10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to          

Commission File Number: 001-35595

GEORGETOWN BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	80-0817763
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
2 East Main Street, Georgetown, MA	01833
(Address of principal executive office)	(Zip Code)

(978) 352-8600

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x Noo

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

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

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 the registrant’s common stock, as of the latest practicable date:  Common Stock, $0.01 par value, 1,834,101 shares outstanding as of May 8, 2014.

Form 10-Q

GEORGETOWN BANCORP, INC.

Table of Contents

			Page
Part I. Financial Information
Item 1:	Financial Statements
	Consolidated Statements of Financial Condition at March 31, 2014 (unaudited) and December 31, 2013		1
	Consolidated Statements of Income for the Three Months Ended March 31, 2014 and 2013 (unaudited)		2
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2014 and 2013 (unaudited)		3
	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2014 and 2013 (unaudited)		4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013 (unaudited)		5
	Notes to Consolidated Financial Statements		7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3:	Quantitative and Qualitative Disclosures About Market Risk		34
Item 4:	Controls and Procedures		34
Part II. Other Information
Item 1:		Legal Proceedings	34
Item 1A:		Risk Factors	34
Item 2:		Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3:		Defaults upon Senior Securities	34
Item 4:		Mine Safety Disclosures	34
Item 5:		Other Information	35
Item 6:		Exhibits	35
SIGNATURES			36

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	At			At
	March 31,			December 31,
	2014			2013
	(Unaudited)
	(In thousands)
ASSETS
Cash and due from banks	$	2,905		$	3,290
Short-term investments	5,160			3,005
Total cash and cash equivalents	8,065			6,295
Securities available for sale, at fair value	18,106			18,281
Securities held to maturity, at amortized cost	986			1,050
Federal Home Loan Bank stock, at cost	2,907			2,907
Loans held for sale	1,763			1,001
Loans, net of allowance for loan losses of $2,185,000 at March 31, 2014 and $2,396,000 at December 31, 2013	227,020			223,912
Premises and equipment, net	3,658			3,669
Accrued interest receivable	715			729
Bank-owned life insurance	2,923			2,898
Other assets	2,182			2,291
Total assets	$	268,325		$	263,033
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	181,450		$	175,961
Short-term Federal Home Loan Bank advances	31,000			32,825
Long-term Federal Home Loan Bank advances	23,100			22,100
Mortgagors’ escrow accounts	1,538			1,230
Accrued expenses and other liabilities	2,132			1,975
Total liabilities	239,220			234,091
Commitments and contingencies	—			—
Stockholders’ equity:
Preferred stock, $0.01 par value per share: 50,000,000 shares authorized; none outstanding	—			—
Common stock, $0.01 par value per share: 100,000,000 shares authorized, 1,834,101 shares issued at March 31, 2014 and 1,831,518 shares issued at December 31, 2013	18			18
Additional paid-in capital	19,273			19,212
Retained earnings	11,590			11,388
Accumulated other comprehensive loss	(214		)	(389		)
Unearned compensation - ESOP (92,316 shares unallocated at March 31, 2014 and 94,126 shares unallocated at December 31, 2013)	(980		)	(1,001		)
Unearned compensation - Restricted stock (46,505 shares non-vested at March 31, 2014 and 35,751 shares non-vested at December 31, 2013)	(582		)	(286		)
Total stockholders’ equity	29,105			28,942
Total liabilities and stockholders’ equity	$	268,325		$	263,033

See accompanying notes to consolidated financial statements.

1

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended
	March 31,
	2014		2013
	(In thousands, except share and per share data)
Interest and dividend income:
Loans, including fees	$	2,630	$	2,156
Securities	137		54
Short-term investments	1		2
Total interest and dividend income	2,768		2,212
Interest expense:
Deposits	194		140
Short-term Federal Home Loan Bank advances	15		4
Long-term Federal Home Loan Bank advances	130		151
Total interest expense	339		295
Net interest and dividend income	2,429		1,917
Provision for loan losses	—		90
Net interest and dividend income, after provision for loan losses	2,429		1,827
Non-interest income:
Customer service fees	141		133
Mortgage banking income, net	42		421
Income from bank-owned life insurance	25		24
Net gain on sale of other real estate owned	—		19
Other	35		24
Total non-interest income	243		621
Non-interest expenses:
Salaries and employee benefits	1,239		1,197
Occupancy and equipment expenses	252		231
Data processing expenses	172		186
Professional fees	144		87
Advertising expenses	88		75
FDIC insurance	43		40
Other general and administrative expenses	299		295
Total non-interest expenses	2,237		2,111
Income before income taxes	435		337
Income tax provision	160		128
Net income	$	275	$	209
Weighted-average number of common shares outstanding:
Basic	1,738,534		1,842,974
Diluted	1,744,886		1,846,984
Earnings per share:
Basic	$	0.16	$	0.11
Diluted	$	0.16	$	0.11

See accompanying notes to consolidated financial statements.

2

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Net income	$	275		$	209
Net unrealized gain (loss) on securities available for sale	273			(29		)
Income tax (provision) benefit	(98		)	10
Other comprehensive income (loss), net of tax	175			(19		)
Comprehensive income	$	450		$	190

See accompanying notes to consolidated financial statements.

3

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

									Accumulated
			Additional						Other			Unearned			Unearned
	Common		Paid-in			Retained			Comprehensive			Compensation-			Compensation-
	Stock		Capital			Earnings			(Loss) Income			ESOP			Restricted Stock			Total
	(In thousands)
Balance at December 31, 2012	$	19	$	20,669		$	10,958		$	183		$	(1,084	)	$	(182	)	$	30,563
Net income	—		—			209			—			—			—			209
Other comprehensive loss	—		—			—			(19		)	—			—			(19		)
Cash dividends paid ($0.04 per share)	—		—			(78		)	—			—			—			(78		)
Repurchased stock related to buyback program (18,312 shares)	—		(242		)	—			—			—			—			(242		)
Common stock held by ESOP allocated or committed to be allocated (1,810 shares)	—		2			—			—			21			—			23
Restricted stock granted in connection with equity incentive plan (22,000 shares)	—		281			—			—			—			(281		)	—
Purchased stock related to vested restricted stock (1,933 shares)	—		(25		)	—			—			—			—			(25		)
Share based compensation - options	—		11			—			—			—			—			11
Share based compensation - restricted stock	—		—			—			—			—			25			25
Balance at March 31, 2013	$	19	$	20,696		$	11,089		$	164		$	(1,063	)	$	(438	)	$	30,467
Balance at December 31, 2013	$	18	$	19,212		$	11,388		$	(389	)	$	(1,001	)	$	(286	)	$	28,942
Net income	—		—			275			—			—			—			275
Other comprehensive income	—		—			—			175			—			—			175
Cash dividends paid ($0.04 per share)	—		—			(73		)	—			—			—			(73		)
Repurchased stock related to buyback program (17,000 shares)	—		(252		)	—			—			—			—			(252		)
Common stock held by ESOP allocated or committed to be allocated (1,810 shares)	—		6			—			—			21			—			27
Restricted stock granted in connection with equity incentive plan (22,000 shares)	—		329			—			—			—			(329		)	—
Purchased stock related to vested restricted stock (2,417 shares)	—		(36		)	—			—			—			—			(36		)
Share based compensation - options	—		14			—			—			—			—			14
Share based compensation - restricted stock	—		—			—			—			—			33			33
Balance at March 31, 2014	$	18	$	19,273		$	11,590		$	(214	)	$	(980	)	$	(582	)	$	29,105

See accompanying notes to consolidated financial statements.

4

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Cash flows from operating activities:
Net income	$	275		$	209
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses	—			90
Amortization of securities, net	30			29
Net change in deferred loan fees and costs	(38		)	24
Depreciation and amortization expense	80			67
Decrease in accrued interest receivable	14			42
Income from bank-owned life insurance	(25		)	(24		)
Stock-based compensation expense	74			59
Gain on sales of loans	(13		)	(199		)
Loans originated for sale	(3,065		)	(14,897		)
Proceeds from sales of loans	2,316			16,405
Gain on sale of other real estate owned	—			(19		)
Net change in other assets and liabilities	168			(186		)
Net cash (used in) provided by operating activities	(184		)	1,600
Cash flows from investing activities:
Activity in securities available for sale:
Maturities, prepayments and calls	418			1,004
Purchases	—			(2,077		)
Maturities, prepayments and calls of securities held to maturity	64			135
Redemption of Federal Home Loan Bank stock	—			232
Loan originations, net	(3,070		)	(2,585		)
Proceeds from sale of other real estate owned	—			197
Purchase of premises and equipment	(69		)	(28		)
Net cash used in investing activities	(2,657		)	(3,122		)

(continued)

See accompanying notes to consolidated financial statements.

