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|  TABLE OF CONTENTS |
|-------------------------|
|                    |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  Page |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| President's Letter to Shareholders                                                                                                                                                                                               | 1          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Selected Consolidated Financial and Other Data                                                                                                                                                                                   | 2          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Management's Discussion and Analysis of Financial Condition and  Results of Operations                                                                                                                                 | 3          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Report of Independent Registered Public Accounting Firm                                                                                                                                                                          |   15  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Consolidated Balance Sheets                                                                                                                                                                                                      |   16  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Consolidated Statements of Income                                                                                                                                                                                                |   17  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Consolidated Statements of Stockholders' Equity                                                                                                                                                                                  |   18  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Consolidated Statements of Cash Flows                                                                                                                                                                                            |   19  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Notes to Consolidated Financial Statements                                                                                                                                                                                       |   20  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Directors and Executive Officers                                                                                                                                                                                                 |   49  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Banking Locations                                                                                                                                                                                                                |   49  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       |
| Transfer Agent/Registrar                                                                                                                                                                                                         |   49  |

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| Quaint Oak Family of Companies                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Quaint Oak Bancorp, Inc.                                                                                                                                                                                          |
| Quaint Oak Bank                                                                                                                                                                                                   |
| Quaint Oak Abstract, LLC     ׀     Quaint Oak Mortgage, LLC     ׀     Quaint Oak Real Estate, LLC |
| Serving the Delaware Valley and the Lehigh Valley Markets                                                                                                                                                         |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | At or For the Years Ended December 31, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2010                                   |      |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |
| (Dollars in Thousands, except per share data)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                   |      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |
| Selected Financial and Other Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                   |      |   |   |   |
| Total assets                                                                                                                                    |   | $                                      | 102,101   |   |   | $ | 93,937 |   |
| Cash and cash equivalents                                                                                                                       |   |                                   | 8,650     |   |   |   | 5,420 |   |
| Investment in interest-earning time deposits                                                                                                    |   |                                   | 6,001     |   |   |   | 3,153 |   |
| Investment securities available for sale at fair value (cost-2010 $3,290; 2009 $1,001)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                   | 3,271     |   |   |   | 1,002 |   |
| Mortgage-backed securities held to maturity (fair value-2010 $5,810; 2009 $8,142)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                   | 5,406     |   |   |   | 7,731 |   |
| Loans receivable, net                                                                                                                           |   |                                   | 74,710    |   |   |   | 72,728 |   |
| Federal Home Loan Bank stock, at cost                                                                                                           |   |                                   | 757       |   |   |   | 797 |   |
| Bank premises and equipment, net                                                                                                                |   |                                   | 1,073     |   |   |   | 1,092 |   |
| Deposits                                                                                                                                        |   |                                   | 79,691    |   |   |   | 68,252 |   |
| Federal Home Loan Bank advances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                   | 5,600     |   |   |   | 6,850 |   |
| Stockholders’ Equity                                                                                                                      |   |                                   | 15,191    |   |   |   | 17,386 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |   |   |
| Selected Operating Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                   |      |   |   |   |   |   |
| Total interest income                                                                                                                                          |   | $                                      | 5,480     |   |   | $ | 5,414 |   |
| Total interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                   | 1,955     |   |   |   | 2,436 |   |
| Net interest income                                                                                                                             |   |                                   | 3,525     |   |   |   | 2,978 |   |
| Provision for loan losses                                                                                                                       |   |                                   |  114 |   |   |   |  165 |   |
|      Net interest income after provision for loan losses                                                                                   |   |                                   | 3,411     |   |   |   | 2,813 |   |
| Total non-interest income                                                                                                                       |   |                                   | 339       |   |   |   | 222 |   |
| Total non-interest expense                                                                                                                      |   |                                   | 2,639     |   |   |   | 2,234 |   |
| Income before income taxes                                                                                                                      |   |                                   | 1,111     |   |   |   | 801 |   |
| Income taxes                                                                                                                                    |   |                                   | 440       |   |   |   | 314 |   |
| Net income                                                                                                                                      |   | $                                      |  671 |   |   | $ | 487 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |   |   |
| Selected Operating Ratios(1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                   |      |   |   |   |   |   |
| Average yield on interest-earning assets                                                                                                        |   |                                   | 5.80      | % |   |   | 6.08 | % |
| Average rate on interest-bearing liabilities                                                                                                    |   |                                   | 2.39      |   |   |   | 3.26 |   |
| Average interest rate spread(2)                                                                                                                 |   |                                   | 3.41      |   |   |   | 2.82 |   |
| Net interest margin(2)                                                                                                                          |   |                                   | 3.73      |   |   |   | 3.34 |   |
| Average interest-earning assets to average interest-bearing liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                   | 115.54    |   |   |   | 119.28 |   |
| Net interest income after provision for loan losses to non-interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                   | 129.25    |   |   |   | 125.92 |   |
| Total non-interest expense to average assets                                                                                                    |   |                                   | 2.66      |   |   |   | 2.41 |   |
| Efficiency ratio(3)                                                                                                                             |   |                                   | 68.30     |   |   |   | 69.81 |   |
| Return on average assets                                                                                                                        |   |                                   | 0.68      |   |   |   | 0.52 |   |
| Return on average equity                                                                                                                        |   |                                   | 4.06      |   |   |   | 2.81 |   |
| Average equity to average assets                                                                                                                |   |                                   | 16.65     |   |   |   | 18.67 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |   |   |
| Asset Quality Ratios(4):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                   |      |   |   |   |   |   |
| Non-performing loans as a percent of total loans receivable, net(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                   | 2.02      | % |   |   | 1.27 | % |
| Non-performing assets as a percent of total assets(5)                                                                                           |   |                                   | 2.64      |   |   |   | 1.96 |   |
| Non-performing assets and troubled debt restructurings as a percent of total assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   | 3.06      |   |   |   | 3.58 |   |
| Allowance for loan losses as a percent of non-performing loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                   | 57.84     |   |   |   | 90.27 |   |
| Allowance for loan losses as a percent of total loans receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                   | 1.15      |   |   |   | 1.14 |   |
| Net charge-offs to average loans receivable                                                                                                     |   |                                   | 0.11      |   |   |   | 0.03 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                   |      |   |   |   |   |   |
| Capital Ratios(4):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                   |      |   |   |   |   |   |
| Tier 1 leverage ratio                                                                                                                           |   |                                   | 13.63     | % |   |   | 14.51 | % |
| Tier 1 risk-based capital ratio                                                                                                                 |   |                                   | 21.50     |   |   |   | 21.42 |   |
| Total risk-based capital ratio                                                                                                                  |   |                                   | 22.77     |   |   |   | 22.69 |   |

| (1) | With the exception of end of period ratios, all ratios are based on average daily balances during the indicated periods. |
|-----|--------------------------------------------------------------------------------------------------------------------------|

| (2) | Average interest rate spread represents the difference between the average yield on interest-earning assets and the average rate paid on interest-bearing liabilities, and net interest margin represents net interest income as a percentage of average interest-earning assets. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The efficiency ratio represents the ratio of non-interest expense divided by the sum of net interest income and non-interest income. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs to average loans receivable. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (5) | Non-performing assets consist of non-performing loans and other real estate owned at December 31, 2010 and 2009.  Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more past due. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                       |   | Year Ended December 31, |        |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|
|                                                                                                                       |   | 2010                         |        |   | 2009 |   |
|                                                                                                                       |   | AverageBalance               |        |   | Interest |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | Interest |   |   | AverageYield/Rate |   |
| Interest-earning assets:                                                                                                   |   | (Dollars In Thousands)       |        |
|   Short-term investments and investment securities                                                               |   | $                            | 13,871      |   |   | $ | 198 |   |   |   | 1.43 | % |   | $ | 8,706 |   |   | $ | 139 |   |   |   | 1.60 | % |
|   Mortgage-backed securities                                                                                     |   |                         | 6,676       |   |   |   | 319 |   |   |   | 4.78 |   |   |   | 8,846 |   |   |   | 425 |   |   |   | 4.80 |   |
|   Loans receivable, net (1)                                                                                      |   |                         | 73,994      |   |   |   | 4,963 |   |   |   | 6.71 |   |   |   | 71,549 |   |   |   | 4,850 |   |   |   | 6.78 |   |
|      Total interest-earning assets                                                                |   |                         | 94,541      |   |   |   | 5,480 |   |   |   | 5.80 | % |   |   | 89,101 |   |   |   | 5,414 |   |   |   | 6.08 | % |
| Non-interest-earning assets                                                                                                |   |                         |  4,690 |   |   |   |   |   |   |   |   |   |   |   | 3,721 |   |   |   |   |   |   |   |   |   |
|      Total assets                                                                                 |   | $                            | 99,231      |   |   |   |   |   |   |   |   |   |   | $ | 92,822 |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                              |   |                         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Passbook accounts                                                                                        |   | $                            | 3,217       |   |   |   | 18 |   |   |   | 0.56 | % |   | $ | 3,320 |   |   |   | 30 |   |   |   | 0.90 | % |
|    Statement savings accounts                                                                               |   |                         | 6,702       |   |   |   | 67 |   |   |   | 1.00 |   |   |   | 5,713 |   |   |   | 86 |   |   |   | 1.51 |   |
|    eSavings accounts                                                                                        |   |                         | 1,913       |   |   |   | 22 |   |   |   | 1.15 |   |   |   | 1,305 |   |   |   | 23 |   |   |   | 1.76 |   |
|    Certificate of deposit accounts                                                                          |   |                         | 63,313      |   |   |   | 1,578 |   |   |   | 2.49 |   |   |   | 56,297 |   |   |   | 1,994 |   |   |   | 3.54 |   |
|       Total deposits                                                                         |   |                         | 75,145      |   |   |   | 1,685 |   |   |   | 2.24 |   |   |   | 66,635 |   |   |   | 2,133 |   |   |   | 3.20 |   |
| FHLB advances                                                                                                              |   |                         | 6,246       |   |   |   | 245 |   |   |   | 3.92 |   |   |   | 7,838 |   |   |   | 292 |   |   |   | 3.73 |   |
| Other borrowings                                                                                                           |   |                         | 433         |   |   |   |  25 |   |   |   | 5.77 |   |   |   | 226 |   |   |   |  11 |   |   |   | 4.87 |   |
|      Total interest-bearing liabilities                                                           |   |                         | 81,824      |   |   |   | 1,955 |   |   |   | 2.39 | % |   |   | 74,699 |   |   |   | 2,436 |   |   |   | 3.26 | % |
| Non-interest-bearing liabilities                                                                                           |   |                         | 889         |   |   |   |   |   |   |   |   |   |   |   | 792 |   |   |   |   |   |   |   |   |   |
|      Total liabilities                                                                            |   |                         | 82,713      |   |   |   |   |   |   |   |   |   |   |   | 75,491 |   |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                                                                                 |   |                         | 16,518      |   |   |   |   |   |   |   |   |   |   |   | 17,331 |   |   |   |   |   |   |   |   |   |
|      Total liabilities and Stockholders’          Equity |   | $                            | 99,231      |   |   |   |   |   |   |   |   |   |   | $ | 92,822 |   |   |   |   |   |   |   |   |   |
| Net interest-earning assets                                                                                                |   | $                            | 12,717      |   |   |   |   |   |   |   |   |   |   | $ | 14,402 |   |   |   |   |   |   |   |   |   |
| Net interest income; average interest rate   spread                                                              |   |                         |        |   |   | $ | 3,525 |   |   |   | 3.41 | % |   |   |   |   |   | $ | 2,978 |   |   |   | 2.82 | % |
| Net interest margin (2)                                                                                                    |   |                         |        |   |   |   |   |   |   |   | 3.73 | % |   |   |   |   |   |   |   |   |   |   | 3.34 | % |
| Average interest-earning assets to average interest-bearing liabilities                                               |   |                         |        |   |   |   |   |   |   |   | 115.54 | % |   |   |   |   |   |   |   |   |   |   | 119.28 | % |

