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|----------------------------------------------------------------------------------
|UNITED STATES                                                                     
|SECURITIES AND EXCHANGE COMMISSION                                                
|WASHINGTON,
 DC 20549                                                             
|                                                                                  
|FORM 10-Q                                                                         
|                                                                                  
|Quarterly
 report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2009

Commission file number 000-27481

|                                                       
|-------------------------------------------------------
|Rome Bancorp, Inc.                                     
|(Exact
 name of registrant as specified in its charter)



|                                 |  |                      | 
|-------------------------------- |  | -------------------- | 
|Delaware                         |  | 16-1573070           | 
|(State
 or other jurisdiction of |  | (I.R.S.
 Employer    | 
|incorporation
 or organization)  |  | Identification
 No.) | 

100 West Dominick Street, Rome, NY 13440-5810(Address of
Principal executive offices)(315) 336-7300(Registrants telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
and (2) has been subject to such filing requirements for the past 90 days. Yes x     No o

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o     No o

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

Large accelerated filer o    Accelerated filer x    Non-accelerated
filer o    Smaller reporting company o

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes o    No x

Indicate
the number of shares outstanding of each class of issuers classes of common
stock as of the last practicable date:

|                               |           |                                 | 
|------------------------------ | --------- | ------------------------------- | 
|Class                          |           | Outstanding at 
 August 3, 2009 | 
|                               |           |                                 | 
|Common
 Stock, par value $0.01 | 6,879,319 |                                

---



ROME BANCORP, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2009

TABLE OF CONTENTS

|         |  |                                                                                        |  |     
|-------- |  | -------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                        |  | PAGE
|         |  |                                                                                        |  |     
|         |  |                                                                                        |  |     
|PART I   |  | FINANCIAL INFORMATION                                                                  |  |     
|         |  |                                                                                        |  |     
|ITEM 1.  |  | FINANCIAL STATEMENTS
 (unaudited):                                                     |  |     
|         |  | CONDENSED CONSOLIDATED BALANCE
 SHEET                                                  |  | 3   
|         |  | CONDENSED CONSOLIDATED
 STATEMENTS OF INCOME                                           |  | 4   
|         |  | CONDENSED CONSOLIDATED
 STATEMENT OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME     |  | 5   
|         |  | CONDENSED CONSOLIDATED
 STATEMENTS OF CASH FLOWS                                       |  | 6   
|         |  | NOTES TO UNAUDITED CONDENSED
 CONSOLIDATED FINANCIAL STATEMENTS                        |  | 8   
|         |  |                                                                                        |  |     
|ITEM 2.  |  | MANAGEMENTS DISCUSSION
 AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 19  
|ITEM 3.  |  | QUANTITATIVE AND QUALITATIVE
 DISCLOSURES ABOUT MARKET RISK                            |  | 29  
|ITEM 4.  |  | CONTROLS AND PROCEDURES                                                                |  | 29  
|         |  |                                                                                        |  |     
|PART II  |  | OTHER INFORMATION                                                                      |  |     
|         |  |                                                                                        |  |     
|ITEM 1.  |  | LEGAL PROCEEDINGS                                                                      |  | 29  
|ITEM 1A. |  | RISK FACTORS                                                                           |  | 29  
|ITEM 2.  |  | UNREGISTERED SALES OF EQUITY
 SECURITIES AND USE OF PROCEEDS                           |  | 31  
|ITEM 3.  |  | DEFAULTS UPON SENIOR SECURITIES                                                        |  | 31  
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE
 OF SECURITY HOLDERS                                   |  | 32  
|ITEM 5.  |  | OTHER INFORMATION                                                                      |  | 32  
|ITEM 6.  |  | EXHIBITS                                                                               |  | 32  
|         |  |                                                                                        |  |     
|         |  | SIGNATURES                                                                             |  | 34  

2

---



PART I FINANCIAL INFORMATION

Item 1. Financial Statements

ROME BANCORP,
INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheet
June 30, 2009 and December 31, 2008
(in thousands, except share data)

|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | ------------------ | - | ------- | -
|                                                                                                                                                                                               |  | (Unaudited)
 June 30,
 2009 |         | December 31,
 2008 |  
|                                                                                                                                                                                               |  |                             |         |                    |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Assets                                                                                                                                                                                         |  |                             |         |                    |   |         |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Cash and due from banks                                                                                                                                                                        |  | $                           | 6,552   |                    | $ | 6,823   |  
|Federal funds sold and other
 short-term investments                                                                                                                                           |  |                             | 6,918   |                    |   | 2,756   |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total cash and cash equivalents                                                                                                                                                                |  |                             | 13,470  |                    |   | 9,579   |  
|Securities available for sale,
 at fair value                                                                                                                                                  |  |                             | 7,606   |                    |   | 3,563   |  
|Securities held to maturity
 (fair value of $1,522 and $1,561 at June 30, 2009 and December 31, 2008,
 respectively)                                                                           |  |                             | 1,438   |                    |   | 1,447   |  
|Federal Home Loan Bank Stock                                                                                                                                                                   |  |                             | 3,323   |                    |   | 3,578   |  
|Loans                                                                                                                                                                                          |  |                             | 291,217 |                    |   | 300,389 |  
|Less: Allowance for loan loss                                                                                                                                                                  |  |                             | (2,105  | )                  |   | (1,936  | )
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Net loans                                                                                                                                                                                      |  |                             | 289,112 |                    |   | 298,453 |  
|Premises and equipment, net                                                                                                                                                                    |  |                             | 6,219   |                    |   | 6,372   |  
|Accrued interest receivable                                                                                                                                                                    |  |                             | 1,029   |                    |   | 1,085   |  
|Bank-owned life insurance                                                                                                                                                                      |  |                             | 9,212   |                    |   | 9,006   |  
|Other assets                                                                                                                                                                                   |  |                             | 5,254   |                    |   | 4,803   |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total assets                                                                                                                                                                                   |  | $                           | 336,663 |                    | $ | 337,886 |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Liabilities
 & Equity                                                                                                                                                                          |  |                             |         |                    |   |         |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Liabilities                                                                                                                                                                                    |  |                             |         |                    |   |         |  
|Deposits:                                                                                                                                                                                      |  |                             |         |                    |   |         |  
|Non-interest bearing                                                                                                                                                                           |  | $                           | 29,954  |                    | $ | 28,373  |  
|Savings                                                                                                                                                                                        |  |                             | 84,157  |                    |   | 79,221  |  
|Money market                                                                                                                                                                                   |  |                             | 15,470  |                    |   | 11,996  |  
|Time                                                                                                                                                                                           |  |                             | 72,544  |                    |   | 72,138  |  
|Other interest bearing                                                                                                                                                                         |  |                             | 14,435  |                    |   | 14,204  |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total deposits                                                                                                                                                                                 |  |                             | 216,560 |                    |   | 205,932 |  
|Borrowings                                                                                                                                                                                     |  |                             | 55,007  |                    |   | 66,324  |  
|Other liabilities                                                                                                                                                                              |  |                             | 5,531   |                    |   | 5,286   |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total liabilities                                                                                                                                                                              |  |                             | 277,098 |                    |   | 277,542 |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Shareholders equity                                                                                                                                                                           |  |                             |         |                    |   |         |  
|Common Stock, $.01 par value;
 authorized: 30,000,000 shares; issued and outstanding 9,895,757 and 6,879,319
 shares at June 30, 2009 and 9,893,716 and 7,058,866 shares at December 31,
 2008 |  |                             | 99      |                    |   | 99      |  
|Additional paid-in capital                                                                                                                                                                     |  |                             | 62,584  |                    |   | 62,440  |  
|Retained earnings                                                                                                                                                                              |  |                             | 36,945  |                    |   | 36,721  |  
|Accumulated other comprehensive
 income (loss)                                                                                                                                                 |  |                             | (2,061  | )                  |   | (2,212  | )
|Treasury stock 3,016,438 shares
 at June 30, 2009 and 2,834,850 shares at December 31, 2008                                                                                                    |  |                             | (36,070 | )                  |   | (34,662 | )
|Unallocated shares of employee
 stock ownership plan (ESOP): 301,257 shares at June 30, 2009 and 324,239
 shares at December 31, 2008                                                          |  |                             | (1,932  | )                  |   | (2,042  | )
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total shareholders equity                                                                                                                                                                     |  |                             | 59,565  |                    |   | 60,344  |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  
|Total liabilities and
 shareholders equity                                                                                                                                                    |  | $                           | 336,663 |                    | $ | 337,886 |  
|                                                                                                                                                                                               |  |                             |         |                    |   |         |  

See accompanying notes to
unaudited condensed consolidated financial statements.

3

---



ROME BANCORP,
INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2009 and 2008
(in thousands, except share data)
(unaudited)

|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|---------------------------------------------------- |  | ------------------------------------- | ----- | ----------------------------------- | - | ----- |  | ---- | ----- |  | - | ----- | 
|                                                     |  | For the three months ended 
 June 30, |       | For the six months ended 
 June 30, |  
|                                                     |  |                                       |       |                                     |  
|                                                     |  | 2009                                  |       | 2008                                |   | 2009  |  | 2008 |      
|                                                     |  |                                       |       |                                     |   |       |  |      |      
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Interest income:                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Loans                                                |  | $                                     | 4,195 |                                     | $ | 4,314 |  | $    | 8,477 |  | $ | 8,733 | 
|Securities                                           |  |                                       | 126   |                                     |   | 88    |  |      | 205   |  |   | 169   | 
|Other short-term investments                         |  |                                       | 3     |                                     |   | 6     |  |      | 5     |  |   | 15    | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Total interest income                                |  |                                       | 4,324 |                                     |   | 4,408 |  |      | 8,687 |  |   | 8,917 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Interest expense:                                    |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Deposits                                             |  |                                       | 635   |                                     |   | 852   |  |      | 1,313 |  |   | 1,753 | 
|Borrowings                                           |  |                                       | 459   |                                     |   | 351   |  |      | 894   |  |   | 721   | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Total interest expense                               |  |                                       | 1,094 |                                     |   | 1,203 |  |      | 2,207 |  |   | 2,474 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Net interest income                                  |  |                                       | 3,230 |                                     |   | 3,205 |  |      | 6,480 |  |   | 6,443 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Provision for loan losses                            |  |                                       | 200   |                                     |   |      |  |      | 200   |  |   |      | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Net interest income after
 provision for loan losses |  |                                       | 3,030 |                                     |   | 3,205 |  |      | 6,280 |  |   | 6,443 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Non-interest income:                                 |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Other                                                |  |                                       | 635   |                                     |   | 577   |  |      | 1,167 |  |   | 1,091 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Total non-interest income                            |  |                                       | 635   |                                     |   | 577   |  |      | 1,167 |  |   | 1,091 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Non-interest expense:                                |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Salaries and employee benefits                       |  |                                       | 1,553 |                                     |   | 1,406 |  |      | 3,098 |  |   | 3,017 | 
|Building, occupancy and equipment                    |  |                                       | 476   |                                     |   | 486   |  |      | 968   |  |   | 966   | 
|Other                                                |  |                                       | 684   |                                     |   | 686   |  |      | 1,390 |  |   | 1,342 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Total non-interest expense                           |  |                                       | 2,713 |                                     |   | 2,578 |  |      | 5,456 |  |   | 5,325 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Income before income tax
 expense                    |  |                                       | 952   |                                     |   | 1,204 |  |      | 1,991 |  |   | 2,209 | 
|Income tax expense                                   |  |                                       | 305   |                                     |   | 424   |  |      | 637   |  |   | 729   | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Net income                                           |  | $                                     | 647   |                                     | $ | 780   |  | $    | 1,354 |  | $ | 1,480 | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Basic earnings per share                             |  | $                                     | 0.10  |                                     | $ | 0.11  |  | $    | 0.20  |  | $ | 0.21  | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 
|Diluted earnings per share                           |  | $                                     | 0.10  |                                     | $ | 0.11  |  | $    | 0.20  |  | $ | 0.21  | 
|                                                     |  |                                       |       |                                     |   |       |  |      |       |  |   |       | 

See
accompanying notes to unaudited condensed consolidated financial statements.

4

---



ROME BANCORP, INC. AND SUBSIDIARYCondensed Consolidated Statement of Shareholders Equity and
Comprehensive Income
For the Six Months Ended June 30, 2009 and 2008
(in thousands, except share and per share data)(unaudited)