5

GEORGETOWN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(concluded)

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Cash flows from financing activities:
Net change in deposits	5,489			(7,816		)
Net change in Federal Home Loan Bank advances with maturities of three months or less	(1,825		)	11,000
Proceeds of Federal Home Loan Bank advances with maturities greater than three months	1,000			1,000
Repayments of Federal Home Loan Bank advances with maturities greater than three months	—			(4,500		)
Net change in mortgagors’ escrow accounts	308			159
Repurchase of common stock	(288		)	(267		)
Cash dividends paid on common stock	(73		)	(78		)
Net cash provided by (used in) financing activities	4,611			(502		)
Net change in cash and cash equivalents	1,770			(2,024		)
Cash and cash equivalents at beginning of period	6,295			6,789
Cash and cash equivalents at end of period	$	8,065		$	4,765
Supplementary information:
Interest paid on deposit accounts	$	193		$	139
Interest paid on advances	141			165
Income taxes paid	54			61
Loans transferred to other real estate owned	—			244

See accompanying notes to consolidated financial statements.

6

GEORGETOWN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)           Basis of Presentation

The accompanying unaudited financial statements of Georgetown Bancorp, Inc., a Maryland corporation, (the “Company”) were prepared in accordance with the instructions for Form 10-Q and with Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three-month period ended March 31, 2014 are not necessarily indicative of the results that may be expected for future periods, including the entire fiscal year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the December 31, 2013 Consolidated Financial Statements presented in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on March 28, 2014. The consolidated financial statements include the accounts of Georgetown Bank (the “Bank”) and its wholly owned subsidiary, Georgetown Securities Corporation, which engages in the buying, selling and holding of securities. All significant inter-company balances and transactions have been eliminated in consolidation. These consolidated financial statements consider events that occurred through the date the consolidated financial statements were issued.

(2)           Corporate Structure

In conjunction with its reorganization into the mutual holding company structure, on January 5, 2005, the Bank (i) converted to a stock savings bank as the successor to the Bank in its mutual form; (ii) organized Georgetown Bancorp, Inc. (“Georgetown Federal”) as a federally-chartered corporation that owned 100% of the common stock of the Bank (in stock form); and (iii) organized Georgetown Bancorp, MHC as a federally-chartered mutual holding company that owned 56.7% of the Common Stock of Georgetown Federal as of June 30, 2012. On November 28, 2011, the Boards of Directors of Georgetown Federal, Georgetown Bancorp, MHC and the Bank each unanimously adopted a Plan of Conversion or Reorganization of the Mutual Holding Company pursuant to which Georgetown Bancorp, MHC undertook a “second-step” conversion and now ceases to exist. Georgetown Bancorp, MHC reorganized from a two-tier mutual holding company structure to a fully public stock holding company structure effective July 11, 2012, and, as a result, the Bank is now the wholly-owned subsidiary of the Company.

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(3)           Earnings Per Common Share

The Company has adopted the Earnings Per Share (“EPS”) guidance included in Accounting Standards Codification (“ASC”) 260-10. As presented below, basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For purposes of computing diluted EPS, the treasury stock method is used.

Unallocated ESOP shares are not deemed outstanding for earnings per share calculations.

Earnings per common share have been computed based on the following.

	Three Months Ended
	March 31,
	2014			2013
Net income available to common stockholders	$	275,000		$	209,000
Basic common shares:
Weighted average shares outstanding	1,791,850			1,908,514
Less: Weighted average unallocated ESOP shares	(93,490		)	(100,731		)
Add: Weighted average unvested restricted shares with non-forfeitable dividend rights	40,174			35,191
Basic weighted average common shares outstanding	1,738,534			1,842,974
Dilutive potential common shares	6,352			4,010
Diluted weighted average common shares outstanding	1,744,886			1,846,984
Basic earnings per share	$	0.16		$	0.11
Diluted earnings per share	$	0.16		$	0.11

Options to purchase 52,924 shares, representing outstanding options that were granted in 2010, 2011, 2012 and 2013, were included in the computation of diluted earnings per share for the three-month period ended March 31, 2014. Options to purchase 22,000 shares, representing outstanding options that were granted in 2014, were not included in the computation of diluted earnings per share for the three-month period ended March 31, 2014, because to do so would have been antidilutive.  Options to purchase 40,681 shares, representing outstanding options that were granted in 2010, 2011 and 2012, were included in the computation of diluted earnings per share for the three-month period ended March 31, 2013. Options to purchase 22,000 shares, representing outstanding options that were granted in 2013, were not included in the computation of diluted earnings per share for the three-month period ended March 31, 2013, because to do so would have been antidilutive.

(4)           Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-04, “Liabilities (Topic 405):  Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.”  The objective of the amendments in this ASU is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP.  Examples of obligations within the scope of this ASU include debt arrangements, other contractual obligations, and settled litigation and judicial rulings.  The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013; and should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASU scope that exist at the beginning of an entity’s fiscal year of adoption.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In April 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205):  Liquidation Basis of Accounting.”  The amendments in this ASU are being issued to clarify when an entity should apply the liquidation basis of accounting.  The guidance provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting.  Additionally, the amendments require disclosures about an entity’s plan for liquidation, the methods and significant

8

assumptions used to measure assets and liabilities, the type and amount of costs and income accrued, and the expected duration of the liquidation process.  The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein.  Entities should apply the requirements prospectively from the day that liquidation becomes imminent.  Early adoption is permitted.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-10, “Derivatives and Hedging (Topic 815) — Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) (“OIS”) as a Benchmark Interest Rate for Hedge Accounting Purposes.”  The amendments in this ASU permit the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to Treasury Obligations of the U.S. government (“UST”) and the London Interbank Offered Rate (“LIBOR”).  The amendments also remove the restriction on using different benchmark rates for similar hedges.  The amendments apply to all entities that elect to apply hedge accounting of the benchmark interest rate under Topic 815.  The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013.  The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, “Income Taxes — Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.”  The amendments in this ASU provide guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  The amendments in this ASU are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.  The amendments apply to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU 2014-01, “Investments - Equity Method and Joint Ventures (Topic 323):  Accounting for Investments in Qualified Affordable Housing Projects.”  The amendments in this ASU apply to all reporting entities that invest in qualified affordable housing projects through limited liability entities that are flow-through entities for tax purposes as follows:

1.For reporting entities that meet the conditions for and that elect to use the proportional amortization method to account for investments in qualified affordable housing projects, all amendments in this ASU apply.

2.For reporting entities that do not meet the conditions for or that do not elect the proportional amortization method, only the amendments in this ASU that are related to disclosures apply.

The amendments in this ASU permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323.  The amendments in this ASU should be applied retrospectively to all periods presented.  A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments.  The amendments in this ASU are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014.  Early adoption is permitted.  The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40):  Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.”  The objective of the amendments in this ASU is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized.  The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the amendments require interim and annual disclosure of both (i) the amount of foreclosed residential real estate property held by the creditor and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.  For entities other than public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015.  An entity can elect to adopt the amendments in this ASU using either a modified retrospective transition method or a prospective transition method.   The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

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In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This ASU changes the criteria for reporting discontinued operations and modifies related disclosure requirements. The new guidance is effective on a prospective basis for fiscal years beginning on or after December 15, 2014, and interim periods within those years. The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

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(5)           Securities

A summary of securities is as follows.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At March 31, 2014
Securities available for sale
State and municipal	$	2,493	$	20	$	(69	)	$	2,444
Residential mortgage-backed securities	15,945		71		(354		)	15,662
Total securities available for sale	$	18,438	$	91	$	(423	)	$	18,106
Securities held to maturity
Residential mortgage-backed securities	$	986	$	79	$	—		$	1,065

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At December 31, 2013
Securities available for sale
State and municipal	$	2,505	$	4	$	(115	)	$	2,394
Residential mortgage-backed securities	16,381		67		(561		)	15,887
Total securities available for sale	$	18,886	$	71	$	(676	)	$	18,281
Securities held to maturity
Residential mortgage-backed securities	$	1,050	$	86	$	—		$	1,136

All residential mortgage-backed securities have been issued by government-sponsored enterprises.

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The amortized cost and estimated fair value of debt securities by contractual maturity at March 31, 2014 is as follows. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Over ten years	$	2,493	$	2,444	$	—	$	—
Residential mortgage-backed securities	15,945		15,662		986		1,065
	$	18,438	$	18,106	$	986	$	1,065

There were no sales of securities for the three months ended March 31, 2014 and 2013.

Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position, is as follows.

	Less Than Twelve Months					Greater Than Twelve Months
	Gross					Gross
	Unrealized			Fair		Unrealized		Fair
	Losses			Value		Losses		Value
	(In thousands)
At March 31, 2014:
Securities available for sale
State and municipal	$	(69	)	$	1,323	$	—	$	—
Residential mortgage-backed securities	(354		)	14,256		—		—
Total temporarily impaired securities	$	(423	)	$	15,579	$	—	$	—
At December 31, 2013
Securities available for sale
State and municipal	$	(115	)	$	1,827	$	—	$	—
Residential mortgage-backed securities	(561		)	13,389		—		—
Total temporarily impaired securities	$	(676	)	$	15,216	$	—	$	—

Each reporting period, the Company evaluates all securities classified as available-for-sale or held-to-maturity with a decline in fair value below the amortized cost of the investment to determine whether or not the impairment is deemed to be other-than-temporary (“OTTI”).

