----

----

----

----

----

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|   ● | Continuing to emphasize the origination of residential real estate loans; |
|----------------|---------------------------------------------------------------------------|

|   ● | Operating as a community-oriented retail financial institution with branch expansion primarily in eastern Monroe County, New York; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------|

|   ● | Continuing to manage our interest rate risk; |
|----------------|----------------------------------------------|

|   ● | Aggressively marketing our core deposits; increasing our share of lower-cost checking accounts, cross selling our deposit products, and enhancing transaction convenience with wider ATM access at no cost to the customer; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   ● | Maintaining high asset quality; |
|----------------|---------------------------------|

|   ● | Increasing non-interest revenues; and |
|----------------|---------------------------------------|

|   ● | Cost control of operating expenses. |
|----------------|-------------------------------------|

----

|   ● | Retail-Oriented Community Financial Institution.  Fairport Savings Bank was established in Fairport, New York in 1888 and has been operating continuously since that time. We are committed to meeting the financial needs of the communities we serve and we are dedicated to providing personalized quality service to our customers. We believe that we can be more effective than many of our competitors in serving our customers because of the ability of our senior management to promptly and effectively respond to customer requests and inquiries. We intend to open one or two new branch offices in Monroe County in the next three to five years, depending on market conditions and as opportunities present themselves. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   ● | Managing Our Interest Rate Risk. To improve our interest rate risk, in recent years we have reduced the fixed-rate loan originations added to our loan portfolio by selling select fixed rate mortgages in the secondary market, investing a portion of funds received from loan payments and repayments in shorter-term and intermediate term, liquid investment securities and securities classified as available for sale including US Government Agency and  mortgage-backed securities, emphasizing the marketing of our passbook, savings and checking accounts, money market accounts and increasing the duration whenever possible of our certificates of deposit, and longer duration Federal Home Loan Bank borrowings. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   ● | Emphasizing Residential Real Estate Lending.  Historically, we have emphasized the origination of one-to-four family residential loans within Monroe County and the surrounding counties of Livingston, Ontario, Orleans and Wayne. As of December 31, 2009, 90.2% of our loan portfolio consisted of one-to-four family residential loans, and 99.9% of our loan portfolio consisted of loans secured by real estate. We intend to continue to emphasize originating loans secured by residential real estate. If both the prime rate and the treasury rates stay at current interest rate levels, this will continue to have a decreasing effect on the loan yields in 2010. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   ● | Maintaining High Asset Quality. We believe that our high asset quality is a result of conservative underwriting standards, the diligence of our loan collection personnel and the stability of the local economy.  At December 31, 2009, our ratio of non-performing loans to total loans was 0.02%.  At December 31, 2009, our ratio of allowance for loan losses to non-performing loans was 1600.0% and our ratio of allowance for loan losses to total loans was 0.32%.  Because 99.9% of our loans are secured by real estate, and our level of non-performing loans has been low in recent periods, we believe that our allowance for loan losses is adequate to absorb the probable losses inherent in our loan portfolio. The Bank continues not to be involved in, and has no exposure to, sub-prime or Alt-A lending activities.  Management continues to actively monitor the performance of the loan portfolio during these difficult economic times. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   |                |    |
|------------------------------------|--------|---------------------|---------|
|                               |   | At December 31,2009 |    |   | At December 31,2008 |   |
|                               |   | (In thousands)      |    |
| Selected Financial Condition Data: |   |                |    |   |   |   |
|                               |   |                |    |   |   |   |
| Total assets                       |   | $                   | 214,443 |   |   | $ | 196,135 |   |
| Cash and cash equivalents          |   |                | 5,965   |   |   |   | 3,173 |   |
| Securities available for sale      |   |                | 75,483  |   |   |   | 43,925 |   |
| Securities held to maturity        |   |                | 6,098   |   |   |   | 7,289 |   |
| Loans, net                         |   |                | 116,372 |   |   |   | 135,713 |   |
| Deposits                           |   |                | 156,510 |   |   |   | 127,522 |   |
| Federal Home Loan Bank advances    |   |                | 34,590  |   |   |   | 45,481 |   |
| Stockholder’s equity         |   |                | 20,350  |   |   |   | 20,041 |   |

----

|                                                |   | For the Year Ended December 31, |   |
|-----------------------------------------------------|--------|---------------------------------|--------|
|                                                |   | 2009                            |   |   | 2008 |   |
|                                                |   | (In thousands)                  |   |
| Selected Operating Data:                            |   |                            |   |   |   |   |
|                                                |   |                            |   |   |   |   |
| Interest and dividend income                        |   | $                               | 9,565  |   |   | $ | 10,159 |   |
| Interest expense                                    |   |                            | 5,031  |   |   |   | 5,862 |   |
| Net interest income                                 |   |                            | 4,534  |   |   |   | 4,297 |   |
| Provision for loan losses                           |   |                            | 28     |   |   |   | 24 |   |
| Net interest income after provision for loan losses |   |                            | 4,506  |   |   |   | 4,273 |   |
| Other income                                        |   |                            | 677    |   |   |   | 453 |   |
| Other expense                                       |   |                            | 5,138  |   |   |   | 4,657 |   |
| Income before income taxes                          |   |                            | 45     |   |   |   | 69 |   |
| Provision (benefit) for income taxes                |   |                            | (23    | ) |   |   | 44 |   |
| Net  income                               |   | $                               | 68     |   |   | $ | 25 |   |

|                                                                    |   | At or For the YearEnded December 31, |   |
|-------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                    |   | 2009                                      |   |   | 2008 |   |
|                                                                    |   |                                      |   |   |   |   |
| Selected Financial Ratios and Other Data:                               |   |                                      |   |   |   |   |
|                                                                    |   |                                      |   |   |   |   |
| Performance Ratios:                                                     |   |                                      |   |   |   |   |
| Return on average assets                                                |   |                                      | 0.03   | % |   |   | 0.01 | % |
| Return on average equity                                                |   |                                      | 0.33   | % |   |   | 0.12 | % |
| Interest rate spread (1)                                                |   |                                      | 1.95   | % |   |   | 1.91 | % |
| Net interest margin (2)                                                 |   |                                      | 2.26   | % |   |   | 2.30 | % |
| Efficiency ratio (3)                                                    |   |                                      | 98.60  | % |   |   | 98.04 | % |
| Other income to average total assets                                    |   |                                      | 0.33   | % |   |   | 0.24 | % |
| Other expense to average total assets                                   |   |                                      | 2.50   | % |   |   | 2.42 | % |
| Average interest-earning assets to average interest-bearing liabilities |   |                                      | 112    | % |   |   | 113 | % |
|                                                                    |   |                                      |   |   |   |   |   |   |
| Asset Quality Ratios:                                                   |   |                                      |   |   |   |   |   |   |
| Non-performing assets as a percent of total assets                      |   |                                      | 0.05   | % |   |   | 0.07 | % |
| Non-performing loans as a percent of total loans                        |   |                                      | 0.02   | % |   |   | 0.11 | % |
| Allowance for loan losses as a percent of non-performing loans          |   |                                      | 1600.0 | % |   |   | 236.3 | % |
| Allowance for loan losses as a percent of total loans                   |   |                                      | 0.32   | % |   |   | 0.25 | % |
|                                                                    |   |                                      |   |   |   |   |   |   |
| Capital Ratios:                                                         |   |                                      |   |   |   |   |   |   |
| Total risk-based capital (to risk-weighted assets)                      |   |                                      | 20.75  | % |   |   | 20.52 | % |
| Tier 1 leverage (core) capital (to adjusted tangible assets)            |   |                                      | 7.80   | % |   |   | 8.47 | % |
| Tangible capital (to tangible assets)                                   |   |                                      | 7.80   | % |   |   | 8.47 | % |
| Tier 1 risk-based capital (to risk-weighted assets)                     |   |                                      | 20.30  | % |   |   | 20.09 | % |
| Average equity to average total assets                                  |   |                                      | 9.92   | % |   |   | 10.42 | % |
|                                                                    |   |                                      |   |   |   |   |   |   |
| Other Data:                                                             |   |                                      |   |   |   |   |   |   |
| Number of full service offices                                          |   |                                      | 4      |   |   |   | 3 |   |

|   | (1) | Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (2) | The net interest margin represents net interest income as a percent of average interest-earning assets for the period.                                                |
|   | (3) | The efficiency ratio represents other expense divided by the sum of net interest income and other income.                                                             |