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

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

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|                                                                                |   | 2010 vs. 2009              |   |   | 2009 vs. 2008 |   |
|-------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|---------------|--------|
|                                                                                |   | Increase (Decrease) Due to |   |   |          |   |   | Increase (Decrease) Due to |   |   |   |   |
|                                                                                |   | Rate                       |   |   | Volume        |   |   | Rate/Volume |   |   | Total Increase(Decrease) |   |   | Rate |   |   | Volume |   |   | Rate/Volume |   |   | Total Increase(Decrease) |   |
|                                                                                |   | (In Thousands)             |   |
| Interest income:                                                                    |   |                       |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Short-term investments and  investment securities       |   | $                          | (14    | )      |          | $      | 82 |   |   | $ | (9 | ) |   | $ | 59 |   |   | $ | (212 | ) |   | $ | (10 | ) |   | $ | 6 |   |   | $ | (216 | ) |
|    Mortgage-backed securities                                        |   |                       | (3     | )      |          |   | (104 | ) |   |   | 1 |   |   |   | (106 | ) |   |   | 1 |   |   |   | 175 |   |   |   | 1 |   |   |   | 177 |   |
|    Loans receivable(1)                                               |   |                       | (51    | )      |          |   | 165 |   |   |   | (1 | ) |   |   | 113 |   |   |   | (66 | ) |   |   | 524 |   |   |   | (8 | ) |   |   | 450 |   |
|    Other interest-earning      assets       |   |                       | -      |   |          |   | - |   |   |   | - |   |   |   |  - |   |   |   | (12 | ) |   |   | (12 | ) |   |   | 12 |   |   |   | (12 | ) |
| Total interest-earning         assets            |   |                       | (68    | )      |          |   | 143 |   |   |   | (9 | ) |   |   | 66 |   |   |   | (289 | ) |   |   | 677 |   |   |   | 11 |   |   |   | 399 |   |
| Interest expense:                                                                   |   |                       |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Passbook accounts                                                 |   |                       | (11    | )      |          |   | (1 | ) |   |   | - |   |   |   | (12 | ) |   |   | (13 | ) |   |   | (2 | ) |   |   | - |   |   |   | (15 | ) |
|    Statement savings accounts                                        |   |                       | (29    | )      |          |   | 15 |   |   |   | (5 | ) |   |   | (19 | ) |   |   | (48 | ) |   |   | 8 |   |   |   | (3 | ) |   |   | (43 | ) |
|    eSavings accounts                                                 |   |                       | (8     | )      |          |   | 11 |   |   |   | (4 | ) |   |   | (1 | ) |   |   | (2 | ) |   |   | 35 |   |   |   | (16 | ) |   |   | 17 |   |
|    Certificate accounts                                              |   |                       | (591   | )      |          |   | 248 |   |   |   | (73 | ) |   |   | (416 | ) |   |   | (415 | ) |   |   | 369 |   |   |   | (72 | ) |   |   | (118 | ) |
| Total deposits                                                                      |   |                       | (639   | )      |          |   | 273 |   |   |   | (82 | ) |   |   | (448 | ) |   |   | (478 | ) |   |   | 410 |   |   |   | (91 | ) |   |   | (159 | ) |
|    FHLB advances                                                     |   |                       | 15     |   |          |   | (59 | ) |   |   | (3 | ) |   |   | (47 | ) |   |   | 11 |   |   |   | 102 |   |   |   | 7 |   |   |   | 120 |   |
|    Other borrowings                                                  |   |                       | 2      |   |          |   |  10 |   |   |   | 2 |   |   |   | 14 |   |   |   | - |   |   |   |  - |   |   |   | 11 |   |   |   | 11 |   |
| Total interest-bearing          liabilities |   |                       | (622   | )      |          |   | 224 |   |   |   | (83 | ) |   |   | (481 | ) |   |   | (467 | ) |   |   | 512 |   |   |   | (73 | ) |   |   | (28 | ) |
| Increase (decrease) in net    interest income                        |   | $                          | 554    |   |          | $      | (81 | ) |   | $ | 74 |   |   | $ | 547 |   |   | $ | 178 |   |   | $ | 165 |   |   | $ | 84 |   |   | $ | 427 |   |
|                                                                                |   |                       |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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

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|                                                                                                                                     |   | 3 Monthsor Less        |   |   | More than3 Monthsto 1 Year |   |   | More than1 Yearto 3 Years |   |   | More than3 Yearsto 5 Years |   |   | More than5 Years |   |   | TotalAmount |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|----------------------------|--------|--------|---------------------------|--------|--------|----------------------------|--------|--------|------------------|--------|--------|-------------|--------|
|                                                                                                                                     |   | (Dollars In Thousands) |   |
| Interest-earning assets (1):                                                                                                             |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |
| Loans receivable (2)                                                                                                                     |   | $                      | 15,155 |   |                       | $      | 26,803 |                      |   | $      | 13,938                     |   |   | $                | 5,034  |   |        | $      | 14,651 |   |   | $ | 75,581 |   |
| Short-term investments and investment securities                                                                                         |   |                   | 8,472  |   |                       |   | 3,956  |                      |   |   | 3,000                      |   |   |             | --     |   |        |   | 1,540 |   |   |   | 16,968 |   |
|     Mortgage-backed securities                                                                                       |   |                   | 747    |   |                       |   | 1,661  |                      |   |   | 515                        |   |   |             | 592    |   |        |   | 1,891 |   |   |   | 5,406 |   |
| Investment in Federal Home Loan Bank stock                                                                                               |   |                   | --     |   |                       |   | --     |                      |   |   | --                         |   |   |             | --     |   |        |   | 757 |   |   |   | 757 |   |
| Total interest-earning assets                                                                                                            |   | $                      | 24,374 |   |                       | $      | 32,420 |                      |   | $      | 17,453                     |   |   | $                | 5,626  |   |        | $      | 18,839 |   |   | $ | 98,712 |   |
|                                                                                                                                     |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                            |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Passbook accounts                                                                                                                        |   | $                      | 308    |   |                       | $      | 308    |                      |   | $      | 1,847                      |   |   | $                | 308    |   |        | $      | 308 |   |   | $ | 3,079 |   |
| Statement savings accounts                                                                                                               |   |                   | 1,700  |   |                       |   | 1,700  |                      |   |   | 1,700                      |   |   |             | 849    |   |        |   | 849 |   |   |   | 6,798 |   |
| eSavings accounts                                                                                                                        |   |                   | 563    |   |                       |   | 563    |                      |   |   | 563                        |   |   |             | 282    |   |        |   | 282 |   |   |   | 2,253 |   |
| Escrow accounts                                                                                                                          |   |                   | 249    |   |                       |   | 497    |                      |   |   | --                         |   |   |             | --     |   |        |   | -- |   |   |   | 746 |   |
| Certificate accounts                                                                                                                     |   |                   | 10,943 |   |                       |   | 20,528 |                      |   |   | 24,271                     |   |   |             | 11,819 |   |        |   | -- |   |   |   | 67,561 |   |
|      FHLB advances                                                                                              |   |                   | --     |   |                       |   | 1,800  |                      |   |   | 3,800                      |   |   |             | --     |   |        |   | -- |   |   |   | 5,600 |   |
|      Other borrowings                                                                                           |   |                   | --     |   |                       |   | --     |                      |   |   | --                         |   |   |             | 423    |   |        |   | -- |   |   |   | 423 |   |
| Total interest-bearing liabilities                                                                                                       |   | $                      | 13,763 |   |                       | $      | 25,396 |                      |   | $      | 32,181                     |   |   | $                | 13,681 |   |        | $      | 1,439 |   |   | $ | 86,460 |   |
|                                                                                                                                     |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Interest-earning assets less interest-bearing liabilities                                                                                |   | $                      | 10,611 |   |                       | $      | 7,024  |                      |   | $      | (14,728                    | )      |   | $                | (8,055 | )      |        | $      | 17,400 |   |   |   |   |   |
|                                                                                                                                     |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Cumulative interest-rate sensitivity gap (3)                                                                                             |   | $                      | 10,611 |   |                       | $      | 17,635 |                      |   | $      | 2,907                      |   |   | $                | (5,148 | )      |        | $      | 12,252 |   |   |   |   |   |
|                                                                                                                                     |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Cumulative interest-rate gap as a percentage of total  assets at December 31, 2010                                        |   |                   | 10.4   | %      |                       |   | 17.3   | %                         |   |   | 2.9                        | %      |   |             | (5.0   | )%     |        |   | 12.0 | % |   |   |   |   |
|                                                                                                                                     |   |                   |   |   |                       |   |   |                      |   |   |                       |   |   |             |   |   |        |   |   |   |   |   |   |   |
| Cumulative interest-earning assets as a percentage of  cumulative interest-bearing liabilities  at December 31, 2010 |   |                   | 177.1  | %      |                       |   | 145.0  | %                         |   |   | 104.1                      | %      |   |             | 94.0   | %      |        |   | 114.2 | % |   |   |   |   |