At March 31, 2014 12 securities classified as available for sale had an unrealized loss with aggregate depreciation of 2.59% from the securities amortized cost basis.  The unrealized losses on the Company’s investments in state and municipal bonds and residential mortgage backed securities were primarily caused by changes in interest rates and not by credit quality.  Many of these investments are guaranteed by the U.S. Government or its agencies and as management has not decided to sell these securities, nor is it likely that the Company will be required to sell these securities, no declines are deemed to be other than temporary.

12

(6)           Loans and Servicing

Loans

A summary of loans is as follows.

	At					At
	March 31,					December 31,
	2014					2013
	Amount			Percent		Amount			Percent
	(Dollars in thousands)
Residential loans:
One- to four-family	$	91,784		40.13	%	$	92,450		40.93	%
Home equity loans and lines of credit	15,798			6.91		15,399			6.82
Total residential mortgage loans	107,582			47.04		107,849			47.75
Commercial loans:
One- to four-family investment property	11,072			4.84		11,089			4.91
Multi-family real estate	13,818			6.04		14,462			6.40
Commercial real estate	55,888			24.42		54,272			24.02
Commercial business	16,725			7.31		16,681			7.39
Total commercial loans	97,503			42.61		96,504			42.72
Construction loans:
One- to four-family	10,575			4.62		9,848			4.36
Multi-family	8,433			3.70		7,304			3.24
Non-residential	4,252			1.86		3,955			1.75
Total construction loans	23,260			10.18		21,107			9.35
Consumer	382			0.17		408			0.18
Total loans	228,727			100.00	%	225,868			100.00	%
Other items:
Net deferred loan costs	478					440
Allowance for loan losses	(2,185		)			(2,396		)
Total loans, net	$	227,020				$	223,912

13

An analysis of the allowance for loan losses at and for the three months ended March 31, 2014 and 2013 and at December 31, 2013 is below. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Residential						Commercial											Construction
	One- to four- family			Home equity loans and lines of credit			One- to four- family investment property		Multi-family real estate			Commercial real estate			Commercial business			One- to four- family			Multi-family		Non- residential		Consumer			Unallocated		Total
	(In thousands)
Allowance for loan losses
Three months ended March 31, 2014
Beginning Balance	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Charge-offs	—			—			—		—			(211		)	—			—			—		—		—			—		(211		)
Recoveries	—			—			—		—			—			—			—			—		—		—			—		—
(Benefit) provision	(3		)	(29		)	—		(4		)	16			—			(36		)	10		5		(3		)	44		—
Ending Balance	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Three months ended March 31, 2013
Beginning Balance	$	378		$	254		$	62	$	40		$	668		$	159		$	149		$	34	$	25	$	11		$	—	$	1,780
Charge-offs	(130		)	—			—		—			—			—			—			—		—		(2		)	—		(132		)
Recoveries	—			—			—		—			—			—			—			—		—		3			—		3
Provision (benefit)	49			(12		)	5		1			20			(6		)	(20		)	3		52		(2		)	—		90
Ending Balance	$	297		$	242		$	67	$	41		$	688		$	153		$	129		$	37	$	77	$	10		$	—	$	1,741
At March 31, 2014
Allowance for loan losses
Individually evaluated for impairment	$	7		$	14		$	—	$	—		$	27		$	—		$	—		$	—	$	—	$	—		$	—	$	48
Collectively evaluated for impairment	274			231			61		104			834			291			97			76		68		12			89		2,137
	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Loans
Individually evaluated for impairment	$	320		$	428		$	—	$	—		$	566		$	—		$	—		$	—	$	—	$	—		$	—	$	1,314
Collectively evaluated for impairment	91,464			15,370			11,072		13,818			55,322			16,725			10,575			8,433		4,252		382			—		227,413
	$	91,784		$	15,798		$	11,072	$	13,818		$	55,888		$	16,725		$	10,575		$	8,433	$	4,252	$	382		$	—	$	228,727
At December 31, 2013
Allowance for loan losses
Individually evaluated for impairment	$	7		$	49		$	—	$	—		$	277		$	—		$	—		$	—	$	—	$	—		$	—	$	333
Collectively evaluated for impairment	277			225			61		108			779			291			133			66		63		15			45		2,063
	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Loans
Individually evaluated for impairment	$	321		$	428		$	—	$	—		$	2,406		$	—		$	—		$	—	$	—	$	—		$	—	$	3,155
Collectively evaluated for impairment	92,129			14,971			11,089		14,462			51,866			16,681			9,848			7,304		3,955		408			—		222,713
	$	92,450		$	15,399		$	11,089	$	14,462		$	54,272		$	16,681		$	9,848		$	7,304	$	3,955	$	408		$	—	$	225,868

14

The following is a summary of past-due and non-accrual loans at March 31, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Loans delinquent for:												90 days
					90 days		Total		Total		Total		or more		Non-accrual
	30 - 59 Days		60 - 89 Days		or more		Past Due		Current		Loans		and accruing		Loans
	(In thousands)
At March 31, 2014:
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	91,784	$	91,784	$	—	$	—
Home equity loans and lines of credit	—		—		473		473		15,325		15,798		—		473
Commercial loans:
One- to four-family investment property	—		—		—		—		11,072		11,072		—		—
Multi-family real estate	—		—		—		—		13,818		13,818		—		—
Commercial real estate	—		—		267		267		55,621		55,888		—		267
Commercial business	—		—		—		—		16,725		16,725		—		—
Construction loans:
One- to four-family	—		—		—		—		10,575		10,575		—		—
Multi-family	—		—		—		—		8,433		8,433		—		—
Non-residential	—		—		—		—		4,252		4,252		—		—
Consumer	1		2		—		3		379		382		—		—
Total	$	1	$	2	$	740	$	743	$	227,984	$	228,727	$	—	$	740
At December 31, 2013:
Residential loans:
One- to four-family	$	—	$	245	$	—	$	245	$	92,205	$	92,450	$	—	$	—
Home equity loans and lines of credit	15		—		399		414		14,985		15,399		—		399
Commercial loans:
One- to four-family investment property	—		—		—		—		11,089		11,089		—		—
Multi-family real estate	—		—		—		—		14,462		14,462		—		—
Commercial real estate	—		267		—		267		54,005		54,272		—		—
Commercial business	—		—		—		—		16,681		16,681		—		—
Construction loans:
One- to four-family	—		—		—		—		9,848		9,848		—		—
Multi-family	—		—		—		—		7,304		7,304		—		—
Non-residential	—		—		—		—		3,955		3,955		—		—
Consumer	1		—		—		1		407		408		—		—
Total	$	16	$	512	$	399	$	927	$	224,941	$	225,868	$	—	$	399

15

The following is an analysis of impaired loans at March 31, 2014 and December 31, 2013.

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
At March 31, 2014
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		29		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	299		299		—		300		4
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	328	$	328	$	—	$	329	$	4
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	320	$	320	$	7	$	321	$	4
Home equity loans and lines of credit	399		399		14		399		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	267		267		27		1,120		8
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	986	$	986	$	48	$	1,840	$	12
At December 31, 2013
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		31		1
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	301		301		—		304		18
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	330	$	330	$	—	$	335	$	19
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	321	$	321	$	7	$	379	$	13
Home equity loans and lines of credit	399		399		49		377		2
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	2,105		2,208		277		2,105		104
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	2,825	$	2,928	$	333	$	2,861	$	119

16

There were no loan modifications made that resulted in the classification of a troubled debt restructure (“TDR”) during the three months ended March 31, 2014 and 2013.

At March 31, 2014 and December 31, 2013 there were no TDRs in default of their modified terms.

17

The following table represents the Company’s loans by risk rating at March 31, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Residential				Commercial								Construction
	One- to four- family		Home equity loans and lines of credit		One- to four- family investment property		Multi-family real estate		Commercial real estate		Commercial business		One- to four- family		Multi-family		Non- residential		Consumer		Total
	(In thousands)
At March 31, 2014
Classification:
Not formally rated	$	91,464	$	15,325	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	382	$	107,171
Pass	—		—		11,072		13,818		55,621		16,725		10,575		8,433		4,252		—		120,496
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	320		473		—		—		267		—		—		—		—		—		1,060
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	91,784	$	15,798	$	11,072	$	13,818	$	55,888	$	16,725	$	10,575	$	8,433	$	4,252	$	382	$	228,727
At December 31, 2013
Classification:
Not formally rated	$	92,129	$	15,000	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	408	$	107,537
Pass	—		—		11,089		14,462		51,900		16,681		9,848		7,304		3,955		—		115,239
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	321		399		—		—		2,372		—		—		—		—		—		3,092
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	92,450	$	15,399	$	11,089	$	14,462	$	54,272	$	16,681	$	9,848	$	7,304	$	3,955	$	408	$	225,868

18

Credit Quality Information

The Bank utilizes a nine grade internal loan rating system for all commercial and construction loans as follows:

Loans rated 1 - 5:  Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 6:  Loans in this category are considered “special mention.” These loans have risk profiles that are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 7:  Loans in this category are considered “substandard.” These loans have a well defined weakness that jeopardizes the liquidation of the debt and is inadequately protected by the current sound worth and paying capacity of the borrower or pledged collateral. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Loans rated 8:  Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 9:  Loans in this category are considered a “loss.” The loan has been determined to be uncollectible and the chance of loss is inevitable. Loans in this category will be charged-off.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on all commercial and construction loans.