----

----

----

----

----

----

|                                                                    |   | For the Years Ended December 31, |    |
|-------------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                                    |   | 2009                             |    |   | 2008 |   |
|                                                                    |   | AverageBalance                   |    |   | InterestIncome/Expense |   |   | Yield/Cost |   |   | AverageBalance |   |   | InterestIncome/Expense |   |   | Yield/Cost |   |
| Interest-earning assets:                                                |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                   |   | $                                | 123,046 |   |   | $ | 6,976 |   |   |   | 5.67 | % |   | $ | 130,321 |   |   | $ | 7,596 |   |   |   | 5.83 | % |
| Federal funds sold                                                      |   |                             | 5,525   |   |   |   | 6 |   |   |   | 0.11 |   |   |   | 3,920 |   |   |   | 106 |   |   |   | 2.70 |   |
| Investment securities                                                   |   |                             | 43,830  |   |   |   | 1,439 |   |   |   | 3.28 |   |   |   | 28,532 |   |   |   | 1,356 |   |   |   | 4.75 |   |
| Mortgage-backed securities                                              |   |                             | 28,180  |   |   |   | 1,144 |   |   |   | 4.06 |   |   |   | 23,988 |   |   |   | 1,101 |   |   |   | 4.59 |   |
| Total interest-earning assets                                           |   |                             | 200,581 |   |   |   | 9,565 |   |   |   | 4.77 |   |   |   | 186,761 |   |   |   | 10,159 |   |   |   | 5.44 |   |
| Noninterest-earning assets                                              |   |                             | 4,936   |   |   |   |   |   |   |   |   |   |   |   | 5,302 |   |   |   |   |   |   |   |   |   |
| Total assets                                                            |   | $                                | 205,517 |   |   |   |   |   |   |   |   |   |   | $ | 192,063 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                           |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                                                            |   | $                                | 8,333   |   |   |   | 56 |   |   |   | 0.67 |   |   | $ | 6,940 |   |   |   | 75 |   |   |   | 1.08 |   |
| Passbook savings                                                        |   |                             | 17,392  |   |   |   | 146 |   |   |   | 0.84 |   |   |   | 13,897 |   |   |   | 134 |   |   |   | 0.96 |   |
| Money market savings Individual retirement accounts                |   |                             | 20,868  |   |   |   | 335 |   |   |   | 1.61 |   |   |   | 12,429 |   |   |   | 263 |   |   |   | 2.12 |   |
|                                                                    |   | 17,681                           |    |   |   | 649 |   |   |   | 3.67 |   |   |   | 16,362 |   |   |   | 709 |   |   |   | 4.33 |   |
| Certificates of deposit                                                 |   |                             | 76,104  |   |   |   | 2,224 |   |   |   | 2.92 |   |   |   | 74,725 |   |   |   | 2,958 |   |   |   | 3.96 |   |
| Federal Home Loan Bank advances                                         |   |                             | 38,095  |   |   |   | 1,621 |   |   |   | 4.26 |   |   |   | 41,603 |   |   |   | 1,723 |   |   |   | 4.14 |   |
| Total interest-bearing liabilities                                      |   |                             | 178,473 |   |   |   | 5,031 |   |   |   | 2.82 | % |   |   | 165,956 |   |   |   | 5,862 |   |   |   | 3.53 | % |
| Noninterest-bearing liabilities:                                        |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                         |   |                             | 3,620   |   |   |   |   |   |   |   |   |   |   |   | 3,256 |   |   |   |   |   |   |   |   |   |
| Other                                                                   |   |                             | 3,045   |   |   |   |   |   |   |   |   |   |   |   | 2,835 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                       |   |                             | 185,138 |   |   |   |   |   |   |   |   |   |   |   | 172,047 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                              |   |                             | 20,379  |   |   |   |   |   |   |   |   |   |   |   | 20,016 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                        |   | $                                | 205,517 |   |   |   |   |   |   |   |   |   |   | $ | 192,063 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                     |   |                             |    |   |   | $ | 4,534 |   |   |   |   |   |   |   |   |   |   | $ | 4,297 |   |   |   |   |   |
| Interest rate spread (1)                                                |   |                             |    |   |   |   |   |   |   |   | 1.95 | % |   |   |   |   |   |   |   |   |   |   | 1.91 | % |
| Net interest-earning assets (2)                                         |   | $                                | 22,108  |   |   |   |   |   |   |   |   |   |   | $ | 20,805 |   |   |   |   |   |   |   |   |   |
| Net interest margin (3)                                                 |   |                             |    |   |   |   | 2.26 | % |   |   |   |   |   |   |   |   |   |   | 2.30 | % |   |   |   |   |
| Average interest-earning assets to average interest-bearing liabilities |   |                             | 112     | % |   |   |   |   |   |   |   |   |   |   | 113 | % |   |   |   |   |   |   |   |   |

----

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

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

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

----

|                                                |   | For theYears Ended December 31,2009 vs. 2008 |   |
|-----------------------------------------------------|--------|----------------------------------------------|--------|
|                                                |   | Increase (Decrease)Due to                    |   |   |   |   |
|                                                |   | Volume                                       |   |   | Rate |   |   | Net |   |
|                                                |   | (In thousands)                               |   |
|                                                |   |                                         |   |   |   |   |   |   |   |
| Interest-earning assets:                            |   |                                         |   |   |   |   |   |   |   |
| Loans                                               |   | $                                            | (416   | ) |   | $ | (204 | ) |   | $ | (620 | ) |
| Federal funds sold                                  |   |                                         | 74     |   |   |   | (174 | ) |   |   | (100 | ) |
| Investment securities                               |   |                                         | 196    |   |   |   | (113 | ) |   |   | 83 |   |
| Mortgage-backed securities                          |   |                                         | 127    |   |   |   | (84 | ) |   |   | 43 |   |
|   Total interest-earning assets           |   |                                         | (19    | ) |   |   | (575 | ) |   |   | (594 | ) |
|                                                |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                       |   |                                         |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                                        |   |                                         | 21     |   |   |   | (40 | ) |   |   | (19 | ) |
| Passbook savings                                    |   |                                         | 24     |   |   |   | (12 | ) |   |   | 12 |   |
| Money market savings                                |   |                                         | 112    |   |   |   | (40 | ) |   |   | 72 |   |
| Individual retirement accounts                      |   |                                         | 67     |   |   |   | (127 | ) |   |   | (60 | ) |
| Certificates of deposit                             |   |                                         | 55     |   |   |   | (789 | ) |   |   | (734 | ) |
| Federal Home Loan Bank advances                     |   |                                         | (149   | ) |   |   | 47 |   |   |   | (102 | ) |
|   Total interest-bearing liabilities |   |                                         | 130    |   |   |   | (961 | ) |   |   | (831 | ) |
|                                                |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Net change in net interest income                   |   | $                                            | (149   | ) |   | $ | 386 |   |   | $ | 237 |   |
|                                                |   |                                         |   |   |   |   |   |   |   |   |   |   |

----

|   | (i) | invest in shorter to medium-term repricing and/or maturing securities whenever market allows; |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | (ii) | emphasize the marketing of our passbook, savings and checking accounts and increasing the duration of our certificates of deposit; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | sell a portion of our long-term, fixed-rate one-to-four family residential real estate mortgage loans; and |
|--------|-------|------------------------------------------------------------------------------------------------------------|

----

|   |                                            |   |   |             |   |   |   Estimated Increase (Decrease) inNPV |         | NPV as a Percentage of PresentValue of Assets (3) |
|--------|-------------------------------------------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------------|---------------------------------------------------|
|   |  Change in InterestRates (basispoints) (1) |   |   | EstimatedNPV (2) |   |   |                                       | NPVRatio (4) |                                              |   | Increase(Decrease)(basis points) |
|   |                                            |   |   |             |   |   |                                       |
|   |                                            |   |   |             | Amount |   |                                       | Percent      |                                              |   |   |
|   | (Dollars in thousands)                          |   |
|   | +300                                            |   | $      | 8,614            |   |   | $                                          | (14,311      | )                                                 |   | (62 | )% |   | 4.26 | % |   |   | (612 | ) |
|   | +200                                            |   |   | 14,397           |   |   |                                       | (8,528       | )                                                 |   | (37 | ) |   | 6.88 |   |   |   | (350 | ) |
|   | +100                                            |   |   | 19,505           |   |   |                                       | (3,420       | )                                                 |   | (15 | ) |   | 9.03 |   |   |   | (134 | ) |
|   | +50                                             |   |   | 19,892           |   |   |                                       | (3,033       | )                                                 |   | (13 | ) |   | 9.16 |   |   |   | (121 | ) |
|   | —                                         |   |   | 22,925           |   |   |                                       | —      |                                              |   | — |   |   | 10.38 |   |   |   | — |   |
|   | -50                                             |   |   | 22,182           |   |   |                                       | (743         | )                                                 |   | (3 | ) |   | 10.04 |   |   |   | (34 | ) |
|   | -100                                            |   |   | 23,422           |   |   |                                       | 497          |                                              |   | 2 |   |   | 10.50 |   |   |   | 13 |   |

----

|      (1) | Assumes an instantaneous uniform change in interest rates at all maturities. |
|------------------------------|------------------------------------------------------------------------------|

|     (2) | NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. |
|------------------------|----------------------------------------------------------------------------------------------------------------------|

|     (3) | Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets. |
|------------------------|--------------------------------------------------------------------------------------------------------------------|

|     (4) | NPV Ratio represents NPV divided by the present value of assets. |
|------------------------|------------------------------------------------------------------|