| (1) | Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | For purposes of the gap analysis, loans receivable includes non-performing loans gross of the allowance for loan losses, unamortized discounts and deferred loan fees. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Interest-rate sensitivity gap represents the difference between net interest-earning assets and interest-bearing liabilities. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                                            |   |           |   |   | Payments Due By Period |   |
|-------------------------------------------------|--------|----------------|--------|--------|------------------------|--------|
|                                            |   | Total          |   |   | To1 Year               |   |   | 1-3Years |   |   | 4-5Years |   |   | After 5Years |   |
|                                            |   | (In Thousands) |   |
| Certificates of deposit                         |   | $              | 67,561 |   |                   | $      | 31,471 |   |   | $ | 24,272 |   |   | $ | 11,818 |   |   | $ | -- |   |
| FHLB advances                                   |   |           | 5,600  |   |                   |   | 1,800 |   |   |   | 3,800 |   |   |   | -- |   |   |   | -- |   |
| Other Borrowings                                |   |           | 423    |   |                   |   | 21 |   |   |   | 46 |   |   |   | 356 |   |   |   | -- |   |
|    Total contractual obligations |   | $              | 73,584 |   |                   | $      | 33,292 |   |   | $ | 28,118 |   |   | $ | 12,174 |   |   | $ | -- |   |

----

----

----

----

|                                                                                                                                               |   |                              |            |   |   |   |            |   | At December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------------|--------|--------|--------|-----------------|--------|-----------------|--------|
|                                                                                                                                               |   |                              |            |   |   |   |            |   | 2010            |   |   | 2009 |   |
| ASSETS                                                                                                                                             |   | (In thousands, except share data) |            |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |            |   |   |   |   |
| Due from banks, non-interest-bearing                                                                                                               |   | $                                 | 973             |   |   | $      | 582             |   |
| Due from banks, interest-bearing                                                                                                                   |   |                              | 7,677           |   |   |   | 4,838           |   |
| Cash and cash equivalents                                                                                                                          |   |                              | 8,650           |   |   |   | 5,420           |   |
| Investment in interest-earning time deposits                                                                                                       |   |                              | 6,001           |   |   |   | 3,153           |   |
| Investment securities available for sale at fair value (cost-2010 $3,290; 2009 $1,001)                                                             |   |                              |  3,271     |   |   |   |  1,002     |   |
| Mortgage-backed securities held to maturity (fair value-2010 $5,810; 2009 $8,142)                                                                  |   |                              |  5,406     |   |   |   |  7,731     |   |
| Loans receivable, net of allowance for loan losses                                                                                                 |   |                              |            |   |   |   |            |   |
|     2010 $871; 2009 $835                                                                                                            |   |                              | 74,710          |   |   |   | 72,728          |   |
| Accrued interest receivable                                                                                                                        |   |                              | 423             |   |   |   | 397             |   |
| Investment in Federal Home Loan Bank stock, at cost                                                                                                |   |                              | 757             |   |   |   | 797             |   |
| Premises and equipment, net                                                                                                                        |   |                              | 1,073           |   |   |   | 1,092           |   |
| Other real estate owned, net                                                                                                                       |   |                              | 1,191           |   |   |   | 913             |   |
| Prepaid expenses and other assets                                                                                                                  |   |                              |  619       |   |   |   |  704       |   |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |
| Total Assets                                                                                                                                       |   | $                                 | 102,101         |   |   | $      | 93,937          |   |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |            |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                               |   |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |            |   |   |   |   |   |   |   |   |   |
| LIABILITIES                                                                                                                                        |   |                              |            |   |   |   |            |   |
| Deposits, interest-bearing                                                                                                                         |   | $                                 | 79,691          |   |   | $      | 68,252          |   |
| Federal Home Loan Bank advances                                                                                                                    |   |                              | 5,600           |   |   |   | 6,850           |   |
| Other borrowings                                                                                                                                   |   |                              | 423             |   |   |   | 442             |   |
| Accrued interest payable                                                                                                                           |   |                              | 107             |   |   |   | 117             |   |
| Advances from borrowers for taxes and insurance                                                                                                    |   |                              | 746             |   |   |   | 763             |   |
| Accrued expenses and other liabilities                                                                                                             |   |                              |  343       |   |   |   |  127       |   |
| Total Liabilities                                                                                                                                  |   |                              | 86,910          |   |   |   | 76,551          |   |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |
| STOCKHOLDERS' EQUITY                                                                                                                               |   |                              |            |   |   |   |            |   |
| Preferred stock– $0.01 par value, 1,000,000 shares authorized; none issued or outstanding                                                    |   |                              |  -         |   |   |   |  -         |   |
| Common stock – $0.01 par value; 9,000,000 shares                                                                                             |   |                              |            |   |   |   |            |   |
| authorized; 1,388,625 issued and 992,436 and 1,299,712 outstanding at December 31, 2010    and December 31, 2009, respectively |   |                              |    14 |   |   |   |    14 |   |
| Additional paid-in capital                                                                                                                         |   |                              | 13,478          |   |   |   | 13,442          |   |
| Treasury stock, at cost: 2010 396,189 shares; 2009 88,913 shares                                                                                   |   |                              | (3,636          | )      |   |   | (735            | )      |
| Unallocated common stock held by:    Employee Stock Ownership Plan (ESOP)                                                           |   |                              | (813            | )      |   |   | (883            | )      |
| Recognition & Retention Plan Trust (RRP)                                                                                                       |   |                              | (360            | )      |   |   | (440            | )      |
| Accumulated other comprehensive income (loss)                                                                                                      |   |                              | (13             | )      |   |   | 1               |   |
| Retained earnings                                                                                                                                  |   |                              |  6,521     |   |   |   |  5,987     |   |
| Total Stockholders' Equity                                                                                                                         |   |                              | 15,191          |   |   |   | 17,386          |   |
|                                                                                                                                               |   |                              |            |   |   |   |            |   |
| Total Liabilities and Stockholders’ Equity                                                                                                   |   | $                                 | 102,101         |   |   | $      | 93,937          |   |

----

----

|   |   |   | Years Ended December 31, |   |
|--------|--------|--------|--------------------------|--------|
|   |   |   | 2010                |   |   |   | 2009  |   |

| Interest Income                                                                                                                                                                                          (In thousands, except per share data) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|         Interest  on loans    |   | $      | 4,963 |   |   | $      | 4,850 |   |
|----------------------------------------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Interest and dividends on short-term investments and investment securities |   |   | 517   |   |   |   | 564   |   |
| Total Interest Income                                                      |   |   | 5,480 |   |   |   | 5,414 |   |

| Interest on deposits                        |   |   | 1,685 |   |   |   | 2133  |   |
|---------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Interest on Federal Home Loan Bank advances |   |   | 245   |   |   |   | 292   |   |
| Interest on other borrowings                |   |   | 25    |   |   |   | 11    |   |
| Total Interest Expense                      |   |   | 1,955 |   |   |   | 2,436 |   |

| Net Interest Income |   |   |   |   |   3,525 |   |   | 2,978 |   |
|---------------------|--------|--------|--------|--------|--------------|--------|--------|-------|--------|

| Provision for Loan Losses |   |   |   |   |   114 |   |   | 165 |   |
|---------------------------|--------|--------|--------|--------|------------|--------|--------|-----|--------|

| Net Interest Income after Provision for Loan Losses |   |   |   |   |   3,411 |   |   | 2,813 |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------------|--------|--------|-------|--------|

| Mortgage banking and title abstract fees |   |   | 241    |   |   |   | 111    |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Other fees and services charges          |   |   | 53     |   |   |   | 89     |   |
| Other                                    |   |   | 45     |   |   |   | 22     |   |
| Total Non-Interest Income, net           |   |   | 339    |   |   |   | 222    |   |
|                                     |   |   |   |   |   |   |   |   |

| Salaries and employee benefits     |   |   | 1,376 |   |   |   | 1,043 |   |
|------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Directors’ fees and expenses |   |   | 207   |   |   |   | 247   |   |
| Occupancy and equipment            |   |   | 201   |   |   |   | 130   |   |
| Professional fees                  |   |   | 317   |   |   |   | 337   |   |
| FDIC deposit insurance assessment  |   |   | 152   |   |   |   | 187   |   |
| Other real estate owned expenses   |   |   | 125   |   |   |   | 147   |   |
| Advertising                        |   |   | 56    |   |   |   | 5     |   |
| Other                              |   |   | 205   |   |   |   | 138   |   |
| Total Other Expenses               |   |   | 2,639 |   |   |   | 2,234 |   |

| Income before Income Taxes |   |   |   |   |   1,111 |   |   | 801 |   |
|----------------------------|--------|--------|--------|--------|--------------|--------|--------|-----|--------|

| Income Taxes |   |   |   |   |   440 |   |   | 314 |   |
|--------------|--------|--------|--------|--------|------------|--------|--------|-----|--------|

| Net Income |   |   |   |   | $                 671 |   | $ | 487 |   |
|------------|--------|--------|--------|--------|-------------------------------------------------------------------------------------------------------|--------|---|-----|--------|

| Basic earnings per share – basic |   | $      | 0.65      |   |   | $      | 0.42      |   |
|----------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|
| Average shares outstanding - basic     |   |   | 1,038,155 |   |   |   | 1,168,084 |   |
| Basic earnings per share - diluted     |   | $      | 0.64      |   |   | $      | 0.42      |   |
| Average shares outstanding - diluted   |   |   | 1,042,749 |   |   |   | 1,168,532 |   |