|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|------------------------------------------------------------------------- |  | ------------- | -- | ---------------------------- | - | ------------------ |  | --------------- | ------ | ------------------------------------------------ | - | ------------------------- | - | ----- | ------ | - | - | ------ | - | - | ------ | -
|                                                                          |  | Common
 stock |    | Additional
 Paid-in
 Capital |   | Retained
 earnings |  | Treasury
 Stock |        | Accumulated
 other
 comprehensive
 Income (loss) |   | Unallocated
 ESOP
 shares |   | Total |       
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |       
|Balances at January 1, 2008                                               |  | $             | 99 |                              | $ | 61,884             |  | $               | 36,179 |                                                  | $ | (26,488                   | ) | $     | (376   | ) | $ | (2,261 | ) | $ | 69,037 |  
|Comprehensive income:                                                     |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Net Income                                                                |  |               |   |                              |   |                   |  |                 | 1,480  |                                                  |   |                          |   |       |       |   |   |       |   |   | 1,480  |  
|Other comprehensive income                                                |  |               |   |                              |   |                   |  |                 |        |                                                  |   |                          |   |       | 19     |   |   |       |   |   | 19     |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Total comprehensive income                                                |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   | 1,499  |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Purchase of 456,950 treasury
 shares                                      |  |               |   |                              |   |                   |  |                 |       |                                                  |   | (5,339                    | ) |       |       |   |   |       |   |   | (5,339 | )
|Effect of changing pension plan
 measurement date pursuant to FAS No. 158 |  |               |   |                              |   |                   |  |                 | 48     |                                                  |   |                          |   |       |       |   |   |       |   |   | 48     |  
|Amortization of unearned
 compensation                                    |  |               |   |                              |   | 148                |  |                 |       |                                                  |   |                          |   |       |       |   |   |       |   |   | 148    |  
|Dividends paid ($0.17 per
 share)                                         |  |               |   |                              |   |                   |  |                 | (1,226 | )                                                |   |                          |   |       |       |   |   |       |   |   | (1,226 | )
|ESOP shares released for
 allocation (22,982 shares)                      |  |               |   |                              |   | 155                |  |                 |       |                                                  |   |                          |   |       |       |   |   | 110    |   |   | 265    |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Balances at June 30, 2008                                                 |  | $             | 99 |                              | $ | 62,187             |  | $               | 36,481 |                                                  | $ | (31,827                   | ) | $     | (357   | ) | $ | (2,151 | ) | $ | 64,432 |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Balances at January 1, 2009                                               |  | $             | 99 |                              | $ | 62,440             |  | $               | 36,721 |                                                  | $ | (34,662                   | ) | $     | (2,212 | ) | $ | (2,042 | ) | $ | 60,344 |  
|Comprehensive income:                                                     |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Net Income                                                                |  |               |   |                              |   |                   |  |                 | 1,354  |                                                  |   |                          |   |       |       |   |   |       |   |   | 1,354  |  
|Other comprehensive income                                                |  |               |   |                              |   |                   |  |                 |       |                                                  |   |                          |   |       | 151    |   |   |       |   |   | 151    |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Total comprehensive income                                                |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   | 1,505  |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Purchase of 181,588 treasury
 shares                                      |  |               |   |                              |   |                   |  |                 |       |                                                  |   | (1,408                    | ) |       |       |   |   |       |   |   | (1,408 | )
|Amortization and tax effect of
 unearned compensation                     |  |               |   |                              |   | 63                 |  |                 |       |                                                  |   |                          |   |       |       |   |   |       |   |   | 63     |  
|Dividends paid ($0.17 per
 share)                                         |  |               |   |                              |   |                   |  |                 | (1,130 | )                                                |   |                          |   |       |       |   |   |       |   |   | (1,130 | )
|ESOP shares released for
 allocation (22,982 shares)                      |  |               |   |                              |   | 81                 |  |                 |       |                                                  |   |                          |   |       |       |   |   | 110    |   |   | 191    |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  
|Balances at June 30, 2009                                                 |  | $             | 99 |                              | $ | 62,584             |  | $               | 36,945 |                                                  | $ | (36,070                   | ) | $     | (2,061 | ) | $ | (1,932 | ) | $ | 59,565 |  
|                                                                          |  |               |    |                              |   |                    |  |                 |        |                                                  |   |                           |   |       |        |   |   |        |   |   |        |  

See
accompanying notes to unaudited condensed consolidated financial statements.

5

---



ROME BANCORP, INC. AND SUBSIDIARYCondensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2009 and 2008
(unaudited) (in thousands)

|                                                                                    |  |      |         |      |   |        |  
|----------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------ | -
|                                                                                    |  | 2009 |         | 2008 |  
|                                                                                    |  |      |         |      |  
|Cash flows from operating activities:                                               |  |      |         |      |   |        |  
|Net income                                                                          |  | $    | 1,354   |      | $ | 1,480  |  
|Adjustments to reconcile net
 income to net cash Provided by operating activities:  |  |      |         |      |   |        |  
|Depreciation and amortization                                                       |  |      | 256     |      |   | 300    |  
|Decrease in accrued interest
 receivable                                            |  |      | 56      |      |   | 81     |  
|Provision for loan losses                                                           |  |      | 200     |      |   |       |  
|Net amortization on securities                                                      |  |      | 6       |      |   | 1      |  
|Proceeds from sales of loans                                                        |  |      | 5,124   |      |   | 859    |  
|Net gain on loans sold                                                              |  |      | (73     | )    |   | (13    | )
|Originations of loans held for
 sale                                                |  |      | (5,051  | )    |   | (846   | )
|(Gain) loss on sale of other
 real estate                                           |  |      | (2      | )    |   | 3      |  
|Increase (decrease) in other
 liabilities                                           |  |      | 245     |      |   | (69    | )
|Increase in cash surrender
 value of life insurance                                 |  |      | (206    | )    |   | (197   | )
|Increase in other assets                                                            |  |      | (557    | )    |   | (319   | )
|Allocation of ESOP shares                                                           |  |      | 191     |      |   | 265    |  
|Amortization of unearned
 compensation                                              |  |      | 114     |      |   | 148    |  
|                                                                                    |  |      |         |      |   |        |  
|Net cash provided by operating activities                                           |  |      | 1,657   |      |   | 1,693  |  
|                                                                                    |  |      |         |      |   |        |  
|                                                                                    |  |      |         |      |   |        |  
|Cash flows from investing
 activities:                                              |  |      |         |      |   |        |  
|Net decrease (increase) in
 loans                                                   |  |      | 8,949   |      |   | (7,798 | )
|Proceeds from maturities and
 principal reductions of securities available for sale |  |      | 346     |      |   | 713    |  
|Purchases of securities
 available for sale                                         |  |      | (4,327  | )    |   | (1,004 | )
|Redemption (purchases) of
 Federal Home Loan Bank stock                             |  |      | 255     |      |   | (396   | )
|Purchases of securities held to
 maturity                                           |  |      |        |      |   | (326   | )
|Proceeds from maturities and
 principal reductions of securities held to maturity   |  |      | 6       |      |   | 9      |  
|Proceeds from sale of real
 estate owned                                            |  |      | 332     |      |   | 94     |  
|Additions to premises and
 equipment                                                |  |      | (100    | )    |   | (324   | )
|                                                                                    |  |      |         |      |   |        |  
|Net cash provided by (used in) investing
 activities                                |  |      | 5,461   |      |   | (9,032 | )
|                                                                                    |  |      |         |      |   |        |  
|                                                                                    |  |      |         |      |   |        |  
|Cash flows from financing
 activities:                                              |  |      |         |      |   |        |  
|Increase in time deposits                                                           |  |      | 406     |      |   | 621    |  
|Increase in other deposits                                                          |  |      | 10,222  |      |   | 5,908  |  
|Repayments of borrowings                                                            |  |      | (24,601 | )    |   | (533   | )
|Additional borrowings                                                               |  |      | 13,284  |      |   | 8,400  |  
|Purchase of treasury stock                                                          |  |      | (1,408  | )    |   | (5,339 | )
|Dividends paid                                                                      |  |      | (1,130  | )    |   | (1,226 | )
|                                                                                    |  |      |         |      |   |        |  
|Net cash (used in) provided by financing
 activities                                |  |      | (3,227  | )    |   | 7,831  |  
|                                                                                    |  |      |         |      |   |        |  
|                                                                                    |  |      |         |      |   |        |  
|Net increase in cash and cash
 equivalents                                          |  |      | 3,891   |      |   | 492    |  
|Cash and cash equivalents at
 beginning of period                                   |  |      | 9,579   |      |   | 8,018  |  
|                                                                                    |  |      |         |      |   |        |  
|Cash and cash equivalents at
 end of period                                         |  | $    | 13,470  |      | $ | 8,510  |  
|                                                                                    |  |      |         |      |   |        |  

Condensed
Consolidated Statements of Cash Flows continued on next page.

6

---



ROME BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2009 and 2008
(unaudited) (in thousands)

|                                                   |  |      |       |      |   |       | 
|-------------------------------------------------- |  | ---- | ----- | ---- | - | ----- | 
|                                                   |  | 2009 |       | 2008 |  
|                                                   |  |      |       |      |  
|Supplemental
 disclosure of cash flow information: |  |      |       |      |   |       | 
|Non-cash investing activities:                     |  |      |       |      |   |       | 
|Transfers from loans to other real estate          |  | $    | 192   |      | $ | 174   | 
|Cash paid during the period for:                   |  |      |       |      |   |       | 
|Interest                                           |  |      | 2,178 |      |   | 2,398 | 
|Income taxes                                       |  |      | 422   |      |   | 800   | 

See
accompanying notes to unaudited condensed consolidated financial statements.

7

---



ROME BANCORP, INC.Notes to Unaudited Condensed Consolidated Financial Statements

(1) The accompanying unaudited condensed consolidated financial
statements include the accounts of Rome Bancorp, Inc. (Rome Bancorp or the
Company) and The Rome Savings Bank (the Bank), a wholly-owned subsidiary of
the Company, as of June 30, 2009 and December 31, 2008 and for the three and
six month periods ended June 30, 2009 and 2008. All inter-company accounts and
transactions have been eliminated in consolidation. The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. In the opinion of management, the unaudited
condensed consolidated financial statements include all necessary adjustments,
consisting of normal recurring accruals, necessary for a fair presentation for
the periods presented.

The Company believes that the disclosures are adequate to make the
information presented not misleading; however, the results of operations and
other data presented for the periods presented are not necessarily indicative
of results to be expected for the entire fiscal year. Management has evaluated
all significant events and transactions that occurred after June 30, 2009
through August 6, 2009 (financial statement issuance date), for potential
recognition or disclosure in these condensed consolidated financial statements.

The data in the condensed consolidated balance sheet for December 31,
2008 was derived from the Companys 2008 Annual Report on Form 10-K. That data,
along with the interim financial information presented in the condensed
consolidated balance sheet, statements of income, statement of shareholders
equity and comprehensive income and statements of cash flows should be read in
conjunction with the 2008 consolidated financial statements, including the
notes thereto, included in the Companys Annual Report on Form 10-K.

Amounts in the prior periods consolidated financial statements are
reclassified when necessary to conform with the current periods presentation.

(2) Earnings per Common Share

The Company has stock compensation awards with non-forfeitable dividend
rights which are considered participating securities. As such, earnings per
share is computed using the two-class method as required by FASB Staff Position
EITF 03-6-1. Basic earnings per common share is computed by dividing net income
allocated to common stock by the weighted average number of common shares
outstanding during the period which excludes the participating securities. ESOP
shares are considered outstanding for this calculation unless unearned. Diluted
earnings per common share includes the dilutive effect of additional potential
common shares from stock-based compensation plans, but excludes awards
considered participating securities.

8

---



The following
summarizes the computation of earnings per share for the three and six month
periods ended June 30, 2009 and 2008.

|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | --------- | -------------------------- | - | --------- | - | ---- | --------- | - | - | --------- | -
|                                                                                                  |  | (in thousands, except share and per share
data) |          
|                                                                                                 
|                                                                                                  |  | Three months ended
 June 30,                    |           | Six months ended
 June 30, |  
|                                                                                                  |  |                                                 |           |                            |  
|                                                                                                  |  | 2009                                            |           | 2008                       |   | 2009      |   | 2008 |          
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |          
|Basic earnings per share:                                                                         |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Distributed earnings allocated to common stock                                                    |  | $                                               | 550       |                            | $ | 587       |   | $    | 1,122     |   | $ | 1,204     |  
|Undistributed earnings allocated to common stock                                                  |  |                                                 | 89        |                            |   | 180       |   |      | 221       |   |   | 250       |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Net earnings allocated to
 common stock                                                           |  | $                                               | 639       |                            | $ | 767       |   | $    | 1,343     |   | $ | 1,454     |  
|                                                                                                 
|Weighted average common shares
 outstanding, including shares considered participating securities |  |                                                 | 6,982,296 |                            |   | 7,397,015 |   |      | 7,030,560 |   |   | 7,536,501 |  
|Less: Unallocated ESOP shares                                                                     |  |                                                 | (312,748  | )                          |   | (358,712  | ) |      | (318,462  | ) |   | (364,426  | )
|Less: Average participating
 securities                                                           |  |                                                 | (87,294   | )                          |   | (130,954  | ) |      | (94,137   | ) |   | (127,797  | )
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Weighted average shares                                                                           |  |                                                 | 6,582,254 |                            |   | 6,917,349 |   |      | 6,617,961 |   |   | 7,044,278 |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Basic earnings per common share                                                                   |  | $                                               | 0.10      |                            | $ | 0.11      |   | $    | 0.20      |   | $ | 0.21      |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Diluted
 earnings per share:                                                                      |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Net earnings allocated to
 common stock                                                           |  | $                                               | 639       |                            | $ | 767       |   | $    | 1,343     |   | $ | 1,454     |  
|Weighted average common shares
 outstanding for basic earnings per common share                   |  |                                                 | 6,582,254 |                            |   | 6,917,349 |   |      | 6,617,961 |   |   | 7,044,278 |  
|Add: Dilutive effects of
 assumed exercises of common stock                                       |  |                                                 | 0         |                            |   | 3,025     |   |      | 65        |   |   | 3,722     |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Weighted average shares and
 dilutive potential common shares                                     |  |                                                 | 6,582,254 |                            |   | 6,920,374 |   |      | 6,618,026 |   |   | 7,048,000 |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  
|Diluted earnings per common
 share                                                                |  | $                                               | 0.10      |                            | $ | 0.11      |   | $    | 0.20      |   | $ | 0.21      |  
|                                                                                                  |  |                                                 |           |                            |   |           |   |      |           |   |   |           |  

Stock options for 354,000 shares of common
stock were not considered in computing diluted earnings per common share for
the three and six months ended June 30, 2009 and 2008 because they were
antidilutive.