----

----

----

----

| Year Ended December 31, 2009 |   | High   |   |   | Low    |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
|                         |   |   |   |   |   |   |
| Fourth quarter               |   | $      | 9.95   |   |   | $      | 7.50 |   |
| Third quarter                |   |   | 9.90   |   |   |   | 5.65 |   |
| Second quarter               |   |   | 5.65   |   |   |   | 5.00 |   |
| First quarter                |   |   | 7.40   |   |   |   | 5.00 |   |
|                         |   |   |   |   |   |   |   |   |
| Year Ended December 31, 2008 |   | High   |   |   | Low    |   |
|                         |   |   |   |   |   |   |   |   |
| Fourth quarter               |   | $      | 9.10   |   |   | $      | 5.75 |   |
| Third quarter                |   |   | 9.25   |   |   |   | 7.20 |   |
| Second quarter               |   |   | 9.25   |   |   |   | 6.80 |   |
| First quarter                |   |   | 8.62   |   |   |   | 7.31 |   |

----

| ANNUAL MEETING The Annual Meeting of Stockholders will be held at 3:00 p.m., New York time on May 26, 2010 at the Perinton Community Center located at 1350 Turk Hill Road, Fairport, New York 14450.  |   |   | TRANSFER AGENT Registrar and Transfer Company10 Commerce DriveCranford, New Jersey 07016 If you have any questions concerning your stockholder account, please call our transfer agent, noted above, at (800) 525-7686. This is the number to call if you require a change of address or need records or information about lost certificates. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| STOCK LISTING The Company’s Common Stock is quoted on the OTC Bulletin Board under the symbol “FSBC.”                                                                                     |   |   | ANNUAL REPORT ON FORM 10-K A copy of the Company’s Form 10-K for the year ended December 31, 2009 will be furnished without charge to stockholders as of the record date, upon written request to the Secretary, FSB Community Bankshares, Inc., 54 South Main Street, Fairport, New York 14450.                                             |
|   SPECIAL COUNSEL Luse Gorman Pomerenk & Schick, P.C.5335 Wisconsin Avenue, N.W., Suite 780Washington, D.C. 20015                                                                             |   |   |  INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM ParenteBeard LLC115 Solar Street, Suite 100Syracuse, New York 13204                                                                                                                                                                                                                             |

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----

|                              |                                                    |   Page |
|-----------------------------------|---------------------------------------------------------|------------------|
|                              | Report of Independent Registered Public Accounting Firm | F-1              |
|                              |                                                    |
| Consolidated Financial Statements |                                                    |
|                              |                                                    |             |
|                              | Consolidated Balance Sheets                             | F-2              |
|                              |                                                    |             |
|                              | Consolidated Statements of Income                       | F-3              |
|                              |                                                    |             |
|                              | Consolidated Statements of Stockholders’ Equity   | F-4              |
|                              |                                                    |             |
|                              | Consolidated Statements of Cash Flows                   | F-5              |
|                              |                                                    |             |
|                              | Notes to Consolidated Financial Statements              | F-6              |

----

----

----

|                                                                                                 |   | 2009                                         |    |   | 2008   |   |
|------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|--------|--------|
|                                                                                                 |   | (Dollars in Thousands,Except Per Share Data) |    |
| Assets                                                                                               |   |                                         |    |   |   |   |
| Cash and due from banks                                                                              |   | $                                            | 3,385   |   |   | $      | 2,154 |   |
| Interest bearing demand deposits                                                                     |   |                                         | 2,580   |   |   |   | 1,019 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Cash and Cash Equivalents                                                                            |   |                                         | 5,965   |   |   |   | 3,173 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Securities available for sale                                                                        |   |                                         | 75,483  |   |   |   | 43,925 |   |
| Securities held to maturity (fair value 2009 $6,183; 2008 $7,091)                                    |   |                                         | 6,098   |   |   |   | 7,289 |   |
| Investment in FHLB stock                                                                             |   |                                         | 1,886   |   |   |   | 2,312 |   |
| Loans, net of allowance for loan losses (2009 $368; 2008 $345)                                       |   |                                         | 116,372 |   |   |   | 135,713 |   |
| Bank owned life insurance                                                                            |   |                                         | 3,013   |   |   |   | - |   |
| Accrued interest receivable                                                                          |   |                                         | 1,156   |   |   |   | 1,032 |   |
| Premises and equipment, net                                                                          |   |                                         | 2,556   |   |   |   | 2,308 |   |
| Foreclosed real estate                                                                               |   |                                         | 79      |   |   |   | - |   |
|                                                                                                 |   |                                         | 383     |   |   |   |   |   |
| Prepaid FDIC premium                                                                                 |   |                                         | 793     |   |   |   | 22 |   |
| Other assets                                                                                         |   |                                         | 1,042   |   |   |   | 361 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Total Assets                                                                                         |   | $                                            | 214,443 |   |   | $      | 196,135 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                                           |   |                                         |    |   |   |   |   |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Liabilities                                                                                          |   |                                         |    |   |   |   |   |   |
| Deposits:                                                                                            |   |                                         |    |   |   |   |   |   |
| Non-interest-bearing                                                                                 |   | $                                            | 3,955   |   |   | $      | 3,487 |   |
| Interest bearing                                                                                     |   |                                         | 152,555 |   |   |   | 124,035 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Total Deposits                                                                                       |   |                                         | 156,510 |   |   |   | 127,522 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Short-term borrowings                                                                                |   |                                         | -       |   |   |   | 3,850 |   |
| Long-term borrowings                                                                                 |   |                                         | 34,590  |   |   |   | 41,631 |   |
| Advances from borrowers for taxes and insurance                                                      |   |                                         | 2,012   |   |   |   | 2,152 |   |
| Official bank checks                                                                                 |   |                                         | 432     |   |   |   | 348 |   |
| Other liabilities                                                                                    |   |                                         | 549     |   |   |   | 591 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Total Liabilities                                                                                    |   |                                         | 194,093 |   |   |   | 176,094 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Stockholders’ Equity                                                                           |   |                                         |    |   |   |   |   |   |
| Preferred stock, no par value; 1,000,000 shares authorized, no shares issued and outstanding         |   |                                         | -       |   |   |   | - |   |
| Common stock; $0.10 par value; 10,000,000 shares authorized; 1,785,000 shares issued and outstanding |   |                                         | 179     |   |   |   | 179 |   |
| Paid-in capital                                                                                      |   |                                         | 7,275   |   |   |   | 7,286 |   |
| Retained earnings                                                                                    |   |                                         | 13,317  |   |   |   | 13,249 |   |
| Accumulated other comprehensive income (loss)                                                        |   |                                         | 174     |   |   |   | (43 | ) |
| Unearned ESOP shares – at cost                                                                 |   |                                         | (595    | )      |   |   | (630 | ) |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Total Stockholders’ Equity                                                                     |   |                                         | 20,350  |   |   |   | 20,041 |   |
|                                                                                                 |   |                                         |    |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                                     |   | $                                            | 214,443 |   |   | $      | 196,135 |   |

----

----

|                                                          |   |                                         |    |   |   |   |
|---------------------------------------------------------------|--------|----------------------------------------------|---------|--------|--------|--------|
|                                                          |   | 2009                                         |    |   | 2008   |   |
|                                                          |   | (Dollars in Thousands,Except Per Share Data) |    |
| Interest and Dividend Income                                  |   |                                         |    |   |   |   |
| Loans                                                         |   | $                                            | 6,976   |   |   | $      | 7,596 |   |
| Securities - taxable                                          |   |                                         | 1,439   |   |   |   | 1,356 |   |
| Mortgage-backed securities                                    |   |                                         | 1,144   |   |   |   | 1,101 |   |
| Other                                                         |   |                                         | 6       |   |   |   | 106 |   |
| Total Interest and Dividend Income                            |   |                                         | 9,565   |   |   |   | 10,159 |   |
| Interest Expense                                              |   |                                         |    |   |   |   |   |   |
| Deposits                                                      |   |                                         | 3,410   |   |   |   | 4,139 |   |
| Borrowings:                                                   |   |                                         |    |   |   |   |   |   |
| Short-term                                                    |   |                                         | 1       |   |   |   | 4 |   |
| Long-term                                                     |   |                                         | 1,620   |   |   |   | 1,719 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Total Interest Expense                                        |   |                                         | 5,031   |   |   |   | 5,862 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Net Interest Income                                           |   |                                         | 4,534   |   |   |   | 4,297 |   |
| Provision for loan losses                                     |   |                                         | 28      |   |   |   | 24 |   |
| Net Interest Income after Provision for loan losses           |   |                                         | 4,506   |   |   |   | 4,273 |   |
| Other Income                                                  |   |                                         |    |   |   |   |   |   |
| Service fees                                                  |   |                                         | 253     |   |   |   | 201 |   |
| Fee income                                                    |   |                                         | 50      |   |   |   | 142 |   |
| Realized gain on sale of securities available for sale        |   |                                         | 92      |   |   |   | — |   |
| Loss on impairment of securities                              |   |                                         | — |   |   |   | (57 | ) |
| Increase in cash surrender value of bank owned life insurance |   |                                         | 13      |   |   |   | — |   |
| Realized gain on sale of loans                                |   |                                         | 58      |   |   |   | 15 |   |
| Other                                                         |   |                                         | 211     |   |   |   | 152 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Total Other Income                                            |   |                                         | 677     |   |   |   | 453 |   |
| Other Expense                                                 |   |                                         |    |   |   |   |   |   |
| Salaries and employee benefits                                |   |                                         | 2,524   |   |   |   | 2,435 |   |
| Occupancy                                                     |   |                                         | 523     |   |   |   | 464 |   |
| Data processing costs                                         |   |                                         | 99      |   |   |   | 82 |   |
| Advertising                                                   |   |                                         | 204     |   |   |   | 251 |   |
| Equipment                                                     |   |                                         | 377     |   |   |   | 337 |   |
| Electronic banking                                            |   |                                         | 79      |   |   |   | 70 |   |
| Directors fees                                                |   |                                         | 107     |   |   |   | 114 |   |
| Mortgage fees and taxes                                       |   |                                         | 243     |   |   |   | 241 |   |
| FDIC premium expense                                          |   |                                         | 341     |   |   |   | 26 |   |
| Audit and tax services                                        |   |                                         | 118     |   |   |   | 99 |   |
| Other                                                         |   |                                         | 523     |   |   |   | 538 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Total Other Expense                                           |   |                                         | 5,138   |   |   |   | 4,657 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Income before Income Taxes                                    |   |                                         | 45      |   |   |   | 69 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Provision (Benefit) for Income Taxes                          |   |                                         | (23     | )      |   |   | 44 |   |
|                                                          |   |                                         |    |   |   |   |   |   |
| Net Income                                                    |   | $                                            | 68      |   |   | $      | 25 |   |
| Basic earnings per common share                               |   | $                                            | 0.04    |   |   | $      | 0.01 |   |

