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| UNITED STATES                      |
|------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, DC  20549    |
|                               |
| FORM 10-Q                          |
| (Mark One)                         |
| [X]                           | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |

| For the quarterly period ended: | September 30, 2010 |   |
|---------------------------------|-------------------------|--------|
|  OR                        |

| [  ]  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|-----------------|-----------------------------------------------------------------------------------------|

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

| Commission file number: | 000-52694 |   |
|-------------------------|-----------|--------|

|                                                          |
|---------------------------------------------------------------|
| QUAINT OAK BANCORP, INC.                                      |
| (Exact name of registrant as specified in its charter)        |
|                                                          |
| Pennsylvania                                                  |   | 35-2293957 |
| (State or other jurisdiction ofincorporation or organization) |   | (IRS Employer Identification No.) |
|                                                          |
| 607 Lakeside Drive, Southampton, Pennsylvania 18966                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (215) 364-4059                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (Registrant’s telephone number)                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (Former name, former address and former fiscal year, 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 filing 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 (§232.405 of this chapter) 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 a 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   [X] No                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  As of November 12, 2010, 1,102,336 shares of common stock were issued and outstanding.                                                                                                                                                                                                                              |

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| PART I     | -      | FINANCIAL INFORMATION                                                                       | Page                                                                                                                     |
|------------|--------|---------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                        |                                                                                                                     |
| Item 1:    |   | Financial Statements:                                                                       |                                                                                                                     |
|       |   |                                                                                        |                                                                                                                     |
|       |   |                                                                                        | Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009 (Unaudited)                              |  1 |
|       |   |                                                                                        |                                                                                                                     |   |
|       |   |                                                                                        | Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2010 and 2009 (Unaudited)       |  2 |
|       |   |                                                                                        |                                                                                                                     |   |
|       |   |                                                                                        | Consolidated Statement of Stockholders’ Equity for the Nine  Months Ended September 30, 2010 (Unaudited) |  3 |
|       |   |                                                                                        |                                                                                                                     |   |
|       |   |                                                                                        | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009 (Unaudited)             |  4 |
|       |   |                                                                                        |                                                                                                                     |   |
|       |   |                                                                                        | Notes to Unaudited Consolidated Financial Statements                                                                     | 5 |
|       |   |                                                                                        |                                                                                                                     |
| Item 2:    |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations |                 19                                 |
|       |   |                                                                                        |                                                                                                                     |
| Item 3:    |   | Quantitative and Qualitative Disclosures About Market Risk                                  | 29                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 4:    |   | Controls and Procedures                                                                     | 29                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| PART II    | -      | OTHER INFORMATION                                                                           |                                                                                                                     |
|       |   |                                                                                        |                                                                                                                     |
| Item 1:    |   | Legal Proceedings                                                                           | 30                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 1A:   |   | Risk Factors                                                                                | 30                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 2:    |   | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 30                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 3     |   | Defaults Upon Senior Securities                                                             | 30                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 4:    |   | (Removed and Reserved)                                                                      | 31                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 5:    |   | Other Information                                                                           | 31                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| Item 6:    |   | Exhibits                                                                                    | 31                                                                                                                       |
|       |   |                                                                                        |                                                                                                                     |
| SIGNATURES |   |                                                                                        |                                                                                                                     |

----

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|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |                                                                                                           |   |  At September 30, |  At December 31, |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|--------|------------------------|-----------------------|
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |                                                                                                           |   | 2010                   |                  | 2009 |
| Assets                                                                                                                                                                                             | (In thousands, except share data)                                                                                                                                                                                                                                                                                                                                                                     |
| Due from banks, non-interest-bearing                                                                                                                                                               |    $537                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                 |                         $582                                                                                                                        |
| Due from banks, interest-bearing                                                                                                                                                                   |   6,525                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                 |  4,838                                                                                                                                                                                                                                                            |
|     Cash and cash equivalents                                                                                                                                                  |   7,062                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                 |   5,420                                                                                                                                                                                                                                                      |
| Investment in interest-earning time deposits                                                                                                                                                       |   6,762                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                 |   3,153                                                                                                                                                                                                                                                      |
| Investment securities available for sale, at fair value  (cost-2010     $3,277; 2009 $1,001                                                                          |    3,307                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |   1,002                                                                                                                                                                                                                                                      |
| Mortgage-backed securities held to maturity (fair value-2010     $6,643; 2009 $8,142)                                                                                          |     6,186                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                 |   7,731                                                                                                                                                                                                                                                      |
| Loans receivable, net of allowance for loan losses                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |
|     (2010 $921; 2009 $835)                                                                                                                                                          |  74,777                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                 |                      72,728                                                                                                                                        |
| Accrued interest receivable                                                                                                                                                                        |       422                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |     397                                                                                                                                                                                                                                            |
| Investment in Federal Home Loan Bank stock, at cost                                                                                                                                                |       797                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |     797                                                                                                                                                                                                                                            |
| Premises and equipment, net                                                                                                                                                                        |    1,076                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |  1,092                                                                                                                                                                                                                                                            |
| Other real estate owned                                                                                                                                                                            |    1,198                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |     913                                                                                                                                                                                                                                            |
| Prepaid expenses and other assets                                                                                                                                                                  |       611                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                 |     704                                                                                                                                                                                                                                            |
| Total Assets                                                                                                                                                                                       |                   $102,198                                                                                                                                                                                                                                                                                       |                                                                                                                 |                    $93,937                                                                                                                                                   |
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |                                                                                                           |   |                   |                  |   |
| Liabilities and Stockholders’ Equity                                                                                                                                                         |
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |                                                                                                           |   |                   |                  |   |
| Liabilities                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |
| Deposits, interest-bearing                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                  |                    $79,139 |                                                                                                                                                                                                                                                                   |                   $68,252 |
| Federal Home Loan Bank advances                                                                                                                                                                    |                        5,600                                                                                                                                                                                                                                                            |                                                                                                                 |                       6,850                                                                                                                                   |
| Other borrowings                                                                                                                                                                                   |                           428                                                                                                                                                                                                                                            |                                                                                                                 |                          442                                                                                                                   |
| Accrued interest payable                                                                                                                                                                           |                           103                                                                                                                                                                                                                                            |                                                                                                                 |                          117                                                                                                                   |
| Advances from borrowers for taxes and insurance                                                                                                                                                    |                           479                                                                                                                                                                                                                                            |                                                                                                                 |                          763                                                                                                                   |
| Accrued expenses and other liabilities                                                                                                                                                             |                           252                                                                                                                                                                                                                                            |                                                                                                                 |                          127                                                                                                              |
| Total Liabilities                                                                                                                                                                                  |                      86,001                                                                                                                                                                                                                                                                       |                                                                                                                 |                     76,551                                                                                                                                              |
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |
| Stockholders’ Equity                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |
| Preferred stock– $0.01 par value, 1,000,000 shares authorized;     none issued or outstanding                                                                            |                                -                                                                                                                                                                                                                |                                                                                                                 |                               -                                                                                       |
| Common stock – $0.01 par value; 9,000,000 shares authorized; 1,388,625 issued; 1,112,336 and 1,299,712 outstanding at September  30, 2010 and December 31, 2009, respectively |                                                                    14 |                                                                                                                 |                                              14 |
| Additional paid-in capital                                                                                                                                                                         |                     13,448                                                                                                                                                                                                                                                                        |                                                                                                                 |                    13,442                                                                                                                                                    |
| Treasury stock, at cost: 2010 276,289 shares; 2009 88,913 shares                                                                                                                                   |                      (2,443)                                                                                                                                                                                                                                                                      |                                                                                                                 |                        (735)                                                                                                                             |
| Unallocated common stock held by:        Employee Stock  Ownership Plan (ESOP)                                                                             |                          (831)                                                                                                                                                                                                                                                |                                                                                                                 |                         (883)                                                                                                                       |
|         Recognition & Retention Plan Trust (RRP)                                                                                                            |                         (360)                                                                                                                                                                                                                                                      |                                                                                                                 |                        (440)                                                                                                                             |
| Accumulated other comprehensive income                                                                                                                                                             |                            20                                                                                                                                                                                                                                       |                                                                                                                 |                             1                                                                                              |
| Retained earnings                                                                                                                                                                                  |                       6,349                                                                                                                                                                                                                                                             |                                                                                                                 |                      5,987                                                                                                                                         |
|             Total Stockholders' Equity                                                                                                 |                     16,197                                                                                                                                                                                                                                                                             |                                                                                                                 |                    17,386                                                                                                                                                    |
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                 |                                                                                                                                                                                                                                                                   |
|             Total Liabilities and Stockholders’ Equity                                                                           |                 $102,198                                                                                                                                                                                                                                                                                                   |                                                                                                                 |                  $93,937                                                                                                                                                               |