Loans serviced for others and mortgage servicing rights

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $117.0 million and $117.7 million at March 31, 2014 and December 31, 2013, respectively.

The risks inherent in the mortgage servicing assets relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The fair value of servicing rights was $1.4 million at March 31, 2014 and 2013, and was determined using the moving average 10-year, U.S. Treasury rate plus 5.0%, adjusted to reflect the current credit spreads and conditions in the market as a discount rate. Prepayment assumptions, which are impacted by loan rates and terms, are calculated using a moving average of prepayment data published by the Securities Industry and Financial Markets Association and an independent third party proprietary analysis of prepayment rates embedded in liquid mortgage securities markets and modeled against the serviced loan portfolio by the independent third party valuation specialist.

The following summarizes mortgage servicing rights capitalized and amortized, along with the aggregate activity-related valuation allowances.

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Mortgage servicing rights:
Balance at beginning of period	$	1,084		$	910
Additions	24			227
Amortization	(84		)	(79		)
Balance at end of period	1,024			1,058
Valuation allowances:
Balance at beginning of period	26			20
Additions	—			—
Recoveries	(17		)	(15		)
Balance at end of period	9			5
Mortgage servicing assets, net	$	1,015		$	1,053
Fair value of mortgage servicing assets	$	1,392		$	1,403

19

(7)Secured Borrowings and Collateral

Federal Home Loan Bank advances

At March 31, 2014, all Federal Home Loan Bank (“FHLB”) of Boston advances were secured by a blanket security agreement on qualified collateral, principally first mortgage loans on owner-occupied residential property in the amount of $82.7 million, and mortgage-backed securities with a fair value of $16.7 million.

(8)Fair Value Measurements

The Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

Level l - Valuation is based on quoted prices in active markets for identical assets or liabilities. Level l assets and liabilities generally include debt and equity securities that are traded in an active exchange market. At March 31, 2014, the Company had no assets or liabilities valued using Level 1 measurements.

Level 2 - Valuation is based on observable inputs other than Level l prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

All of the Company’s securities that are measured at fair value are included in Level 2 and are based on pricing models from independent, third party pricing services that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data. There are no liabilities measured at fair value. All of the Company’s impaired loans and other real estate owned that are measured at fair value are included in Level 3 and are based on the appraised value of the underlying collateral considering discounting factors, if deemed appropriate, and adjusted for selling costs. These appraised values may be discounted based on management’s historical knowledge, expertise or changes in market conditions from time of valuation. The Company did not have any significant transfers of assets or liabilities to or from Levels 1 and 2 of the fair value hierarchy during the three month period ended March 31, 2014.

20

Assets and liabilities measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013 are summarized below.

							Assets
	Level 1		Level 2		Level 3		at Fair Value
	(In thousands)
At March 31, 2014
Assets
Securities available for sale
State and municipal	$	—	$	2,444	$	—	$	2,444
Residential mortgage-backed securities	—		15,662		—		15,662
Total securities available for sale	$	—	$	18,106	$	—	$	18,106
At December 31, 2013
Assets
Securities available for sale
State and municipal	$	—	$	2,394	$	—	$	2,394
Residential mortgage-backed securities	—		15,887		—		15,887
Total securities available for sale	$	—	$	18,281	$	—	$	18,281

The Company may also be required, from time to time, to measure certain other financial assets on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. Assets measured at fair value on a non-recurring basis at March 31, 2014 and December 31, 2013 are summarized below. The fair value adjustments relate to the amount of write-down recorded or related allowance recorded as of March 31, 2014 and December 31, 2013.

							Assets		Adjustments
	Level 1		Level 2		Level 3		at Fair Value		to Fair Value
	(In thousands)
At March 31, 2014
Impaired loans	$	—	$	—	$	938	$	938	$	(48	)
At December 31, 2013
Impaired loans	$	—	$	—	$	2,492	$	2,492	$	(333	)

21

The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments.

Cash and cash equivalents: The carrying amounts of cash and short-term investments approximate fair values.

Securities: Fair values for the Company’s debt securities are based on pricing models that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

Federal Home Loan Bank stock: Fair value is based on redemption provisions of the FHLB of Boston. The FHLB stock has no quoted market value.

Loans held for sale: Fair value is based on committed secondary market prices.

Loans: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Capitalized mortgage servicing rights: Fair value is based on a quarterly, independent third-party valuation model that calculates the present value of estimated future net servicing income. The model utilizes a variety of assumptions, the most significant of which are loan prepayment assumptions and the discount rate used to discount future cash flows. Prepayment assumptions, which are impacted by loan rates and terms, are calculated using a moving average of prepayment data published by the Securities Industry and Financial Markets Association and a third party proprietary analysis of prepayment rates embedded in liquid mortgage securities markets and modeled against the serviced loan portfolio by the independent third party valuation specialist. The discount rate is the moving average 10-year, U.S. Treasury rate plus 5.0% and adjusted to reflect the current credit spreads and conditions in the market. Other assumptions include delinquency rates, foreclosure rates, servicing cost inflation, and annual unit loan cost. All assumptions are adjusted periodically to reflect current circumstances and all are obtained from independent market sources.

Deposits: The fair values for non-certificate accounts are, by definition, equal to the amount payable on demand at the reporting date which is the carrying amount. Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-term FHLB advances: The fair value of short-term FHLB advances approximates carrying value, as they generally mature within 90 days.

Long-term FHLB advances: The fair value for long-term FHLB advances is estimated using discounted cash flow analyses based on current market borrowing rates for similar types of borrowing arrangements.

Accrued interest:  The carrying amounts of accrued interest approximate fair value.

Off-balance-sheet instruments:  Fair values for off-balance-sheet, credit-related financial instruments 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. At March 31, 2014 and December 31, 2013, the fair value of commitments outstanding is not significant since fees charged are not material.

22

The estimated fair values and related carrying amounts of the Company’s financial instruments at March 31, 2014 and December 31, 2013 are as follows.

	March 31, 2014
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	8,065	$	8,065	$	—	$	—	$	8,065
Securities available for sale	18,106		—		18,106		—		18,106
Securities held to maturity	986		—		1,065		—		1,065
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,763		1,781		—		—		1,781
Loans, net	227,020		—		—		226,722		226,722
Accrued interest receivable	715		715		—		—		715
Capitalized mortgage servicing rights	1,015		—		1,392		—		1,392
Financial liabilities:
Deposits	$	181,450	$	—	$	181,965	$	—	$	181,965
Short-term FHLB advances	31,000		31,000		—		—		31,000
Long-term FHLB advances	23,100		—		23,410		—		23,410
Mortgagers’ escrow accounts	1,538		1,538		—		—		1,538
Accrued interest payable	51		51		—		—		51

	December 31, 2013
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	6,295	$	6,295	$	—	$	—	$	6,295
Securities available for sale	18,281		—		18,281		—		18,281
Securities held to maturity	1,050		—		1,136		—		1,136
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,001		1,019		—		—		1,019
Loans, net	223,912		—		—		223,659		223,659
Accrued interest receivable	729		729		—		—		729
Capitalized mortgage servicing rights	1,058		—		1,361		—		1,361
Financial liabilities:
Deposits	$	175,961	$	—	$	176,405	$	—	$	176,405
Short-term FHLB advances	32,825		32,825		—		—		32,825
Long-term FHLB advances	22,100		—		22,405		—		22,405
Mortgagors’ escrow accounts	1,230		1,230		—		—		1,230
Accrued interest payable	45		45		—		—		45

23

(9)Equity Incentive Plan

At March 31, 2014, the Company had one equity incentive plan, which was described more fully in Note 12 of the consolidated financial statements and notes thereto for the year ended December 31, 2013.

The following table presents the activity for the plan for the three months ended March 31, 2014.

	Stock Options
	Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	52,924		$	11.12
Granted	22,000		$	14.98
Outstanding at end of period	74,924		$	12.26
Exercisable at end of period	28,426
Weighted average fair value of options granted during the period	$	5.31

Options Outstanding				Options Exercisable
Number	Weighted-Average	Weighted		Number	Weighted
Outstanding	Remaining	Average		Exercisable	Average
as of 03/31/2014	Contractual Life	Exercise Price		as of 03/31/2014	Exercise Price
10,712	5.90 Years	$	9.33	9,559	$	9.33
12,166	6.90 Years	$	9.55	9,213	$	9.55
10,896	7.90 Years	$	9.58	5,277	$	9.58
19,150	8.90 Years	$	14.00	4,377	$	14.00
22,000	9.90 Years	$	14.98	—	$	—
74,924	8.30 Years	$	12.26	28,426	$	10.17

	Non-vested
	Restricted Stock
	Number of Shares		Weighted Average Grant Date Value
Outstanding at beginning of year	35,751		$	10.83
Granted	22,000		$	14.98
Vested	(11,246	)	$	10.21
Outstanding at end of period	46,505		$	12.94

As of March 31, 2014, unrecognized share-based compensation expense related to non-vested options amounted to $222,000 and the unrecognized share-based compensation expense related to non-vested restricted stock amounted to $582,000. Both amounts are expected to be recognized over a weighted average period of 3.8 years.