(3) Other Comprehensive Income
(Loss)

|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  
|------------------------------------------------------------------------------------------------ |  | ---------------------------- | --- | -------------------------- | - | ---- | - | ---- | ----- |  | - | ----- | -
|                                                                                                 |  | Three months ended
 June 30, |     | Six months ended
 June 30, |  
|                                                                                                 |  |                              |     |                            |  
|                                                                                                 |  | (in thousands)               |    
|                                                                                                 |  |                              |    
|                                                                                                 |  | 2009                         |     | 2008                       |   | 2009 |   | 2008 |      
|                                                                                                 |  |                              |     |                            |   |      |   |      |      
|Pension and postretirement
 adjustments                                                          |  | $                            | 94  |                            | $ | 1    |   | $    | 188   |  | $ | 130   |  
|Net change in unrealized gain
 (loss) on available-for-sale securities arising during the period |  |                              | 78  |                            |   | (63  | ) |      | 64    |  |   | (98   | )
|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  
|Other comprehensive income
 (loss), before tax                                                   |  |                              | 172 |                            |   | (62  | ) |      | 252   |  |   | 32    |  
|Deferred tax expense (benefit)                                                                   |  |                              | 69  |                            |   | (25  | ) |      | 101   |  |   | 13    |  
|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  
|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  
|Other comprehensive income
 (loss)                                                               |  |                              | 103 |                            |   | (37  | ) |      | 151   |  |   | 19    |  
|Net income                                                                                       |  |                              | 647 |                            |   | 780  |   |      | 1,354 |  |   | 1,480 |  
|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  
|Total comprehensive income                                                                       |  | $                            | 750 |                            | $ | 743  |   | $    | 1,505 |  | $ | 1,499 |  
|                                                                                                 |  |                              |     |                            |   |      |   |      |       |  |   |       |  

9

---



(4) Securities

Securities
are summarized as follows (In thousands):

|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|------------------------------- |  | ----------------- | ----- | ------------------------ | - | ------------------------- |  | ----------- | -- |  | - | ----- | 
|                                |  |                   |      
|                                |  | June 30, 2009     |      
|                                |  |                   |      
|                                |  | Amortized
 Cost   |       | Gross
 unrealized
 gains |   | Gross
 Unrealized
 Losses |  | Fair
 value |   
|                                |  |                   |       |                          |   |                           |  |             |   
|Available-for-sale:             |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|State and municipal obligations |  | $                 | 2,295 |                          | $ | 83                        |  | $           |   |  | $ | 2,663 | 
|Corporate obligations           |  |                   | 4,332 |                          |   | 38                        |  |             | 17 |  |   | 4,353 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Total debt securities           |  |                   | 6,627 |                          |   | 121                       |  |             | 17 |  |   | 6,731 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Equity and other securities     |  |                   | 872   |                          |   | 3                         |  |             |   |  |   | 875   | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  | $                 | 7,499 |                          | $ | 124                       |  | $           | 17 |  | $ | 7,606 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Held-to-maturity:               |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|U.S. Government securities      |  | $                 | 1,318 |                          | $ | 84                        |  | $           |   |  | $ | 1,402 | 
|Mortgage-backed securities:     |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|GNMA                            |  |                   | 4     |                          |   |                          |  |             |   |  |   | 4     | 
|Other bonds                     |  |                   | 116   |                          |   |                          |  |             |   |  |   | 116   | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  | $                 | 1,438 |                          | $ | 84                        |  | $           |   |  | $ | 1,522 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  |                   |      
|                                |  | December 31, 2008 |      
|                                |  |                   |      
|                                |  | Amortized
 Cost   |       | Gross
 unrealized
 gains |   | Gross
 Unrealized
 Losses |  | Fair
 value |   
|                                |  |                   |       |                          |   |                           |  |             |   
|Available-for-sale:             |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|State and municipal obligations |  | $                 | 2,620 |                          | $ | 52                        |  | $           | 9  |  | $ | 2,663 | 
|Mortgage-backed securities      |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|FNMA                            |  |                   | 4     |                          |   |                          |  |             |   |  |   | 4     | 
|FHLMC                           |  |                   | 24    |                          |   |                          |  |             |   |  |   | 24    | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Total debt securities           |  |                   | 2,648 |                          |   | 52                        |  |             | 9  |  |   | 2,691 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Equity and other securities     |  |                   | 872   |                          |   |                          |  |             |   |  |   | 872   | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  | $                 | 3,520 |                          | $ | 52                        |  | $           | 9  |  | $ | 3,563 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|Held-to-maturity:               |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|U.S. Government securities      |  | $                 | 1,322 |                          | $ | 114                       |  | $           |   |  | $ | 1,436 | 
|Mortgage-backed securities      |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|GNMA                            |  |                   | 7     |                          |   |                          |  |             |   |  |   | 7     | 
|Other bonds                     |  |                   | 118   |                          |   |                          |  |             |   |  |   | 118   | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 
|                                |  | $                 | 1,447 |                          | $ | 114                       |  | $           |   |  | $ | 1,561 | 
|                                |  |                   |       |                          |   |                           |  |             |    |  |   |       | 

All of the
gross unrealized losses on available for sale securities at both June 30, 2009
and December 31, 2009 were less than one year in duration. The detail of these
losses and the carrying value (at estimated fair value) of the underlying
securities available for sale are summarized below (in thousands):

|                                |  |                  |    |                   |   |                  |  |                 |   |  |   |     | 
|------------------------------- |  | ---------------- | -- | ----------------- | - | ---------------- |  | --------------- | - |  | - | --- | 
|                                |  | June 30, 2009    |    | December 31, 2008 |  
|                                |  |                  |    |                   |  
|                                |  | Unrealized
 Loss |    | Carrying
 Value   |   | Unrealized
 Loss |  | Carrying
 Value |  
|                                |  |                  |    |                   |   |                  |  |                 |  
|One year or
 less:              |  |                  |    |                   |   |                  |  |                 |   |  |   |     | 
|Corporate obligations           |  | $                | 17 |                   | $ | 2,020            |  | $               |  |  | $ |    | 
|State and municipal obligations |  |                  |   |                   |   |                 |  |                 | 9 |  |   | 995 | 
|                                |  |                  |    |                   |   |                  |  |                 |   |  |   |     | 
|Total                           |  | $                | 17 |                   | $ | 2,020            |  | $               | 9 |  | $ | 995 | 
|                                |  |                  |    |                   |   |                  |  |                 |   |  |   |     | 

10

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Management
 evaluates securities for other than temporary impairment at least on a
 quarterly basis, and more frequently when economic or market conditions
 warrant such an evaluation. Included in the Companys equity securities is an
 investment in a mutual fund which purchases blue chip common stocks. The
 downturn in the equity markets during 2008 caused a decrease in the market
 value of such fund. During the fourth quarter of 2008, in connection with its
 ongoing review of long term asset values, the Company determined that this
 investment had been other than temporarily impaired, as defined by generally
 accepted accounting principles. Accordingly, an impairment charge of $265,000
 (pre-tax) was recorded to lower the carrying value of this security to the current
 fair market value of $472,000. There were no investments deemed by management
 to be other than temporarily impaired at June 30, 2009.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The
 following table presents the amortized cost and fair value of debt securities
 based on the contractual maturity date (in thousands). Expected maturities
 will differ from contractual maturities because issuers may have the right to
 call or prepay obligations without call or prepayment penalties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|                                        |  |                 |       |             |   |       | 
|--------------------------------------- |  | --------------- | ----- | ----------- | - | ----- | 
|                                        |  | June 30, 2009   |      
|                                        |  |                 |      
|                                        |  | Amortized
 Cost |       | Fair
 Value |  
|                                        |  |                 |       |             |  
|Available-for-sale:                     |  |                 |       |             |   |       | 
|Due within one year                     |  | $               | 1,031 |             | $ | 1,034 | 
|Due after one year through five
 years  |  |                 | 4,304 |             |   | 4,342 | 
|Due after five years through
 ten years |  |                 | 603   |             |   | 634   | 
|Due after 10 years                      |  |                 | 689   |             |   | 721   | 
|                                        |  |                 |       |             |   |       | 
|                                        |  | $               | 6,627 |             | $ | 6,731 | 
|                                        |  |                 |       |             |   |       | 
|                                       
|Held-to-maturity:                       |  |                 |       |             |   |       | 
|Due within one year                     |  | $               |      |             | $ |      | 
|Due after one year through five
 years  |  |                 | 1,322 |             |   | 1,406 | 
|Due after five years through
 ten years |  |                 |      |             |   |      | 
|Due after ten years                     |  |                 | 116   |             |   | 116   | 
|                                        |  |                 |       |             |   |       | 
|                                        |  | $               | 1,438 |             | $ | 1,522 | 
|                                        |  |                 |       |             |   |       | 

| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Securities pledged at both June 30, 2009 and December 31, 2008 had a
 carrying amount of $1.3 million. These securities collateralize state and
 Treasury department programs. As of these dates, there were no holdings of
 securities of any one issuer in an amount greater than 10% of shareholders
 equity.

11

---



|    |                                  
|--- | ---------------------------------
|(5) | Loans                            
|    |                                  
|    | Loans are
 summarized as follows:

| |                                     |  |                |         |                    |   |         | 
| | ----------------------------------- |  | -------------- | ------- | ------------------ | - | ------- | 
| |                                     |  | June 30,
 2009 |         | December 31,
 2008 |  
| |                                     |  |                |         |                    |  
| |                                     |  | (in thousands) |        
| | Mortgage loans:                     |  |                |         |                    |   |         | 
| | Residential (1-4 family)            |  | $              | 162,487 |                    | $ | 170,197 | 
| | Commercial                          |  |                | 49,568  |                    |   | 49,231  | 
| | Construction and land               |  |                | 3,882   |                    |   | 5,827   | 
| |                                     |  |                |         |                    |   |         | 
| |                                     |  |                |         |                    |   |         | 
| | Total Mortgage loans                |  |                | 215,937 |                    |   | 225,255 | 
| |                                     |  |                |         |                    |   |         | 
| | Other loans:                        |  |                |         |                    |   |         | 
| | Commercial                          |  |                | 30,054  |                    |   | 28,472  | 
| | Automobile loans                    |  |                | 10,784  |                    |   | 12,927  | 
| | Property improvement and
 equipment |  |                | 18,630  |                    |   | 17,459  | 
| | Other consumer                      |  |                | 15,812  |                    |   | 16,276  | 
| |                                     |  |                |         |                    |   |         | 
| |                                     |  |                |         |                    |   |         | 
| | Total Other loans                   |  |                | 75,280  |                    |   | 75,134  | 
| |                                     |  |                |         |                    |   |         | 
| |                                     |  |                |         |                    |   |         | 
| | Total Loans                         |  | $              | 291,217 |                    | $ | 300,389 | 
| |                                     |  |                |         |                    |   |         | 

| |                                                                     
| | --------------------------------------------------------------------
| | Changes in
 the allowance for loan losses are summarized as follows:

| |                                 |  |                              |       |                            |   |       |   |      |       |   |   |       |  
| | ------------------------------- |  | ---------------------------- | ----- | -------------------------- | - | ----- | - | ---- | ----- | - | - | ----- | -
| |                                 |  | Three months ended
 June 30, |       | Six months ended
 June 30, |  
| |                                 |  |                              |       |                            |  
| |                                 |  | (in thousands)               |      
| |                                 |  | 2009                         |       | 2008                       |   | 2009  |   | 2008 |      
| |                                 |  |                              |       |                            |   |       |   |      |      
| |                                 |  |                              |       |                            |   |       |   |      |       |   |   |       |  
| | Balance at beginning of period  |  | $                            | 1,918 |                            | $ | 1,908 |   | $    | 1,936 |   | $ | 1,910 |  
| | Provision charged to operations |  |                              | 200   |                            |   |      |   |      | 200   |   |   |      |  
| | Loans charged off               |  |                              | (26   | )                          |   | (14   | ) |      | (63   | ) |   | (37   | )
| | Recoveries                      |  |                              | 13    |                            |   | 24    |   |      | 32    |   |   | 45    |  
| |                                 |  |                              |       |                            |   |       |   |      |       |   |   |       |  
| |                                 |  |                              |       |                            |   |       |   |      |       |   |   |       |  
| | Balance at end of period        |  | $                            | 2,105 |                            | $ | 1,918 |   | $    | 2,105 |   | $ | 1,918 |  
| |                                 |  |                              |       |                            |   |       |   |      |       |   |   |       |  

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 Companys recorded investment in loans that are considered impaired totaled
 $704,000 and $710,000 at June 30, 2009 and December 31, 2008, respectively.
 These impaired loans carried allowances of $244,000 and $246,000 June 30,
 2009 and December 31, 2008, respectively. The average recorded investment in
 impaired loans was $706,000 and $392,000 in the first half of 2009 and 2008,
 respectively. The Company recognized no interest on impaired loans during the
 three and six month periods ended June 30, 2009 and 2008.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The
 principal balances of loans not accruing interest amounted to $1.3 million at
 both June 30, 2009 and December 31, 2008. The Company held loans 90 days past
 due and accruing interest totaling $91,000 and $0 at June 30, 2009 and
 December 31, 2008, respectively. The differences between the                                                                                                                                                                                                                                       

12

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | amount of
 interest income that would have been recorded if non-accrual loans had been
 paid in accordance with their original terms and the amount of interest
 income that was recorded during the six months ended June 30, 2009 and 2008
 was $41,400 and $41,800, respectively. There are no commitments to extend
 further credit on non-accruing loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | A
 substantial portion of the Companys loans are mortgage and consumer loans in
 Oneida County. Accordingly, the ultimate collectibility of a substantial
 portion of the Companys loan portfolio is susceptible to changes in market
 conditions in this area. A majority of the Companys loan portfolio is secured
 by real estate. Other than general economic risks, management is not aware of
 any material concentrations of credit risk to any industry or individual
 borrower. The Company does not originate sub-prime mortgage loans and has not
 purchased investments collateralized by sub-prime loans.                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(6) | Stock-Based
 Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On May 24,
 2006, the Companys Board of Directors issued 354,000 stock options to
 directors and key employees with an exercise price equal to the market price
 of the Companys stock on that day. These options have a ten year life and
 vest ratably over a five year period or in certain cases upon retirement. The
 fair value of the options granted is estimated at grant date using a
 Black-Scholes option pricing model based upon the following assumptions:
 expected dividend yield 2.52%, expected stock price volatility 8.25%, risk
 free interest rate 4.60% and an expected option life of 6.5 years. At May 24,
 2006, certain awardees met the retirement eligibility criteria and
 accordingly, stock-based compensation expense of $350,000 related to their
 options was expensed immediately. As of June 30, 2009, unrecognized
 compensation cost related to these options was $96,000. This expense is being
 amortized on a straight line basis over the remainder of the sixty month
 vesting period of the options.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Following is
 a summary of the Companys 2009 year to date stock option activity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                                          |  |                                   |         |                                   |   |                               |  |   |      | 
|----------------------------------------- |  | --------------------------------- | ------- | --------------------------------- | - | ----------------------------- |  | - | ---- | 
|                                          |  | Three
 Months ended June 30, 2009 |        
|                                          |  |                                   |        
|                                          |  | (Dollars
 in thousands)           |        
|                                          |  |                                   |        
|                                          |  | Shares                            |         | Weighted
 Average
 Exercise Price |   | Weighted
 Average
 Fair Value | 
|                                          |  |                                   |         |                                   |   |                               | 
|Options
 outstanding, beginning of period |  |                                   | 356,726 |                                   | $ | 12.76                         |  | $ | 1.68 | 
|Exercised                                 |  |                                   | (2,726  | )                                 |   | 2.19                          |  |   |     | 
|Granted                                   |  |                                   |        |                                   |   |                              |  |   |     | 
|                                          |  |                                   |         |                                   |   |                               |  |   |      | 
|Options
 outstanding at end of period     |  |                                   | 354,000 |                                   | $ | 12.84                         |  | $ | 1.69 | 
|                                          |  |                                   |         |                                   |   |                               |  |   |      | 
|Options
 exercisable at end of period     |  |                                   | 212,400 |                                   | $ | 12.84                         |  | $ | 1.69 | 
|                                          |  |                                   |         |                                   |   |                               |  |   |      | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 aggregate intrinsic value of all options outstanding and exercisable at June
 30, 2009 was $0. The intrinsic value of options exercised during the quarters
 ended June 30, 2009 and June 30, 2008 was $0 and $25,000, respectively. The
 intrinsic value of options exercised during the six months ended June 30,
 2009 and June 30, 2008 was $18,000 and $25,000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | On May 24,
 2006, the Companys Board of Directors awarded 168,300 shares of restricted
 stock to directors and certain key employees. These shares vest to the
 recipients ratably over a five year period, or in certain cases upon
 retirement and the related unrecognized compensation cost related to this
 grant will be expensed over the same period. At May 24, 2006, certain
 awardees met the retirement eligibility criteria and accordingly, stock-based
 compensation expense of $1.1 million related to their 2006 Recognition and
 Retention Plan (RRP) awards was expensed immediately. At June 30, 2009, the
 unrecognized compensation cost attributable to restricted stock awards was
 $341,000. One-fifth of the 2006 restricted stock grants, or 33,660 shares,
 vested in the current quarter. The aggregate intrinsic value of restricted
 stock that is expected to vest in the future was $565,000 at June 30, 2009.