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|                                                |   |  For the Three |      |   |  For the Nine                    |   |
|-----------------------------------------------------|--------|---------------------|-----------|--------|---------------------------------------|--------|
|                                                |   |  Months Ended  |      |   |  Months Ended                    |   |
|                                                |   | September 30,       |      |   | September 30,                         |   |
|                                                |   |  2010          |      |   |  2009                            |   |   |  2010 |   |   |  2009 |   |
| Interest Income                                     |   |                |      |   | (In thousands, except for share data) |   |   |
| Loans receivable, including fees                    |   | $                   | 1,290     |   |                                  | $      | 1,232 |   |   | $ | 3,678 |   |   | $ | 3,637 |   |
| Short-term investments and investment securities    |   |                | 131       |   |                                  |   | 128 |   |   |   | 376 |   |   |   | 444 |   |
| Total Interest Income                               |   |                | 1,421     |   |                                  |   | 1,360 |   |   |   | 4,054 |   |   |   | 4,081 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                    |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                            |   |                | 427       |   |                                  |   | 538 |   |   |   | 1,259 |   |   |   | 1,658 |   |
| Federal Home Loan Bank and other borrowings         |   |                |  67  |   |                                  |   | 75 |   |   |   | 207 |   |   |   | 227 |   |
| Total Interest Expense                              |   |                | 494       |   |                                  |   | 613 |   |   |   | 1,466 |   |   |   | 1,885 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                 |   |                | 927       |   |                                  |   | 747 |   |   |   | 2,588 |   |   |   | 2,196 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Provision for Loan Losses                           |   |                | 29        |   |                                  |   | 44 |   |   |   | 86 |   |   |   | 129 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income after Provision for Loan Losses |   |                | 898       |   |                                  |   | 703 |   |   |   | 2,502 |   |   |   | 2,067 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Non-Interest Income                                 |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage banking fees                               |   |                | 71        |   |                                  |   | 39 |   |   |   | 171 |   |   |   | 39 |   |
| Other fees and services charges                     |   |                | 13        |   |                                  |   | 10 |   |   |   | 36 |   |   |   | 54 |   |
| Other                                               |   |                | 5         |   |                                  |   | 15 |   |   |   | 29 |   |   |   | 15 |   |
| Total Non-Interest Income                           |   |                | 89        |   |                                  |   | 64 |   |   |   | 236 |   |   |   | 108 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Non-Interest Expense                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                      |   |                | 347       |   |                                  |   | 265 |   |   |   | 1,005 |   |   |   | 737 |   |
| Directors' fees and expenses                        |   |                | 51        |   |                                  |   | 63 |   |   |   | 155 |   |   |   | 196 |   |
| Occupancy and equipment                             |   |                | 49        |   |                                  |   | 41 |   |   |   | 139 |   |   |   | 87 |   |
| Professional fees                                   |   |                | 84        |   |                                  |   | 58 |   |   |   | 265 |   |   |   | 261 |   |
| FDIC deposit insurance assessment                   |   |                | 38        |   |                                  |   | 48 |   |   |   | 114 |   |   |   | 131 |   |
| Other real estate owned expense                     |   |                | 72        |   |                                  |   | 24 |   |   |   | 98 |   |   |   | 97 |   |
| Advertising                                         |   |                | 15        |   |                                  |   | 3 |   |   |   | 44 |   |   |   | 9 |   |
| Other                                               |   |                | 46        |   |                                  |   | 37 |   |   |   |  150 |   |   |   | 99 |   |
| Total Non-Interest Expense                          |   |                | 702       |   |                                  |   | 539 |   |   |   | 1,970 |   |   |   | 1,617 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Income before Income Taxes                          |   |                | 285       |   |                                  |   | 228 |   |   |   | 768 |   |   |   | 558 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes                                        |   |                | 112       |   |                                  |   | 89 |   |   |   | 303 |   |   |   | 220 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
|   Net Income                              |   | $                   | 173       |   |                                  | $      | 139 |   |   | $ | 465 |   |   | $ | 338 |   |
|                                                |   |                |      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
|    Earnings per share - basic             |   | $                   | 0.17      |   |                                  | $      | 0.12 |   |   | $ | 0.44 |   |   | $ | 0.29 |   |
|    Average shares outstanding - basic     |   |                | 1,014,681 |   |                                  |   | 1,158,177 |   |   |   | 1,060,602 |   |   |   | 1,171,563 |   |
|    Earnings per share - diluted           |   | $                   | 0.17      |   |                                  | $      | 0.12 |   |   | $ | 0.44 |   |   | $ | 0.29 |   |
|    Average shares outstanding - diluted   |   |                | 1,016,299 |   |                                  |   | 1,158,427 |   |   |   | 1,064,789 |   |   |   | 1,171,824 |   |