----

----

|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   | Unallocated |   |   |          |   |   |     |   |   |          |   |
|---------------------------------------------------------------------------------|--------|--------------------|-----------|--------|--------|--------|--------|------------------|--------|--------|-----------|--------|--------|-------------|--------|--------|---------------|--------|--------|----------|--------|--------|---------------|--------|
|                                                                            |   | Common Stock  |      |   |   |   |   |             |   |   | Common    |   |   | Accumulated |   |   |          |   |   |     |   |
|                                                                            |   |  Number of    |      |   |   |   |   | Additional  |   |   |      |   |   | Stock Held  |   |   | Other         |   |   |     |   |   | Total         |   |
|                                                                            |   |  Shares       |      |   |   |   |   | Paid-in          |   |   | Treasury  |   |   | by Benefit  |   |   | Comprehensive |   |   | Retained |   |   | Stockholders' |   |
| (In thousands, except per share data)                                           |   | Outstanding        |      |   | Amount |   |   | Capital          |   |   | Stock     |   |   | Plans       |   |   | Income (Loss) |   |   | Earnings |   |   | Equity        |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |
| BALANCE – JANUARY 1, 2009                                                 |   |               | 1,352,021 |   |   | $      | 14     |             |   | $      | 13,409    |   |   | $           | (312   | )      |          | $      | (1,472 | )        |   | $      | -             |   |   | $ | 5,634 |   |   | $ | 17,273 |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Common stock allocated by ESOP                                                  |   |               |      |   |   |   |   |             |   |   |  (8  | )      |   |        |   |   |          |   | 69     |     |   |   |          |   |   |   |   |   |   |   |  61 |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Treasury stock purchased                                                        |   |               | (52,309   | )      |   |   |   |             |   |   |      |   |   |        | (423   | )      |          |   |   |     |   |   |          |   |   |   |   |   |   |   | (423 | ) |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Stock based compensation expense                                                |   |               |      |   |   |   |   |             |   |   |  119 |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |  119 |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Release of 8,588 Vested RRP Shares                                              |   |               |      |   |   |   |   |             |   |   | (78       | )      |   |        |   |   |          |   | 80     |     |   |   |          |   |   |   | (2 | ) |   |   | - |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Cash dividends declared    ($0.10 per share)                |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   | (132 | ) |   |   | (132 | ) |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Net income                                                                      |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   | 487 |   |   |   | 487 |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Unrealized gain on securities AFS,    net of deferred taxes |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |  1       |   |   |   |   |   |   |   |   1 |   |
|                                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                            |   |               |      |   |   |   |   |             |   |   |      |   |   |        |   |   |          |   |   |     |   |   |          |   |   |   |   |   |   | $ | 488 |   |

|   |   |
|--------|--------|

|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
|---------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| BALANCE – DECEMBER 31, 2009                                               |   |   | 1,299,712 |   |   | $      | 14     |   |   | $      | 13,442    |   |   | $      | (735   | )      |   | $      | (1,323 | )      |   | $      | 1      |   |   | $      | 5,987  |   |   | $      | 17,386    |   |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Common stock allocated by ESOP                                                  |   |   |      |   |   |   |   |   |   |   |  (2  | )      |   |   |   |   |   |   | 70     |   |   |   |   |   |   |   |   |   |   |   |  68  |   |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Treasury stock purchased                                                        |   |   | (307,276  | )      |   |   |   |   |   |   |      |   |   |   | (2,901 | )      |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,901    | )      |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Stock based compensation expense                                                |   |   |      |   |   |   |   |   |   |   |  118 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |  118 |   |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Release of 8,529 Vested RRP Shares                                              |   |   |      |   |   |   |   |   |   |   | (80       | )      |   |   |   |   |   |   | 80     |   |   |   |   |   |   |   |   |   |   |   | -         |   |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Cash dividends declared    ($0.115 per share)               |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (137   | )      |   |   | (137      | )      |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Net income                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 671    |   |   |   | 671       |   |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Unrealized loss on securities AFS,    net of deferred taxes |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   | (14    | )      |   |   |   |   |   |   |  (14 | )      |
|                                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |      |   |
| Comprehensive income                                                            |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $      | 657       |   |

|                              |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| BALANCE – DECEMBER 31, 2010 |   |   | 992,436 |   |   | $      | 14     |   |   | $      | 13,478 |   |   | $      | (3,636 | )      |   | $      | (1,173 | )      |   | $      | (13    | )      |   | $      | 6,521  |   |   | $      | 15,191 |   |

----

----

| Consolidated Statements of Cash Flows | Years Ended  |
|---------------------------------------|--------------|
|                                  | December 31, |
|                                  | 2010         |   | 2009 |

| Cash Flows from Operating Activities |                   (In Thousands) |
|--------------------------------------|-----------------------------------------------------------------------------------------------------------------------|

| Net income                                                                                                |   | $      | 671    |   |   | $      | 487    |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Adjustments to reconcile net income to net cash provided by operating activities:                         |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                                                 |   |   | 114    |   |   |   | 165    |   |
| Provision for losses on other real estate owned                                                           |   |   | -      |   |   |   | 27     |   |
| Depreciation expense                                                                                      |   |   | 55     |   |   |   | 41     |   |
| Net accretion of securities discounts                                                                     |   |   | (8     | )      |   |   | (7     | )      |
| Amortization of deferred loan fees and costs                                                              |   |   | 5      |   |   |   | (15    | )      |
| Deferred income taxes                                                                                     |   |   | (51    | )      |   |   | (76    | )      |
| Stock-based compensation expense                                                                          |   |   | 186    |   |   |   | 180    |   |
| Gain on the sale of investment securities available for sale                                              |   |   | (1     | )      |   |   | -      |   |
| Loss on the sale of other real estate owned                                                               |   |   | 4      |   |   |   | -      |   |
|        Changes in assets and liabilities which provided (used) cash:   |   |   |   |   |   |   |   |   |
|             Accrued interest receivable       |   |   | (26    | )      |   |   | (42    | )      |
|             Prepaid expenses and other assets |   |   | 142    |   |   |   | (305   | )      |
|     Accrued interest payable                                                          |   |   | (10    | )      |   |   | (21    | )      |
|     Accrued expenses and other liabilities                                            |   |   | 216    |   |   |   | 17     |   |
| Net Cash Provided by Operating Activities                                                                 |   |   | 1,297  |   |   |   | 451    |   |

| Net (increase) decrease in investment in interest-earning time deposits     |   |   | (2,848 | )      |   |   | 582    |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Purchase of investment securities available for sale                        |   |   | (3,797 | )      |   |   | (1,001 | )      |
| Proceeds from the sale or calls of investment securities available for sale |   |   | 1,510  |   |   |   | -      |   |
| Proceeds from calls of investment securities held to maturity               |   |   | -      |   |   |   | 2,250  |   |
| Principal payments received on mortgage-backed securities held to maturity  |   |   | 2,332  |   |   |   | 2,053  |   |
| Net increase in loans receivable                                            |   |   | (2,686 | )      |   |   | (3,776 | )      |
| Net decrease in Federal Home Loan Bank stock                                |   |   | 40     |   |   |   | -      |   |
| Capitalized expenditures on other real estate owned                         |   |   | (25    | )      |   |   | -      |   |
| Proceeds from the sale of other real estate owned                           |   |   | 328    |   |   |   | -      |   |
| Purchase of property and equipment                                          |   |   | (36    | )      |   |   | (1,066 | )      |
| Net Cash Used in Investing Activities                                       |   |   | (5,182 | )      |   |   | (958   | )      |

| Net increase in deposits                                               |   |   | 11,439 |   |   |   | 9,271  |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Decrease in Federal Home Loan Bank advances                            |   |   | (1,250 | )      |   |   | (4,300 | )      |
| Proceeds from other borrowings                                         |   |   | -      |   |   |   | 450    |   |
| Repayment of other borrowings                                          |   |   | (19    | )      |   |   | (8     | )      |
| Dividends paid                                                         |   |   | (137   | )      |   |   | (132   | )      |
| Purchase of treasury stock                                             |   |   | (2,901 | )      |   |   | (423   | )      |
| Increase (decrease) in advances from borrowers for taxes and insurance |   |   | (17    | )      |   |   | 34     |   |
| Net Cash Provided by Financing Activities                              |   |   | 7,115  |   |   |   | 4,892  |   |
|     Net Increase in Cash and Cash Equivalents           |   |   | 3,230  |   |   |   | 4,385  |   |

| Cash and Cash Equivalents – Beginning of Period |   |   | 5,420 |   |   |   | 1,035 |   |
|-------------------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Cash and Cash Equivalents – End of Period       |   | $      | 8,650 |   |   | $      | 5,420 |   |

| Cash payments for interest                   |   | $ | 1,965 |   |   | $ | 2,457 |   |
|----------------------------------------------|--------|---|-------|--------|--------|---|-------|--------|
| Cash payments for taxes                      |   | $ | 320   |   |   | $ | 340   |   |
| Transfer of loans to other real estate owned |   | $ | 585   |   |   | $ | 208   |   |

|   |   |
|--------|--------|

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|                                  |   | 2010           |   |   | 2009   |   |
|---------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                  |   | (In Thousands) |   |
| Due in one year or less               |   | $              | 3,001  |   |   | $      | 2,499 |   |
| Due after one year through five years |   |           | 3,000  |   |   |   | 654 |   |
|                                  |   | $              | 6,001  |   |   | $      | 3,153 |   |