13

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Compensation
 cost for the Companys stock option plans in both the 2009 and 2008 second
 quarters was $12,000. In both of the six month periods ended June 30, 2009
 and 2008 compensation expense related to the stock option plans was $25,000.
 For both of the three month periods ended June 30, 2009 and 2008 compensation
 cost related to the restricted stock plan was $45,000.For the six month periods
 ended June 30, 2009 and 2008 compensation cost related to the restricted
 stock plan was $89,000 and $143,000 respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | During the three months ended June 30, 2009 and 2008, dividends of
 $9,000 and $11,000, respectively, were paid on unvested shares with
 non-forfeitable dividend rights. During the six months ended June 30, 2009
 and 2008, dividends of $17,000 and $23,000, respectively, were paid on
 unvested shares with non-forfeitable dividend rights. These dividend amounts
 were not included in net income as compensation expense due to the
 expectation that all of the awards will vest.                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(7) | Pension and
 Postretirement Medical Benefit Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The
 components of net periodic pension and postretirement benefit cost consisted
 of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|----------------------------------------- |  | ---------------------------- | ---- | ------------------------ | - | ---- | - | ---- | -- | - | - | -- | -
|                                          |  | Three
 months ended June 30, |     
|                                          |  |                              |     
|                                          |  | (in thousands)               |     
|                                          |  | Pension
 benefits            |      | Postretirement
 benefits |  
|                                          |  |                              |      |                          |  
|                                          |  | 2009                         |      | 2008                     |   | 2009 |   | 2008 |   
|                                          |  |                              |      |                          |   |      |   |      |   
|Components
 of net periodic pension cost: |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|Service cost                              |  | $                            |     |                          | $ |     |   | $    | 5  |   | $ | 5  |  
|Interest cost                             |  |                              | 87   |                          |   | 88   |   |      | 37 |   |   | 37 |  
|Expected return on plan assets            |  |                              | (108 | )                        |   | (168 | ) |      |   |   |   |   |  
|Amortization                              |  |                              | 96   |                          |   |     |   |      | (2 | ) |   | (2 | )
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|Net periodic pension cost                 |  | $                            | 75   |                          | $ | 80   |   | $    | 40 |   | $ | 40 |  
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|                                          |  | Six months
 ended June 30,   |     
|                                          |  |                              |     
|                                          |  | (in
 thousands)              |     
|                                          |  | Pension
 benefits            |      | Postretirement
 benefits |  
|                                          |  |                              |      |                          |  
|                                          |  | 2009                         |      | 2008                     |   | 2009 |   | 2008 |   
|                                          |  |                              |      |                          |   |      |   |      |   
|Components
 of net periodic pension cost: |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|Service cost                              |  | $                            |     |                          | $ |     |   | $    | 10 |   | $ | 10 |  
|Interest cost                             |  |                              | 174  |                          |   | 176  |   |      | 74 |   |   | 74 |  
|Expected return on plan assets            |  |                              | (216 | )                        |   | (336 | ) |      |   |   |   |   |  
|Partial settlement                        |  |                              |     |                          |   | 134  |   |      |   |   |   |   |  
|Amortization                              |  |                              | 192  |                          |   |     |   |      | (4 | ) |   | (4 | )
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  
|Net periodic pension cost                 |  | $                            | 150  |                          | $ | (26  | ) | $    | 80 |   | $ | 80 |  
|                                          |  |                              |      |                          |   |      |   |      |    |   |   |    |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | In December
 of 2002, the Companys Board of Directors amended the defined benefit pension
 plan to cease the accrual of further benefits. During the quarter ended June
 30, 2008, the Company recorded a curtailment charge of $134,000 related to a
 partial settlement of the defined benefit plan. For the fiscal year ended
 December 31, 2009, the Company expects to make no contributions to the
 defined benefit pension plan.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(8) | Recent
 Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company adopted FASB Staff Position (FSP) EITF
 03-6-1, effective January 1, 2009. The FSP requires the use of the two-class
 method for computing earnings per share when stock compensation awards with
 non-forfeitable dividend rights are present. Prior earnings per share amounts
 have be                                                                                                                                   

14

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | retrospectively
 adjusted to conform with the provisions of this FSP. The effect of adopting
 this FSP was not material on the computation of earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In April 2009, the FASB issued Staff Position (FSP) No. 115-2 and No.
 124-2, Recognition
 and Presentation of Other-Than-Temporary Impairments, which amends existing
 guidance for determining whether impairment is other-than-temporary for debt
 securities. The FSP requires an entity to assess whether it intends to sell,
 or it is more likely than not that it will be required to sell a security in
 an unrealized loss position before recovery of its amortized cost basis. If
 either of these criteria is met, the entire difference between amortized cost
 and fair value is recognized in earnings. For securities that do not meet the
 aforementioned criteria, the amount of impairment recognized in earnings is
 limited to the amount related to credit losses, while impairment related to
 other factors is recognized in other comprehensive income. Additionally, the
 FSP expands and increases the frequency of existing disclosures about
 other-than-temporary impairments for debt and equity securities. This FSP
 became effective for interim and annual reporting periods ending after June
 15, 2009, with early adoption permitted for periods ending after March 15,
 2009. The Company adopted this FSP in the second quarter,
 however, the adoption had no material effect on the results of operations or
 financial position.                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In April 2009, the FASB issued Staff Position (FSP) No. 157-4,
 Determining Fair Value When the Volume and Level of Activity for the Asset
 and Liability Have Significantly Decreased and Identifying Transactions That
 Are Not Orderly. This FSP emphasizes that even if there has been a significant
 decrease in the volume and level of activity, the objective of a fair value
 measurement remains the same. Fair value is the price that would be received
 to sell an asset or paid to transfer a liability in an orderly transaction
 (that is, not a forced liquidation or distressed sale) between market
 participants. The FSP provides a number of factors to consider when
 evaluating whether there has been a significant decrease in the volume and
 level of activity for an asset or liability in relation to normal market
 activity. In addition, when transactions or quoted prices are not considered
 orderly, adjustments to those prices based on the weight of available
 information may be needed to determine the appropriate fair value. The FSP
 also requires increased disclosures. This FSP is effective for interim and
 annual reporting periods ending after June 15, 2009, and shall be applied
 prospectively. The Company adopted this FSP in the second
 quarter, however, the adoption had no material effect on the results of
 operations or financial position.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In April 2009, the FASB issued Staff Position (FSP) No. 107-1 and APB
 28-1, Interim Disclosures about Fair Value of Financial Instruments. This
 FSP amended FASB Statement No. 107, Disclosures about Fair Value of Financial
 Instruments, to require disclosures about fair value of financial
 instruments for interim reporting periods of publicly traded companies that
 were previously only required in annual financial statements. This FSP is
 effective for interim reporting periods ending after June 15, 2009, with
 early adoption permitted for periods ending after March 15, 2009. The
 Company adopted this FSP in the second quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In
 May 2009, the FASB issued Statement No. 165, Subsequent Events
 which establishes general standards of accounting for and disclosure of
 events that occur after the balance sheet date but before financial
 statements are issued or available to be issued. Statement No. 165 sets forth
 (i) the period after the balance sheet date during which management of a
 reporting entity should evaluate events or transactions that may occur for
 potential recognition or disclosure in the financial statements,
 (ii) the circumstances under which an entity should recognize events or
 transactions occurring after the balance sheet date in its financial
 statements and (iii) the disclosures that an entity should make about
 events or transactions that occurred after the balance sheet date. This
 pronouncement was effective for the period ended June 30, 2009 and did
 not have a significant impact on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In June
 2009, the FASB issued SFAS No. 166, Accounting
 for Transfers of Financial Assetsan amendment of FASB Statement No. 140.
 This Statement defines the term participating
 interest to establish
 specific conditions for reporting a transfer of a portion of a financial
 asset as a sale. If the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

15

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | transfer
 does not meet those conditions, a transferor should account for the transfer
 as a sale only if it transfers an entire financial asset or a group of entire
 financial assets and surrenders control over the entire transferred asset(s)
 in accordance with the conditions in paragraph 9 of Statement 140, as amended
 by this Statement. The special provisions in Statement 140 and FASB Statement
 No. 65, Accounting for Certain
 Mortgage Banking Activities,
 for guaranteed mortgage securitizations are removed to require those
 securitizations to be treated the same as any other transfer of financial
 assets within the scope of Statement 140, as amended by this Statement. If
 such a transfer does not meet the requirements for sale accounting, the
 securitized mortgage loans should continue to be classified as loans in the
 transferors statement of financial position. This Statement requires that a
 transferor recognize and initially measure at fair value all assets obtained
 (including a transferors beneficial interest) and liabilities incurred as a
 result of a transfer of financial assets accounted for as a sale. This
 Statement is effective as of the beginning of each reporting entitys first
 annual reporting period that begins after November 15, 2009, for interim
 periods within that first annual reporting period, and for interim and annual
 reporting periods thereafter. We do not expect that Statement No. 166 will
 have a material impact on our financial condition, results of operations or
 financial statement disclosures.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | In June
 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation
 No. 46(R). Statement No. 167 amends FASB Interpretation No. 46(R) to requite
 an enterprise to perform an analysis to determine whether the enterprises
 variable interest or interests give it a controlling financial interest in a
 variable interest entity. This analysis identifies the primary beneficiary of
 a variable interest entity as the enterprise that has both of the following
 characteristics:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |    |                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | The power to
 direct the activities of a variable interest entity that most significantly
 impact the entitys economic performance                                                                                                           
|
| | b. | The obligation
 to absorb losses of the entity that could potentially be significant to the
 variable interest entity or the right to receive benefits from the entity
 that could potentially be significant to the variable interest entity.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Additionally,
 an enterprise is required to assess whether it has an implicit financial
 responsibility to ensure that a variable interest entity operates as designed
 when determining whether it has the power to direct the activities of the
 variable interest entity that most significantly impact the entitys economic
 performance. This Statement is effective as of the beginning of each
 reporting entitys first annual reporting period that begins after November
 15, 2009, for interim periods within that first annual reporting period, and
 for interim and annual reporting periods thereafter. We do not expect that
 Statement No. 167 will have a material impact on our financial condition,
 results of operations or financial statement disclosures.                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | In June
 2009, the FASB issued Statement No. 168, The FASB
 Accounting Standards CodificationTM(Codification) and
 the Hierarchy of Generally Accepted Accounting Principlesa replacement of
 FASB Statement No. 162. The Codification will become the source of
 authoritative U.S. generally accepted accounting principles (GAAP)
 recognized by the FASB to be applied by non-governmental entities. Rules
 and interpretive releases of the SEC under authority of federal securities
 laws are also sources of authoritative GAAP for SEC registrants. On the effective
 date of this Statement, the Codification will supersede all then-existing
 non-SEC accounting and reporting standards. All other non-grandfathered
 non-SEC accounting literature not included in the Codification will become
 non-authoritative. This Statement is effective for financial statements
 issued for interim and annual periods ending after September 15, 2009.