----

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|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |
|------------------------------------------------------------------------------------------------------|--------|--------------|------------------------|--------|--------|--------|------------------------------|---------------|------------|--------|----------------|----------|--------------|-------------|--------------------|------------------|---------------|-------------------|----------------|--------|--------|-----------------------------------|--------|--------|---------------|---------|--------|--------|--------------------------------|
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |  Unallocated |           |   |   |                              |   |   |          |    |   |   |                           |
|                                                                                                 |   | Common Stock |                   |   |   |   |                         |          |       |   |           |     |  Common |        | Accumulated        |             |          |              |           |   |   |                              |   |
|                                                                                                 |   | Number of    |                   |   |   |   |                         |          | Additional |   |           |     |         |        |               |  Stock Held |          | Other             |           |   |   |                              |   | Total  |          |
| (In thousands, except share                                                                          |   |  Shares |                   |   |   |   |                         |          | Paid-in    |   |           | Treasury |         |        |  by Benefit   |             | Comprehensive |              |  Retained |   |   | Stockholders'                     |   |
| data)                                                                                                |   | Outstanding  |                   |   | Amount |   |                         |  Capital |       |   |  Stock    |     |         |  Plans |               |  Income     |          |  Earnings    |           |   | Equity |                              |
|  BALANCE – DECEMBER 31, 2009                                                              |   |         |    1,299,712 |   |   |   | $     14 |          |       |   | $  13,442 |     |         |        | $   (735 | )                |          |              | $  (1,323 | )      |   | $      1 |   |   | $  5,987 |    |   |   | $  17,386            |   |
|  Common stock allocated by ESOP                                                                 |   |         |                   |   |   |   |                         |          |       |   |   (2 | )        |         |        |               |             |          |              |   52 |   |   |                              |   |   |          |    |   |   |  50                  |   |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Treasury stock purchased                                                                             |   |         | (187,376               | )      |   |   |                         |          |       |   |           |     |         |        | (1,708             | )                |          |              |           |   |   |                              |   |   |          |    |   |   |  (1,708                   | ) |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Stock based compensation expense                                                                     |   |         |                   |   |   |   |                         |          |       |   |  88       |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |  88                  |   |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Release of vested common stock by the Recognition and Retention Plan Trust  (8,529 shares) |   |         |                   |   |   |   |                         |          |       |   | (80            | )        |         |        |               |             |          |              | 80             |   |   |                              |   |   |          |    |   |   |  -                        |   |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Cash dividends declared ($0.085 per share)                                                           |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   | (103          | )  |   |   |  (103                     | ) |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Net income                                                                                           |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   | 465           |    |   |   | 465                            |   |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Unrealized gain on investment securities available for sale, net of deferred taxes                   |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   | 19                                |   |   |          |    |   |   |  19                       |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| Comprehensive Income                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   | $      484 |   |   |   |   |   |
|                                                                                                 |   |         |                   |   |   |   |                         |          |       |   |           |     |         |        |               |             |          |              |           |   |   |                              |   |   |          |    |   |   |                           |   |   |   |   |   |
| BALANCE – September  30, 2010                                                        |   |         | 1,112,336              |   |   |   | $     14      |          |       |   | $  13,448 |     |         |        | $  (2,443     | )                |          |              | $  (1,191 | )      |   | $     20      |   |   | $  6,349 |    |   |   | $  16,197            |   |

----

----

|                                                                                                      |   |   | For the Nine Months Ended |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|---------------------------|--------|
|                                                                                                      |   |   | September 30,             |   |
|                                                                                                      |   |   | 2010                 |   |   |   | 2009 |   |
|                                                                                                      |   |   | (In Thousands)            |   |
| Cash Flows from Operating Activities                                                                      |   |   |                      |   |   |   |   |   |
| Net income                                                                                                |   | $      | 465                       |   |   | $ | 338 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                         |   |   |                      |   |   |   |   |   |
| Provision for loan losses                                                                                 |   |   | 86                        |   |   |   | 129 |   |
| Provision for other real estate losses                                                                    |   |   | -                         |   |   |   | 9 |   |
| Depreciation expense                                                                                      |   |   | 41                        |   |   |   | 26 |   |
| Net accretion of securities discounts                                                                     |   |   | (7                        | )      |   |   | (6 | ) |
| Amortization of deferred loan fees and costs                                                              |   |   | 7                         |   |   |   | (10 | ) |
| Deferred income tax                                                                                       |   |   | -                         |   |   |   | 3 |   |
| Stock-based compensation expense                                                                          |   |   | 138                       |   |   |   | 134 |   |
|        Changes in assets and liabilities which provided (used) cash:   |   |   |                      |   |   |   |   |   |
|             Accrued interest receivable       |   |   | (25                       | )      |   |   | (52 | ) |
|             Prepaid expenses and other assets |   |   | 84                        |   |   |   | (56 | ) |
|     Accrued interest payable                                                          |   |   | (14                       | )      |   |   | (9 | ) |
|     Accrued expenses and other liabilities                                            |   |   | 125                       |   |   |   | 50 |   |
| Net Cash Provided by Operating Activities                                                                 |   |   | 900                       |   |   |   | 556 |   |

