourth  quarter  of 2009 with a
weighted  average cost of 2.65%.  Based on current market rates,  if these funds
remain with  Fairport  Savings Bank with similar  maturities,  the rates paid on
these deposits will decrease.

     Net Interest Income. Net interest income decreased $49,000 or 4.3%, to $1.1
million for the three months ended  September 30, 2009 from $1.2 million for the
three months ended  September 30, 2008. The decrease in net interest  income was
due primarily to an increase in lower yielding earning assets,  partially offset
by a lower  average  cost of  deposits  lowering  the  overall  cost of interest
bearing liabilities. The Company's net interest margin decreased 23 basis points
to 2.17% for the three months ended  September 30, 2009 from 2.40% for the three
months ended September 30, 2008.

     Provision for Loan Losses. Based on management's  evaluation of the factors
that determine the level of the allowance for loan losses, we recorded $7,000 in
provision  for loan losses for the three month period ended  September  30, 2009
compared  to an $8,000  provision  for loan  losses for the three  months  ended
September  30, 2008.  The allowance for loan losses as of September 30, 2009 was
$360,000 or 0.31% of total  loans,  compared to $335,000 or 0.24% of total loans
as of September 30, 2008. We ended the quarter with $93,000 in non-accrual loans
as of September  30, 2009 compared to no  non-accrual  loans as of September 30,
2008.  We recorded a $4,000  charge off in the third quarter of 2009 compared to
no charge offs in the third quarter of 2008. We had no foreclosed real estate at
September 30, 2009 or 2008.

                                       22
<PAGE>

     Other Income.  Total other income  increased  $44,000 or 49.4%, to $133,000
for the three months ended  September 30, 2009 compared to $89,000 for the three
months ended  September 30, 2008. In the three months ended  September 30, 2009,
there was an increase of $19,000 in other income  primarily  from  mortgage fees
and  gain on sale of  mortgage  loans  in the  secondary  market  and a  $16,000
increase in service fee income in deposit account service charge fees, partially
offset  by  a  decrease  of  $48,000  in  commissions   from  Oakleaf   Services
insurance/annuity  and security  sales.  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;   there  was  no
other-than-temporary impairment loss recorded in 2009.

     Other  Expense.  Total other expense  increased  $88,000,  or 7.4%, to $1.3
million for the three months ended  September  30, 2009 compared to $1.2 million
for the three months ended  September  30, 2008.  The increase was primarily the
result of a $74,000  increase in FDIC insurance  premium  expense to $80,000 for
the three months  ended  September  30,  2009,  compared to $6,000 for the three
months ended September 30, 2008. Advertising expense increased by $22,000, other
expense  increased  by $23,000,  occupancy  expense  increased  by $12,000,  and
equipment  expense  increased by $8,000  primarily  due to  additional  expenses
associated with the new Webster branch that opened in the third quarter of 2009.
The increase was partially offset by a decrease in salaries and benefits expense
of $42,000  resulting  from two  management  positions  left  vacant,  and board
approved reductions in year end incentive and discretionary pension contribution
accruals in the third quarter of 2009 compared to the third quarter of 2008.

     Income Tax  Expense.  We had pre-tax  loss of $57,000 for the three  months
ended  September 30, 2009 versus  pre-tax income of $35,000 for the three months
ended September 30, 2008,  which resulted in a $23,000 tax benefit for the three
months  ended  September  30,  2009,  versus a $34,000 tax expense for the three
months ended September 30, 2008, a change of $57,000.  The effective tax benefit
rate was 40.3% for the three months ended  September  30, 2009 compared to a tax
expense rate of 97.1% for the three months  ended  September  30, 2008 due to no
tax benefit  recognized  as a result of the $57,000  other-than-impairment  loss
recorded in 2008 for tax purposes as a capital loss.

Comparison of Operating Results for the Nine Months Ended September 30, 2009 and
September 30, 2008

     General.  We had net income of $44,000 for the nine months ended  September
30, 2009  compared to a net loss of $95,000 for the nine months ended  September
30,  2008.  The  $139,000  improvement  was  attributable  to an increase in net
interest income of $313,000, an increase in other income of $202,000,  partially
offset by an increase in other  expenses of $331,000,  a $7,000  increase in the
provision  for loan  losses,  and an increase in income tax of $38,000.  The net
interest  income  improvement  was generated by an increase in  interest-earning
assets and the  Company's  ability to reduce the deposit costs in a low interest
rate environment,  both of which positively  impacted the net interest margin in
the  first  nine  months of 2009  compared  to the  first  nine  months of 2008.
Decreased  short term interest  rates have provided an  opportunity to lower our
costs on deposits at a faster rate than our interest  earning assets,  providing
positive results in our net interest  margin.  The net interest margin increased
by 9 basis  points to 2.30% for the nine months  ended  September  30, 2009 from
2.21% for the nine months ended September 30, 2008.