----

----

|                                                                        |   | December 31, 2010 |      |
|-----------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                        |   | Amortized Cost    |      |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Available for Sale:                                                         |   |              |      |   |   |   |   |   |   |   |   |   |
|     U.S. Government agency securities                   |   |              |      |   |   |   |   |   |   |   |   |   |
|        Due after 1 year through 5 years  |   | $                 | 1,250     |   |   | $ | 2 |   |   | $ | - |   |   | $ | 1,252 |   |
|        Due after 5 year through 10 years |   |              | 500       |   |   |   | - |   |   |   | (15 | ) |   |   | 485 |   |
|     Short-term bond fund                                |   |              | 1,035     |   |   |   | 2 |   |   |   | - |   |   |   | 1,037 |   |
|     Limited-term bond fund                              |   |              |  505 |   |   |   |  - |   |   |   |  ( 8 | ) |   |   |  497 |   |
|                                                                        |   | $                 | 3,290     |   |   | $ | 4 |   |   | $ | (23 | ) |   | $ | 3,271 |   |

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

|                                                      |   | Less Than 12 Months    |   |   | 12 Months or Longer    |   |   | Total      |   |
|-----------------------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|------------|--------|
|                                                      |   | Fair Value             |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                                      |   | (Dollars in Thousands) |   |
|     U.S. Government agency securities |   | $                      | -      |   |                   | $      | -      |       |   | $ | 485 |   |   | $ | 15 |   |   | $ | 485 |   |   | $ | 15 |   |
|     Limited-term bond fund            |   |                   | -      |   |                   |   | -      |       |   |   | 497 |   |   |   | 8 |   |   |   |  497 |   |   |   |  8 |   |
|                                                      |   | $                      | -      |   |                   | $      | -      |       |   | $ |   982 |   |   | $ | 23 |   |   | $ |   982 |   |   | $ | 23 |   |
|                                                      |   |                   |   |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

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|   |   |   |  Amortized Cost |   |   Fair Value |   |
|--------|--------|--------|----------------------|--------|-------------------|--------|

| Due in one year or less                |   | $      | -     |   |   | $      | -     |   |
|----------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Due after one year through five years  |   |   | 1,250 |   |   |   | 1,252 |   |
| Due after five years through ten years |   |   | 500   |   |   |   | 485   |   |
|                                   |   | $      | 1,750 |   |   | $      | 1,737 |   |

|                                                    |   | December 31, 2010   |   |
|---------------------------------------------------------|--------|---------------------|--------|
|                                                    |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Held to Maturity:                                       |   |                |   |   |   |   |   |   |   |   |   |   |
|     FNMA pass-through certificates  |   | $                   | 2,803  |   |   | $ | 222 |   |   | $ | - |   |   | $ | 3,025 |   |
|     FHLMC pass-through certificates |   |                | 2,603  |   |   |   |  182 |   |   |   |  - |   |   |   |  2,785 |   |
|                                                    |   | $                   | 5,406  |   |   | $ | 404 |   |   | $ | - |   |   | $ | 5,810 |   |

|                                                    |   | December 31, 2009 |   |
|---------------------------------------------------------|--------|-------------------|--------|
|                                                    |   | Amortized Cost    |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   |  Fair Value |   |
| Held to Maturity:                                       |   |              |   |   |   |   |   |   |   |   |   |   |
|     FNMA pass-through certificates  |   | $                 | 4,071  |   |   | $ | 211 |   |   | $ | - |   |   | $ | 4,282 |   |
|     FHLMC pass-through certificates |   |              | 3,660  |   |   |   |  200 |   |   |   |  - |   |   |   |  3,860 |   |
|                                                    |   | $                 | 7,731  |   |   | $ | 411 |   |   | $ | - |   |   | $ | 8,142 |   |

----

----

|   |   |   |  2010 |   |   2009 |   |
|--------|--------|--------|------------|--------|-------------|--------|

| Real estate loans:                                        |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|    One-to-four family residential:         |   |   |   |   |   |   |
|        Owner occupied  |   | $      | 13,428 |   |   | $      | 15,388 |   |
| Non-owner occupied                                        |   |   | 26,263 |   |   |   | 25,133 |   |
| Total one-to-four family residential                      |   |   | 39,691 |   |   |   | 40,521 |   |
|                                                      |   |   |   |   |   |   |   |   |
|    Multi-family (five or more) residential |   |   | 3,226  |   |   |   | 3,127 |   |
|    Commercial real estate                  |   |   | 18,773 |   |   |   | 18,617 |   |
|    Construction                            |   |   | 5,773  |   |   |   | 3,536 |   |
|    Commercial lines of credit              |   |   | 1,854  |   |   |   | 1,197 |   |
|    Home equity loans                       |   |   | 6,181  |   |   |   | 6,445 |   |
| Total real estate loans                                   |   |   | 75,498 |   |   |   | 73,443 |   |
|                                                      |   |   |   |   |   |   |   |   |
| Auto loans                                                |   |   | 75     |   |   |   | 78 |   |
| Loans secured by deposits                                 |   |   | 15     |   |   |   | 13 |   |
| Total Loans                                               |   |   | 75,588 |   |   |   | 73,534 |   |

| Deferred loan fees and costs |   |   | (7     | )      |   |   | 29     |   |
|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Allowance for loan losses    |   |   | (871   | )      |   |   | (835   | )      |
|                         |   |   |   |   |   |   |   |   |
| Net Loans                    |   | $      | 74,710 |   |   | $      | 72,728 |   |

|                                              |   | Pass           |     |   | Special Mention |   |    |  Substandard |   |   |  Doubtful |   |   |  Total |    |
|---------------------------------------------------|--------|----------------|----------|--------|----------------------|--------|---------|-------------------|--------|--------|----------------|--------|--------|-------------|---------|
|                                              |   | (In Thousands) |     |
| One-to-four family residential owner occupied     |   | $              | 12,139   |   |                 | $      | 742     |              |   | $      | 79             |   |   | $           | 468     |   |   | $ | 13,428 |   |
| One-to-four family residential non-owner occupied |   |           | 24,700   |   |                 |   | 109     |              |   |   | 1,079          |   |   |        | 375     |   |   |   | 26,263 |   |
| Multi-family residential                          |   |           | 3,022    |   |                 |   | 204     |              |   |   | -              |   |   |        | -       |   |   |   | 3,226 |   |
| Commercial real estate and lines of credit        |   |           | 20,202   |   |                 |   | 318     |              |   |   | 107            |   |   |        | -       |   |   |   | 20,627 |   |
| Construction                                      |   |           | 5,773    |   |                 |   | -       |              |   |   | -              |   |   |        | -       |   |   |   | 5,773 |   |
| Home equity                                       |   |           | 5,757    |   |                 |   | 350     |              |   |   | 74             |   |   |        | -       |   |   |   | 6,181 |   |
| Consumer non-real estate                          |   |           |  75 |   |                 |   |  - |              |   |   |  15       |   |   |        |  - |   |   |   |  90 |   |
|                                              |   | $              | 71,668   |   |                 | $      | 1,723   |              |   | $      | 1,354          |   |   | $           | 843     |   |   | $ | 75,588 |   |

----

----

|                                                                                 |   | Recorded Investment |   |   |   UnpaidPrincipalBalance |   |   | RelatedAllowance     |   |   |   AverageRecordedInvestment |   |   | InterestIncomeRecognized |   |
|--------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|------------------------------------|--------|--------|----------------------|--------|--------|---------------------------------------|--------|--------|--------------------------|--------|
|                                                                                 |   |                     |   |   |                               |   |   |  (In Thousands) |   |   |                                  |   |   |                     |   |
| With no related allowance recorded:                                                  |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |
|    One-to-four family residential owner occupied                           |   | $                        | -      |   |                               | $      | -      |                 |   | $      | -                                     |   |   | $                        | -      |   |   | $ | - |   |
|    One-to-four family residential non-owner occupied                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Multi-family residential                                           |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|        Commercial real estate and lines of credit |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Construction                                                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Home equity                                                        |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Consumer non-real estate                                           |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|                                                                                 |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |   |   |   |   |   |
| With an allowance recorded:                                                          |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |   |   |   |   |   |
|    One-to-four family residential owner occupied                      |   | $                        | 546    |   |                               | $      | 546    |                 |   | $      | 108                                   |   |   | $                        | 547    |   |   | $ | 12 |   |
|    One-to-four family residential non-owner occupied                  |   |                     | 1,454  |   |                               |   | 1,454  |                 |   |   | 136                                   |   |   |                     | 1,462  |   |   |   | 76 |   |
|    Multi-family residential and lines of credit                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|        Commercial real estate                     |   |                     | 107    |   |                               |   | 107    |                 |   |   | 1                                     |   |   |                     | 108    |   |   |   | 6 |   |
|    Construction                                                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Home equity                                                        |   |                     | 74     |   |                               |   | 74     |                 |   |   | 25                                    |   |   |                     | 75     |   |   |   | 5 |   |
|    Consumer non-real estate                                           |   |                     | 15     |   |                               |   | 15     |                 |   |   | 1                                     |   |   |                     | 18     |   |   |   | 1 |   |
|                                                                                 |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |   |   |   |   |   |
| Total:                                                                               |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |   |   |   |   |   |
|    One-to-four family residential owner occupied                      |   | $                        | 546    |   |                               | $      | 546    |                 |   | $      | 108                                   |   |   | $                        | 547    |   |   | $ | 12 |   |
|    One-to-four family residential non-owner occupied                  |   |                     | 1,454  |   |                               |   | 1,454  |                 |   |   | 136                                   |   |   |                     | 1,462  |   |   |   | 76 |   |
|    Multi-family residential and lines of credit                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|        Commercial real estate                     |   |                     | 107    |   |                               |   | 107    |                 |   |   | 1                                     |   |   |                     | 108    |   |   |   | 6 |   |
|    Construction                                                       |   |                     | -      |   |                               |   | -      |                 |   |   | -                                     |   |   |                     | -      |   |   |   | - |   |
|    Home equity                                                        |   |                     | 74     |   |                               |   | 74     |                 |   |   | 25                                    |   |   |                     | 75     |   |   |   | 5 |   |
|    Consumer non-real estate                                           |   |                     | 15     |   |                               |   | 15     |                 |   |   | 1                                     |   |   |                     | 18     |   |   |   | 1 |   |
|                                                                                 |   |                     |   |   |                               |   |   |                 |   |   |                                  |   |   |                     |   |   |   |   |   |   |