For the three months ended March 31, 2014, the Company recognized compensation expense for stock options of $14,000 with a related tax benefit of $2,000. The related tax benefit applies only to non-qualified stock options. For the three months ended March 31, 2014, the Company recognized compensation expense for restricted stock awards of $33,000 with a related tax benefit of $13,000.

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

This document may contain certain forward-looking statements, such as statements of the Company’s or the Bank’s plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified by the use of words such as “expects,” “subject,” and “believe”, “will”, “intends”, “will be” or “would”. These statements are subject to change based on various important factors (some of which are beyond the Company’s or the Bank’s control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements, which reflect management’s analysis of factors only as of the date of which they are given. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, the ability of the Company or the Bank to effectively manage its growth, and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including Current Reports on Form 8-K.

Except as required by applicable law and regulation, the Company does not undertake — and specifically disclaims any obligation — to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Overview

The Company’s results of operations depend primarily on net interest and dividend income, which is the difference between the interest and dividend income earned on its interest-earning assets, such as loans and securities, and the interest expense on its interest-bearing liabilities, such as deposits and advances. The Company also generates non-interest income, primarily from gain on sale of loans. Fees and service charges are additional sources of non-interest income. The Company’s non-interest expense primarily consists of employee compensation and benefits, occupancy and equipment expense, advertising, data processing, professional fees and other operating expenses.

We continued to maintain high asset quality, as non-performing assets to total assets was 0.28% at March 31, 2014, increasing slightly from 0.15% at December 31, 2013. Net income for the three months ended March 31, 2014 increased $66,000, or 31.6% compared to the same period in 2013. The increase in net income was driven by the expansion of our net interest margin and a smaller provision for loan losses, partially offset by a decrease in non-interest income and an increase in non-interest expenses. Net interest and dividend income increased primarily due to an increase in loans outstanding. Non-interest income decreased $378,000, or 60.9% primarily due to a decline in mortgage banking income. Mortgage banking income has declined, as the volume of residential loan sales has been negatively affected by lower loan refinancing volumes. The increase in non-interest expenses was primarily due to professional fees, as the Company implemented a sub-servicing function for residential loans and incurred legal expenses related to our proposed equity incentive plan. The Company continues to focus on generating commercial loans and core deposit growth, the development of our mortgage banking operation and increasing operating efficiencies, which we believe will build long-term shareholder value. To support the continued growth of our commercial loans, we expect to open a Loan Production Office (LPO) in southern New Hampshire during the second half of 2014.

Critical Accounting Policies

Critical accounting policies are those that involve significant judgments and assumptions by management and that have, or could have, a material impact on our income or the carrying value of our assets. Our critical accounting policies are those related to our allowance for loan losses and the valuation of our deferred tax assets.

Allowance for Loan Losses. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a monthly basis by management and is based upon management’s monthly review of the collectability of the loans in light of known and inherent risks in the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. Additionally, as part of the evaluation of the level of the allowance for loan losses, on a quarterly basis management analyzes several qualitative loan portfolio risk factors including, but not limited to, charge-off history, changes in management or underwriting policies, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower and results of internal and external loan reviews. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance for loan losses consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For such loans that are classified as impaired, an allowance for loan losses is established when the discounted cash flows or the fair value of the existing collateral (less costs to sell) of the impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component may be maintained to cover uncertainties that could affect management’s estimate of probable losses.

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A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

We periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring. All troubled debt restructurings are initially classified as impaired.

Adjustable-rate mortgage loans decrease the risk associated with changes in market interest rates by periodically repricing, but involve other risks because, as interest rates increase, the underlying payments by the borrower increase, thus increasing the potential for default by the borrower. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustment of the contractual interest rate is also limited by the maximum periodic and lifetime interest rate adjustments permitted by our loan documents and, therefore, the effectiveness of adjustable-rate mortgage loans may be limited during periods of rapidly rising interest rates.

Loans secured by commercial real estate, multi-family and one- to four-family investment properties generally involve larger principal amounts and a greater degree of risk than one- to four-family residential mortgage loans. Because payments on loans secured by commercial real estate, including multi-family and one- to four-family investment properties, are often dependent on successful operation or management of the properties, repayment of such loans may be affected by adverse conditions in the real estate market or the economy.

Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans generally are made on the basis of the borrower’s ability to repay the loan from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may depend substantially on the success of the business itself. Further, any collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value.

Construction and development financing is generally considered to involve a higher degree of credit risk than long-term financing on improved, owner-occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, we may be required to advance funds beyond the amount originally committed in order to protect the value of the property. Additionally, if the estimate of value proves to be inaccurate, we may be confronted with a project, when completed, having a value that is insufficient to assure full repayment.

Income Taxes. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized.

Comparison of Financial Condition at March 31, 2014 and December 31, 2013

Total assets increased $5.3 million, or 2.0%, to $268.3 million at March 31, 2014 from $263.0 million at December 31, 2013. The increase was primarily from increases in loans and short term investments.

Cash and cash equivalents increased $1.8 million, or 28.1%, to $8.1 million at March 31, 2014 from $6.3 million at December 31, 2013. The increase in cash and cash equivalents resulted from a temporary increase in short-term investments. We expect cash and cash equivalents balances to decrease as they are used to fund loan demand.

Loans, net (excluding loans held for sale) increased $3.1 million, or 1.4%, to $227.0 million at March 31, 2014 from $223.9 million at December 31, 2013, due primarily to an increase in commercial and construction loans, partially offset by decreases in residential mortgage loans and consumer loans. Despite the current competitive market, we have decided to maintain our historically high underwriting standards instead of relaxing these standards and we have not reduced loan rates below levels at which we could not operate profitably. Commercial real estate loans increased $1.6 million, or 3.0%, to $55.9 million at March 31, 2014 from $54.3 million at December 31, 2013. Multi-family real estate loans decreased $644,000 or 4.5% to $13.8 million at March 31, 2014 from $14.5 million at December 31, 2013.  Construction loans increased $2.2 million, or 10.2%, to $23.3 million at March 31, 2014 from $21.1 million at December 31, 2013, primarily due to a $1.1 million, or 15.5% increase in multi-family construction loans. The majority of our construction loans remain collateralized by residential real estate (81.7% at March 31, 2014 and 81.3% at December 31, 2013). One- to four-family loans decreased $666,000, or 0.72%, to $91.8 million at March 31, 2014 from $92.4 million at December 31, 2013. Home equity loans increased $399,000, or 2.6%, to $15.8 million at March 31, 2014 from $15.4 million at December 31, 2013.

Our total securities portfolio decreased $239,000, or 1.2%, to $19.1 million at March 31, 2014 from $19.3 million at December 31, 2013.

26

Deposits increased $5.5 million, or 3.1%, to $181.4 million at March 31, 2014 from $176.0 million at December 31, 2013. The increase was primarily due to increases in certificates of deposits, NOW accounts and money market accounts, partially offset by a decrease in demand deposit and savings accounts. Certificates of deposit increased $2.6 million, or 4.1%, as funds gathered through the use of deposit listing services of $2.9 million were partially offset by declines in retail certificates of deposit. NOW accounts increased $4.7 million, or 16.3%, as business interest-bearing checking accounts increased $3.5 million, or 39.6%. Money market accounts increased $1.8 million or 4.2%. Demand deposits decreased $2.6 million, or 10.4%. Savings accounts decreased $691,000, or 4.7%. Management continues to focus on the generation of core checking accounts.

Total FHLB advances decreased $825,000, or 1.5% to $54.1 million at March 31, 2014 compared to $54.9 million at December 31, 2013. Management is maintaining short-term advances as it is taking advantage of the current yield curve and the expectations that short-term rates will not increase in the near-term.

Stockholders’ equity increased $163,000 or 0.6% to $29.1 million at March 31, 2014. The increase resulted primarily from net income of $275,000 for the three months ended March 31, 2014 and other comprehensive income, partially offset by the shares repurchased as part of an announced buyback program and dividend payments. The other comprehensive income, net of taxes of $175,000 reflects the change in net unrealized gains/losses on securities available for sale from a net unrealized loss of $389,000 at December 31, 2013 to a net unrealized loss of $214,000 at March 31, 2014. The unrealized losses on securities available for sale were attributable to changes in market interest rates and were not considered by management to be other than temporary at March 31, 2014. There were 19,417 shares repurchased at a cost of $288,000 during the three months ended March 31, 2014. Dividend payments totaled $73,000 for the three months ended March 31, 2014.

27

Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by type of loan as of the dates indicated.