     Interest and Dividend  Income.  Interest and dividend  income  decreased by
$345,000 or 4.6% to $7.2  million for the nine months ended  September  30, 2009
from $7.6 million for the nine months  ended  September  30, 2008.  The $345,000
decrease in interest and dividend income  resulted  primarily from a $293,000 or
5.2%  decrease in interest  income  from  loans,  a $50,000 or 4.8%  decrease in
interest  income from  securities,  and a $99,000 or 95.2%  decrease in interest
income from other  sources,  partially  offset by a $97,000 or 12.3% increase in
mortgage-backed  securities  interest income.  Average  interest-earning  assets
increased by $11.3 million, or 6.1%, to $196.8 million for the nine months ended
September 30, 2009 from $185.5  million for the nine months ended  September 30,
2008. The yield on interest earning assets decreased by 55 basis points to 4.88%
for the nine months  ended  September  30,  2009  compared to 5.43% for the nine
months ended September 30, 2008,  reflecting decreases in interest yields in all
asset  categories  due to the 175  basis  point  drop in  interest  rates by the
Federal Reserve since September 30, 2008.

                                       23
<PAGE>

     Interest Expense.  Interest expense decreased  $658,000,  or 14.7%, to $3.8
million for the nine months ended  September  30, 2009 from $4.5 million for the
nine months ended September 30, 2008. The decrease in interest  expense resulted
from lower average rates paid on deposit  liabilities despite an increase in the
aggregate  average balance.  Average  balances in interest  bearing  liabilities
increased  $9.9 million,  or 6.0%, to $174.4.  million for the nine months ended
September  30,  2009  compared  to  $164.5  million  for the nine  months  ended
September 30, 2008. The average cost of interest-bearing  liabilities  decreased
by 71 basis  points to 2.92% for the nine months ended  September  30, 2009 from
3.63% for the nine months ended  September 30, 2008. The average cost of deposit
accounts  decreased  by 91 basis  points  to 2.54%  for the  nine  months  ended
September  30, 2009  compared to 3.45% for the nine months ended  September  30,
2008.  The average cost of  borrowings  increased by 8 basis points to 4.25% for
the nine months ended  September  30, 2009 compared to 4.17% for the nine months
ended September 30, 2008. The decrease in interest expense reflects a lower cost
of funds in deposits in a lower interest rate environment.

     Net Interest Income. Net interest income increased  $313,000,  or 10.2%, to
$3.4 million for the nine months ended  September 30, 2009 from $3.1 million for
the nine months ended  September 30, 2008.  The increase in net interest  income
was due  primarily  to a decrease  in the average  cost of our  interest-bearing
liabilities of 71 basis points,  while the average yield on our interest-earning
assets  decreased by 55 basis  points.  Our net interest  margin  increased by 9
basis  points to 2.30% for the nine months ended  September  30, 2009 from 2.21%
for the nine months  ended  September  30,  2008.  The  increase in net interest
margin was also  attributable to the effect of a decrease of 175 basis points in
short  term  rates by the  Federal  Reserve  Bank  from  September  30,  2008 to
September 30, 2009.

     Provision for Loan Losses. Based on management's  evaluation of the factors
that determine the level of the allowance for loan losses, we recorded a $21,000
provision  for loan losses for the nine month  period ended  September  30, 2009
compared to the  $14,000  provision  for loan  losses for the nine month  period
ended  September  30,  2008.   Management   believes  we  continue  to  maintain
exceptional  credit  quality  within our loan  portfolio  with one charge-off of
$4,000  recorded  within the first nine months of 2009.  The  allowance for loan
losses as of September 30, 2009 was $360,000,  or 0.31% of total loans, compared
to  $335,000,  or  0.24%  of  total  loans  as of  September  30,  2008.  We had
non-accrual  loans totaling  $93,000,  or 0.08% of total loans  receivable as of
September 30, 2009 compared to no non-accrual loans as of September 30, 2008.