| Net (increase) decrease in investment in interest-earning time deposits    |   |   | (3,609 | )      |   |   | 101    |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Purchase of investment securities available for sale                       |   |   | (2,775 | )      |   |   | -      |   |
| Proceeds from calls of investment securities available for sale            |   |   | 500    |   |   |   | 2,000  |   |
| Principal payments received on mortgage-backed securities held to maturity |   |   | 1,550  |   |   |   | 1,477  |   |
| Net increase in loans receivable                                           |   |   | (2,402 | )      |   |   | (2,041 | )      |
| Capitalized expenditures on other real estate owned                        |   |   | (25    | )      |   |   | -      |   |
| Purchase of premises and equipment                                         |   |   | (25    | )      |   |   | (1,057 | )      |
| Net Cash (Used in) Provided by Investing Activities                        |   |   | (6,786 | )      |   |   | 480    |   |

| Net increase in deposits                                    |   |   | 10,887 |   |   |   | 9,279  |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Decrease in Federal Home Loan Bank advances                 |   |   | (1,250 | )      |   |   | (4,300 | )      |
| Increase in other borrowings                                |   |   | -      |   |   |   | 450    |   |
| Repayment of other borrowings                               |   |   | (14    | )      |   |   | (3     | )      |
| Dividends paid                                              |   |   | (103   | )      |   |   | (100   | )      |
| Purchase of treasury stock                                  |   |   | (1,708 | )      |   |   | (413   | )      |
| Decrease in advances from borrowers for taxes and insurance |   |   | (284   | )      |   |   | (239   | )      |
|    Net Cash Provided by Financing Activities      |   |   | 7,528  |   |   |   | 4,674  |   |
|    Net Increase in Cash and Cash Equivalents      |   |   | 1,642  |   |   |   | 5,710  |   |
| Cash and Cash Equivalents – Beginning of Period       |   |   | 5,420  |   |   |   | 1,035  |   |
| Cash and Cash Equivalents – End of Period             |   | $      | 7,062  |   |   | $      | 6,745  |   |

|                                                            |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Supplementary Disclosure of Cash Flow and Non-Cash Information: |   |   |   |   |   |   |   |   |
| Cash payments for interest                                      |   | $      | 1,480  |   |   | $      | 1,890  |   |
| Cash payments for income taxes                                  |   | $      | 235    |   |   | $      | 250    |   |
| Transfer of loans to other real estate owned                    |   | $      | 260    |   |   | $      | 208    |   |

----

----

----

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

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----

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

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

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

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----

|                                                                        |   | September 30, 2010 |   |
|-----------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                        |   | Amortized Cost     |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Available for Sale:                                                         |   |               |   |   |   |   |   |   |   |   |   |   |
|     U.S. Government agency securities                   |   |               |   |   |   |   |   |   |   |   |   |   |
|        Due after 1 year through 5 years  |   | $                  | 750    |   |   | $ | 3 |   |   | $ | - |   |   | $ | 753 |   |
|        Due after 5 year through 10 years |   |               | 499    |   |   |   | 6 |   |   |   | - |   |   |   | 505 |   |
|     Limited-term bond fund                              |   |               | 501    |   |   |   | 1 |   |   |   | - |   |   |   | 502 |   |
|     Short-term bond funds                               |   |               | 1,527  |   |   |   | 20 |   |   |   | - |   |   |   | 1,547 |   |
|                                                                        |   | $                  | 3,277  |   |   | $ | 30 |   |   | $ | - |   |   | $ | 3,307 |   |

|                                                                        |   | December 31, 2009 |      |
|-----------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                        |   | Amortized Cost    |      |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Available for Sale:                                                         |   |              |      |   |   |   |   |   |   |   |   |   |
|     U.S. Government agency securities                   |   |              |      |   |   |   |   |   |   |   |   |   |
|        Due after 5 year through 10 years |   | $                 | 499       |   |   | $ | - |   |   | $ | (1 | ) |   | $ | 498 |   |
|     Short-term bond funds                               |   |              |  502 |   |   |   | 2 |   |   |   | - |   |   |   |  504 |   |
|                                                                        |   | $                 | 1,001     |   |   | $ | 2 |   |   | $ | (1 | ) |   | $ | 1,002 |   |

|                                                    |   |               |   |   |                   |   |   |                    |   |   |             |   |
|---------------------------------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------------|--------|
|                                                    |   | September 30, 2010 |   |
|                                                    |   | Amortized Cost     |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Held to Maturity:                                       |   |               |   |   |                   |   |   |                    |   |   |             |   |
|     FNMA pass-through certificates  |   | $                  | 3,301  |   |                   | $      | 254    |                    |   | $      | -                |   |   | $ | 3,555 |   |
|     FHLMC pass-through certificates |   |               | 2,885  |   |                   |   | 203    |                    |   |   | -                |   |   |   | 3,088 |   |
|                                     |   | $                  | 6,186  |   |                   | $      | 527    |                    |   | $      | -                |   |   | $ | 6,643 |   |
|                                                    |   |               |   |   |                   |   |   |                    |   |   |             |   |   |   |   |   |
|                                                    |   |               |   |   |                   |   |   |                    |   |   |             |   |   |   |   |   |
|                                                    |   | December 31, 2009  |   |
|                                                    |   | Amortized Cost     |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Held to Maturity:                                       |   |               |   |   |                   |   |   |                    |   |   |             |   |   |   |   |   |
|     FNMA pass-through certificates  |   | $                  | 4,071  |   |                   | $      | 211    |                    |   | $      | -                |   |   | $ | 4,282 |   |
|     FHLMC pass-through certificates |   |               | 3,660  |   |                   |   | 200    |                    |   |   | -                |   |   |   | 3,860 |   |
|                                     |   | $                  | 7,731  |   |                   | $      | 411    |                    |   | $      | -                |   |   | $ | 8,142 |   |