16

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Fair Value Measurement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The Company
 adopted FAS No. 157 Fair Value Measurements in the first quarter of 2008.
 The Companys available for sale investment portfolio is subject to FAS No.
 157 disclosure for interim reporting. Fair value is the price that would be
 received upon sale of an asset or paid to transfer a liability in an orderly
 transaction between market participants at the measurement date. The
 following fair value hierarchy is used in selecting inputs, with the highest
 priority given to Level 1, as these are the most transparent or reliable.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Level 1 -
 Quoted prices for identical instruments in active markets that the Company
 has the ability to access as of the measurement date.                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Level 2 
 Significant other observable inputs, such as quoted prices for similar
 instruments in active markets; quoted prices for identical or similar
 instruments in markets that are not active; and model-derived valuations in
 which all significant inputs are observable in active markets.                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Level 3 
 Significant unobservable inputs that reflect the Companys own assumptions
 about the assumptions that market participants would use in pricing an
 instrument.                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The Company
 is responsible for the valuation process and as part of this process may use
 data from outside sources in establishing fair value. The Company performs
 due diligence to understand the inputs used or how the data was calculated or
 derived. The Company corroborates the reasonableness of external inputs in
 the valuation process.                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|To estimate
 the market value of its available for sale security portfolio, the Company
 obtains current market pricing from quoted market sources or using pricing
 for similar securities. The fair value of impaired loans with specific
 allocations of the allowance for loan losses is generally based on recent
 real estate appraisals. These appraisals may utilize a single valuation
 approach or a combination of approaches including comparable sales and the
 income approach. Adjustments are routinely made in the appraisal process by
 the appraisers to adjust for differences between the comparable sales and
 income data available. Such adjustments are typically significant and result
 in a Level 3 classification of the inputs for determining fair value.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Assets
 measured at fair value on a recurring basis are summarized below (in
 thousands of dollars).                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                               |  |         |     |         |   |         |  |                                    |   |  |   |       | 
|------------------------------ |  | ------- | --- | ------- | - | ------- |  | ---------------------------------- | - |  | - | ----- | 
|                               |  | Level 1 |     | Level 2 |   | Level 3 |  | TotalAssets
 measuredat fair value |  
|June 30, 2009                  |  |         |     |         |   |         |  |                                    |   |  |   |       | 
|Available
 for sale securities |  | $       | 475 |         | $ | 7,131   |  | $                                  |  |  | $ | 7,606 | 
|                               |  |         |     |         |   |         |  |                                    |   |  |   |       | 
|December 31, 2008              |  |         |     |         |   |         |  |                                    |   |  |   |       | 
|Available
 for sale securities |  | $       | 500 |         | $ | 3,063   |  | $                                  |  |  | $ | 3,563 | 

| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Assets measured
 at fair value on a non-recurring basis are summarized below. (in thousands of
 dollars).

|                  |  |         |   |         |   |         |  |                                    |     |  |   |     | 
|----------------- |  | ------- | - | ------- | - | ------- |  | ---------------------------------- | --- |  | - | --- | 
|                  |  | Level 1 |   | Level 2 |   | Level 3 |  | TotalAssets
 measuredat fair value |    
|June 30, 2009     |  |         |   |         |   |         |  |                                    |    
|Impaired
 loans   |  | $       |  |         | $ |        |  | $                                  | 460 |  | $ | 460 | 
|                  |  |         |   |         |   |         |  |                                    |     |  |   |     | 
|December 31, 2008 |  |         |   |         |   |         |  |                                    |     |  |   |     | 
|Impaired
 loans   |  | $       |  |         | $ |        |  | $                                  | 464 |  | $ | 464 | 

17

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Impaired
 loans, which are measured for impairment using the fair value of the
 collateral for collateral dependent loans, had a carrying value of $704,000
 and $710,000 at June 30, 2009 and December 31, 2008, respectively. These
 loans carried a valuation allowance of $244,000 and $246,000 at June 30, 2009
 and December 31, 2008, respectively, resulting in no additional provision for
 loan losses for such periods.

The following methods
and assumptions were used by Rome Savings in estimating fair values of
financial instruments:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and cash equivalents:
 For these short-term instruments that generally mature in ninety days or
 less, the carrying value approximates fair value.                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Securities: The fair values of securities available
 for sale are determined by obtaining quoted prices on nationally recognized
 securities exchanges (Level 1 inputs) or matrix pricing, which is a
 mathematical technique widely used to in the industry to value debt
 securities without relying exclusively on quoted prices for the specific
 securities but rather by relying on the securities relationship to other
 benchmark quoted securities (Level 2 inputs).                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Federal Home Loan Bank Stock:It
 is not practicable to determine the value of FHLB stock due to restrictions
 placed on its transferability.                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Loans: The fair
 values for all loans are estimated using discounted cash flow analyses, using
 interest rates currently being offered for loans with similar terms to
 borrowers of similar credit rating. The carrying amount of accrued interest
 receivable approximates its fair value. The Company has not considered market
 illiquidity in estimating the fair value of loans due to uncertain and
 inconsistent market pricing being experienced at measurement date.                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Deposits: The fair
 values of demand deposits (interest and non-interest checking) savings
 accounts and money market accounts are, by definition, equal to the amount
 payable on demand at the reporting date (i.e., their carrying amounts). Fair
 values for fixed-rate certificates of deposits, are estimated using a
 discounted cash flow calculation that applies interest rates currently being
 offered on these products to a schedule of aggregated expected monthly maturities
 on time deposits.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Borrowings:Fair
 values of long-term borrowings are estimated using a discounted cash flow
 approach, based on current market rates for similar borrowings. The fair
 value of accrued interest approximates carrying value.                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Off-balance-sheet instruments:
 Fair values for the Companys off-balance-sheet instruments (lines of credit
 and commitments to fund loans) are based on fees currently charged to enter
 into similar agreements, taking into account the remaining terms of the agreements
 and the counterparties credit standing. The fair value of these financial
 instruments is immaterial and has therefore been excluded from the table
 below.                                                                    

18

---



| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 estimated carrying values and fair values of the Companys financial
 instruments, not previously presented, for June 30, 2009 and December 31,
 2008 are as follows (in thousands):

|                              |  |                  |         |                   |   |                  |  |             |         |  |   |         | 
|----------------------------- |  | ---------------- | ------- | ----------------- | - | ---------------- |  | ----------- | ------- |  | - | ------- | 
|                              |  | June 30, 2009    |         | December 31, 2008 |  
|                              |  |                  |         |                   |  
|                              |  | Carrying
 amount |         | Fair
 value       |   | Carrying
 amount |  | Fair
 value |        
|                              |  |                  |         |                   |   |                  |  |             |        
|Financial assets:             |  |                  |         |                   |   |                  |  |             |         |  |   |         | 
|Cash and cash equivalents     |  | $                | 13,470  |                   | $ | 13,470           |  | $           | 9,579   |  | $ | 9,579   | 
|Securities available for sale |  |                  | 7,606   |                   |   | 7,606            |  |             | 3,563   |  |   | 3,563   | 
|Securities held to maturity   |  |                  | 1,438   |                   |   | 1,522            |  |             | 1,447   |  |   | 1,561   | 
|Loans, net                    |  |                  | 289,112 |                   |   | 291,834          |  |             | 298,453 |  |   | 302,424 | 
|Federal Home Loan Bank Stock  |  |                  | 3,323   |                   |   | n/a              |  |             | 3,578   |  |   | n/a     | 
|Accrued interest receivable   |  |                  | 1,029   |                   |   | 1,029            |  |             | 1,085   |  |   | 1,085   | 
|Financial liabilities:        |  |                  |         |                   |   |                  |  |             |         |  |   |         | 
|Non-interest bearing deposits |  |                  | 29,954  |                   |   | 29,954           |  |             | 28,373  |  |   | 28,373  | 
|Interest bearing deposits     |  |                  | 186,606 |                   |   | 187,099          |  |             | 177,559 |  |   | 178,007 | 
|Borrowings                    |  |                  | 55,007  |                   |   | 55,501           |  |             | 66,324  |  |   | 67,276  | 
|Accrued interest payable      |  |                  | 152     |                   |   | 152              |  |             | 121     |  |   | 121     | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | It is not
 practicable to determine the fair value of FHLB stock due to restrictions
 placed on its transferability. Fair value estimates are made at a specific
 point in time, based on relevant market information and information about the
 financial instrument. These estimates are subjective in nature and involve
 uncertainties and matters of significant judgment and, therefore, cannot be
 determined with precision. Changes in assumptions could significantly affect
 the estimates.

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 2. | Managements
 Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking
Statements

Statements
included in this discussion and in future filings by Rome Bancorp, Inc. (Rome
Bancorp or the Company) with the Securities and Exchange Commission, in Rome
Bancorp press releases, and in oral statements made with the approval of an
authorized executive officer, which are not historical or current facts, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, and are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. Rome
Bancorp wishes to caution readers not to place undue reliance on such
forward-looking statements, which speak only as of the date made. Rome Bancorp
disclaims any obligation to subsequently revise any forward-looking statements
to reflect events or circumstances after the date of such statements, or to reflect
the occurrence of anticipated or unanticipated events.

19

---



General

The
Company is a Delaware corporation regulated by the Office of Thrift Supervision
(OTS) as a savings and loan holding company, whose sole business is conducted
by its wholly-owned subsidiary, The Rome Savings Bank (the Bank) The Banks
principal business is accepting deposits from the general public and using
those deposits to make residential and commercial real estate loans, as well as
commercial and consumer loans to individuals and small businesses primarily in
Oneida County and also elsewhere in New York State. The Bank also invests in
long-and short-term marketable securities and other liquid investments. Since
its conversion to a federal charter on April 27, 2004, the Bank has been
regulated by the OTS as a federal savings bank.

Overview

The
Banks results of operations depend primarily on its net interest income, which
is the difference between the interest income it earns on its loans and
investments and the interest it pays on its deposits and other interest-bearing
liabilities. Net interest income is affected by the relative amounts of
interest-bearing assets and interest-bearing liabilities and the interest rates
earned or paid on these balances. The Banks operations are also affected by
non-interest income, such as service fees and gains and losses on sales of
securities, the provision for loan losses and non-interest expense such as
salaries and employee benefits, occupancy costs, and other general and
administrative expenses. Financial institutions in general, including the Bank,
are significantly affected by economic conditions, competition and the monetary
and fiscal policies of the federal government. Lending activities are
influenced by the demand for and supply of housing, competition among lenders,
interest rate conditions and funds availability. The Banks operations and
lending are principally concentrated in the Central New York area, therefore
its operations and earnings are influenced by the economics of the area in
which it operates. Deposit balances and cost of funds are influenced by
prevailing market rates on competing investments, customer preferences and
levels of personal income and savings in the Banks primary market area.

Net
income for the second quarter of 2009 decreased to $647,000, from the prior
years second quarter net income of $780,000. The significant factors and
trends impacting the second quarter of 2009, which are discussed in greater
depth below, were as follows:

| |   |                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net interest
 income before loan loss provision increased by $25,000 or 0.8% from the same
 quarter last year as a result of increases in the level of interest earning
 assets and interest bearing liabilities as well as decreases in both yields
 on average earning assets and the Companys cost of funds.
| |   |                                                                                                                                                                                                                                                                                                                 
| |  | The Company
 recorded a provision for loan losses of $200,000 in the current quarter
 versus no provision for loan losses in the second quarter of 2008.                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                 
| |  | Non-interest
 income increased by $58,000, or 10.1%, from the second quarter 2008 levels
 primarily due to an increase in gains on sales of mortgages.                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                 
| |  | Non-interest
 expense increased to $2.7 million in the quarter ended June 30, 2009 from
 $2.6 million for the same period of 2008.                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                 
| |  | Income tax
 expense for the second quarter of 2009 decreased to $305,000 compared to
 $424,000 in the second quarter of 2008.                                                                                                                                                                                   

20

---



Critical Accounting Policies

The
preparation of consolidated financial statements requires management to make
estimates and assumptions. Changes in these estimates and assumptions affect
the reported amounts of certain assets, liabilities, revenue and expenses.
Different amounts could be reported under different conditions, or if different
assumptions were used in the application of these accounting policies.

It
is managements opinion that accounting estimates covering certain aspects of
the business have more significance than others due to the relative importance
of those areas to overall performance, or the level of subjectivity required in
making these estimates. Management of the Company considers the accounting
policy relating to the allowance for loan losses to be a critical accounting
policy given the uncertainty in evaluating the level of the allowance required
for probable credit losses and the material effect that such judgments can have
on the results of operations. Managements quarterly evaluation of the adequacy
of the allowance considers the Companys historical loan loss experience,
review of specific loans, current economic conditions and such other factors
considered appropriate to estimate losses. Management uses presently available
information to estimate probable losses on loans; however, future additions to
the allowance may be necessary based on changes in estimates, assumptions or
economic conditions. Significant factors that could give rise to changes in
these estimates include, but are not limited to, changes in economic conditions
in the local area, concentrations of risk and declines of local property
values.

Management
also considers the accounting policy relating to the impairment of long lived
assets to be a critical accounting policy due to the subjectivity and judgment
involved and the material effect an impairment loss could have on the results
of operations. A decline in the fair value of a long lived asset below cost
that is deemed to be other than temporary is charged to earnings resulting in
the establishment of a new cost basis for the asset. Management continually
reviews the current value of its long lived assets for evidence of other than
temporary impairment.

The
Companys critical policies and their application are reviewed periodically by
the Audit Committee and the Board of Directors. All accounting policies are
important, and as such, the Company encourages the reader to review each of the
policies included in Note 2 to the consolidated financial statements reported
on the Companys 2008 Annual Report on Form 10-K to obtain a better understanding
of how its financial performance is reported.

Analysis of Net
Interest Income

Average
Balances, Interest and Average Yields - The following table sets forth
certain information relating to the Companys average balance sheets and reflects
the average yield on interest-earnings assets and average cost of
interest-bearing liabilities, interest earned and interest paid for the periods
indicated. Such yields and costs are derived by dividing income or expense by
the average balance of interest-earning assets or interest-bearing liabilities,
respectively, for the periods presented. Average balances are derived from
daily balances over the periods indicated. The average balances for loans are
net of allowance for loan losses, but include non-accrual loans. Interest
income on securities includes a tax equivalent adjustment for bank qualified
municipals.