----

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|                                                                                                            |   | CommonStock |   |   | Paid-InCapital |   |   | RetainedEarnings |   |   | Accumulated OtherComprehensiveIncome (Loss) |   |   | UnearnedESOPShares |   |   | Total  |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|----------------|--------|--------|------------------|--------|--------|---------------------------------------------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2007                                                                                     |   | $           | 179    |   |           |   | 7,293  |             |   |   | 13,224                                      |   |   |               | 118    |   |   |   | (665 | ) |   |   | 20,149 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Loss:                                                                                             |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                      |   |        | -      |   |           |   | -      |             |   |   | 25                                          |   |   |               | -      |   |   |   | - |   |   |   | 25 |   |
| Change in unrealized gain (loss) on securities available for sale, net of reclassification adjustment and taxes |   |        | -      |   |           |   | -      |             |   |   | -                                           |   |   |               | (161   | )      |   |   | - |   |   |   | (161 | ) |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Total Comprehensive Loss                                                                                        |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   | (136 | ) |
| ESOP shares committed to be released                                                                            |   |        | -      |   |           |   | (7     | )                |   |   | -                                           |   |   |               | -      |   |   |   | 35 |   |   |   | 28 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2008                                                                                     |   |        | 179    |   |           |   | 7,286  |             |   |   | 13,249                                      |   |   |               | (43    | )      |   |   | (630 | ) |   |   | 20,041 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Income:                                                                                           |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                      |   |        | -      |   |           |   | -      |             |   |   | 68                                          |   |   |               | -      |   |   |   | - |   |   |   | 68 |   |
| Change in unrealized gain (loss) on securities available for sale, net of reclassification adjustment and taxes |   |        | -      |   |           |   | -      |             |   |   | -                                           |   |   |               | 217    |   |   |   | - |   |   |   | 217 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                                                      |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   | 285 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released                                                                            |   |        | -      |   |           |   | (11    | )                |   |   | -                                           |   |   |               | -      |   |   |   | 35 |   |   |   | 24 |   |
|                                                                                                            |   |        |   |   |           |   |   |             |   |   |                                        |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2009                                                                                     |   | $           | 179    |   |           | $      | 7,275  |             |   | $      | 13,317                                      |   |   | $                  | 174    |   |   | $      | (595 | ) |   | $ | 20,350 |   |

----

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|                                                                                     |   |           |     |   |   |   |
|------------------------------------------------------------------------------------------|--------|----------------|----------|--------|--------|--------|
|                                                                                     |   | 2009           |     |   | 2008   |   |
|                                                                                     |   | (In Thousands) |     |
| Cash Flows from Operating Activities                                                     |   |           |     |   |   |   |
| Net income                                                                               |   | $              | 68       |   |   | $      | 25 |   |
| Adjustments to reconcile net income to net cash provided (used) by operating activities: |   |           |     |   |   |   |   |   |
| Net amortization of premiums and discounts on investments                                |   |           | 778      |   |   |   | 284 |   |
| Gain on sale of securities available for sale                                            |   |           | (92      | )      |   |   | - |   |
| Impairment loss on securities available for sale                                         |   |           | -        |   |   |   | 57 |   |
| Gain on sale of loans to others                                                          |   |           | (58      | )      |   |   | (20 | ) |
| Proceeds from loans sold to others                                                       |   |           | 13,899   |   |   |   | - |   |
| Loans originated for sale                                                                |   |           | (13,841  | )      |   |   | - |   |
| Amortization of net deferred loan origination costs                                      |   |           | 26       |   |   |   | 27 |   |
| Depreciation and amortization                                                            |   |           | 296      |   |   |   | 266 |   |
| Provision for loan losses                                                                |   |           | 28       |   |   |   | 24 |   |
| Expense related to ESOP                                                                  |   |           | 24       |   |   |   | 28 |   |
| Deferred income tax (expense) benefit                                                    |   |           | (7       | )      |   |   | 21 |   |
| Earnings on investment in bank owned life insurance                                      |   |           | (13      | )      |   |   | - |   |
| Increase in accrued interest receivable                                                  |   |           | (124     | )      |   |   | (160 | ) |
| Increase in prepaid FDIC premium and other assets                                        |   |           | (1,439   | )      |   |   | (143 | ) |
| Increase (decrease) in other liabilities                                                 |   |           | (160     | )      |   |   | 181 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Net Cash Provided (Used) by Operating Activities                                         |   |           | (615     | )      |   |   | 590 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Cash Flows from Investing Activities                                                     |   |           |     |   |   |   |   |   |
| Purchases of securities available for sale                                               |   |           | (102,032 | )      |   |   | (58,971 | ) |
| Proceeds from maturities and calls of securities available for sale                      |   |           | 59,960   |   |   |   | 12,050 |   |
| Proceeds from sales of securities available for sale                                     |   |           | 5,355    |   |   |   | - |   |
| Proceeds from principal paydowns on securities available for sale                        |   |           | 4,811    |   |   |   | 2,685 |   |
| Purchases of securities held to maturity                                                 |   |           | -        |   |   |   | (3,001 | ) |
| Proceeds from maturities and calls of securities held to maturity                        |   |           | -        |   |   |   | 21,987 |   |
| Proceeds from principal paydowns on securities held to maturity                          |   |           | 1,182    |   |   |   | 2,245 |   |
| Net (increase) decrease in loans                                                         |   |           | 19,208   |   |   |   | (14,315 | ) |
| Proceeds from loans sold to others                                                       |   |           | -        |   |   |   | 2,897 |   |
| Redemption (purchase) of Federal Home Loan Bank stock                                    |   |           | 426      |   |   |   | (907 | ) |
| Purchase of premises and equipment                                                       |   |           | (544     | )      |   |   | (49 | ) |
| Purchase of Bank Owned Life Insurance                                                    |   |           | (3,000   | )      |   |   | - |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Net Cash Used by Investing Activities                                                    |   |           | (14,634  | )      |   |   | (35,379 | ) |
|                                                                                     |   |           |     |   |   |   |   |   |
| Cash Flows from Financing Activities                                                     |   |           |     |   |   |   |   |   |
| Net increase in deposits                                                                 |   |           | 28,988   |   |   |   | 8,364 |   |
| Net increase (decrease) in short-term borrowings                                         |   |           | (3,850   | )      |   |   | 3,850 |   |
| Proceeds from long-term borrowings                                                       |   |           | 1,000    |   |   |   | 22,000 |   |
| Repayments on long-term borrowings                                                       |   |           | (8,041   | )      |   |   | (5,950 | ) |
| Net increase (decrease) in advances from borrowers for taxes and insurance               |   |           | (140     | )      |   |   | 254 |   |
| Net increase in official bank checks                                                     |   |           | 84       |   |   |   | - |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Net Cash Provided by Financing Activities                                                |   |           | 18,041   |   |   |   | 28,518 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents                                     |   |           | 2,792    |   |   |   | (6,271 | ) |
|                                                                                     |   |           |     |   |   |   |   |   |
| Cash and Cash Equivalents - Beginning                                                    |   |           | 3,173    |   |   |   | 9,444 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Cash and Cash Equivalents - Ending                                                       |   | $              | 5,965    |   |   | $      | 3,173 |   |
| Supplementary Cash Flows Information                                                     |   |           |     |   |   |   |   |   |
| Interest paid                                                                            |   | $              | 5,055    |   |   | $      | 5,805 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Income taxes paid                                                                        |   | $              | 115      |   |   | $      | 1 |   |
|                                                                                     |   |           |     |   |   |   |   |   |
| Supplementary Schedule of Noncash Investing and Financing Activities                     |   |           |     |   |   |   |   |   |
| Transfer of loans to foreclosed real estate                                              |   | $              | 79       |   |   | $      | - |   |