----

----

|                                              |   |   | Total  |   |   |   | Individually EvaluatedforImpairment  |   |   |   | Collectively Evaluated for Impairment  |   |
|---------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------------------------------------|--------|--------|--------|--------------------------------------------------|--------|
|                                              |   |   |        |   |   |   | (In Thousands)                  |   |   |   |                                             |   |
| One-to-four family residential owner occupied     |   | $      | 13,428      |   |   | $      | 546                                       |   |   | $      | 12,882                                           |   |
| One-to-four family residential non-owner occupied |   |   | 26,263      |   |   |   | 1,454                                     |   |   |   | 24,809                                           |   |
| Multi-family residential                          |   |   | 3,226       |   |   |   | -                                         |   |   |   | 3,226                                            |   |
| Commercial real estate and lines of credit        |   |   | 20,627      |   |   |   | 107                                       |   |   |   | 20,520                                           |   |
| Construction                                      |   |   | 5,773       |   |   |   | -                                         |   |   |   | 5,773                                            |   |
| Home equity                                       |   |   | 6,181       |   |   |   | 74                                        |   |   |   | 6,107                                            |   |
| Consumer non-real estate                          |   |   |  90    |   |   |   |  15                                  |   |   |   |  75                                         |   |
|                                              |   | $      | 75,588      |   |   | $      | 2,196                                     |   |   | $      | 73,392                                           |   |

|                                              |   |   | Total Financing Receivable  |   |   |   | Total Allowance for Loan Losses  |   |   |   | Allowance for Loan Losses Individually Evaluated for Impairment  |   |   |   | Allowance for Loan Losses Collectively Evaluated for Impairment  |
|---------------------------------------------------|--------|--------|----------------------------------|--------|--------|--------|---------------------------------------|--------|--------|--------|-----------------------------------------------------------------------|--------|--------|--------|-----------------------------------------------------------------------|
|                                              |   |   |                             |   |   |   | (In Thousands)                        |   |   |   |                                                                  |
| One-to-four family residential owner occupied     |   | $      | 13,428                           |   |   | $      | 185                                   |   |   | $      | 108                                                                   |   |   | $      | 77                                                                    |
| One-to-four family residential non-owner occupied |   |   | 26,263                           |   |   |   | 335                                   |   |   |   | 136                                                                   |   |   |   | 199                                                                   |
| Multi-family residential                          |   |   | 3,226                            |   |   |   | 23                                    |   |   |   | -                                                                     |   |   |   | 23                                                                    |
| Commercial real estate and lines of credit        |   |   | 20,627                           |   |   |   | 155                                   |   |   |   | 1                                                                     |   |   |   | 154                                                                   |
| Construction                                      |   |   | 5,773                            |   |   |   | 40                                    |   |   |   | -                                                                     |   |   |   | 40                                                                    |
| Home equity                                       |   |   | 6,181                            |   |   |   | 92                                    |   |   |   | 26                                                                    |   |   |   | 66                                                                    |
| Consumer non-real estate                          |   |   | 90                               |   |   |   | 1                                     |   |   |   | 1                                                                     |   |   |   | -                                                                     |
| Unallocated                                       |   |   |  -                          |   |   |   |  40                              |   |   |   |  -                                                               |   |   |   |  40                                                              |
|                                              |   | $      | 75,588                           |   |   | $      | 871                                   |   |   | $      | 272                                                                   |   |   | $      | 599                                                                   |

|                            |   | 2010           |   |   | 2009   |   |
|---------------------------------|--------|----------------|--------|--------|--------|--------|
|                            |   | (In Thousands) |   |
| Balance, beginning              |   | $              | 835    |   |   | $      | 689 |   |
| Charge-offs                     |   |           | (78    | )      |   |   | (19 | ) |
| Recoveries                      |   |           | -      |   |   |   | - |   |
| Net charge-offs                 |   |           | (78    | )      |   |   | (19 | ) |
| Provision charged to operations |   |           | 114    |   |   |   | 165 |   |
| Balance, ending                 |   | $              | 871    |   |   | $      | 835 |   |

----

----

|                                                               |   | 2010   |    |
|--------------------------------------------------------------------|--------|--------|---------|
| One-to-four family residential owner occupied                      |   | $      | 539     |   |
| One-to-four family residential non-owner occupied                  |   |   | 422     |   |
| Multi-family residential                                           |   |   | -       |   |
|     Commercial real estate and lines of credit |   |   | -       |   |
| Construction                                                       |   |   | -       |   |
| Home equity                                                        |   |   | 23      |   |
| Consumer non-real estate                                           |   |   |  - |   |
|                                                               |   | $      | 984     |   |

|                                                     |   |  30-90 Days Past Due |        |   |  Greaterthan 90 Days |   |      |   Total Past Due |   |   |    Current |   |   |   Total Loans Receivable |         |   | Loans Receivable > 90 Days and Accruing |   |
|----------------------------------------------------------|--------|--------------------------------|-------------|--------|--------------------------------|--------|-----------|----------------------------|--------|--------|---------------------------|--------|--------|------------------------------------|--------------|--------|-------------------------------------------------|--------|
|                                                     |   | (In Thousands)                 |        |
| One-to-four family residential owner occupied            |   | $                              | 810         |   |                           | $      | 61        |                       |   | $      | 871                       |   |   | $                                  | 12,557       |   |                                            | $      | 13,428 |   |   | $ | 61 |   |
| One-to-four family residential non-owner   occupied |   |                           |  1,106 |   |                           |   |  353 |                       |   |   |  1,459               |   |   |                               |  24,804 |   |                                            |   |  26,263 |   |   |   |  353 |   |
| Multi-family residential                                 |   |                           | 204         |   |                           |   | -         |                       |   |   | 204                       |   |   |                               | 3,022        |   |                                            |   | 3,226 |   |   |   | - |   |
| Commercial real estate and lines of credit               |   |                           | 1,061       |   |                           |   | 108       |                       |   |   | 1,169                     |   |   |                               | 19,458       |   |                                            |   | 20,627 |   |   |   | 108 |   |
| Construction                                             |   |                           | -           |   |                           |   | -         |                       |   |   | -                         |   |   |                               | 5,773        |   |                                            |   | 5,773 |   |   |   | - |   |
| Home equity                                              |   |                           | 437         |   |                           |   | -         |                       |   |   | 437                       |   |   |                               | 5,744        |   |                                            |   | 6,181 |   |   |   | - |   |
| Consumer non-real estate                                 |   |                           |  15    |   |                           |   |  -   |                       |   |   |  15                  |   |   |                               |  75     |   |                                            |   |  90 |   |   |   |  - |   |
|                                                     |   | $                              | 3,633       |   |                           | $      | 522       |                       |   | $      | 4,155                     |   |   | $                                  | 71,433       |   |                                            | $      | 75,588 |   |   | $ | 522 |   |

----

----

|                              |   | 2010           |   |   | 2009   |   |
|-----------------------------------|--------|----------------|--------|--------|--------|--------|
|                              |   | (In Thousands) |   |
| Land and building                 |   | $              | 1,016  |   |   | $      | 1,016 |   |
| Leasehold improvements            |   |           | 20     |   |   |   | 9 |   |
| Furniture, fixtures and equipment |   |           | 261    |   |   |   | 238 |   |
|                              |   |           | 1,297  |   |   |   | 1,263 |   |
| Accumulated depreciation          |   |           | (224   | )      |   |   | (171 | ) |
|                              |   | $              | 1,073  |   |   | $      | 1,092 |   |

|                            |   |   | 2010         |   |   |   |  2009                          |   |
|---------------------------------|--------|--------|--------------|--------|--------|--------|-------------------------------------|--------|
|                            |   |   | Amount  |   |   |   | Weighted Average InterestRate  |   |   |   | Amount  |   |   |   | Weighted Average Interest Rate  |   |
|                            |   |   |         |   |   |   | (Dollars in Thousands)              |   |   |   |   |   |
| Passbook savings accounts       |   | $      | 3,079        |   |   |   | 0.55                                | %      |   | $ | 3,277 |   |   |   | 0.89 | % |
| Statement savings accounts      |   |   | 6,798        |   |   |   | 0.97                                |   |   |   | 6,508 |   |   |   | 1.45 |   |
| eSavings accounts               |   |   | 2,253        |   |   |   | 1.12                                |   |   |   | 1,978 |   |   |   | 1.64 |   |
| Certificate of deposit accounts |   |   | 67,561       |   |   |   | 2.31                                |   |   |   | 56,489 |   |   |   | 2.80 |   |
|                            |   | $      | 79,691       |   |   |   | 2.10                                | %      |   | $ | 68,252 |   |   |   | 2.55 | % |

| Year ending December 31: |   |   |   |
|--------------------------|--------|--------|--------|
| 2011                     |   | $      | 31,471 |   |
| 2012                     |   |   | 15,750 |   |
| 2013                     |   |   | 8,522  |   |
| 2014                     |   |   | 2,189  |   |
| 2015                     |   |   | 9,629  |   |
|                     |   | $      | 67,561 |   |

----

----

|   |   |   | 2010 |   | 2009 |
|--------|--------|--------|------|--------|------|

| Passbook savings accounts       |   | $      | 18    |   |   | $      | 30    |   |
|---------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Statement savings accounts      |   |   | 67    |   |   |   | 86    |   |
| eSavings accounts               |   |   | 22    |   |   |   | 23    |   |
| Certificate of deposit accounts |   |   | 1,578 |   |   |   | 1,994 |   |
|                            |   | $      | 1,685 |   |   | $      | 2,133 |   |