21

---



|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|----------------------------------------------------------------- |  | --------------------------------------------- | ------- | ----------------------------------------- | - | --------------------- | - | ---------------- | ---- | -------------------------- | - | --------------------- |  | - | ----- | - |  | ---- | -
|                                                                  |  | Average Balances, Interest and Average Yields |        
|                                                                  |  |                                               |        
|                                                                  |  | For the three months ended June 30, 2009      |         | For the three months ended June 30,
 2008 |  
|                                                                  |  |                                               |         |                                           |  
|                                                                  |  | Average
 Balance                              |         | Interest
 Income/
 Expense                |   | Average
 Yield/
 Cost |   | Average
 Balance |      | Interest
 Income/
 Expense |   | Average
 Yield/
 Cost | 
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       | 
|                                                                  |  | (Dollars in thousands)                        |        
|                                                                  |  |                                               |        
|Assets:                                                           |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Interest-earning assets:                                          |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Loans                                                             |  | $                                             | 289,805 |                                           | $ | 4,195                 |   |                  | 5.81 | %                          | $ | 284,819               |  | $ | 4,314 |   |  | 6.09 | %
|Securities (1)                                                    |  |                                               | 10,383  |                                           |   | 130                   |   |                  | 5.02 |                            |   | 6,638                 |  |   | 95    |   |  | 5.77 |  
|Federal funds sold & other interest bearing
 deposits             |  |                                               | 6,508   |                                           |   | 3                     |   |                  | 0.18 |                            |   | 1,202                 |  |   | 6     |   |  | 2.04 |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-earnings assets                                    |  |                                               | 306,696 |                                           |   | 4,328                 |   |                  | 5.66 |                            |   | 292,659               |  |   | 4,415 |   |  | 6.07 |  
|Noninterest-earning assets                                        |  |                                               | 28,110  |                                           |   |                       |   |                  |      |                            |   | 29,809                |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total assets                                                      |  | $                                             | 334,806 |                                           |   |                       |   |                  |      |                            | $ | 322,468               |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Liabilities and Shareholders Equity:                             |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Interest-bearing liabilities:                                     |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Savings accounts                                                  |  | $                                             | 83,405  |                                           | $ | 83                    |   |                  | 0.40 |                            | $ | 82,087                |  | $ | 113   |   |  | 0.55 |  
|Time deposits                                                     |  |                                               | 72,713  |                                           |   | 488                   |   |                  | 2.69 |                            |   | 72,721                |  |   | 677   |   |  | 3.74 |  
|Money market accounts                                             |  |                                               | 15,309  |                                           |   | 51                    |   |                  | 1.34 |                            |   | 9,378                 |  |   | 46    |   |  | 1.97 |  
|Other interest bearing deposits                                   |  |                                               | 13,876  |                                           |   | 13                    |   |                  | 0.38 |                            |   | 12,944                |  |   | 16    |   |  | 0.50 |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-bearing deposits                                   |  |                                               | 185,303 |                                           |   | 635                   |   |                  | 1.37 |                            |   | 177,130               |  |   | 852   |   |  | 1.93 |  
|Borrowings                                                        |  |                                               | 54,677  |                                           |   | 459                   |   |                  | 3.37 |                            |   | 45,255                |  |   | 351   |   |  | 3.12 |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-bearing liabilities                                |  |                                               | 239,980 |                                           |   | 1,094                 |   |                  | 1.83 |                            |   | 222,385               |  |   | 1,203 |   |  | 2.17 |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Noninterest-bearing deposits                                      |  |                                               | 30,160  |                                           |   |                       |   |                  |      |                            |   | 29,451                |  |   |       |   |  |      |  
|Other liabilities                                                 |  |                                               | 6,106   |                                           |   |                       |   |                  |      |                            |   | 5,465                 |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total liabilities                                                 |  |                                               | 276,246 |                                           |   |                       |   |                  |      |                            |   | 257,301               |  |   |       |   |  |      |  
|Shareholders equity                                              |  |                                               | 58,560  |                                           |   |                       |   |                  |      |                            |   | 65,167                |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total liabilities and shareholders
equity                        |  | $                                             | 334,806 |                                           |   |                       |   |                  |      |                            | $ | 322,468               |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest income                                               |  |                                               |         |                                           |   | 3,234                 |   |                  |      |                            |   |                       |  |   | 3,212 |   |  |      |  
|Tax equivalent adjustment on securities                           |  |                                               |         |                                           |   | (4                    | ) |                  |      |                            |   |                       |  |   | (7    | ) |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest income per consolidated financial
 statements        |  |                                               |         |                                           | $ | 3,230                 |   |                  |      |                            |   |                       |  | $ | 3,205 |   |  |      |  
|                                                                  |  |                                               |         |                                           |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest rate spread                                          |  |                                               |         |                                           |   |                       |   |                  | 3.83 | %                          |   |                       |  |   |       |   |  | 3.90 | %
|Net interest margin                                               |  |                                               |         |                                           |   |                       |   |                  | 4.23 | %                          |   |                       |  |   |       |   |  | 4.42 | %
|Ratio of interest-earning assets to
 interest-bearing liabilities |  |                                               |         |                                           |   |                       |   |                  | 1.28 | x                          |   |                       |  |   |       |   |  | 1.32 | x

(1)
Includes tax equivalent adjustment for the Companys
tax-exempt municipal securities.

22

---



|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|----------------------------------------------------------------- |  | --------------------------------------------- | ------- | --------------------------------------- | - | --------------------- | - | ---------------- | ---- | -------------------------- | - | --------------------- |  | - | ----- | - |  | ---- | -
|                                                                  |  | Average Balances, Interest and Average Yields |        
|                                                                  |  |                                               |        
|                                                                  |  | For the six months ended June 30, 2009        |         | For the six months ended June 30,
 2008 |  
|                                                                  |  |                                               |         |                                         |  
|                                                                  |  | Average
 Balance                              |         | Interest
 Income/
 Expense              |   | Average
 Yield/
 Cost |   | Average
 Balance |      | Interest
 Income/
 Expense |   | Average
 Yield/
 Cost | 
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       | 
|                                                                  |  | (Dollars in thousands)                        |        
|                                                                  |  |                                               |        
|Assets:                                                           |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Interest-earning assets:                                          |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Loans                                                             |  | $                                             | 292,922 |                                         | $ | 8,477                 |   |                  | 5.84 | %                          | $ | 283,157               |  | $ | 8,733 |   |  | 6.20 | %
|Securities (1)                                                    |  |                                               | 9,323   |                                         |   | 213                   |   |                  | 4.60 |                            |   | 6,689                 |  |   | 185   |   |  | 5.57 |  
|Federal funds sold & other interest bearing
 deposits             |  |                                               | 4,477   |                                         |   | 5                     |   |                  | 0.21 |                            |   | 1,092                 |  |   | 15    |   |  | 2.77 |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-earnings assets                                    |  |                                               | 306,722 |                                         |   | 8,695                 |   |                  | 5.72 |                            |   | 290,938               |  |   | 8,933 |   |  | 6.17 |  
|Noninterest-earning assets                                        |  |                                               | 27,737  |                                         |   |                       |   |                  |      |                            |   | 29,599                |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total assets                                                      |  | $                                             | 334,459 |                                         |   |                       |   |                  |      |                            | $ | 320,537               |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Liabilities and Shareholders Equity:                             |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Interest-bearing liabilities:                                     |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Savings accounts                                                  |  | $                                             | 81,765  |                                         | $ | 163                   |   |                  | 0.40 |                            | $ | 81,404                |  | $ | 223   |   |  | 0.55 |  
|Time deposits                                                     |  |                                               | 72,536  |                                         |   | 1,024                 |   |                  | 2.85 |                            |   | 72,739                |  |   | 1,412 |   |  | 3.91 |  
|Money market accounts                                             |  |                                               | 14,390  |                                         |   | 100                   |   |                  | 1.39 |                            |   | 8,656                 |  |   | 85    |   |  | 1.98 |  
|Other interest bearing deposits                                   |  |                                               | 13,628  |                                         |   | 26                    |   |                  | 0.39 |                            |   | 12,759                |  |   | 33    |   |  | 0.52 |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-bearing deposits                                   |  |                                               | 182,319 |                                         |   | 1,313                 |   |                  | 1.45 |                            |   | 175,558               |  |   | 1,753 |   |  | 2.01 |  
|Borrowings                                                        |  |                                               | 56,952  |                                         |   | 894                   |   |                  | 3.16 |                            |   | 43,647                |  |   | 721   |   |  | 3.32 |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total interest-bearing liabilities                                |  |                                               | 239,271 |                                         |   | 2,207                 |   |                  | 1.86 |                            |   | 219,205               |  |   | 2,474 |   |  | 2.27 |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Noninterest-bearing deposits                                      |  |                                               | 29,783  |                                         |   |                       |   |                  |      |                            |   | 28,712                |  |   |       |   |  |      |  
|Other liabilities                                                 |  |                                               | 6,517   |                                         |   |                       |   |                  |      |                            |   | 5,981                 |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total liabilities                                                 |  |                                               | 275,271 |                                         |   |                       |   |                  |      |                            |   | 253,898               |  |   |       |   |  |      |  
|Shareholders equity                                              |  |                                               | 59,188  |                                         |   |                       |   |                  |      |                            |   | 66,639                |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Total liabilities and shareholders equity                        |  | $                                             | 334,459 |                                         |   |                       |   |                  |      |                            | $ | 320,537               |  |   |       |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest income                                               |  |                                               |         |                                         |   | 6,488                 |   |                  |      |                            |   |                       |  |   | 6,459 |   |  |      |  
|Tax equivalent adjustment on securities                           |  |                                               |         |                                         |   | (8                    | ) |                  |      |                            |   |                       |  |   | (16   | ) |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest income per consolidated financial
 statements        |  |                                               |         |                                         | $ | 6,480                 |   |                  |      |                            |   |                       |  | $ | 6,443 |   |  |      |  
|                                                                  |  |                                               |         |                                         |   |                       |   |                  |      |                            |   |                       |  |   |       |   |  |      |  
|Net interest rate spread                                          |  |                                               |         |                                         |   |                       |   |                  | 3.86 | %                          |   |                       |  |   |       |   |  | 3.90 | %
|Net interest margin                                               |  |                                               |         |                                         |   |                       |   |                  | 4.27 | %                          |   |                       |  |   |       |   |  | 4.46 | %
|Ratio of interest-earning assets to
 interest-bearing liabilities |  |                                               |         |                                         |   |                       |   |                  | 1.28 | x                          |   |                       |  |   |       |   |  | 1.33 | x

(1)
Includes tax equivalent adjustment for the Companys
tax-exempt municipal securities.

23

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Rate
Volume Analysis  The following table analyzes the dollar amount of changes
in interest income and interest expense for major components of
interest-earning assets and interest-bearing liabilities. It shows the amount
of the change in interest income or expense caused by either changes in
outstanding balances (volume) or changes in interest rates. The effect of a
change in volume is measured by applying the average rate during the first
period to the volume change between the two periods. The effect of changes in
rate is measured by applying the change in rate between the two periods to the
average volume during the first period. Changes attributable to both rate and
volume, which cannot be segregated, have been allocated proportionately to the
absolute value of the change due to volume and the change due to rate.

|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|---------------------------------- |  | ------------------------------------------------------------------------------ | ---- | -------------------------------------------------------------------------- | - | --- |  | ---- | ---- | ------ | - | ---- | - | - | --- | - | - | ---- | -
|                                   |  | Three months ended June 30, 2009
 Compared to Three months ended June 30, 2008 |      | Six months ended June 30, 2009
 Compared to Six months ended June 30, 2008 |  
|                                   |  |                                                                                |      |                                                                            |  
|                                   |  | Increases (decreases) due to                                                   |     
|                                   |  | Rate                                                                           |      | Volume                                                                     |   | Net |  | Rate |      | Volume |   | Net  |  
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |  
|                                   |  | (in thousands)                                                                 |     
|Assets:                            |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Interest-earning assets:           |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Loans                              |  | $                                                                              | (195 | )                                                                          | $ | 76  |  | $    | (119 | )      | $ | (551 | ) | $ | 295 |   | $ | (256 | )
|Securities (1)                     |  |                                                                                | (11  | )                                                                          |   | 46  |  |      | 35   |        |   | (49  | ) |   | 77  |   |   | 28   |  
|Federal funds sold & other         |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Interest bearing
 deposits         |  |                                                                                | (30  | )                                                                          |   | 27  |  |      | (3   | )      |   | (57  | ) |   | 47  |   |   | (10  | )
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Total interest-earnings assets     |  |                                                                                | (236 | )                                                                          |   | 149 |  |      | (87  | )      |   | (657 | ) |   | 419 |   |   | (238 | )
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Interest-bearing liabilities:      |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Savings accounts                   |  |                                                                                | (32  | )                                                                          |   | 2   |  |      | (30  | )      |   | (61  | ) |   | 1   |   |   | (60  | )
|Time deposits                      |  |                                                                                | (189 | )                                                                          |   |    |  |      | (189 | )      |   | (384 | ) |   | (4  | ) |   | (388 | )
|Money market accounts              |  |                                                                                | (24  | )                                                                          |   | 29  |  |      | 5    |        |   | (42  | ) |   | 57  |   |   | 15   |  
|Other interest bearing deposits    |  |                                                                                | (4   | )                                                                          |   | 1   |  |      | (3   | )      |   | (9   | ) |   | 2   |   |   | (7   | )
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Total interest-bearing deposits    |  |                                                                                | (249 | )                                                                          |   | 32  |  |      | (217 | )      |   | (496 | ) |   | 56  |   |   | (440 | )
|Borrowings                         |  |                                                                                | 36   |                                                                            |   | 72  |  |      | 108  |        |   | (47  | ) |   | 220 |   |   | 173  |  
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Total interest-bearing liabilities |  |                                                                                | (213 | )                                                                          |   | 104 |  |      | (109 | )      |   | (543 | ) |   | 276 |   |   | (267 | )
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  
|Net change (1)                     |  | $                                                                              | (23  | )                                                                          | $ | 45  |  | $    | 22   |        | $ | (114 | ) | $ | 143 |   | $ | 29   |  
|                                   |  |                                                                                |      |                                                                            |   |     |  |      |      |        |   |      |   |   |     |   |   |      |  

(1)
Includes tax equivalent adjustment for the Companys
tax-exempt municipal securities.

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

Total
assets at June 30, 2009 decreased slightly to $336.7 million from $337.9
million at December 31, 2008. The decrease is attributable to the Companys loan
portfolio, which decreased by $9.4 million, or 3.1%, from $298.5 million at
December 31, 2008 to $289.1 million at June 30, 2009. As a result of current
economic uncertainty, demand for loans declined from normal levels during the
first quarter of 2009. During the first six months of 2009, the Company
originated approximately $25.5 million of loans, compared to approximately
$32.1 million of loans originated in the same period of 2008. The majority of
the loan originations for this year to date have been mortgage loans. In
addition, the Company has been selling a larger percentage of its residential
loan originations into the secondary market. Loan sales through six months of
2009 were $5.1 million, compared to $846,000 for the first half of 2008. Partially
offsetting the decrease in the loan portfolio was an increase in the balance of
available for sale securities resulting from investment purchases of $4.3
million during the first half of 2009.

The
continued uncertainty in the United States investment markets has encouraged
investors to exit those markets in favor of insured deposit accounts. Total
deposits increased to $216.6 million at June 30, 2009 from $205.9 million at
December 31, 2008. During the first six months of 2009, savings deposits
increased by $4.9 million, or 6.2%, and money market balances increased by $3.5
million, or 29.0%. Time deposits increased by $406,000 or 0.6% to $72.5 million
at June 30, 2009 from $72.1 million at year end 2008. Balances of non-interest
bearing deposits increased by $1.6 million, or 5.6%, while other interest
bearing deposits increased $231,000, or 1.6%, throughout the first half of
2009.

24

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As
a result of decreased loan originations and increases in deposit balances, the
Company was able to pay down debt during the first half of 2009. Borrowings
from the Federal Home Loan Bank of New York (FHLB) decreased from $66.3
million at December 31, 2008 to $55.0 million at the end of the current
quarter.