----

----

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|   |                                                                 |   |           |   |   |   |   |
|--------|----------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|   |                                                                 |   | 2009           |   |   | 2008   |   |
|   |                                                                 |   | (In Thousands) |   |
|   |                                                                 |   |           |   |   |   |   |
|   | Unrealized holding gain (loss) on available for sale securities      |   | $              | 420    |   |   | $      | (301 | ) |
|   | Reclassification adjustment for realized gain included in net income |   |           | (92    | )      |   |   | - |   |
|   | Realized loss on other than temporary impairment of securities       |   |           | -      |   |   |   | 57 |   |
|   |                                                                 |   |           |   |   |   |   |   |   |
|   | Net Unrealized Gain (Loss)                                           |   |           | 328    |   |   |   | (244 | ) |
|   |                                                                 |   |           |   |   |   |   |   |   |
|   | Tax effect                                                           |   |           | 111    |   |   |   | (83 | ) |
|   |                                                                 |   |           |   |   |   |   |   |   |
|   | Net of Tax Amount                                                    |   | $              | 217    |   |   | $      | (161 | ) |

----

----

----

----

|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |
|------------------------------------------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                                     |   | AmortizedCost  |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|                                     |   | (In Thousands) |   |
| December 31, 2009:                       |   |           |   |   |                 |   |   |                  |   |   |      |   |
| Available for Sale:                      |   |           |   |   |                 |   |   |                  |   |   |      |   |
| Equity securities                        |   | $              | 9      |   |                 | $      | 3      |                  |   | $      | -         |   |   | $ | 12 |   |
| U.S. Government obligations              |   |           | 54,842 |   |                 |   | 100    |                  |   |   | (313      | )      |   |   | 54,629 |   |
| Mortgage-backed securities - residential |   |           | 20,369 |   |                 |   | 473    |                  |   |   | -         |   |   |   | 20,842 |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
|                                     |   | $              | 75,220 |   |                 | $      | 576    |                  |   | $      | (313      | )      |   | $ | 75,483 |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Held to Maturity:                        |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Mortgage-backed securities - residential |   | $              | 6,098  |   |                 | $      | 86     |                  |   | $      | (1        | )      |   | $ | 6,183 |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| December 31, 2008:                       |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Available for Sale:                      |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Equity securities                        |   | $              | 9      |   |                 | $      | -      |                  |   | $      | (3        | )      |   | $ | 6 |   |
| U.S. Government obligations              |   |           | 22,196 |   |                 |   | 82     |                  |   |   | (49       | )      |   |   | 22,229 |   |
| Mortgage-backed securities - residential |   |           | 21,785 |   |                 |   | 38     |                  |   |   | (133      | )      |   |   | 21,690 |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
|                                     |   | $              | 43,990 |   |                 | $      | 120    |                  |   | $      | (185      | )      |   | $ | 43,925 |   |
|                                     |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Held to Maturity:                        |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Mortgage-backed securities - residential |   | $              | 7,289  |   |                 | $      | -      |                  |   | $      | (198      | )      |   | $ | 7,091 |   |

|                                   |   |                     |   |   |                   |   |   |          |   |   |                |   |
|----------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|---------------|--------|--------|---------------------|--------|
|                                   |   |  Available for Sale |   |   |  Held to Maturity |   |
|                                   |   | AmortizedCost            |   |   | EstimatedFair Value    |   |   | AmortizedCost |   |   | EstimatedFair Value |   |
|                                   |   |  (In Thousands)     |   |   | (In Thousands)         |   |
| Due in one year or less                |   | $                        | -      |   |                   | $      | -      |          |   | $      | -                   |   |   | $ | - |   |
| Due after one year through five years  |   |                     | 5,525  |   |                   |   | 5,533  |          |   |   | -                   |   |   |   | - |   |
| Due after five years through ten years |   |                     | 15,045 |   |                   |   | 15,007 |          |   |   | -                   |   |   |   | - |   |
| Due after ten years                    |   |                     | 34,272 |   |                   |   | 34,089 |          |   |   | -                   |   |   |   | - |   |
| Mortgage-backed securities             |   |                     | 20,369 |   |                   |   | 20,842 |          |   |   | 6,098               |   |   |   | 6,183 |   |
|                                   |   |                     |   |   |                   |   |   |          |   |   |                |   |   |   |   |   |
|                                   |   | $                        | 75,211 |   |                   | $      | 75,471 |          |   | $      | 6,098               |   |   | $ | 6,183 |   |

----

----

|                                      |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |
|-------------------------------------------|--------|---------------------|--------|--------|-----------------------|--------|--------|-----------|--------|--------|-----------------------|--------|--------|-----------|--------|--------|-----------------------|--------|
|                                      |   | Less than 12 Months |   |   | 12 Months or More     |   |   | Total     |   |
|                                      |   | FairValue           |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |
|                                      |   | (In Thousands)      |   |
| 2009:                                     |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |
| U.S. Government obligations               |   | $                   | 27,241 |   |                  | $      | 313    |      |   | $      | -                     |   |   | $         | -      |   |                  | $      | 27,241 |   |   | $ | 313 |   |
| Mortgaged-backed securities - residential |   |                | 442    |   |                  |   | 1      |      |   |   | 18                    |   |   |      | -      |   |                  |   | 460 |   |   |   | 1 |   |
|                                      |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |   |   |   |   |   |   |
|                                      |   | $                   | 27,683 |   |                  | $      | 314    |      |   | $      | 18                    |   |   | $         | -      |   |                  | $      | 27,701 |   |   | $ | 314 |   |
|                                      |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |   |   |   |   |   |   |
| 2008:                                     |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |   |   |   |   |   |   |
| Equity securities                         |   | $                   | 6      |   |                  | $      | 3      |      |   | $      | -                     |   |   | $         | -      |   |                  | $      | 6 |   |   | $ | 3 |   |
| U.S. Government obligations               |   |                | 3,354  |   |                  |   | 49     |      |   |   | -                     |   |   |      | -      |   |                  |   | 3,354 |   |   |   | 49 |   |
| Mortgaged-backed securities - residential |   |                | 22,556 |   |                  |   | 268    |      |   |   | 1,335                 |   |   |      | 63     |   |                  |   | 23,891 |   |   |   | 331 |   |
|                                      |   |                |   |   |                  |   |   |      |   |   |                  |   |   |      |   |   |                  |   |   |   |   |   |   |   |
|                                      |   | $                   | 25,916 |   |                  | $      | 320    |      |   | $      | 1,335                 |   |   | $         | 63     |   |                  | $      | 27,251 |   |   | $ | 383 |   |

----

----

|                                      |   |           |    |   |   |   |
|-------------------------------------------|--------|----------------|---------|--------|--------|--------|
|                                      |   | 2009           |    |   | 2008   |   |
|                                      |   | (In Thousands) |    |
|                                      |   |           |    |   |   |   |
| Real estate loans:                        |   |           |    |   |   |   |
| Secured by one to four family residences  |   | $              | 104,960 |   |   | $      | 123,880 |   |
| Secured by five or more family residences |   |           | 781     |   |   |   | 846 |   |
| Construction                              |   |           | 170     |   |   |   | 316 |   |
| Commercial                                |   |           | 1,809   |   |   |   | 2,119 |   |
| Home equity lines of credit               |   |           | 8,496   |   |   |   | 8,214 |   |
| Other                                     |   |           | 91      |   |   |   | 148 |   |
|                                      |   |           |    |   |   |   |   |   |
| Total Loans                               |   |           | 116,307 |   |   |   | 135,523 |   |
|                                      |   |           |    |   |   |   |   |   |
| Net deferred loan origination costs       |   |           | 433     |   |   |   | 535 |   |
| Allowance for loan losses                 |   |           | (368    | )      |   |   | (345 | ) |
|                                      |   |           |    |   |   |   |   |   |
| Net Loans                                 |   | $              | 116,372 |   |   | $      | 135,713 |   |

|                      |   |           |   |   |   |   |
|---------------------------|--------|----------------|--------|--------|--------|--------|
|                      |   | 2009           |   |   | 2008   |   |
|                      |   | (In Thousands) |   |
|                      |   |           |   |   |   |   |
| Balance at January 1      |   | $              | 345    |   |   | $      | 319 |   |
| Provision for loan losses |   |           | 28     |   |   |   | 24 |   |
| Loans charged-off         |   |           | (5     | )      |   |   | - |   |
| Recoveries                |   |           | -      |   |   |   | 2 |   |
|                      |   |           |   |   |   |   |   |   |
| Balance at December 31    |   | $              | 368    |   |   | $      | 345 |   |