----

----

|                                                                                             |   | September 30,2010 |         |   | December 31,2009 |   |
|--------------------------------------------------------------------------------------------------|--------|-------------------|--------------|--------|------------------|--------|
| Real estate loans:                                                                               |   |              |         |   |             |   |
|   One-to four-family residential:                                                      |   |              |         |   |             |   |
|        Owner occupied                                         |   | $                 | 14,233       |   |             | $      | 15,388 |   |
|   Non-owner occupied                                                                   |   |              | 26,429       |   |             |   | 25,133 |   |
|           Total one-to-four family residential |   |              | 40,662       |   |             |   | 40,521 |   |
|                                                                                             |   |              |         |   |             |   |   |   |
|    Multi-family residential                                                       |   |              | 3,279        |   |             |   | 3,127 |   |
|    Commercial real estate                                                         |   |              | 18,615       |   |             |   | 18,617 |   |
|    Construction                                                                   |   |              | 4,872        |   |             |   | 3,536 |   |
|    Commercial lines of  credit                                          |   |              | 1,711        |   |             |   | 1,197 |   |
|    Home equity loans                                                              |   |              |  6,460  |   |             |   |  6,445 |   |
|           Total real estate loans              |   |              | 75,599       |   |             |   | 73,443 |   |
|                                                                                             |   |              |         |   |             |   |   |   |
| Auto loans                                                                                       |   |              | 82           |   |             |   | 78 |   |
| Loans secured by deposits                                                                        |   |              |  11     |   |             |   |  13 |   |
| Total loans                                                                                      |   |              | 75,692       |   |             |   | 73,534 |   |
|                                                                                             |   |              |         |   |             |   |   |   |
| Deferred loan fees and costs                                                                     |   |              | 6            |   |             |   | 29 |   |
|        Allowance for loan losses                              |   |              |  (921   | )      |             |   |  (835 | ) |
| Net loans                                                                                        |   | $                 |  74,777 |   |             | $      |  72,728 |   |

|                                                                                      |   | September 30,2010 |   |   | September 30,2009 |   |
|-------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Balance, beginning of the year                                                            |   | $                 | 835    |   |              | $      | 689 |   |
|      Provision for loan losses                                   |   |              | 86     |   |              |   | 129 |   |
|      Charge-offs                                                 |   |              | -      |   |              |   | (12 | ) |
| Recoveries                                                                                |   |              | -      |   |              |   | - |   |
|           (Charge-offs)/recoveries, net |   |              | -      |   |              |   | (12 | ) |
|                                                                                      |   |              |   |   |              |   |   |   |
| Balance, end of period                                                                    |   | $                 | 921    |   |              | $      | 806 |   |

----

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|   |                                                            |        September 30,      2010 |   |    | December 31,2009 |   |
|--------|-----------------------------------------------------------------|---------------------------------------------------------------------------------------|--------|---------|------------------|--------|
|   | Impaired collateral-dependent loans with a valuation allowance  |                                                                                  | $      | 1,388   |             |   | $ | - |   |
|   | Impaired collateral-dependent loans with no valuation allowance |                                                                                  |   |  - |             |   |   | - |   |
|   |                                                            | $                                                                                     | 1,338  |    |             | $      | - |   |
|   |                                                            |                                                                                  |   |    |             |   |   |   |
|   | Valuation allowance on impaired loans                           |                                                                                  | $      | 173     |             |   | $ | - |   |
|   |                                                            |                                                                                  |   |    |             |   |   |   |

----

----

|   |                                         | September 30,2010 |   |   | December 31, 2009 |   |
|--------|----------------------------------------------|-------------------|--------|--------|-------------------|--------|
|   | Passbook savings accounts                    |              | $      | 3,191  |              |   | $ | 3,277 |   |
|   | Statement savings accounts                   |              |   | 6,765  |              |   |   | 6,508 |   |
|   | eSavings accounts                            |              |   | 1,870  |              |   |   | 1,978 |   |
|   | Certificates of deposit                      |              |   | 67,313 |              |   |   | 56,489 |   |
|   |      Total deposits |              | $      | 79,139 |              |   | $ | 68,252 |   |
|   |                                         |              |   |   |              |   |   |   |

|   |     Maturity Period |   | Amount |   |   | WeightedInterest Rate |   |
|--------|-----------------------------------------|--------|--------|--------|--------|-----------------------|--------|
|   |   1 to 12 months              |   | $      | 1,800  |   |                  |   | 3.66 | % |
|   | 13 to 24 months                         |   |   | 1,800  |   |                  |   | 3.98 | % |
|   | 25 to 36 months                         |   |   | 2,000  |   |                  |   | 4.19 | % |
|   |     Total           |   | $      | 5,600  |   |                  |   | 3.95 | % |

----

----

|                                  |   | September 30, 2010 |   |   | September 30, 2009                         |   |
|---------------------------------------|--------|--------------------|--------|--------|--------------------------------------------|--------|
|                                  |   | Number of Shares   |   |   | WeightedAverage Grant Date Fair Value |   | Number of Shares |   |   |        Weighted    Average Grant   Date Fair Value |   |
| Unvested at the beginning of the year |   |               | 34,498 |   |                                       | $      | 9.05 |   |   |   | 43,324 |   |   | $ | 9.05 |   |
| Granted                               |   |               | --     |   |                                       |   | -- |   |   |   | -- |   |   |   | -- |   |
| Vested                                |   |               | (8,529 | )      |                                       |   | 9.05 |   |   |   | (8,588 | ) |   |   | 9.05 |   |
| Forfeited                             |   |               | --     |   |                                       |   | -- |   |   |   | -- |   |   |   | -- |   |
| Unvested at the end of the period     |   |               | 25,969 |   |                                       | $      | 9.05 |   |   |   | 34,736 |   |   | $ | 9.05 |   |