     Other Income. Total other income increased $202,000,  or 64.3%, to $516,000
for the nine months ended  September  30, 2009 compared to $314,000 for the nine
months  ended  September  30,  2008.  The primary  increase  was due to the Bank
completing  a sale  of $5.3  million  mortgage-backed  securities  on  which  it
recorded a pre-tax gain on sale of  securities  of $92,000 in May 2009.  We also
had an  increase  of $40,000 in  service  fees  resulting  from an  increase  in
checking  account  service  charge fees and an $87,000  increase in other income
which was primarily the result of mortgage  fees, and gain on sale of fixed rate
mortgages to Freddie Mac.  The Company  recorded a $57,000  other-than-temporary
impairment  loss  on  its  available  for  sale  securities  in  2008,  with  no
other-than-temporary  impairment loss recorded in 2009. There was also a $74,000
reduction  in fee  income in the first  nine  months  of 2009  compared  to 2008
resulting from a decrease in Oakleaf subsidiary revenue.

     Other Expense.  Total other expense  increased  $331,000,  or 9.5%, to $3.8
million for the nine months ended  September  30, 2009  compared to $3.5 million
for the nine months ended  September  30, 2008.  The increase was  primarily the
result of an  additional  $248,000 in FDIC  premiums due to the $91,000  special

                                       24
<PAGE>

assessment  accrued in the second quarter and a $157,000 combined first,  second
and third quarter assessment at increased rates over the prior year. There was a
$23,000 increase in salaries and benefits  expense  primarily due to annual cost
of  living  raises  effective  January  1  of  each  year,  additional  expenses
associated with new branch  staffing,  partially  offset by savings in incentive
and pension  benefit  accruals  with a board  approved  expense  reduction  plan
implemented  in February  2009.  In the nine  months  ended  September  30, 2009
compared to the nine months ended  September 30, 2008 there was also an increase
in  occupancy  expense of  $33,000,  and an  increase  in  equipment  expense of
$20,000,  and an increase in other expense of $29,000 due to additional expenses
associated  with the new Webster  branch,  partially  offset by $43,000  less in
advertising expense due to a decrease in deposit product promotions.

     Income  Taxes.  We had  pre-tax  net income of $62,000  for the nine months
ended  September  30, 2009 versus a pre-tax loss of $115,000 for the nine months
ended  September 30, 2008,  which resulted in a $18,000 tax expense for the nine
months  ended  September  30,  2009,  versus a $20,000  tax benefit for the nine
months ended September 30, 2008, a change of $38,000. The effective tax rate was
29.0% for the nine months ended  September  30, 2009 compared to (17.4%) for the
nine months ended September 30, 2008.

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, 2009,  our liquidity  ratio averaged  18.8%.  We believe that we have enough
sources of liquidity to satisfy our short and  long-term  liquidity  needs as of
September 30, 2009.

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,  2009,  cash and cash  equivalents
totaled $10.0 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.

                                       25
<PAGE>

At September 30, 2009, we had $2.8 million in loan commitments  outstanding.  In
addition to commitments to originate  loans, we had $7.9 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, 2009  totaled  $73.9  million,  or 74.3% of our  certificates  of
deposit and 46.1% 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, 2010. We believe,  however,  based on
past experience that a significant portion of such deposits will remain with us.
We have the ability to attract and retain  deposits by  adjusting  the  interest
rates offered.

Our primary  investing  activity is and will continue to be  originating  loans.
During the three months ended  September 30, 2009, we originated $6.8 million of
loans.

Financing  activities  consist  primarily  of activity in deposit  accounts  and
Federal  Home Loan Bank  borrowings.  We  experienced  a net  increase  in total
deposits of $18.1  million for the quarter  ended  September  30, 2009.  Deposit
flows are affected by the overall level of interest  rates,  the interest  rates
and products offered by us and our local competitors, and by other factors.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.  If we require funds beyond our ability to generate them internally,
borrowing  agreements  exist with the Federal Home Loan Bank of New York,  which
provides  an  additional  source of  funds.  Federal  Home Loan Bank  borrowings
decreased by $8.3 million to $37.2  million for the nine months ended  September
30, 2009,  compared to a net increase of $17.0  million to $42.6 million for the
nine months  ended  September  30,  2008.  Historically,  Federal Home Loan Bank
borrowings  have  primarily  been used to fund loan  demand  and  expanding  the
investment  portfolio.  At  September  30,  2009,  we had the  ability to borrow
approximately  $87.8  million  from the Federal  Home Loan Bank of New York,  of
which $37.2 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, 2009,  Fairport  Savings Bank
exceeded  all  regulatory  capital   requirements,   and  was  considered  "well
capitalized" under regulatory guidelines.