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

----

----

|   |   |   | 2010 |   |  2009 |   |
|--------|--------|--------|------|--------|------------|--------|

| Federal:       |   |   |   |   |   |   |
|----------------|--------|--------|--------|--------|--------|--------|
| Current        |   | $      | 408    |   |   | $      | 334 |   |
| Deferred       |   |   | (51    | )      |   |   | (76 | ) |
|           |   |   | 357    |   |   |   | 258 |   |
| State, current |   |   | 83     |   |   |   | 56 |   |
|           |   | $      | 440    |   |   | $      | 314 |   |

|   |   |   | 2010 |   | 2009 |   |
|--------|--------|--------|------|--------|------|--------|

| Federal income tax at statutory rate |   | $      | 377 |   |   | $      | 272 |   |
|--------------------------------------|--------|--------|-----|--------|--------|--------|-----|--------|
| State tax, net of federal benefit    |   |   | 57  |   |   |   | 37  |   |
| Stock compensation expense           |   |   | 5   |   |   |   | 3   |   |
| Other                                |   |   | 1   |   |   |   | 2   |   |
|                                 |   | $      | 440 |   |   | $      | 314 |   |

|   |   |   | 2010 |   | 2009 |
|--------|--------|--------|------|--------|------|

| Deferred tax assets:                                                                                  |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Allowance for loan losses                                                                             |   | $      | 298    |   |   | $      | 284 |   |
|         Stock-based compensation                              |   |   | 39     |   |   |   | 30 |   |
|        Allowance for OREO losses                                   |   |   | 9      |   |   |   | 9 |   |
|        Interest on non-accrual loans                               |   |   | 9      |   |   |   | - |   |
|        Unrealized loss on investment securities available for sale |   |   | 6      |   |   |   | - |   |
|        Deferred loan fees                                          |   |   | 2      |   |   |   | - |   |
|        Organization costs                                          |   |   | 3      |   |   |   | - |   |
| Total deferred tax assets                                                                             |   |   | 366    |   |   |   | 323 |   |

| Deferred tax liabilities:                                   |   |   |   |   |   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Bank premises and equipment                                 |   |   | (23    | )      |   |   | (28 | ) |
| Deferred loan costs                                         |   |   | -      |   |   |   | (9 | ) |
| Unrealized gain on investment securities available for sale |   |   | -      |   |   |   | (1 | ) |
| Total deferred tax liabilities                              |   |   | (23    | )      |   |   | (37 | ) |

| Net Deferred Tax Asset |   |   | $ | 343 |   |   | $ | 285 |   |
|------------------------|--------|--------|---|-----|--------|--------|---|-----|--------|

----

----

|                                           |   | 2010   |    |   | 2009   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Allocated shares                               |   |   | 24,070  |   |   |   | 16,664 |   |
| Unreleased  shares                   |   |   | 87,020  |   |   |   | 94,426 |   |
| Total ESOP shares                              |   |   | 111,090 |   |   |   | 111,090 |   |
| Fair value of unreleased shares (in thousands) |   | $      | 822     |   |   | $      | 803 |   |

|                                  |   | 2010            |   | 2009   |                                  |
|---------------------------------------|--------|-----------------|--------|--------|---------------------------------------|
|                                  |   | Number ofShares |   |   | WeightedAverage Grant Date Fair Value |   | Number ofShares |   |   | WeightedAverage Grant Date Fair Value |   |
| Unvested at the beginning of the year |   |            | 34,498 |   |                                  | $ | 9.05 |   |   | 43,324 |   |   | $ | 9.05 |   |
| Granted                               |   |            | --     |   |                                  |   | -- |   |   | -- |   |   |   | -- |   |
| Vested                                |   |            | (8,529 | )      |                                  |   | 9.05 |   |   | (8,588 | ) |   |   | 9.05 |   |
| Forfeited                             |   |            | --     |   |                                  |   | -- |   |   | (238 | ) |   |   | 9.05 |   |
| Unvested at the end of the year       |   |            | 25,969 |   |                                  | $ | 9.05 |   |   | 34,498 |   |   | $ | 9.05 |   |

----

----

|                                     |   | 2010            |    | 2009   |                               |
|------------------------------------------|--------|-----------------|---------|--------|------------------------------------|
|                                     |   | Number ofShares |    |   | WeightedAverage ExercisePrice |   |   | WeightedAverage Remaining Contractual Life (in years) |   |   | Number ofShares |   |   | WeightedAverage Exercise Price |   |
| Outstanding at the beginning of the year |   |            | 107,718 |   |                               | $ | 10.00 |   |   |   | 8.4 |   |   |   | 108,311 |   |   | $ | 10.00 |   |
| Granted                                  |   |            | --      |   |                               |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Exercised                                |   |            | --      |   |                               |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Forfeited                                |   |            | (148    | )      |                               |   |  10.00 |   |   |   | -- |   |   |   | (593 | ) |   |   |  -- |   |
| Outstanding at the end of the period     |   |            | 107,570 |   |                               | $ | 10.00 |   |   |   | 7.4 |   |   |   | 107,718 |   |   | $ | 10.00 |   |
| Exercisable at the end of the period     |   |            | 42,666  |   |                               | $ | 10.00 |   |   |   | 7.4 |   |   |   | 21,481 |   |   | $ | 10.00 |   |

----

----

|   |   |   | 2010 |   | 2009 |
|--------|--------|--------|------|--------|------|

| Commitments to grant loans                 |   | $      | 789   |   |   | $      | 191   |   |
|--------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Unfunded commitments under lines of credit |   |   | 3,827 |   |   |   | 3,227 |   |

----

----

|                                     |   |   Actual     |   |   |  For Capital Adequacy Purposes |   |   | To be Well Capitalized under Prompt Corrective Action Provisions |   |
|------------------------------------------|--------|------------------------|--------|--------|-------------------------------------|--------|--------|-----------------------------------------------------------------------|--------|
|                                     |   | Amount                 |   |   | Ratio                               |   |   | Amount                                                                |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                     |   | (Dollars in Thousands) |   |
| As of December 31, 2010:            |   |                   |   |   |                                |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $                      | 14,523 |   |                                |   | 22.77  | %                                                                     |   | $ | 35,103 |   |   |   | ≥8.00 | % |   | $ | 36,379 |   |   |   | ≥10.00 | % |
| Tier 1 capital (to risk-weighted assets) |   |                   | 13,715 |   |                                |   | 21.50  |                                                                  |   |   | 32,551 |   |   |   | 34.00 |   |   |   | 33,827 |   |   |   | 3 6.00 |   |
| Tier 1 capital (to average assets)       |   |                   | 13,715 |   |                                |   | 13.63  |                                                                  |   |   | 34,024 |   |   |   | 34.00 |   |   |   | 35,030 |   |   |   | 3 5.00 |   |
|                                     |   |                   |   |   |                                |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:            |   |                   |   |   |                                |   |   |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $                      | 13,823 |   |                                |   | 22.69  | %                                                                     |   | $ | 34,874 |   |   |   | ≥8.00 | % |   | $ | 36,093 |   |   |   | ≥10.00 | % |
| Tier 1 capital (to risk-weighted assets) |   |                   | 13,051 |   |                                |   | 21.42  |                                                                  |   |   | 32,437 |   |   |   | 34.00 |   |   |   | 33,365 |   |   |   | 3 6.00 |   |
| Tier 1 capital (to average assets)       |   |                   | 13,051 |   |                                |   | 14.51  |                                                                  |   |   | 33,598 |   |   |   | 34.00 |   |   |   | 34,497 |   |   |   | 3 5.00 |   |

----

----

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

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

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

----

----

|                                                        |   | December 31, 2010                 |      |
|-------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                        |   |   Total Fair Value |      |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   |  Significant Other Observable Inputs(Level 2) |   |   | Significant Other Observable Inputs(Level 3) |   |
|    Investment securities available for sale: |   |                              |      |
| U.S. Government agency securities                           |   | $                                 | 1,737     |   |   | $ | - |   |   | $ | 1,737 |   |   | $ | - |   |
| Short-term bond fund                                        |   |                              | 1,037     |   |   |   | 1,037 |   |   |   | - |   |   |   | - |   |
| Limited-term bond fund                                      |   |                              |  497 |   |   |   |  497 |   |   |   |  - |   |   |   | - |   |
|                                                        |   | $                                 | 3,271     |   |   | $ | 1,534 |   |   | $ | 1,737 |   |   | $ | - |   |

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

|                    |   | December 31, 2010                 |   |
|-------------------------|--------|-----------------------------------|--------|
|                    |   |    Carrying Amount |   |   | Quoted Prices in Active Markets for IdenticalAssets(Level 1) |   |   |  Significant Other Observable Inputs(Level 2) |   |   | Significant Other Observable Inputs(Level 3) |   |
|                    |   |                              |   |
| Impaired loans          |   | $                                 | 1,925  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,925 |   |
|                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned |   | $                                 | 1,191  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,191 |   |
|                    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                    |   | December 31, 2009           |   |
|-------------------------|--------|-----------------------------|--------|
|                    |   |   Carrying Amount |   |   | Quoted Prices in Active Markets for IdenticalAssets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant OtherObservable Inputs(Level 3) |   |
|                    |   |                        |   |
| Impaired loans          |   | $                           | 2,276  |   |   | $ | - |   |   | $ | - |   |   | $ | 2,276 |   |
|                    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned |   | $                           | 913    |   |   | $ | - |   |   | $ | - |   |   | $ | ,913 |   |
|                    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