Comparison of
Operating Results for the Three-Month Periods Ended June 30, 2009 and 2008

General

During
the three months ended June 30, 2009, the Company recorded net income of $647,000,
compared to $780,000 for the second quarter of 2008. The decrease in net income
is comprised of a slight increase in the net interest income before provision
for loan losses of $25,000, a $58,000 increase in non-interest income and a
decrease in income tax expense of $119,000, offset by an increase in the
provision for loan losses of $200,000 and non-interest expense of $135,000.

Diluted
earnings per share decreased to $0.10 per diluted share for the quarter ended
June 30, 2009 from $0.11 per diluted share in the quarter ended June 30, 2008.
Average diluted shares decreased to 6,582,254 for the second quarter of 2009
from 6,920,374 in the same period of 2008 due to the Companys stock
repurchases over the past four quarters.

Net Interest Income

Net
interest income before loan loss provision for the quarter ended June 30, 2009
increased by $25,000 or 0.8%, compared to the same quarter of 2008. This
increase is attributable to a rate driven reduction in interest expense on
increased deposit and borrowing levels partially offset by decreases in yields
on a larger portfolio of average earning assets.

Interest Income

Interest
income decreased to $4.3 million for the quarter ended June 30, 2009 from $4.4
million for the same quarter of 2008. Average loan balances for the second
quarter of 2009 were $289.8 million, an increase of $5.0 million over the
average outstanding loans for the second quarter of 2008. The yield on the
Companys loan portfolio for the quarter ended June 30, 2009 decreased to 5.81%
from a yield of 6.09% for the same period last year, reflecting the effect of
decreases in the prime rate over the past year. Interest income on securities
increased by $38,000 from $88,000 for the quarter ended June 30, 2008 to $126,000
for the quarter ended June 30, 2009. The average balance of securities
increased by $3.7 million, or 56.4%, from the second quarter of 2008 to $10.4
million for the current quarter while the yield on the Companys securities
decreased from 5.77% to 5.02%. Finally, interest income on federal funds sold
and other interest bearing deposits decreased by $3,000 to $3,000 for the
quarter ended June 30, 2009 from the same quarter in 2008 due primarily to
lower interest rates paid on those funds.

Interest Expense

Interest
expense decreased to $1.1 million for the quarter ended June 30, 2009 from $1.2
million for the same quarter of 2008. Interest expense on deposits decreased to
$635,000 for the quarter ended June 30, 2009 from $852,000 for the quarter
ended June 30, 2008, due to lower rates paid on deposits consistent with market
trends over the past year. This was partially offset by an increase in the
average balance of interest-bearing deposits to $185.3 million for the quarter
ended June 30, 2009, from $177.1 million for the same period of 2008. Interest
expense on borrowed funds increased to $459,000 for the quarter ended June 30,
2009 from $351,000 for the comparative quarter of 2008 due to an increase in
the average balance of borrowings to $54.7 million in the current quarter
compared to $45.3 million in the second quarter of 2008. The rate on the
Companys borrowings increased to 3.37% during the second quarter of 2009 from
3.12% in the same quarter of 2008 as the Company restructured its short-term
debt into longer maturity advances.

25

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Provision for Loan
Losses

The
Company recorded a $200,000 provision for loan losses in the second quarter of
2009, compared to no loan loss provision in the same period of 2008. This
provision was deemed necessary due to managements judgment that one of its
commercial creditors may be experiencing financial difficulties, despite that
borrowers current ability to service its loans. During the current quarter,
net loan charge-offs were $13,000. Asset quality remained favorable at June 30,
2009 with non-performing loans as a percent of loans of 0.49% and the allowance
for loan losses as a percent of non-performing loans of 146.2% at June 30,
2009, compared to 0.42% and 152.1%, respectively, at December 31, 2008. The
allowance for loan losses as a percentage of loans increased to 0.72% at June
30, 2009 compared to 0.64% at December 31, 2008.

In
determining the appropriate provision for loan losses, management considers the
level of and trend in non-performing loans, the level of and trend in net loan
charge-offs, the dollar amount and mix of the loan portfolio, as well as
general economic conditions and real estate trends in the Companys market
area, which can impact the inherent risk of loss in the Companys loan
portfolio.

Non-Interest Income
and Non-Interest Expense

Non-interest
income increased $58,000 to $635,000 in the second quarter of 2009 from
$577,000 in the same period of 2008. The increase is directly attributable to
an increase in the gains on sales of residential mortgages to the secondary
market as a greater volume of loans were sold in 2009.

Non-interest
expense increased to $2.7 million in the second quarter of 2009 from $2.6
million in the same quarter of 2008. Within this category, the Company
experienced an increase in its deposit insurance and regulatory assessments of
$64,000, increasing to $93,000 for the second quarter of 2009 from $29,000 for
the same period of 2008. This increase was the result in the industry-wide
increase in Federal Deposit Insurance Corporation (FDIC) regular deposit
insurance rates and as well as the announcement by the FDIC of a special
assessment to replenish the insurance fund. The Company also recorded higher
salary and employee benefit costs in the second quarter of 2009, partially
attributable to increased pension expense.

Income
tax expense for the second quarter of 2009 decreased to $305,000 from $424,000
in the same period of 2008, due to the decrease in pre-tax income, and an
increase in 2009 of positive permanent tax benefits.

Comparison of
Operating Results for the Six-Month Periods Ended June 30, 2009 and 2008

General

During
the six months ended June 30, 2008, the Company recorded net income of $1.4
million compared to $1.5 million for the first half of 2008. The decrease
resulted from an increase in the provision for loan losses of $200,000, and
non-interest expense of $131,000, partially offset by a $37,000 increase in net
interest income before the provision for loan losses, a $76,000 increase in
non-interest income and a $92,000 reduction in income tax expense.

Diluted
earnings per share were $0.20 per diluted share for the six months ended June
30, 2009 in comparison to $0.21 per diluted share for the same period of 2008.
The year-to-date 2009 average outstanding diluted shares decreased to 6,618,026
from 7,048,000 due to ongoing treasury stock purchases.

Net Interest Income

Net
interest income before loan loss provision for the six months ended June 30,
2009 increased by $37,000 or 0.6%, as compared to the same period of 2008. This
increase is attributable to decreases in the cost

26

---



of funds and
an increase in average earning assets, partially offset by a reduction in the yields
earned on assets as well as an increase in the volume of interest bearing
deposits and debt.

Interest Income

Interest
income decreased to $8.7 million for the six month period ended June 30, 2009
from $8.9 million for the first half of 2008. Average earning assets for the
first half of 2009 increased to $306.7 million from $290.9 million in the same
period of 2008. The yield on earning assets decreased to 5.72% for the six
months ended June 30, 2009, from 6.17% for the first half of 2008. Average loan
balances for the first six months of 2009 were $292.9 million, an increase of
$9.7 million over the average outstanding loans for the same period of 2008.
The yield on the Companys loan portfolio for the six months ended June 30,
2009 was 5.84% compared to a yield of 6.20% for the same period last year,
reflecting decreases in underlying interest rates. Interest income on
securities increased $36,000 from $169,000 for the six months ended June 30,
2008 to $205,000 for the six months ended June 30, 2009 as the average balance
of the investment portfolio increased to $9.3 million for the first half of
2009 from $6.7 million during the same half of 2008. Finally, interest income
on federal funds sold and other interest bearing deposits decreased by $10,000
to $5,000 for the first half of 2009 from the same period in 2008 due to
decreases in market interest rates.

Interest Expense

Interest
expense decreased to $2.2 million for the six months ended June 30, 2009 from
$2.5 million for the six months ended June 30, 2008. Interest expense on
deposits decreased to $1.3 million for the six months ended June 30, 2009 from
$1.8 million for the six months ended June 30, 2008 as a result of an increase
in the average balance of interest bearing deposits to $182.3 million this year
from $175.6 million during the first half of 2008 and a decrease in the cost of
these deposits from 1.45% to 2.01%. Interest expense on borrowed funds
increased to $894,000 for the six months ended June 30, 2009 from $721,000 for
the comparative period of 2008 primarily due to an increase in the average
balance of borrowings to $57.0 million in the current half as compared to $43.6
million in the six months ended 2008. The increase in outstanding debt was
partially offset by a decrease in the rate paid on these borrowings from 3.32%
for the six months ended June 30, 2007 to 3.16% for the same period this year.
The increased borrowings were used to fund the aforementioned investments in
loans, securities and purchases of treasury stock that have been made over the
past year.

Provision for Loan
Losses

The
Company recorded a $200,000 provision for loan losses in the first half of 2009
versus none in the first six months of 2008. The 2009 provision was deemed
necessary due to managements judgment that one of its commercial creditors may
be experiencing financial difficulties, despite that borrowers current ability
to service its loans. The Companys loss experience for the first six months of
2009 remains favorable with year to date loan charge-offs of $31,000, compared
to net loan recoveries of $8,000 for the same period of 2008.

In
determining the appropriate provision for loan losses, management considers the
level of and trend in non-performing loans, the level of and trend in net loan
charge-offs, the dollar amount and mix of the loan portfolio, as well as
general economic conditions and real estate trends in the Companys market
area, which can impact the inherent risk of loss in the Companys loan portfolio.

Non-Interest Income
and Non-Interest Expense

Non-interest
income increased to $1.2 million for the first half of 2009 from $1.1 million
for the first six months of both 2008. The increase is attributable to gains on
sales of residential mortgages and an increase in fee revenue.

Non-interest
expense increased to $5.5 million in the first six months of 2009 compared to
$5.3 million in the same period of 2008, principally due to an increase in
deposit insurance and regulatory assessments of

27

---



$221,000,
increasing to $279,000 for the first half of 2009 from $59,000 for the same
period of 2008. This increase was the result in the industry-wide increase in
Federal Deposit Insurance Corporation (FDIC) regular deposit insurance rates
and as well as the announcement by the FDIC of a special assessment to
replenish the insurance fund.

Income
tax expense for the first half of 2009 decreased to $637,000 from $729,000 in
the same period of 2008, due to the decrease in pre-tax income and an increase
in favorable permanent tax benefits.

Liquidity and Capital
Resources

The
Companys primary sources of funds consist of deposits, scheduled amortization
and prepayments of loans and mortgage-backed securities, maturities of
investments, interest-bearing deposits at other financial institutions and
funds provided from operations. The Bank also has a written agreement with the
FHLB that allows it to borrow up to $58.9 million. At June 30, 2009, the Bank
had no outstanding borrowings against this line of credit, and outstanding
advances and amortizing notes totaling $55.0 million. During the first half of
2009 the Company decreased its overall FHLB borrowings by $11.3 million.

Loan
repayments and maturing investment securities are a relatively predictable
source of funds. However, deposit flows, calls of investment securities, and
prepayments of loans and mortgage-backed securities are strongly influenced by
interest rates, general and local economic conditions, and competition in the
marketplace. These factors reduce the predictability of the timing of these
sources of funds.

The
Companys primary investing activities include the origination of loans, and to
a lesser extent, the purchase of investment securities. For the six months
ended June 30, 2009, the Company originated loans of approximately $25.5
million, compared to $32.1 of loans originated in the first half of 2008. The
Company has been selling a larger percentage of its residential loan
originations into the secondary market. Loan sales through six months of 2009
were $5.1 million, compared to $846,000 for the first half of 2008.

At
June 30, 2009, the Company had loan commitments to borrowers of approximately
$4.9 million, and available letters and lines of credit of approximately $18.5
million.

Time
deposit accounts scheduled to mature within one year were $52.1 million at June
30, 2009. Based on the Companys deposit retention experience and current
pricing strategy, the Company anticipates that a significant portion of these
time deposits will remain with the Company. The Company is committed to
maintaining a strong liquidity position; therefore, the Company monitors its
liquidity position on a daily basis. The Company anticipates that the Company
will have sufficient funds to meet the Companys current funding commitments.
The marginal cost of new funding however, whether from deposits or borrowings
from the FHLB, will be carefully considered as the Company monitors its
liquidity needs. Therefore, in order to minimize its cost of funds, the Company
may consider additional borrowings from the FHLB in the future.

At
June 30, 2009, the Bank exceeded each of the applicable regulatory capital
requirements. The Banks leverage (Tier 1) capital at June 30, 2009 was $52.0
million, or 15.33% of adjusted assets. In order to be classified as
well-capitalized by the OTS, the Bank is required to have leverage (Tier 1)
capital of $17.0 million, or 5.0% of adjusted assets. To be classified as a
well-capitalized bank by the OTS, the Bank must also have a total risk-based
capital ratio of 10.0%. At June 30, 2009, the Bank had a total risk-based
capital ratio of 22.0%.

The
Company paid cash dividends of $0.17 per share during the six-month period
ended June 30, 2009 totaling $1.1 million.

28

---



During
the first quarter of 2009, the Companys Board of Directors authorized the
repurchase of 446,000 shares of the Companys outstanding common stock. Through
June 30, 2009, $1.4 million was expended to repurchase 181,588 shares.

The
Company does not anticipate any material capital expenditures, nor does it have
any balloon or other payments due on any long-term obligations or any
off-balance sheet items other than the commitments and unused lines of credit
noted above.

Off-Balance Sheet
Arrangements

The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Companys financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.

Item
3. Quantitative and Qualitative Disclosures about Market Risk

There
has been no material change in the Companys interest rate risk profile since
December 31, 2008. For a more complete discussion of the Companys asset and
liability management policies, see Managements Discussion and Analysis of
Financial Condition and Results of Operations in the Companys 2008 Form 10-K.

Item
4. Controls and Procedures

Management,
including the Companys President and Chief Executive Officer and the Chief
Financial Officer, has evaluated the effectiveness of the Companys disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by this report. Based upon that
evaluation, the President and Chief Executive Officer and the Chief
Financial Officer concluded that the disclosure controls and procedures were
effective to ensure that information required to be disclosed in the reports
the Company files and submits under the Exchange Act is (i) recorded,
processed, summarized and reported as and when required and (ii) accumulated
and communicated to the Companys management, including the Companys President
and Chief Executive Officer and the Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.

There
have been no significant changes in the Companys internal controls over
financial reporting identified in connection with the evaluation that occurred
during the Companys last fiscal quarter that has materially affected, or that
is reasonably likely to materially affect, the Companys internal control over financial
reporting.