Off-Balance Sheet Arrangements

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

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

                                       26
<PAGE>

At  September  30,  2009  and  2008,  we had  $2.8  million  and  $3.6  million,
respectively,  of commitments to grant loans, and $7.9 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 4T. Controls and Procedures

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

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

                           Part II - Other Information

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

     In addition to the other  information  contained this  Quarterly  Report on
Form 10-Q, the following risk factors  represent  material updates and additions
to the risk factors previously  disclosed in the Company's Annual Report on Form
10-K for the Year Ended  December 31, 2008,  and Quarterly  Reports on Form 10-Q
for the  quarters  ended  March 31,  2009 and June 30,  2009,  as filed with the
Securities and Exchange Commission.  Additional risks not presently known to us,
or that we currently deem  immaterial,  may also adversely  affect our business,
financial condition or results of operations. Further, to the extent that any of
the  information  contained in this  Quarterly  Report on Form 10-Q  constitutes
forward-looking statements, the risk factors set forth below also are cautionary
statements  identifying important factors that could cause our actual results to
differ materially from those expressed in any forward-looking statements made by
or on behalf of us.

The FDIC Has  Proposed  A Rule That Would  Require  Us to Prepay  Our  Insurance
Premiums

     On September 29, 2009, the Federal Deposit Insurance  Corporation  issued a
proposed rule  pursuant to which all insured  depository  institutions  would be
required to prepay their  estimated  assessments for the fourth quarter of 2009,
and for all of 2010, 2011 and 2012.  Under the proposed rule,  this  pre-payment
would be due on December 30, 2009.  Under the proposed rule, the assessment rate

                                       27
<PAGE>

for the fourth quarter of 2009 and for 2010 would be based on each institution's
total base  assessment  rate for the third  quarter of 2009,  modified to assume
that the assessment  rate in effect on September 30, 2009 had been in effect for
the entire third  quarter,  and the  assessment  rate for 2011 and 2012 would be
equal to the modified third quarter  assessment  rate plus an additional 3 basis
points.  In addition,  each  institution's  base assessment rate for each period
would be calculated using its third quarter assessment base,  adjusted quarterly
for an estimated 5% annual growth rate in the assessment base through the end of
2012.  Based on our  deposits and  assessment  rate at  September  30, 2009,  we
estimate that our prepayment  amount will be approximately  $852,687.  We expect
that we will be able to make the prepayment from available cash on hand.

A  Legislative  Proposal Has Been  Introduced  That Would  Eliminate our Primary
Federal Regulator and Require us to Convert to a National Bank or State Bank.

     The House  Financial  Services  Committee  has released a draft of proposed
restructuring  legislation that would implement  sweeping changes to the current
bank regulatory structure.  The proposed  legislation,  developed in conjunction
with  the  U.S.  Treasury  Department,  would  establish  a  Financial  Services
Oversight  Council  and  merge  our  primary  regulator,  the  Office  of Thrift
Supervision,  into the Office of the  Comptroller  of the Currency,  the primary
federal  regulator for national  banks.  The proposal also  contemplates  that a
division  of thrift  supervision  within  the Office of the  Comptroller  of the
Currency would regulate federal thrifts.  The proposal,  if adopted,  also would
subject FSB Community Bankshares, Inc. to be regulated as a bank holding company
by the Federal Reserve Board.

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

     None.

Item 5. Other Information

     None.

                                       28
<PAGE>

Item 6. Exhibits

     The  following  exhibits  are  either  filed as part of this  report or are
     incorporated herein by reference:

3.1      Charter of FSB Community Bankshares, Inc.*
3.2      Bylaws of FSB Community Bankshares, Inc.*
4        Form of Common Stock Certificate of FSB Community Bankshares, Inc.*
10.1     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) on March 16, 2007.
     **  Filed as an exhibit to the Company's Current Report on form 8-K filed
         with the Securities and Exchange Commission on April 7, 2009.

                                       29
<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, 2009                 /s/ Dana C. Gavenda
                                           -----------------------------------
                                           Dana C. Gavenda
                                           President and Chief Executive Officer


Date:    November 13, 2009                 /s/ Kevin D. Maroney
                                           -----------------------------------
                                           Kevin D. Maroney
                                           Executive Vice President and Chief
                                           Financial Officer




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