----

----

|                                      |   |           |   |   |   |   |
|-------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                      |   | 2009           |   |   | 2008   |   |
|                                      |   | (In Thousands) |   |
|                                      |   |           |   |   |   |   |
| Premise                                   |   | $              | 2,998  |   |   | $      | 2,763 |   |
| Furniture, fixtures and equipment         |   |           | 1,817  |   |   |   | 1,556 |   |
| Construction in process                   |   |           | 5      |   |   |   | 12 |   |
|                                      |   |           |   |   |   |   |   |   |
|                                      |   |           | 4,820  |   |   |   | 4,331 |   |
| Accumulated depreciation and amortization |   |           | (2,264 | )      |   |   | (2,023 | ) |
|                                      |   |           |   |   |   |   |   |   |
|                                      |   | $              | 2,556  |   |   | $      | 2,308 |   |

|   |   |           |   |   |     |   |   |        |   |   |        |   |   |      |   |   |      |   |   |   |   |
|--------|--------|----------------|--------|--------|----------|--------|--------|-------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|
|   |   | Webster        |   |   | Penfield |   |   | Irondequoit |   |   | Canandaigua |   |   | Watertown |   |   | Pittsford |   |   | Total  |   |
|   |   | (In Thousands) |   |
|   |   |           |   |   |     |   |   |        |   |   |        |   |   |      |   |   |      |   |   |   |   |
| 2010   |   | $              | 68     |   |     | $      | 72     |        |   | $      | 55          |   |   | $         | 6      |   |      | $      | 8      |   |   | $ | 14 |   |   | $ | 223 |   |
| 2011   |   |           | 68     |   |     |   | 72     |        |   |   | 55          |   |   |      | -      |   |      |   | -      |   |   |   | 14 |   |   |   | 209 |   |
| 2012   |   |           | 68     |   |     |   | 72     |        |   |   | 63          |   |   |      | -      |   |      |   | -      |   |   |   | 14 |   |   |   | 217 |   |
| 2013   |   |           | 68     |   |     |   | 79     |        |   |   | 63          |   |   |      | -      |   |      |   | -      |   |   |   | 14 |   |   |   | 224 |   |
| 2014   |   |           | 68     |   |     |   | 79     |        |   |   | 63          |   |   |      | -      |   |      |   | -      |   |   |   | 14 |   |   |   | 224 |   |
|   |   |           |   |   |     |   |   |        |   |   |        |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
|   |   | $              | 340    |   |     | $      | 374    |        |   | $      | 299         |   |   | $         | 6      |   |      | $      | 8      |   |   | $ | 70 |   |   | $ | 1,097 |   |

----

----

|                             |   |           |    |   |   |   |
|----------------------------------|--------|----------------|---------|--------|--------|--------|
|                             |   | 2009           |    |   | 2008   |   |
|                             |   | (In Thousands) |    |
|                             |   |           |    |   |   |   |
| Non-interest bearing             |   | $              | 3,955   |   |   | $      | 3,487 |   |
| NOW accounts                     |   |           | 9,141   |   |   |   | 7,582 |   |
| Regular savings and demand clubs |   |           | 26,682  |   |   |   | 13,457 |   |
| Money market                     |   |           | 22,588  |   |   |   | 15,685 |   |
| Individual retirement accounts   |   |           | 17,996  |   |   |   | 16,812 |   |
| Certificates of deposit          |   |           | 76,148  |   |   |   | 70,499 |   |
|                             |   |           |    |   |   |   |   |   |
|                             |   | $              | 156,510 |   |   | $      | 127,522 |   |

|   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|
|   | 2010   |   | $      | 65,345 |   |
|   | 2011   |   |   | 12,392 |   |
|   | 2012   |   |   | 10,954 |   |
|   | 2013   |   |   | 2,627  |   |
|   | 2014   |   |   | 2,826  |   |
|   |   |   |   |   |   |
|   |   |   | $      | 94,144 |   |

|                             |   |           |   |   |   |   |   |
|----------------------------------|--------|----------------|--------|--------|--------|--------|--------|
|                             |   | 2009           |   | 2008   |   |
|                             |   | (In Thousands) |   |
|                             |   |           |   |   |   |   |   |
| NOW accounts                     |   | $              | 56     |   | $      | 75     |   |
| Regular savings and demand clubs |   |           | 146    |   |   | 134    |   |
| Money market                     |   |           | 335    |   |   | 263    |   |
| Individual retirement accounts   |   |           | 649    |   |   | 709    |   |
| Certificates of deposit          |   |           | 2,224  |   |   | 2,958  |   |
|                             |   |           |   |   |   |   |   |
|                             |   | $              | 3,410  |   | $      | 4,139  |   |

----

----

|   |        |   |         |   |        |   |   |           |   |   |   |   |   |
|--------|-------------|--------|--------------|--------|-------------|--------|--------|----------------|--------|--------|--------|--------|--------|
|   | AdvanceDate |   | MaturityDate |   | CurrentRate |   | 2009   |           | 2008   |   |
|   |        |   |         |   |        |   |   | (In Thousands) |   |
|   |        |   |         |   |        |   |   |           |   |   |   |   |   |
|   | 11/29/04    |   | 11/30/09     |   |        | 3.94   | %      | $              | -      |   | $      | 216    |   |
|   | 03/22/05    |   | 03/23/09     |   |        | 4.60   | %      |           | -      |   |   | 750    |   |
|   | 03/22/05    |   | 03/22/10     |   |        | 4.73   | %      |           | 750    |   |   | 750    |   |
|   | 08/18/05    |   | 08/18/10     |   |        | 4.70   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 09/06/05    |   | 09/06/11     |   |        | 4.53   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 09/14/05    |   | 09/14/15     |   |        | 4.75   | %      |           | 789    |   |   | 844    |   |
|   | 11/01/05    |   | 11/02/09     |   |        | 5.05   | %      |           | -      |   |   | 1,000  |   |
|   | 11/01/05    |   | 11/01/10     |   |        | 4.95   | %      |           | 220    |   |   | 430    |   |
|   | 11/16/05    |   | 11/18/13     |   |        | 5.19   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 11/16/05    |   | 11/16/12     |   |        | 5.18   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 11/16/05    |   | 11/16/10     |   |        | 5.11   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 06/05/06    |   | 06/06/16     |   |        | 5.63   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 06/05/06    |   | 06/05/14     |   |        | 5.60   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 08/17/06    |   | 08/19/13     |   |        | 5.45   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 08/17/06    |   | 08/17/15     |   |        | 5.50   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 08/24/06    |   | 08/24/11     |   |        | 5.39   | %      |           | 381    |   |   | 583    |   |
|   | 09/08/06    |   | 09/09/13     |   |        | 5.32   | %      |           | 593    |   |   | 729    |   |
|   | 11/28/06    |   | 11/28/11     |   |        | 5.00   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 10/25/07    |   | 10/25/10     |   |        | 4.52   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 11/27/07    |   | 11/27/09     |   |        | 4.04   | %      |           | -      |   |   | 1,000  |   |
|   | 11/27/07    |   | 11/27/12     |   |        | 4.46   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 12/12/07    |   | 12/14/09     |   |        | 4.09   | %      |           | -      |   |   | 1,000  |   |
|   | 12/12/07    |   | 12/12/11     |   |        | 4.36   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 12/28/07    |   | 12/28/10     |   |        | 4.09   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 01/04/08    |   | 01/04/11     |   |        | 3.71   | %      |           | 500    |   |   | 500    |   |
|   | 01/04/08    |   | 01/04/13     |   |        | 4.04   | %      |           | 500    |   |   | 500    |   |
|   | 01/15/08    |   | 01/18/11     |   |        | 3.45   | %      |           | 500    |   |   | 500    |   |
|   | 01/15/08    |   | 01/17/12     |   |        | 3.65   | %      |           | 500    |   |   | 500    |   |
|   | 01/15/08    |   | 01/15/13     |   |        | 3.81   | %      |           | 500    |   |   | 500    |   |
|   | 01/29/08    |   | 01/29/10     |   |        | 3.11   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 01/29/08    |   | 01/31/11     |   |        | 3.37   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 02/13/08    |   | 02/13/09     |   |        | 2.69   | %      |           | -      |   |   | 1,000  |   |
|   | 02/13/08    |   | 02/16/10     |   |        | 2.39   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 02/13/08    |   | 02/13/13     |   |        | 3.39   | %      |           | 2,007  |   |   | 2,582  |   |
|   | 02/19/08    |   | 02/19/09     |   |        | 2.78   | %      |           | -      |   |   | 1,000  |   |
|   | 02/19/08    |   | 02/22/11     |   |        | 2.85   | %      |           | 2,000  |   |   | 2,000  |   |
|   | 02/19/08    |   | 02/21/12     |   |        | 3.73   | %      |           | 1,000  |   |   | 1,000  |   |
|   | 02/20/08    |   | 02/20/13     |   |        | 3.29   | %      |           | 2,000  |   |   | 2,000  |   |
|   | 06/12/08    |   | 06/12/13     |   |        | 4.36   | %      |           | 1,477  |   |   | 1,849  |   |
|   | 06/12/08    |   | 06/12/15     |   |        | 4.70   | %      |           | 1,647  |   |   | 1,898  |   |
|   | 11/21/08    |   | 11/21/13     |   |        | 4.48   | %      |           | 1,226  |   |   | 1,500  |   |
|   | 11/03/09    |   | 11/03/14     |   |        | 2.37   | %      |           | 1,000  |   |   | -      |   |
|   |        |   |         |   |        |   |   |           |   |   |   |   |   |
|   |        |   |         |   |        |   |   | $              | 34,590 |   | $      | 41,631 |   |