	At					At
	March 31,					December 31,
	2014					2013
	Amount			Percent		Amount			Percent
	(Dollars in thousands)
Residential loans:
One- to four-family	$	91,784		40.13	%	$	92,450		40.93	%
Home equity loans and lines of credit	15,798			6.91		15,399			6.82
Total residential mortgage loans	107,582			47.04		107,849			47.75
Commercial loans:
One- to four-family investment property	11,072			4.84		11,089			4.91
Multi-family real estate	13,818			6.04		14,462			6.40
Commercial real estate	55,888			24.42		54,272			24.02
Commercial business	16,725			7.31		16,681			7.39
Total commercial loans	97,503			42.61		96,504			42.72
Construction loans:
One- to four-family	10,575			4.62		9,848			4.36
Multi-family	8,433			3.70		7,304			3.24
Non-residential	4,252			1.86		3,955			1.75
Total construction loans	23,260			10.18		21,107			9.35
Consumer	382			0.17		408			0.18
Total loans	228,727			100.00	%	225,868			100.00	%
Other items:
Net deferred loan costs	478					440
Allowance for loan losses	(2,185		)			(2,396		)
Total loans, net	$	227,020				$	223,912

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Asset Quality. The table below sets forth the amounts and categories of our non-performing assets at the dates indicated. Delinquent loans that are 90 days or more past due are generally considered non-performing assets.

	At March 31,			At December 31,
	2014			2013
	(Dollars in thousands)
Non-accrual loans:
Residential mortgage loans	$	473		$	399
Commercial loans	267			—
Construction loans	—			—
Consumer	—			—
Total non-accrual loans	740			399
Non-performing restructured loans	—			—
Total non-performing loans	740			399
Other real estate owned	—			—
Total non-performing assets	$	740		$	399
Ratios:
Non-performing loans to total loans	0.32		%	0.18		%
Non-performing assets to total assets	0.28		%	0.15		%
Allowance for loan losses to non-performing loans	295.27		%	600.50		%

Total delinquent loans decreased $184,000, from $927,000 at December 31, 2013 to $743,000 at March 31, 2014, primarily due to one one- to four- family residential loan totaling $245,000 that was brought current during the three months ended March 31, 2014.

Non-performing assets increased $341,000 to $740,000 at March 31, 2014 compared to $399,000 at December 31, 2013. Total non-performing assets represented 0.28% of total assets at March 31, 2014 and 0.15% of total assets at December 31, 2013.

Loans classified as substandard decreased $2.0 million to $1.1 million at March 31, 2014 from $3.1 million at December 31, 2013. The decrease in substandard loans was primarily due to the sale of our mortgage on one commercial real estate loan, which had previously been fully reserved for. All of these credits continue to be managed in an effort to minimize loss to the Bank.

The allowance for loan losses decreased $211,000 to $2.2 million at March 31, 2014. Loan charge-offs were $211,000 and there were no loan recoveries for the three months ended March 31, 2014, as compared to loan charge-offs of $132,000 and loan recoveries of $3,000 for the same period in 2013. The allowance represented 0.96% of total loans at March 31, 2014 and 1.06% of total loans at December 31, 2013. At these levels, the allowance for loan losses as a percentage of non-performing loans was 295.27% at March 31, 2014 and 600.50% at December 31, 2013.

Comparison of Operating Results for the Three Months Ended March 31, 2014 and 2013

General. Net income increased $66,000, or 31.6%, to $275,000 for the three months ended March 31, 2014, compared to net income of $209,000 for the three months ended March 31, 2013. The increase was primarily due to an increase in net interest and dividend income and a decrease in the provision for loan losses, partially offset by a decrease in mortgage banking income and an increase in non-interest expenses.

Interest and Dividend Income. Interest and dividend income increased $556,000, or 25.1%, to $2.8 million for the three months ended March 31, 2014, due to increases in interest income on loans and interest income on investment securities. Interest income on loans increased $474,000, or 22.0%, to $2.6 million for the three months ended March 31, 2014, due to a $43.1 million, or 23.3%, increase in the average balance of loans, partially offset by a five basis point decrease in yield to 4.61% for the three months ended March 31, 2014 from 4.66% for the three months ended March 31, 2013.

Interest and dividend income on investment securities increased $83,000, or 153.7%, to $137,000 for the three months ended March 31, 2014 from $54,000 for the three months ended March 31, 2013, due to a $9.5 million, or 76.3% increase in the average balance of investment securities for the three months ended March 31, 2014 and by a 90 basis point increase in yield to 2.63% for the three months ended March 31, 2014 from 1.73% for the three months ended March 31, 2013. The increase in investment securities was in residential mortgage-backed securities and state and municipal obligations.

29

Interest Expense. Interest expense increased $44,000, or 14.9%, to $339,000 for the three months ended March 31, 2014 from $295,000 for the three months ended March 31, 2013. Interest expense on deposits increased $54,000, or 38.6%, to $194,000 for the three months ended March 31, 2014 from $140,000 for the three months ended March 31, 2013, due to an increase in the average balance of interest-bearing deposits of $25.2 million, or 19.6%, to $153.6 million for the three months ended March 31, 2014 from $128.4 million for the three months ended March 31, 2013 and by an increase in the average rate we paid on interest-bearing deposits to 0.51% for the three months ended March 31, 2014 compared to 0.44% for the three months ended March 31, 2013.

Interest expense on FHLB advances decreased $10,000, or 6.5%, to $145,000 for the three months ended March 31, 2014 from $155,000 for the three months ended March 31, 2013. The decrease was primarily due to a 112 basis point decrease in the average rate we paid on FHLB advances to 1.06% for the three months ended March 31, 2014 compared to 2.18% for the three months ended March 31, 2013, partially offset by an increase in the average balance, which increased $26.2 million, or 92.4%, to $54.6 million for the three months ended March 31, 2014 from $28.4 million for the three months ended March 31, 2013.

Net Interest and Dividend Income. Net interest and dividend income increased $512,000, or 26.7%, to $2.4 million for the three months ended March 31, 2014 compared to $1.9 million for the three months ended March 31, 2013. The increase in net interest income was primarily the result of a $2.5 million or 5.7%, increase in net average interest-earning assets to $45.9 million for the three months ended March 31, 2014, from $43.5 million for the same period in 2013 and by a one basis point increase in net interest margin to 3.84% for the three months ended March 31, 2014 compared to the same period in 2013. Our net interest margin may compress in the future due to competitive pricing in our market area.

Provision for Loan Losses. We establish provisions for loan losses, which are charged to operations, at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses quarterly, management analyzes several qualitative loan portfolio risk factors including but not limited to, charge-off history over a relevant period, changes in management or underwriting policies, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower and results of internal and external loan reviews. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. After an evaluation of these factors, we did not record a provision for loan losses for the three months ended March 31, 2014 compared to $90,000 for the three months ended March 31, 2013. We recorded $211,000 in loan charge-offs and no recoveries during the three months ended March 31, 2014. The allowance for loan losses was $2.2 million, or 0.95% of total loans and 295.3% of non-performing loans at March 31, 2014, compared to an allowance for loan losses of $2.4 million, or 1.06% of total loans and 600.5% of non-performing loans at December 31, 2013.

Non-interest Income. Non-interest income decreased $378,000, or 60.9%, to $243,000 for the three months ended March 31, 2014 from $621,000 for the three months ended March 31, 2013, primarily due to a decrease in mortgage banking income. Mortgage banking income decreased $379,000, or 90.0%, to $42,000 for the three months ended March 31, 2014 from $421,000 for the three months ended March 31, 2013. We sold $2.3 million of loans during the three months ended March 31, 2014 compared to $16.2 million of such sales for the three months ended March 31, 2013. The loan sale volume was negatively affected by a decline in loan refinancing volume. We intend to continue to expand the geographic footprint of our residential loan origination staff as a means to increase revenue from our mortgage banking operations. Other non-interest income included $29,000 of fees associated with commercial lines of credit facilities for the three months ended March 31, 2014 compared to $20,000 for the three months ended March 31, 2013.

Non-interest Expense. Non-interest expense increased $126,000, or 6.0%, to $2.2 million for the three months ended March 31, 2014 compared to the same period in 2013. Salaries and benefits expense increased $42,000, or 3.5%, as increases in commercial lending staff salaries were partially offset by staff reductions from a reorganization. Occupancy and equipment expense increased $21,000, or 9.1% primarily due to depreciation expense associated with a new commercial loan software system. Professional fees increased $57,000, or 65.5% primarily due to the implementation of a sub-servicing function for residential loans ($28,000) and legal expenses related to our proposed equity incentive plan ($21,000).

Income Tax Expense. The income before income taxes of $435,000 resulted in income tax expense of $160,000 for the three months ended March 31, 2014, compared to income before income taxes of $337,000 resulting in an income tax expense of $128,000 for the three months ended March 31, 2013. The effective income tax rate was 36.8% for the three months ended March 31, 2014 compared to 38.0% for the three months ended March 31, 2013. The decrease in the effective rate for the three months ended March 31, 2014, compared to the effective tax rate for the three months ended March 31, 2013, was primarily due to the increase in municipal securities income and increased interest income on securities held at the Bank’s subsidiary, Georgetown Securities Corporation, during the three months ended March 31, 2014.