Part
II - OTHER INFORMATION

|         |                  
|-------- | -----------------
|Item 1.  | Legal Proceedings
|         |                  
|         | None.            
|         |                  
|Item 1A. | Risk Factors     

The
potential adoption of significant aspects of the Obama Administration Reform
Plan may have a material effect on our operations.In
June 2009, the Obama Administration released a white paper setting forth its
comprehensive plan for financial regulatory reform, or the Reform Plan. The
Reform Plan contains a number of recommendations and proposals that are
intended to address perceived weaknesses in the U.S. financial regulatory
system and prevent future economic and financial crises. Most significantly for
us, the Reform Plan contains proposals affecting the chartering and regulation
of savings banks, savings and loan associations (such as the Bank) and savings
and loan holding companies (such as the Company). Savings and

29

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loan
associations and savings banks are collectively referred to below as thrifts.
We anticipate the following key points of the Reform Plan, if enacted, would
have a material impact on our operations:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Reform
 Plan calls for the elimination of the federal thrift charter, subject to
 undefined reasonable transition arrangements, after which all federal
 thrifts that wish to remain federally chartered would become, and would be
 supervised and regulated as, national banks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | A new
 National Bank Supervisor, or NBS, would be created, which would regulate and
 supervise all federally chartered depository institutions. The NBS would
 replace the OTS (our primary federal regulator) and would inherit the OTSs
 responsibilities and authorities to require reports, conduct examinations,
 impose and enforce prudential requirements and conduct overall supervision.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | In
 connection with the elimination of the federal thrift charter, savings and
 loan holding companies would be required to become bank holding companies;
 therefore the Company would be subject to consolidated supervision and
 regulation at the federal level by the FRB. Further, the Company would be
 subject to the provisions of the Bank Holding Company Act, including
 consolidated leverage and risk-based capital requirements and activity
 restrictions. Former savings and loan holding companies would be given five
 years to conform to the activity restrictions of the Bank Holding Company
 Act.                                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | A new
 consumer financial protection agency, or the CFPA, would be created to be the
 single primary federal consumer protection supervisor and would have
 supervisory, examination, and enforcement authority over all entities subject
 to its regulations, including regulations implementing consumer protection,
 fair lending, and community reinvestment laws, as well as entities subject to
 selected statutes for which existing rule-writing authority does not exist or
 is limited (for example, the Fair Housing Act to the extent it covers
 mortgages, the Credit Repair Organization Act, the Fair Debt Collection
 Practices Act, and provisions of the Fair Credit Reporting Act). The CFPA
 would assume from the federal banking regulators all responsibilities for
 supervising banking institutions for compliance with consumer regulations,
 whether federally-chartered or state-chartered and supervised by a federal
 banking regulator.

Legislation
has been introduced in Congress to implement the Reform Plan. This legislation
is in an early stage of consideration in Congress and at this point in time it
cannot be determined which provisions of the Reform Plan will result in final
legislation. If the more significant provisions of the Reform Plan become law,
our operations would be significantly affected.

The Reform Plan may lead to the
erosion of federal preemption of state law which could significantly affect our
operations.In connection with the Reform Plans proposal to
establish the CFPA, the Reform Plan states that the CFPAs rules, particularly
as they relate to residential lending, would serve as a floor, not a ceiling
and that states should have the ability to adopt and enforce stricter consumer
compliance laws. The Reform Plan proposes that states be given concurrent
authority to enforce regulations of the CFPA and that the CFPA should
coordinate enforcement efforts with the states. The Reform Plan does not
specify how preemption of state laws would be handled following the elimination
of the federal thrift charter or how long federal thrifts would have to comply
with any state laws that are no longer preempted. Further, a recent decision by
the United States Supreme Court (the Court) has reinforced the erosion of
federal preemption. On June 29, 2009, in the case Cuomo v. The Clearing
House Association, LLC, the Court addressed national bank preemption and
held that states have the power to enforce state fair lending laws against
national banks. The Cuomo decision indicates a movement towards a system in
which federal banking agencies have authority over purely visitorial issues
(i.e., chartering, and safety and soundness supervision) and the CFPA and state
regulators have authority to regulate federal and state consumer protection
laws. While it is unclear how the balance between federal and state consumer
protection regulation will be struck, it is possible we will face more
burdensome regulation not only from newly empowered states, but also from
federal regulators.

30

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 FDICs recently adopted restoration plan and the related increased assessment
 rate schedule may have a material effect on our results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The FDIC
 adopted a restoration plan that raised the deposit insurance assessment rate
 schedule, uniformly across all four risk categories into which the FDIC
 assigns insured institutions, by seven basis points (annualized) of insured
 deposits beginning on January 1, 2009. Additionally, beginning with the
 second quarter of 2009, the initial base assessment rates were increased
 further depending on an institutions risk category, with adjustments
 resulting in increased assessment rates for institutions with a significant
 reliance on secured liabilities and brokered deposits. The FDIC also adopted
 a final rule in May 2009, imposing a five basis point special assessment on
 each insured depository institutions assets minus Tier 1 capital as of June
 30, 2009, which will be collected on September 30, 2009. Our FDIC special
 assessment was in the amount of $143,000, increasing our non-interest expense
 for the three and six months ended June 30, 2009. The final rule also allows
 the FDIC to impose possible additional special assessments of up to five
 basis points thereafter to maintain public confidence in the DIF. There is no
 guarantee that the higher premiums and special assessments described above
 will be sufficient for the DIF to meet its funding requirements, which may
 necessitate further special assessments or increases in deposit insurance premiums.
 Any such future assessments or increases could have a further material impact
 on our results of operations.

There
have been no other material changes to the Companys risk factors previously
disclosed in the Companys Form 10-K for the year ending December 31, 2008.

|        |                                                            
|------- | -----------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds

The
following table provides information with respect to purchases made by or on
behalf of the Company or any affiliated purchases (as defined in Rule 106-18
(a)(3) under the Securities Exchange Act of 1934) of the Companys common stock
during the quarter ended June 30, 2009.

COMPANY
PURCHASES OF EQUITY SECURITIES

|                                     |  |                                                   |  |                                              |  |                                                                                                     |      |                                                                                                                                     |  |       |  |  |         |  | 
|------------------------------------ |  | ------------------------------------------------- |  | -------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ---- | ----------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  |  | ------- |  | 
|Period                               |  | (a) Total Number
 of Shares (or
 Units) Purchased |  | (b) Average Price
 Paid per Share
 (or Unit) |  | (c) Total Number of
 Shares (or Units)
 Purchased as Part of
 Publicly Announced
 Plans or Programs |      | (d) Maximum
 Number (or
 Approximate
 Dollar Value) of
 Shares (or Units)
 that may yet be
 Purchased under
 the Plans or
 Programs | 
|                                     |  |                                                   |  |                                              |  |                                                                                                     |      |                                                                                                                                     | 
|April 1, 2009 through April 30, 2009 |  | 1,000                                             |  |                                              |  | $                                                                                                   | 8.05 |                                                                                                                                     |  | 1,000 |  |  | 297,412 |  | 
|May 1, 2009 through May 31, 2009     |  |                                                  |  |                                              |  |                                                                                                     |     |                                                                                                                                     |  |      |  |  | 297,412 |  | 
|June 1, 2009 through June 30, 2009   |  | 5,750                                             |  |                                              |  | $                                                                                                   | 8.91 |                                                                                                                                     |  | 5,750 |  |  | 291,662 |  | 
|Total                                |  | 6,750                                             |  |                                              |  | $                                                                                                   | 8.78 |                                                                                                                                     |  | 6,750 |  |  | 291,662 |  | 

|        |                                
|------- | -------------------------------
|Item 3. | Defaults Upon Senior Securities
|        |                                
|        | None.                          

31

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|        |                                                                                                                                                                                                                                                                             |                                                                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                             |                                                                                                                                                                     
|        | The Company
 held its Annual Meeting of Shareholders (Meeting) on May 6, 2009. The two
 proposals submitted to the shareholders at the Meeting were approved. The
 proposals submitted to the shareholders and the tabulation for votes for the
 proposals is as follows:
|        |                                                                                                                                                                                                                                                                             |                                                                                                                                                                     
|        | 1.                                                                                                                                                                                                                                                                          | Election of
 one director to serve for a three-year term to expire at the 2012 Annual
 Meeting. The number of votes cast with respect to this matter was as follows:

| |                                                                                                                                                                 |  |           |     |        |  |          | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | --- | ------ |  | -------- | 
| | Nominee                                                                                                                                                         |  |           | For |        |  | Withheld | 
| |                                                                                                                                                                 |  |           |     |        |  |          | 
| | Dale A.
 Laval                                                                                                                                                  |  | 5,713,572 |     | 81,348 | 
| |                                                                                                                                                                 |  |           |     |       
| | The
 following directors terms continued after the meeting: Bruce R. Engelbert,
 David C. Grow, John A. Reinhardt, Charles M. Sprock and Michael J. Valentine.

| |    |                                                                                                                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Ratification
 of the appointment of Crowe Horwath LLP as the Companys independent
 registered public accounting firm for the fiscal year ending December 31,
 2009;

| |           |  |        |          |        |  |         | 
| | --------- |  | ------ | -------- | ------ |  | ------- | 
| | For       |  |        | Withheld |        |  | Abstain | 
| |           |  |        |          |        |  |         | 
| | 5,769,089 |  | 11,802 |          | 14,030 | 

|        |                  
|------- | -----------------
|Item 5. | Other Information
|        |                  
|        | None.            
|        |                  
|Item 6. | Exhibits         

|      |  |                                                                                                                                   
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------
|2.1   |  | Amended and Restated Plan
 of Conversion and Agreement and Plan of Reorganization. (1)                                            
|3.1   |  | Certificate of
 Incorporation of New Rome Bancorp, Inc. (1)                                                                       
|3.2   |  | Bylaws of New Rome
 Bancorp, Inc. (1)                                                                                             
|4.1   |  | Form of Stock Certificate
 of New Rome Bancorp, Inc. (1)                                                                          
|10.1  |  | Form of Employee Stock
 Ownership Plan of Rome Bancorp, Inc. (2)                                                                  
|10.2  |  | Amendment No. 1 to
 Employee Stock Ownership Plan of Rome Bancorp, Inc. (1)                                                       
|10.3  |  | Amendment No. 2 to
 Employee Stock Ownership Plan of Rome Bancorp, Inc. (1)                                                       
|10.4  |  | Form of Executive
 Employment Agreement by and between Charles M. Sprock and Rome Bancorp, Inc.
 (2)                              
|10.5  |  | Form of One Year Change in
 Control Agreement by and among certain officers and Rome Bancorp, Inc. and
 The Rome Savings Bank. (1)
|10.6  |  | Form of Employment
 Agreement between New Rome Bancorp, Inc. and Charles M. Sprock. (1)                                           
|10.7  |  | Form of Employment
 Agreement between The Rome Savings Bank and Charles M. Sprock. (1)                                            
|10.8  |  | Rome Bancorp, Inc. 2000
 Stock Option Plan. (3)                                                                                   
|10.9  |  | Rome Bancorp, Inc. 2000
 Recognition and Retention Plan. (3)                                                                      
|10.10 |  | Amended and Restated
 Benefit Restoration Plan of Rome Bancorp, Inc. (4)                                                          
|10.11 |  | Amended and Restated
 Directors Deferred Compensation Plan of Rome Bancorp, Inc. (4)                                             
|10.12 |  | Loan Agreement by and
 between the Employee Stock Ownership Plan Trust of Rome Bancorp, Inc. and
 Rome Bancorp, Inc. (5)          
|10.13 |  | Amendment No. 3 to the
 Employee Stock Ownership Plan of Rome Bancorp, Inc. (6)                                                   
|10.14 |  | Rome Bancorp, Inc. 2006
 Stock Option Plan. (7)                                                                                   
|10.15 |  | Rome Bancorp, Inc. 2006
 Recognition and Retention Plan. (7)                                                                      
|31.1  |  | Rule 13a-14a/15d-14a
 Certification.                                                                                              

32

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|     |  |                                     
|---- |  | ------------------------------------
|31.2 |  | Rule 13a-14a/15d-14a
 Certification.
|32.1 |  | Section 1350
 Certification.        
|32.2 |  | Section 1350
 Certification.        



---

|    |                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated
 by reference to Rome Bancorp, Inc.s Form S-1 (Registration No. 333-121245),
 filed with the Commission on December 14, 2004, as amended.     
|    |                                                                                                                                                             
|(2) | Incorporated
 by reference to Rome Bancorp, Inc.s Form SB-2 (Registration No. 333-80487),
 filed with the Commission on June 11, 1999, as amended.         
|    |                                                                                                                                                             
|(3) | Incorporated
 by reference to Rome Bancorp, Incs Proxy Statement on Schedule 14A, filed
 with the Commission on April 5, 2000 and amended on April 2, 2001.
|    |                                                                                                                                                             
|(4) | Incorporated
 by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
 December 27, 2005.                                                
|    |                                                                                                                                                             
|(5) | Incorporated
 by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
 March 29, 2005.                                                   
|    |                                                                                                                                                             
|(6) | Incorporated
 by reference to Rome Bancorp, Inc.s Form 8-K filed with the Commission on
 August 29, 2005.                                                  
|    |                                                                                                                                                             
|(7) | Incorporated
 by reference to Rome Bancorp, Inc.s Form S-8 filed with the Commission on
 May 19, 2006, as amended.                                         

33

---



SIGNATURES

Pursuant
to the requirement of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ROME BANCORP, INC.

|                       |      |                                                                                                |  |                 |       |  |  |  |      |  | 
|---------------------- | ---- | ---------------------------------------------------------------------------------------------- |  | --------------- | ----- |  |  |  | ---- |  | 
|                       | Name |                                                                                                |  |                 | Title |  |  |  | Date |  | 
|                       |      |                                                                                                |  |                 |       |  |  |  |      |  | 
|                      
|/s/ Charles
 M. Sprock |      | Chairman of
 the Board,
 President and Chief
 Executive Officer
 (Principal Executive Officer) |  | August 6,
 2009
|Charles M.
 Sprock     |      |                                                                                                | 
|                       |      |                                                                                               
|                       |      |                                                                                               
|/s/ David C.
 Nolan    |      | Executive
 Vice President
 and Chief Financial
 Officer (Principal Financial Officer)          |  | August 6, 2009  |      
|David C.
 Nolan        |      |                                                                                                | 
|                       |      |                                                                                               

34

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