----

----

|                                     |   | September 30, 2010 |    |   | September 30, 2009             |   |     |             |   |
|------------------------------------------|--------|--------------------|---------|--------|--------------------------------|--------|----------|------------------|--------|
|                                     |   | Number of Shares   |    |   | WeightedAverage Exercise Price |   |     | Number of Shares |   |   | Weighted  Average Exercise  Price |   |   | WeightedAverage Remaining Contractual Life (in years) |   |
| Outstanding at the beginning of the year |   |               | 107,718 |   |                           | $      | 10.00    |             |   |   | 108,311 |   |   | $ | 10.00 |   |   |   | 8.4 |   |
| Granted                                  |   |               | --      |   |                           |   | --       |             |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Exercised                                |   |               | --      |   |                           |   | --       |             |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Forfeited                                |   |               | (148    | )      |                           |   |  -- |             |   |   | -- |   |   |   |  -- |   |   |   | -- |   |
| Outstanding at the end of the period     |   |               | 107,570 |   |                           | $      | 10.00    |             |   |   | 108,311 |   |   | $ | 10.00 |   |   |   | 7.6 |   |
| Exercisable at the end of the period     |   |               | 42,666  |   |                           | $      | 10.00    |             |   |   | 21,481 |   |   | $ | 10.00 |   |   |   | 7.6 |   |

----

----

|   | 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). |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | September 30, 2010                 |   |
|-------------------------------------------------------------|--------|------------------------------------|--------|
|                                                        |   |    Total Fair Value |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   |   Significant Other Observable Inputs(Level 2) |   |   |  Significant Other Observable Inputs(Level 3) |   |
|    Investment securities available for sale: |   |                               |   |
| U.S. Government agency securities                           |   | $                                  | 1,258  |   |   | $ | - |   |   | $ | 1,258 |   |   | $ | - |   |
| Limited-term bond fund                                      |   |                               | 502    |   |   |   | - |   |   |   | 502 |   |   |   | - |   |
| Short-term bond funds                                       |   |                               | 1,547  |   |   |   | - |   |   |   | 1,547 |   |   |   | - |   |
|                                                        |   | $                                  | 3,307  |   |   | $ | - |   |   | $ | 3,307 |   |   | $ | - |   |

----

----

|                                      |   | December 31, 2009                  |      |
|-------------------------------------------|--------|------------------------------------|-----------|
|                                      |   |    Total Fair Value |      |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   |   Significant Other Observable Inputs(Level 2) |   |   |  Significant Other ObservableInputs(Level 3) |   |
| Investment securities available for sale: |   |                               |      |
| U.S. Government agency securities         |   | $                                  | 498       |   |   | $ | - |   |   | $ | 498 |   |   | $ | - |   |
| Short-term bond funds                     |   |                               |  504 |   |   |   | - |   |   |   |  504 |   |   |   | - |   |
|                                      |   | $                                  | 1,002     |   |   | $ | - |   |   | $ | 1,002 |   |   | $ | - |   |

|                    |   | September 30, 2010                      |   |
|-------------------------|--------|-----------------------------------------|--------|
|                    |   |     Carrying Amount |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   |   Significant Other Observable Inputs(Level 2) |   |   |  Significant Other ObservableInputs(Level 3) |   |
|                    |   |                                    |   |
| Impaired loans          |   | $                                       | 1,338  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,338 |   |
|                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned |   | $                                       | 1,198  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,198 |   |
|                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                    |   | December 31, 2009                       |   |
|-------------------------|--------|-----------------------------------------|--------|
|                    |   |     Carrying Amount |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   |   Significant Other Observable Inputs(Level 2) |   |   |  Significant Other ObservableInputs(Level 3) |   |
|                    |   |                                    |   |
| Other real estate owned |   | $                                       | 913    |   |   | $ | - |   |   | $ | - |   |   | $ | 913 |   |
|                    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

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|                                                     |   | September 30, 2010 |   |   | December 31, 2009 |   |
|----------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                     |   |  Carrying     |   |   |  Estimated   |   |   |  Carrying |   |   |  Estimated |   |
|                                      |   | Amount             |   |   |  Fair Value  |   |   |  Amount |   |   |  Fair Value |   |
| Assets:                                                  |   |               |   |   |              |   |   |   |   |   |   |   |
|   Cash and cash equivalents                    |   | $                  | 7,062  |   |              | $      | 7,062 |   |   | $ | 5,420 |   |   | $ | 5,420 |   |
|   Investment in interest-earning time deposits |   |               | 6,762  |   |              |   | 6,783 |   |   |   | 3,153 |   |   |   | 3,157 |   |
|   Investment securities available for sale     |   |               | 3,307  |   |              |   | 3,307 |   |   |   | 1,002 |   |   |   | 1,002 |   |
|   Mortgage-backed securities held to maturity  |   |               | 6,186  |   |              |   | 6,643 |   |   |   | 7,731 |   |   |   | 8,142 |   |
|   Loans receivable, net                        |   |               | 74,777 |   |              |   | 76,706 |   |   |   | 72,728 |   |   |   | 74,175 |   |
|   Investment in FHLB stock                     |   |               | 797    |   |              |   | 797 |   |   |   | 797 |   |   |   | 797 |   |
|   Accrued interest receivable                  |   |               | 422    |   |              |   | 422 |   |   |   | 397 |   |   |   | 397 |   |
|                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                             |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Deposits                                     |   |               | 79,139 |   |              |   | 79,839 |   |   |   | 68,252 |   |   |   | 68,917 |   |
|   FHLB advances, long-term                     |   |               | 3,800  |   |              |   | 4,057 |   |   |   | 5,600 |   |   |   | 5,854 |   |
|   FHLB advances, short-term                    |   |               | 1,800  |   |              |   | 1,800 |   |   |   | 1,250 |   |   |   | 1,250 |   |
|   Other borrowings                             |   |               | 428    |   |              |   | 428 |   |   |   | 442 |   |   |   | 442 |   |
|   Accrued interest payable                     |   |               | 103    |   |              |   | 103 |   |   |   | 117 |   |   |   | 117 |   |
|                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments                  |   |               | --     |   |              |   | -- |   |   |   | -- |   |   |   | -- |   |
|                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |

----

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

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----

----

|                                                                                     |   |   |                   |   |   |   | Three Months Ended September 30, |   |   |   |          |   |
|------------------------------------------------------------------------------------------|--------|--------|------------------------|--------|--------|--------|----------------------------------|--------|--------|--------|---------------|--------|
|                                                                                     |   |   | 2010                   |   |   |   | 2009                             |   |
|                                                                                     |   |   |                   |   |   |   |                             |   |   |   | Average  |   |   |   |   |   |   |   |   |   |   |   | Average  |   |
|                                                                                     |   |   | Average           |   |   |   |                             |   |   |   | Yield/   |   |   |   | Average  |   |   |   |   |   |   |   | Yield/  |   |
|                                                                                     |   |   |  Balance          |   |   |   | Interest                    |   |   |   |  Rate    |   |   |   |  Balance |   |   |   | Interest  |   |   |   |  Rate |   |
|   Short-term investments and investment securities                             |   | $      | 15,260                 |   |   | $      |  54                         |   |   |   | 1.42          | %      |   | $ | 11,205 |   |   | $ |  25 |   |   |   | 0.89 | % |
|   Mortgage-backed securities                                                   |   |   | 6,444                  |   |   |   | 77                               |   |   |   | 4.78          |   |   |   | 8,586 |   |   |   | 103 |   |   |   | 4.80 |   |
|   Loans receivable, net (1)                                                    |   |   | 74,977                 |   |   |   | 1,290                            |   |   |   | 6.88          |   |   |   | 71,061 |   |   |   | 1,232 |   |   |   | 6.93 |   |
|      Total interest-earning assets                              |   |   | 96,681                 |   |   |   | 1,421                            |   |   |   | 5.88          | %      |   |   | 90,852 |   |   |   | 1,360 |   |   |   | 5.99 | % |
| Non-interest-earning assets                                                              |   |   |  4,661            |   |   |   |                             |   |   |   |          |   |   |   | 4,308 |   |   |   |   |   |   |   |   |   |
|      Total assets                                               |   | $      | 101,342                |   |   |   |                             |   |   |   |          |   |   | $ | 95,160 |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                            |   |   |                   |   |   |   |                             |   |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Passbook accounts                                                      |   | $      | 3,184                  |   |   |   | 4                                |   |   |   | 0.50          | %      |   | $ | 3,347 |   |   |   |  7 |   |   |   | 0.84 | % |
|    Statement savings accounts                                             |   |   | 6,766                  |   |   |   | 15                               |   |   |   | 0.89          |   |   |   | 6,126 |   |   |   | 13 |   |   |   | 0.85 |   |
|    eSavings accounts                                                      |   |   | 1,831                  |   |   |   |  5                          |   |   |   | 1.09          |   |   |   | 1,532 |   |   |   |  6 |   |   |   | 1.57 |   |
|    Certificate of deposit accounts                                        |   |   | 65,771                 |   |   |   |    403                 |   |   |   | 2.45          |   |   |   | 58,472 |   |   |   |   512 |   |   |   | 3.50 |   |
|       Total deposits                                       |   |   | 77,552                 |   |   |   | 427                              |   |   |   | 2.20          |   |   |   | 69,477 |   |   |   |   538 |   |   |   | 3.10 |   |
| FHLB advances                                                                            |   |   | 6,057                  |   |   |   |   61                        |   |   |   | 4.03          |   |   |   | 7,314 |   |   |   |  70 |   |   |   | 3.83 |   |
| Other borrowings                                                                         |   |   | 429                    |   |   |   |   6                         |   |   |   | 5.59          |   |   |   | 449 |   |   |   |  5 |   |   |   | 4.45 |   |
|      Total interest-bearing liabilities                         |   |   | 84,038                 |   |   |   |     494           |   |   |   | 2.35          | %      |   |   | 77,240 |   |   |   |   613 |   |   |   | 3.17 | % |
| Non-interest-bearing liabilities                                                         |   |   |     879 |   |   |   |                             |   |   |   |          |   |   |   | 719 |   |   |   |   |   |   |   |   |   |
|      Total liabilities                                          |   |   | 84,917                 |   |   |   |                             |   |   |   |          |   |   |   | 77,959 |   |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                                               |   |   | 16,425                 |   |   |   |                             |   |   |   |          |   |   |   | 17,201 |   |   |   |   |   |   |   |   |   |
|      Total liabilities and Stockholders’ Equity           |   | $      | 101,342                |   |   |   |                             |   |   |   |          |   |   | $ | 95,160 |   |   |   |   |   |   |   |   |   |
| Net interest-earning assets                                                              |   | $      | 12,643                 |   |   |   |                             |   |   |   |          |   |   | $ | 13,612 |   |   |   |   |   |   |   |   |   |
| Net interest income; average interest rate   spread                            |   |   |                   |   |   | $      |   927                       |   |   |   | 3.53          | %      |   |   |   |   |   | $ |   747 |   |   |   | 2.82 | % |
| Net interest margin (2)                                                                  |   |   |                   |   |   |   |                             |   |   |   | 3.84          | %      |   |   |   |   |   |   |   |   |   |   | 3.29 | % |
| Average interest-earning assets to   average interest-bearing liabilities |   |   |                   |   |   |   |                             |   |   |   | 115.04        | %      |   |   |   |   |   |   |   |   |   |   | 117.62 | % |

| (1) | Includes non-accrual loans during the respective periods.  Calculated net of deferred fees and discounts, loans in process and allowance for loan losses. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Equals net interest income divided by average interest-earning assets. |
|-----|------------------------------------------------------------------------|