30

Average Balance Sheet. The following table sets forth certain information regarding the Company’s average balance sheet for the periods indicated, including the average yields on its interest-earning assets and the average costs of its interest-bearing liabilities. Average yields are calculated by dividing the interest and dividend income produced by the average balance of interest-bearing assets. Average costs are calculated by dividing the interest expense produced by the average balance of interest-bearing liabilities. The average balances for the period are derived from average balances that are calculated daily. The average yields and costs include fees that are considered adjustments to such average yields and costs.

	Three Months Ended March 31,
	2014							2013
	Average							Average
	Outstanding					Yield/		Outstanding				Yield/
	Balance		Interest (1)			Rate (1)		Balance		Interest (1)		Rate (1)
	(Dollars in thousands)
Interest-earning assets:
Loans (2)	$	228,282	$	2,630		4.61	%	$	185,179	$	2,156	4.66	%
Investment securities (1)	22,032		145			2.63	%	12,494		54		1.73	%
Short-term investments	3,796		1			0.11	%	2,555		2		0.31	%
Total interest-earning assets	254,110		2,776			4.37	%	200,228		2,212		4.42	%
Non-interest-earning assets	9,289		—					8,301		—
Total assets	$	263,399	2,776					$	208,529	2,212
Interest-bearing liabilities:
Savings deposits	$	14,314	1			0.03	%	$	12,163	1		0.03	%
NOW accounts	30,815		14			0.18	%	27,900		14		0.20	%
Money market accounts	43,430		12			0.11	%	47,208		6		0.05	%
Certificates of deposit	65,023		167			1.03	%	41,128		119		1.16	%
Total interest-bearing deposits	153,582		194			0.51	%	128,399		140		0.44	%
FHLB advances	54,588		145			1.06	%	28,378		155		2.18	%
Total interest-bearing liabilities	208,170		339			0.65	%	156,777		295		0.75	%
Non-interest-bearing liabilities:
Demand deposits	23,529							19,224
Other non-interest-bearing liabilities	2,805							2,131
Total liabilities	234,504							178,132
Stockholders’ equity	28,895							30,397
Total liabilities and equity	$	263,399						$	208,529
Net interest-earning assets (4)	$	45,940						$	43,451
Fully tax-equivalent net interest income			2,437							1,917
Less: tax-equivalent adjustments			(8		)					—
Net interest income			$	2,429						$	1,917
Net interest rate spread (1)(3)						3.72	%					3.67	%
Net interest margin (1)(5)						3.84	%					3.83	%
Average of interest-earning assets to interest-bearing liabilities						122.07	%					127.72	%

(1)  Interest and yield on investment securities, interest rate spread and net interest margin, are presented on a tax-equivalent basis. Tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of income.  For the three months ended March 31, 2014 the yield on investment securities before tax-equivalent adjustments was 2.49% and yield on total interest-earning assets was 4.36%. Net interest rate spread before tax-equivalent adjustments for the three months ended March 31, 2014 was 3.71%, while net interest margin before tax-equivalent adjustments was 3.82%.  There were no tax-equivalent adjustments made for the three months ended March 31, 2013.

(2)  Includes loans held for sale.

(3)  Net interest rate spread represents the difference between the tax-equivalent yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4)  Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5)  Net interest margin represents net interest income (tax-equivalent basis) divided by average total interest-earning assets.

31

Rate/Volume Analysis. The following table presents the effects of changing rates and volumes on our net interest and dividend income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

	For the Three Months Ended March 31, 2014
	Compared to the Three Months Ended
	March 31, 2013
	Increase (Decrease) Due to
	Volume		Rate			Net
	(In thousands)
Interest-earning assets:
Loans	$	502	$	(28	)	$	474
Investment securities (1)	41		50			91
Short-term investments	1		(2		)	(1		)
Total interest-earning assets	544		20			564
Interest-bearing liabilities:
Savings deposits	—		—			—
NOW accounts	1		(1		)	—
Money market accounts	—		6			6
Certificates of deposit	69		(21		)	48
Total interest-bearing deposits	70		(16		)	54
FHLB advances	143		(153		)	(10		)
Total interest-bearing liabilities	213		(169		)	44
Change in net interest income	$	331	$	189		$	520

(1)  Municipal securities income and net interest income are presented on a tax-equivalent basis using a tax rate of 34% resulting in an adjustment of $8,000 for the three months ended March 31, 2014.  Three months ended March 31, 2013 consisted entirely of taxable investment securities.

32

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments and maturities and sales of residential loans and investment securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We regularly adjust our investments in liquid assets based upon our assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and securities, and (iv) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short- and intermediate-term securities. The excess cash and cash equivalent balances are expected to be used to fund increases in loans and securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At March 31, 2014, cash and cash equivalents totaled $8.1 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $18.1 million at March 31, 2014. Our policies also allow for access to the wholesale funds market for up to 50.0% of total assets, or $134.2 million. At March 31, 2014, we had $54.1 million in FHLB advances outstanding, $29.0 million in certificates of deposit obtained through a listing service and $1.2 million in brokered certificates of deposit, allowing the Company access to an additional $49.9 million in wholesale funds based on policy guidelines.

At March 31, 2014 we had $3.9 million in loan commitments outstanding. In addition to commitments to originate loans, we had $34.9 million in unadvanced funds to borrowers. Related to our secondary market activities, we had $3.5 million of forward loan sale commitments at March 31, 2014. These forward loan sale commitments were used to offset the interest rate risk associated with mortgage loans, which have had their interest rate locked by our customers.

Certificates of deposit due within one year of March 31, 2014 totaled $23.8 million, or 13.1% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit or other wholesale funding options. Depending on market conditions, we may be required to pay higher rates on such deposits or other advances than we currently pay on the certificates of deposit due on or before March 31, 2015. We believe, however, based on past experience that a significant portion of our certificates of deposit will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

We have no material commitments or demands that are likely to affect our liquidity other than set forth below. In the event loan demand were to increase at a pace greater than expected, or any unforeseen demand or commitment were to occur, we would access our borrowing capacity with the FHLB and other wholesale market sources.

Our primary investing activities are the origination and purchase of loans and the purchase of securities. During the three months ended March 31, 2014, we originated $17.9 million in loans. No securities or loans were purchased during the three months ended March 31, 2014.

Financing activities consist primarily of activity in deposit accounts, FHLB advances and the sale of residential mortgages. We experienced a net increase in total deposits of $5.5 million for the three months ended March 31, 2014. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our deposits to be competitive. FHLB advances reflected a net decrease of $825,000 during the three months ended March 31, 2014. FHLB advances have primarily been used to fund loan demand and deposit outflows. We sold $2.3 million in conforming residential mortgage loans for the three months ended March 31, 2014.

Capital Management. The Bank is subject to various regulatory capital requirements including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At March 31, 2014, the Bank exceeded all of its regulatory capital requirements and is considered “well capitalized” under regulatory guidelines.

In July 2013, the Office of the Comptroller of the Currency and the other federal bank regulatory agencies issued a final rule that will revise their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the rule establishes a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets) and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-in or opt-out is exercised. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

The final rule becomes effective for the Bank on January 1, 2015. The capital conservation buffer requirement will be phased in beginning January 1, 2016 and ending January 1, 2019, when the full capital conservation buffer requirement will be effective. The final rule also implements consolidated capital requirements for savings and loan holding companies, such as the Company, effective January 1, 2015. Management is evaluating what impact, if any, these new rules will have on the operation of the Bank and/or the Company.

33

Off-Balance Sheet Arrangements.  For the three months ended March 31, 2014, we engaged in no off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

Item 3.Quantitative and Qualitatives Disclosure About Market Risk

Not applicable to smaller reporting companies.

Item 4.Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure (i) that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and (ii)  that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Neither the Company nor the Bank is engaged in pending legal proceedings material to the Company’s consolidated financial condition or results of operations.

Item 1A. Risk Factors

Other than as set forth in prior filings with the Securities and Exchange Commission or this Quarterly Report on Form 10-Q, there have been no material changes to the Risk Factors set forth in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on March 28, 2014.

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

a) Not applicable

b) Not applicable

c) The following table presents a summary of the Company’s share repurchases during the quarter ended March 31, 2014.

				Total Number of Shares	Maximum Number of
				Purchased as Part of	Shares That May Yet be
	Total Number of	Average Price Paid		Publicly Announced	Purchased Under the
Period	Shares Purchased	Per Share		Program (1)	Program (1)
January 1 through January 31, 2014	0	$	0.00	0	49,973
February 1 through February 28, 2014	19,417	$	14.84	17,000	32,973
March 1 through March 31, 2014	0	$	0.00	0	32,973

(1) On July 23, 2013 the Company announced that its Board of Directors had authorized a second stock repurchase program pursuant to which the Company intends to purchase up to approximately 5.0% of its issued and outstanding shares, or up to 93,765 shares.

Item 3.Defaults Upon Senior Securities

None

Item 4.Mine Safety Disclosures

Not applicable

34

Item 5.Other Information

a)  Not applicable

b) There were no material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors during the period covered by this Form 10-Q.

Item 6.Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101	The following financial statements from Georgetown Bancorp Inc.’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2014, filed on May 13, 2014, formatted in XBRL: (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.