----

----

|       |   |                |   |   |                 |   |   |          |   |   |                 |   |
|------------|--------|---------------------|--------|--------|----------------------|--------|--------|---------------|--------|--------|----------------------|--------|
|       |   | ContractualMaturity |   |   | WeightedAverage Rate |   |   | Next CallDate |   |   | WeightedAverage Rate |   |
|       |   |                |   |   |                 |   |   |          |   |   |                 |   |
| 2010       |   | $                   | 6,970  |   |                 |   | 4.10   | %             |   | $      | 2,000                |   |   |   | 2.85 | % |
| 2011       |   |                | 7,381  |   |                 |   | 3.87   |          |   |   | 2,000                |   |   |   | 3.29 |   |
| 2012       |   |                | 3,500  |   |                 |   | 4.34   |          |   |   | -                    |   |   |   | - |   |
| 2013       |   |                | 10,303 |   |                 |   | 4.18   |          |   |   | -                    |   |   |   | - |   |
| 2014       |   |                | 2,000  |   |                 |   | 3.99   |          |   |   | -                    |   |   |   | - |   |
| Thereafter |   |                | 4,436  |   |                 |   | 5.10   |          |   |   | -                    |   |   |   | - |   |
|       |   |                |   |   |                 |   |   |          |   |   |                 |   |   |   |   |   |
|       |   | $                   | 34,590 |   |                 |   | 4.22   | %             |   | $      | 4,000                |   |   |   | 3.07 | % |

|     |   |           |      |   |   |   |   |
|----------|--------|----------------|-----------|--------|--------|--------|--------|
|     |   | 2009           |      | 2008   |   |
|     |   | (In Thousands) |      |
| Current  |   |           |      |   |   |   |   |
| Federal  |   | $              | (17       | )      | $      | 23     |   |
| State    |   |           | -         |   |   | -      |   |
| Deferred |   |           | (6        | )      |   | 21     |   |
|     |   | $              |  (23 | )      | $      | 44     |   |

----

----

|                                  |   |   |   |   |               |   |   |   |   |   |              |   |
|---------------------------------------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|-------------------|--------|
|                                  |   | 2009   |   |   | 2008               |   |
|                                  |   | Amount |   |   | % of Pre-taxIncome |   |   | Amount |   |   | % of Pre-tax Loss |   |
|                                  |   |   |   |   |               |   |   |   |   |   |              |   |
| Federal Tax at a Statutory rate       |   | $      | 15     |   |               |   | 34     | %      |   | $      | 23                |   |   |   | 34 | % |
| State taxes, net of Federal provision |   |   | -      |   |               |   | -      |   |   |   | -                 |   |   |   | - |   |
| Change in valuation allowance         |   |   | 68     |   |               |   | 151    | %      |   |   | 107               |   |   |   | 155 | % |
| Other items                           |   |   | (106   | )      |               |   | (236   | )      |   |   | (86               | )      |   |   | (125 | ) |
| Income tax provision (benefit)        |   | $      | (23    | )      |               |   | (51    | )%     |   | $      | 44                |   |   |   | 64 | % |

|                                                  |   |           |   |   |   |   |
|-------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                  |   | 2009           |   |   | 2008   |   |
|                                                  |   | (In Thousands) |   |
|                                                  |   |           |   |   |   |   |
| Deferred tax assets:                                  |   |           |   |   |   |   |
| Deferred loan origination fees                        |   | $              | 14     |   |   | $      | 20 |   |
| Pension expense                                       |   |           | 8      |   |   |   | - |   |
| Allowance for loan losses - Federal                   |   |           | 35     |   |   |   | 26 |   |
| Charitable contributions                              |   |           | 24     |   |   |   | 16 |   |
| State tax credits                                     |   |           | 422    |   |   |   | 382 |   |
| Depreciation                                          |   |           | -      |   |   |   | 17 |   |
| Supplemental Executive Retirement Plan                |   |           | 34     |   |   |   | 19 |   |
| Other than temporary impairment loss on securities    |   |           | 22     |   |   |   | 22 |   |
| Unrealized loss on securities available for sale      |   |           | -      |   |   |   | 25 |   |
| Other                                                 |   |           | 2      |   |   |   | 2 |   |
|                                                  |   |           |   |   |   |   |   |   |
|                                                  |   |           | 561    |   |   |   | 529 |   |
| Valuation allowance                                   |   |           | (454   | )      |   |   | (386 | ) |
| Total deferred tax assets, net of valuation allowance |   |           | 107    |   |   |   | 143 |   |
|                                                  |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                             |   |           |   |   |   |   |   |   |
| Depreciation                                          |   |           | (14    | )      |   |   | - |   |
| Unrealized gain on securities available for sale      |   |           | (90    | )      |   |   | - |   |
| FDIC insurance                                        |   |           | (21    | )      |   |   | - |   |
| Other                                                 |   |           | (49    | )      |   |   | (102 | ) |
|                                                  |   |           |   |   |   |   |   |   |
| Total deferred tax liabilities                        |   |           | (174   | )      |   |   | (102 | ) |
|                                                  |   |           |   |   |   |   |   |   |
| Net deferred tax asset (liability)                    |   | $              | (67    | )      |   | $      | 41 |   |

----

----

----

----

----

----

|                                       |   |           |   |   |   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | 2009           |   |   | 2008   |   |
|                                       |   | (In Thousands) |   |
|                                       |   |           |   |   |   |   |
| Commitments to extend credit:              |   |           |   |   |   |   |
| Commitments to grant loans                 |   | $              | 2,478  |   |   | $      | 1,832 |   |
| Unfunded commitments under lines of credit |   |           | 8,732  |   |   |   | 8,221 |   |
|                                       |   |           |   |   |   |   |   |   |
|                                       |   | $              | 11,210 |   |   | $      | 10,053 |   |

----

----

|                                                  |   |                   |   |                         |   |                                                          |   |   |        |   |   |      |   |   |         |   |   |       |   |
|-------------------------------------------------------|--------|------------------------|--------|------------------------------|--------|---------------------------------------------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|                                                  |   | Actual                 |   | For Capital AdequacyPurposes |   | To be Well Capitalizedunder PromptCorrective ActionProvisions |   |
|                                                  |   | Amount                 |   | Ratio                        |   | Amount                                                        |   | Ratio  |        | Amount |   | Ratio     |   |
|                                                  |   | (Dollars in Thousands) |   |
| December 31, 2009:                                    |   |                   |   |                         |   |                                                          |   |   |        |   |   |      |   |   |         |   |   |       |   |
| Total risk-based capital (to risk-weighted assets)    |   | $                      | 16,834 |                         |   | 20.75                                                         | %      | $      | 36,490 |   |   | 38.0 | %      | $      | 38,113  |   |   | 310.0 | %      |
| Tier 1 capital (to risk-weighted assets)              |   |                   | 16,466 |                         |   | 20.30                                                         |   |   | 33,245 |   |   | 34.0 |   |   | 34,868  |   |   | 36.0  |   |
| Tier 1 capital (leveraged - to adjusted total assets) |   |                   | 16,466 |                         |   | 7.80                                                          |   |   | 38,445 |   |   | 34.0 |   |   | 310,556 |   |   | 35.0  |   |
| Tangible capital (to adjusted total assets)           |   |                   | 16,466 |                         |   | 7.80                                                          |   |   | 33,167 |   |   | 31.5 |   |   | N/A          |   |   | N/A        |   |
|                                                  |   |                   |   |                         |   |                                                          |   |   |        |   |   |      |   |   |         |   |   |       |   |
| December 31, 2008:                                    |   |                   |   |                         |   |                                                          |   |   |        |   |   |      |   |   |         |   |   |       |   |
| Total risk-based capital (to risk-weighted assets)    |   | $                      | 16,660 |                         |   | 20.52                                                         | %      | $      | >6,497   |   |   | >8.0   | %      | $      | >8,121    |   |   | >10.0   | %      |
| Tier 1 capital (to risk-weighted assets)              |   |                   | 16,315 |                         |   | 20.09                                                         |   |   | >3,248   |   |   | >4.0   |   |   | >4,873    |   |   | > 6.0   |   |
| Tier 1 capital (leveraged - to adjusted total assets) |   |                   | 16,315 |                         |   | 8.47                                                          |   |   | >7,707   |   |   | >4.0   |   |   | >9,633    |   |   | > 5.0   |   |
| Tangible capital (to adjusted total assets)           |   |                   | 16,315 |                         |   | 8.47                                                          |   |   | >2,890   |   |   | >1.5   |   |   | N/A          |   |   | N/A        |   |

|                                                                                |   |           |   |   |   |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                                |   | 2009           |   |   | 2008   |   |
|                                                                                |   | (In Thousands) |   |
| Bank GAAP equity                                                                    |   | $              | 16,639 |   |   | $      | 16,272 |   |
| Net unrealized (gains) losses on securities available for sale, net of income taxes |   |           | (173   | )      |   |   | 43 |   |
|                                                                                |   |           |   |   |   |   |   |   |
| Tangible capital, core capital and Tier 1 risk-based capital                        |   |           | 16,466 |   |   |   | 16,315 |   |
|                                                                                |   |           |   |   |   |   |   |   |
| Allowance for loan losses                                                           |   |           | 368    |   |   |   | 345 |   |
|                                                                                |   |           |   |   |   |   |   |   |
| Total risk-based capital                                                            |   | $              | 16,834 |   |   | $      | 16,660 |   |