----

----

|                                                     |   |   | December 31, 2010 |   |   |   | December 31, 2009 |   |
|----------------------------------------------------------|--------|--------|-------------------|--------|--------|--------|-------------------|--------|
|                                                     |   |   | Carrying     |   |   |   | Estimated    |   |   |   | Carrying  |   |   |   | Estimated  |   |
|                                                     |   |   | Amount       |   |   |   | Fair Value   |   |   |   | Amount  |   |   |   | Fair Value |   |
| Assets:                                                  |   |   |              |   |   |   |              |   |   |   |   |   |   |   |   |   |
|   Cash and cash equivalents                    |   | $      | 8,650             |   |   | $      | 8,650             |   |   | $ | 5,420 |   |   | $ | 5,420 |   |
|   Investment in interest-earning time deposits |   |   | 6,001             |   |   |   | 6,019             |   |   |   | 3,153 |   |   |   | 3,157 |   |
|   Investment securities available for sale     |   |   | 3,271             |   |   |   | 3,271             |   |   |   | 1,002 |   |   |   | 1,002 |   |
|   Mortgage-backed securities held to maturity  |   |   | 5,406             |   |   |   | 5,810             |   |   |   | 7,731 |   |   |   | 8,142 |   |
|   Loans receivable, net                        |   |   | 74,710            |   |   |   | 76,212            |   |   |   | 72,728 |   |   |   | 74,175 |   |
|   Investment in FHLB stock                     |   |   | 757               |   |   |   | 757               |   |   |   | 797 |   |   |   | 797 |   |
|   Accrued interest receivable                  |   |   | 423               |   |   |   | 423               |   |   |   | 397 |   |   |   | 397 |   |
|                                                     |   |   |              |   |   |   |              |   |   |   |   |   |   |   |   |   |
| Liabilities:                                             |   |   |              |   |   |   |              |   |   |   |   |   |   |   |   |   |
|   Deposits                                     |   |   | 79,691            |   |   |   | 80,526            |   |   |   | 68,252 |   |   |   | 68,917 |   |
|   FHLB advances, long-term                     |   |   | 3,800             |   |   |   | 4,020             |   |   |   | 5,600 |   |   |   | 5,854 |   |
|   FHLB advances, short-term                    |   |   | 1,800             |   |   |   | 1,800             |   |   |   | 1,250 |   |   |   | 1,250 |   |
|   Other borrowings                             |   |   | 423               |   |   |   | 423               |   |   |   | 442 |   |   |   | 442 |   |
|   Accrued interest payable                     |   |   | 107               |   |   |   | 107               |   |   |   | 117 |   |   |   | 117 |   |
|                                                     |   |   |              |   |   |   |              |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments                  |   |   | --                |   |   |   | --                |   |   |   | -- |   |   |   | -- |   |
|                                                     |   |   |              |   |   |   |              |   |   |   |   |   |   |   |   |   |

----

----

|                                                                           |   | December 31, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Assets                                                                         |   |              |   |   |              |   |
| Cash and cash equivalents                                                      |   | $                 | 388    |   |              | $      | 2,324 |   |
| Investment in interest-earning time deposits                                   |   |              | 513    |   |              |   | 876 |   |
| Investments securities available for sale                                      |   |              | -      |   |              |   | 501 |   |
| Investment in Quaint Oak Bank                                                  |   |              | 13,871 |   |              |   | 13,169 |   |
| Premises and equipment, net                                                    |   |              | 985    |   |              |   | 1,020 |   |
| Other assets                                                                   |   |              | 39     |   |              |   | 71 |   |
|      Total Assets                                     |   | $                 | 15,796 |   |              | $      | 17,961 |   |
|                                                                           |   |              |   |   |              |   |   |   |
| Liabilities and Stockholders’ Equity                                     |   |              |   |   |              |   |   |   |
| Other borrowings                                                               |   | $                 | 423    |   |              | $      | 442 |   |
| Other liabilities                                                              |   |              | 182    |   |              |   | 133 |   |
| Stockholders’ equity                                                     |   |              | 15,191 |   |              |   | 17,386 |   |
|      Total Liabilities and Stockholders’ Equity |   | $                 | 15,796 |   |              | $      | 17,961 |   |

|                                             |   |                                 |   |   |                                 |   |
|--------------------------------------------------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
|                                             |   | For the Year Ended December 31, 2010 |   |   | For the Year Ended December 31, 2009 |   |
| Income                                           |   |                                 |   |   |                                 |   |
| Interest income                                  |   | $                                    | 35     |   |                                 | $      | 83 |   |
| Rental income                                    |   |                                 | 77     |   |                                 |   | 3 |   |
|    Total Income                   |   |                                 | 112    |   |                                 |   | 86 |   |
|                                             |   |                                 |   |   |                                 |   |   |   |
| Expenses                                         |   |                                 |   |   |                                 |   |   |   |
| Occupancy and equipment expense                  |   |                                 | 89     |   |                                 |   | 35 |   |
| Other expenses                                   |   |                                 | 90     |   |                                 |   | 66 |   |
|    Total Expenses                 |   |                                 | 179    |   |                                 |   | 101 |   |
|                                             |   |                                 |   |   |                                 |   |   |   |
| Net Loss Before Income Taxes                     |   |                                 | (67    | )      |                                 |   | (15 | ) |
| Equity in Undistributed Net Income of Subsidiary |   |                                 | 715    |   |                                 |   | 496 |   |
| Income Tax Benefit                               |   |                                 | 23     |   |                                 |   | 6 |   |
| Net Income                                       |   | $                                    | 671    |   |                                 | $      | 487 |   |

----

----

|                                                                                                                       |   | For the Year EndedDecember 31, 2010 |   |   | For the Year EndedDecember 31, 2009 |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|-------------------------------------|--------|
|                                                                                                                       |   |                                |   |   |                                |   |
| Operating Activities                                                                                                       |   |                                |   |   |                                |   |
| Net income                                                                                                                 |   | $                                   | 671    |   |                                | $      | 487 |   |
| Adjustments to reconcile net income to net cash provided byoperating activities:                                           |   |                                |   |   |                                |   |   |   |
|              Undistributed income in subsidiary           |   |                                | (715   | )      |                                |   | (496 | ) |
|       Depreciation expense                                                                   |   |                                | 21     |   |                                |   | 12 |   |
|       Deferred income taxes                                                                  |   |                                | (8     | )      |                                |   | - |   |
|       Stock-based compensation expense                                                       |   |                                | 186    |   |                                |   | 180 |   |
|              Accretion of investment securities discounts |   |                                | (1     | )      |                                |   | - |   |
|              Decrease in other assets                     |   |                                | 40     |   |                                |   | 36 |   |
|       Increase in other liabilities                                                          |   |                                | 49     |   |                                |   | 60 |   |
|            Net cash provided by operating activities                |   |                                | 243    |   |                                |   | 279 |   |
|                                                                                                                       |   |                                |   |   |                                |   |   |   |
| Investing Activities                                                                                                       |   |                                |   |   |                                |   |   |   |
| Net decrease  in investment in interest-earning time deposits                                                    |   |                                | 363    |   |                                |   | 894 |   |
| Sale (purchase) of investment securities                                                                                   |   |                                | (4     | )      |                                |   | (500 | ) |
| Proceeds from the sale or calls of investment securities available for sale                                                |   |                                | 505    |   |                                |   | 2,250 |   |
| Sale (purchase) of property and equipment                                                                                  |   |                                | 14     |   |                                |   | (1,032 | ) |
| Net cash provided by investing activities                                                                                  |   |                                | 878    |   |                                |   | 1,612 |   |
|                                                                                                                       |   |                                |   |   |                                |   |   |   |
| Financing Activities                                                                                                       |   |                                |   |   |                                |   |   |   |
| Proceeds from borrowings                                                                                                   |   |                                | -      |   |                                |   | 450 |   |
| Repayment of other borrowings                                                                                              |   |                                | (19    | )      |                                |   | (8 | ) |
| Dividends paid                                                                                                             |   |                                | (137   | )      |                                |   | (132 | ) |
| Purchase of treasury stock                                                                                                 |   |                                | (2,901 | )      |                                |   | (423 | ) |
| Net cash used in financing activities                                                                                      |   |                                | (3,057 | )      |                                |   | (113 | ) |
|                                                                                                                       |   |                                |   |   |                                |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents                                                                       |   |                                | (1,936 | )      |                                |   | 1,778 |   |
| Cash and Cash Equivalents-Beginning of Period                                                                              |   |                                | 2,324  |   |                                |   | 546 |   |
| Cash and Cash Equivalents-End of Period                                                                                    |   | $                                   | 388    |   |                                | $      | 2,324 |   |
|                                                                                                                       |   |                                |   |   |                                |   |   |   |

----

|  DIRECTORS AND EXECUTIVE OFFICERS |
|----------------------------------------|

| Directors                                                                                                      |
|---------------------------------------------------------------------------------------------------------------------|
| Robert T. StrongPresident and Chief Executive Officer                                                               | James J. Clarke, Ph.D.Principal of Clarke Consulting, Villanova, Pennsylvania |
|  Robert J. PhillipsChairman of the Board. Partner, Phillips and Phillips Enterprises, Doylestown, Pennsylvania |  Andrew E. DiPiero, Jr., Esq.Partner with Stampone D'Angelo Renzi DiPiero, Attorney at Law, P.C., Cheltenham, Pennsylvania |
|  George M. Ager, Jr.Currently retired                                                                          |  Kenneth R. Gant, MBAAssociate Agent, Landis Agencies, Doylestown, Pennsylvania |
|  John J. Augustine, CPAChief Financial Officer                                                                 |  Marsh B. SpinkManaging Partner of Lawn-Crest Realty, Philadelphia, Pennsylvania |
|                                                                                                                |   |
|                                                                                                                |   |
|                                                                                                                |   |
| Executive Officers                                                                                             |
| Diane J. ColyerChief Operating Officer and Corporate Secretary                                                      | Robert FarrerChief Risk Officer, Compliance Officer, Security Officer  and Community Reinvestment Act Officer |
|                                                                                                                |   |
| Curt T. SchulmeisterChief Lending Officer                                                                           |

| BANKING LOCATIONS |
|-------------------|

|   |  Main Office         |   |  Lehigh Valley Office |   |
|--------|---------------------------|--------|----------------------------|--------|
|   |                      |   |                       |   |
|   | 607 Lakeside Drive        |   | 1710 Union Boulevard       |   |
|   | Southampton, Pennsylvania |   | Allentown, PA 18109        |   |
|   | (215) 364-4059            |   | (610) 351-9960             |   |
|   |  www.quaintoak.com   |   |

| TRANSFER AGENT / REGISTRAR |
|----------------------------|