----

----

----

|                                                                                                                     |   | Nine Months Ended September 30, |        |
|--------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                                                                     |   | 2010                            |        |   | 2009 |   |
|                                                                                                                     |   | AverageBalance                  |        |   | Interest |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | Interest |   |   | AverageYield/Rate |   |
| Interest-earning assets:                                                                                                 |   | (Dollars in thousands)          |        |
|   Short-term investments and   investment securities                                                 |   | $                               | 12,548      |   |   | $ | 127 |   |   |   | 1.35 | % |   | $ | 8,129 |   |   | $ | 116 |   |   |   | 1.90 | % |
|   Mortgage-backed securities                                                                                   |   |                            | 6,943       |   |   |   | 249 |   |   |   | 4.78 |   |   |   | 9,102 |   |   |   | 328 |   |   |   | 4.80 |   |
|   Loans receivable, net (1)                                                                                    |   |                            | 73,883      |   |   |   | 3,678 |   |   |   | 6.64 |   |   |   | 71,542 |   |   |   | 3,637 |   |   |   | 6.78 |   |
|      Total interest-earning assets                                                              |   |                            | 93,374      |   |   |   | 4,054 |   |   |   | 5.79 | % |   |   | 88,773 |   |   |   | 4,081 |   |   |   | 6.13 | % |
| Non-interest-earning assets                                                                                              |   |                            |  4,612 |   |   |   |   |   |   |   |   |   |   |   | 3,633 |   |   |   |   |   |   |   |   |   |
|      Total assets                                                                               |   | $                               | 97,986      |   |   |   |   |   |   |   |   |   |   | $ | 92,406 |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                            |   |                            |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Passbook accounts                                                                                      |   | $                               | 3,247       |   |   |   | 15 |   |   |   | 0.62 | % |   | $ | 3,334 |   |   |   | 23 |   |   |   | 0.92 | % |
|    Statement savings accounts                                                                             |   |                            | 6,654       |   |   |   | 53 |   |   |   | 1.06 |   |   |   | 5,478 |   |   |   | 67 |   |   |   | 1.63 |   |
|    eSavings accounts                                                                                      |   |                            | 1,871       |   |   |   | 17 |   |   |   | 1.21 |   |   |   | 1,158 |   |   |   | 16 |   |   |   | 1.84 |   |
|    Certificate of deposit accounts                                                                        |   |                            | 61,718      |   |   |   | 1,174 |   |   |   | 2.54 |   |   |   | 56,024 |   |   |   | 1,552 |   |   |   | 3.69 |   |
|       Total deposits                                                                       |   |                            | 73,490      |   |   |   | 1,259 |   |   |   | 2.28 |   |   |   | 65,994 |   |   |   | 1,658 |   |   |   | 3.35 |   |
| FHLB advances                                                                                                            |   |                            | 6,462       |   |   |   | 188 |   |   |   | 3.88 |   |   |   | 8,168 |   |   |   | 222 |   |   |   | 3.62 |   |
| Other borrowings                                                                                                         |   |                            | 434         |   |   |   |  19 |   |   |   | 5.84 |   |   |   | 153 |   |   |   |  5 |   |   |   | 4.36 |   |
|      Total interest-bearing liabilities                                                         |   |                            | 80,386      |   |   |   | 1,466 |   |   |   | 2.43 | % |   |   | 74,315 |   |   |   | 1,885 |   |   |   | 3.38 | % |
| Non-interest-bearing liabilities                                                                                         |   |                            | 863         |   |   |   |   |   |   |   |   |   |   |   | 775 |   |   |   |   |   |   |   |   |   |
|      Total liabilities                                                                          |   |                            | 81,249      |   |   |   |   |   |   |   |   |   |   |   | 75,090 |   |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                                                                               |   |                            | 16,737      |   |   |   |   |   |   |   |   |   |   |   | 17,316 |   |   |   |   |   |   |   |   |   |
|      Total liabilities and Stockholders’        Equity |   | $                               | 97,986      |   |   |   |   |   |   |   |   |   |   | $ | 94,406 |   |   |   |   |   |   |   |   |   |
| Net interest-earning assets                                                                                              |   | $                               | 12,988      |   |   |   |   |   |   |   |   |   |   | $ | 14,458 |   |   |   |   |   |   |   |   |   |
| Net interest income; average interest    rate spread                                                           |   |                            |        |   |   | $ | 2,588 |   |   |   | 3.36 | % |   |   |   |   |   | $ | 2,196 |   |   |   | 2.75 | % |
| Net interest margin (2)                                                                                                  |   |                            |        |   |   |   |   |   |   |   | 3.70 | % |   |   |   |   |   |   |   |   |   |   | 3.30 | % |
| Average interest-earning assets to average interest-bearing liabilities                                             |   |                            |        |   |   |   |   |   |   |   | 116.16 | % |   |   |   |   |   |   |   |   |   |   | 119.46 | % |

| (1) | Includes non-accrual loans during the respective periods.  Calculated net of deferred fees and discounts, loans in process and allowance for loan losses. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Equals net interest income divided by average interest-earning assets. |
|-----|------------------------------------------------------------------------|

----

----

----

----

| Period                                                  |   | Total Number of SharesPurchased (1) |   |   | Average PricePaid per Share |   |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |   |   | MaximumNumber of Shares that May Yet Be Purchased Underthe Plans or Programs (2) |   |
|---------------------------------------------------------|--------|-------------------------------------|--------|--------|-----------------------------|--------|--------|----------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|
| July 1, 2010 – July 31, 2010                      |   |                                | 2,500  |   |                        | $      | 9.01   |                                                                             |   |   | 2,500                                                                            |   |   |   | 53,104 |   |
| August 1, 2010 – August 31, 2010                  |   |                                | 21,000 |   |                        |   | 8.76   |                                                                             |   |   | 1,000                                                                            |   |   |   | 52,104 |   |
| September  1, 2010 – September 30, 2010 |   |                                | 33,100 |   |                        |   | 9.06   |                                                                             |   |   | 33,100                                                                           |   |   |   | 19,004 |   |
| Total                                                   |   |                                | 56,600 |   |                        | $      | 8.94   |                                                                             |   |   | 36,600                                                                           |   |   |   | 19,004 |   |

| (1)   | Certain shares were acquired during the quarter as a result of privately negotiated transactions. |
|-----------------|---------------------------------------------------------------------------------------------------|

| (2)   | On March 11, 2010, the Company announced by press release its second repurchase program to repurchase up to an additional 69,431 shares, or approximately 5.5% of the Company's current outstanding shares of common stock as of March 11, 2010. On September 10, 2010, the Company announced by press release its third repurchase program to repurchase up to an additional 69,431 shares, or approximately 6.2% of the Company's current outstanding shares of common stock as of September 30, 2010. The Company will commence this third stock repurchase program upon the completion of its prior repurchase program which has 19,004 shares remaining to be purchased as of September 30, 2010. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | No. | Description |
|--------|-----|-------------|

----

|   |              |   |                                  |
|--------|-------------------|--------|---------------------------------------|
| Date:  | November 15, 2010 | By:    | /s/ Robert T. Strong                  |
|   |              |   | Robert T. Strong                      |
|   |              |   | President and Chief Executive Officer |
|   |              |   |                                  |
|   |              |   |                                  |
|   |              | By:    | /s/ John J. Augustine                 |
| Date:  | November 15, 2010 |   | John J. Augustine                     |
|   |              |   | Chief Financial Officer               |