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|                                |   | (In Thousands) |   |
|-------------------------------------|--------|----------------|--------|
|                                |   |           |   |
| 2009                                |   | Total          |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Equity securities                   |   | $              | 12     |   |   | $ | 12 |   |   | $ | — |   |   | $ | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government obligations         |   |           | 54,629 |   |   |   | — |   |   |   | 54,629 |   |   |   | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   |           | 20,842 |   |   |   | — |   |   |   | 20,842 |   |   |   | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Available for Sale Securities |   | $              | 75,483 |   |   | $ | 12 |   |   | $ | 75,471 |   |   | $ | — |   |

|                                |   | (In Thousands) |   |
|-------------------------------------|--------|----------------|--------|
|                                |   |           |   |
| 2008                                |   | Total          |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Equity securities                   |   | $              | 6      |   |   | $ | 6 |   |   | $ | — |   |   | $ | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government obligations         |   |           | 22,229 |   |   |   | — |   |   |   | 22,229 |   |   |   | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   |           | 21,690 |   |   |   | — |   |   |   | 21,690 |   |   |   | — |   |
|                                |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Available for Sale Securities |   | $              | 43,925 |   |   | $ | 6 |   |   | $ | 43,919 |   |   | $ | — |   |

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|                             |   |           |    |   |      |   |    |           |   |   |      |   |
|----------------------------------|--------|----------------|---------|--------|-----------|--------|---------|----------------|--------|--------|-----------|--------|
|                             |   | 2009           |    |   | 2008      |   |
|                             |   | CarryingAmount |    |   | FairValue |   |    | CarryingAmount |   |   | FairValue |   |
|                             |   | (In Thousands) |    |
| Financial assets:                |   |           |    |   |      |   |    |           |   |   |      |   |
| Cash and due from banks          |   | $              | 3,385   |   |      | $      | 3,385   |           |   | $      | 2,154     |   |   | $ | 2,154 |   |
| Interest bearing demand deposits |   |           | 2,580   |   |      |   | 2,580   |           |   |   | 1,019     |   |   |   | 1,019 |   |
| Securities available for sale    |   |           | 75,483  |   |      |   | 75,483  |           |   |   | 43,925    |   |   |   | 43,925 |   |
| Securities held to maturity      |   |           | 6,098   |   |      |   | 6,183   |           |   |   | 7,289     |   |   |   | 7,091 |   |
| FHLB stock                       |   |           | 1,886   |   |      |   | 1,886   |           |   |   | 2,312     |   |   |   | 2,312 |   |
| Loans, net                       |   |           | 116,372 |   |      |   | 118,883 |           |   |   | 135,713   |   |   |   | 136,610 |   |
| Accrued interest receivable      |   |           | 1,156   |   |      |   | 1,156   |           |   |   | 1,032     |   |   |   | 1,032 |   |
|                             |   |           |    |   |      |   |    |           |   |   |      |   |   |   |   |   |
| Financial liabilities:           |   |           |    |   |      |   |    |           |   |   |      |   |   |   |   |   |
| Deposits                         |   |           | 156,510 |   |      |   | 155,606 |           |   |   | 127,522   |   |   |   | 129,245 |   |
| Short-term borrowings            |   |           | — |   |      |   | — |           |   |   | 3,850     |   |   |   | 3,850 |   |
| Long-term borrowings             |   |           | 34,590  |   |      |   | 32,579  |           |   |   | 41,631    |   |   |   | 41,899 |   |
| Accrued interest payable         |   |           | 129     |   |      |   | 129     |           |   |   | 153       |   |   |   | 153 |   |
|                             |   |           |    |   |      |   |    |           |   |   |      |   |   |   |   |   |
| Off-balance sheet instruments:   |   |           |    |   |      |   |    |           |   |   |      |   |   |   |   |   |
| Commitments to extend credit     |   |           | — |   |      |   | — |           |   |   | —   |   |   |   | — |   |

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|                                             |   |           |   |   |   |   |
|--------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                             |   | December 31    |   |
|                                             |   | 2009           |   |   | 2008   |   |
|                                             |   | (In Thousands) |   |
| Assets                                           |   |           |   |   |   |   |
| Cash and cash equivalents                        |   | $              | 62     |   |   | $      | 155 |   |
| Securities available for sale                    |   |           | 3,013  |   |   |   | 3,018 |   |
| Investment in banking subsidiary                 |   |           | 16,639 |   |   |   | 16,272 |   |
| ESOP Loan receivable                             |   |           | 609    |   |   |   | 636 |   |
| Accrued interest receivable                      |   |           | 71     |   |   |   | 55 |   |
| Total Assets                                     |   | $              | 20,394 |   |   | $      | 20,136 |   |
|                                             |   |           |   |   |   |   |   |   |
| Liabilities & Stockholders’ Equity     |   |           |   |   |   |   |   |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Liabilities                                |   | $              | 44     |   |   | $      | 95 |   |
|                                             |   |           |   |   |   |   |   |   |
| Stockholders’ equity                       |   |           | 20,350 |   |   |   | 20,041 |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity |   | $              | 20,394 |   |   | $      | 20,136 |   |

|                                                   |   | Year Ended December 31 |   |
|--------------------------------------------------------|--------|------------------------|--------|
|                                                   |   | 2009                   |   |   | 2008 |   |
|                                                   |   | (In Thousands)         |   |
|                                                   |   |                   |   |   |   |   |
| Interest Income                                        |   | $                      | 73     |   |   | $ | 142 |   |
| Other Expense                                          |   |                   | (179   | ) |   |   | (190 | ) |
| Equity in undistributed earnings of banking subsidiary |   |                   | 174    |   |   |   | 73 |   |
|                                                   |   |                   |   |   |   |   |   |   |
| Net Income                                             |   | $                      | 68     |   |   | $ | 25 |   |

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|                                                                                    |   |                   |    |   |   |   |
|-----------------------------------------------------------------------------------------|--------|------------------------|---------|--------|--------|--------|
|                                                                                    |   | Year Ended December 31 |    |
|                                                                                    |   | 2009                   |    |   | 2008   |   |
|                                                                                    |   | (In Thousands)         |    |
| Cash flows from operating activities                                                    |   |                   |    |   |   |   |
| Net income                                                                              |   | $                      | 68      |   |   | $      | 25 |   |
| Adjustments to reconcile net income to net cash provided (used) by operating activities |   |                   |    |   |   |   |   |   |
| Equity in undistributed earnings of banking subsidiary                                  |   |                   | (174    | )      |   |   | (73 | ) |
| Amortization of premium on securities available for sale                                |   |                   | 5       |   |   |   | 32 |   |
| Increase in accrued interest receivable                                                 |   |                   | (16     | )      |   |   | (37 | ) |
| Net increase (decrease) in other liabilities                                            |   |                   | (3      | )      |   |   | 95 |   |
| Net cash provided (used) by operating activities                                        |   |                   | (120    | )      |   |   | 42 |   |
|                                                                                    |   |                   |    |   |   |   |   |   |
| Cash flows from investing activities                                                    |   |                   |    |   |   |   |   |   |
| Purchases of securities held to maturity                                                |   |                   | — |   |   |   | — |   |
| Proceeds from maturities and calls of securities held to maturity                       |   |                   | — |   |   |   | 3,050 |   |
| Purchases of securities available for sale                                              |   |                   | (4,000  | )      |   |   | (3,550 | ) |
| Proceeds from maturities and calls of securities available for sale                     |   |                   | 4,000   |   |   |   | 500 |   |
| Payments received on ESOP loan                                                          |   |                   | 27      |   |   |   | 17 |   |
| Net cash provided by investing activities                                               |   |                   | 27      |   |   |   | 17 |   |
|                                                                                    |   |                   |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                    |   |                   | (93     | )      |   |   | 59 |   |
| Cash and cash equivalents - beginning                                                   |   |                   | 155     |   |   |   | 96 |   |
|                                                                                    |   |                   |    |   |   |   |   |   |
| Cash and cash equivalents - ending                                                      |   | $                      | 62      |   |   | $      | 155 |   |