101.INS	Interactive datafile	XBRL Instance Document
101.SCH	Interactive datafile	XBRL Taxonomy Extension Schema Document
101.CAL	Interactive datafile	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Interactive datafile	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Interactive datafile	XBRL Taxonomy Extension Label Linkbase
101.PRE	Interactive datafile	XBRL Taxonomy Extension Presentation Linkbase Document

35

SIGNATURES

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

	GEORGETOWN BANCORP, INC.
	(Registrant)
Date: May 13, 2014	/s/ Robert E. Balletto
	Robert E. Balletto
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 13, 2014	/s/ Joseph W. Kennedy
	Joseph W. Kennedy
	Senior Vice President, Chief Financial Officer and Treasurer
	(Principal Accounting and Financial Officer)

36

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert E. Balletto, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Georgetown Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2014	/s/ Robert E. Balletto
	Robert E. Balletto
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph W. Kennedy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Georgetown Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2014	/s/ Joseph W. Kennedy
	Joseph W. Kennedy
	Senior Vice President, Chief Financial Officer and Treasurer
	(Principal Accounting and Financial Officer)

EX-32

Exhibit 32

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Robert E. Balletto, President and Chief Executive Officer and Joseph W. Kennedy, Senior Vice President and Chief Financial Officer of Georgetown Bancorp, Inc. (the “Company”) each certify in their capacity as officers of the Company that they have reviewed the quarterly report of the Company on Form 10-Q for the quarter ended March 31, 2014 and that to the best of their knowledge:

1.the report fully complies with the requirements of Sections 13(a) of the Securities Exchange Act of 1934; and

2.the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 13, 2014	/s/ Robert E. Balletto
	Robert E. Balletto
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 13, 2014	/s/ Joseph W. Kennedy
	Joseph W. Kennedy
	Senior Vice President, Chief Financial Officer and Treasurer
	(Principal Accounting and Financial Officer)

The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been provided to Georgetown Bancorp, Inc. and will be retained by Georgetown Bancorp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Equity Incentive Plan (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014
Options Outstanding
Number Outstanding at the end of the period (in shares)	74,924
Weighted-Average Remaining Contractual Life	8 years 3 months 18 days
Weighted Average Exercise Price (in dollars per share)	$ 12.26
Options Exercisable
Number Exercisable at the end of the period (in shares)	28,426
Weighted Average Exercise Price (in dollars per share)	$ 10.17
Weighted Average Exercise Price - $9.33
Options Outstanding
Number Outstanding at the end of the period (in shares)	10,712
Weighted-Average Remaining Contractual Life	5 years 10 months 24 days
Weighted Average Exercise Price (in dollars per share)	$ 9.33
Options Exercisable
Number Exercisable at the end of the period (in shares)	9,559
Weighted Average Exercise Price (in dollars per share)	$ 9.33
Weighted Average Exercise Price - $9.55
Options Outstanding
Number Outstanding at the end of the period (in shares)	12,166
Weighted-Average Remaining Contractual Life	6 years 10 months 24 days
Weighted Average Exercise Price (in dollars per share)	$ 9.55
Options Exercisable
Number Exercisable at the end of the period (in shares)	9,213
Weighted Average Exercise Price (in dollars per share)	$ 9.55
Weighted Average Exercise Price - $9.58
Options Outstanding
Number Outstanding at the end of the period (in shares)	10,896
Weighted-Average Remaining Contractual Life	7 years 10 months 24 days
Weighted Average Exercise Price (in dollars per share)	$ 9.58
Options Exercisable
Number Exercisable at the end of the period (in shares)	5,277
Weighted Average Exercise Price (in dollars per share)	$ 9.58
Weighted Average Exercise Price $14.00
Options Outstanding
Number Outstanding at the end of the period (in shares)	19,150
Weighted-Average Remaining Contractual Life	8 years 10 months 24 days
Weighted Average Exercise Price (in dollars per share)	$ 14.00
Options Exercisable
Number Exercisable at the end of the period (in shares)	4,377
Weighted Average Exercise Price (in dollars per share)	$ 14.00
Weighted Average Exercise Price $14.98
Options Outstanding
Number Outstanding at the end of the period (in shares)	22,000
Weighted-Average Remaining Contractual Life	9 years 10 months 24 days
Weighted Average Exercise Price (in dollars per share)	$ 14.98

XML

Loans and Servicing (Details 7) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Loans serviced for others
Unpaid principal balances of mortgage loans serviced for others not included in the accompanying consolidated balance sheets	$ 117,000,000		$ 117,700,000
Moving average term of U.S. Treasury rate used to estimate the discount rate in order to determine the fair value of servicing rights (in years)	10 years
Percentage added to the moving average 10-year U.S. Treasury rate to estimate the discount rate used to determine the fair value of servicing rights	5.00%
Mortgage servicing rights capitalized and amortized
Balance at beginning of period	1,084,000	910,000
Additions	24,000	227,000
Amortization	(84,000)	(79,000)
Balance at end of period	1,024,000	1,058,000
Valuation allowances:
Balance at beginning of period	26,000	20,000
Recoveries	(17,000)	(15,000)
Balance at end of period	9,000	5,000
Mortgage servicing assets, net	1,015,000	1,053,000
Fair value of mortgage servicing assets	$ 1,392,000	$ 1,403,000

XML

Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Securities available for sale
Amortized Cost	$ 18,438		$ 18,886
Gross Unrealized Gains	91		71
Gross Unrealized Losses	(423)		(676)
Fair Value	18,106		18,281
Securities held to maturity
Available for sale securities sold	0	0
State and municipal
Securities available for sale
Amortized Cost	2,493		2,505
Gross Unrealized Gains	20		4
Gross Unrealized Losses	(69)		(115)
Fair Value	2,444		2,394
Residential mortgage-backed securities
Securities available for sale
Amortized Cost	15,945		16,381
Gross Unrealized Gains	71		67
Gross Unrealized Losses	(354)		(561)
Fair Value	15,662		15,887
Securities held to maturity
Amortized Cost	986		1,050
Gross Unrealized Gains	79		86
Fair Value	$ 1,065		$ 1,136

XML

Fair Value Measurements (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Financial assets:
Securities available for sale	$ 18,106	$ 18,281
Financial liabilities:
Short-term FHLB advances	31,000	32,825
Mortgagor's escrow accounts	1,538	1,230
Level 1
Financial assets:
Cash and cash equivalents	8,065	6,295
FHLB stock	2,907	2,907
Loans held for sale	1,781	1,019
Accrued interest receivable	715	729
Financial liabilities:
Short-term FHLB advances	31,000	32,825
Mortgagor's escrow accounts	1,538	1,230
Accrued interest payable	51	45
Level 2
Financial assets:
Securities available for sale	18,106	18,281
Securities held to maturity	1,065	1,136
Capitalized mortgage servicing rights	1,392	1,361
Financial liabilities:
Deposits	181,965	176,405
Long-term FHLB advances	23,410	22,405
Level 3
Financial assets:
Loans, net	226,722	223,659
Total
Financial assets:
Cash and cash equivalents	8,065	6,295
Securities available for sale	18,106	18,281
Securities held to maturity	1,065	1,136
FHLB stock	2,907	2,907
Loans held for sale	1,781	1,019
Loans, net	226,722	223,659
Accrued interest receivable	715	729
Capitalized mortgage servicing rights	1,392	1,361
Financial liabilities:
Deposits	181,965	176,405
Short-term FHLB advances	31,000	32,825
Long-term FHLB advances	23,410	22,405
Mortgagor's escrow accounts	1,538	1,230
Accrued interest payable	51	45
Carrying Amount
Financial assets:
Cash and cash equivalents	8,065	6,295
Securities available for sale	18,106	18,281
Securities held to maturity	986	1,050
FHLB stock	2,907	2,907
Loans held for sale	1,763	1,001
Loans, net	227,020	223,912
Accrued interest receivable	715	729
Capitalized mortgage servicing rights	1,015	1,058
Financial liabilities:
Deposits	181,450	175,961
Short-term FHLB advances	31,000	32,825
Long-term FHLB advances	23,100	22,100
Mortgagor's escrow accounts	1,538	1,230
Accrued interest payable	$ 51	$ 45

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2014

Basis of Presentation

Basis of Presentation

(1)           Basis of Presentation

The accompanying unaudited financial statements of Georgetown Bancorp, Inc., a Maryland corporation, (the “Company”) were prepared in accordance with the instructions for Form 10-Q and with Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three-month period ended March 31, 2014 are not necessarily indicative of the results that may be expected for future periods, including the entire fiscal year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the December 31, 2013 Consolidated Financial Statements presented in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on March 28, 2014. The consolidated financial statements include the accounts of Georgetown Bank (the “Bank”) and its wholly owned subsidiary, Georgetown Securities Corporation, which engages in the buying, selling and holding of securities. All significant inter-company balances and transactions have been eliminated in consolidation. These consolidated financial statements consider events that occurred through the date the consolidated financial statements were issued.

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Loans and Servicing (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Past-due and non-accrual loans
Loans delinquent for: 30 - 59 Days	$ 1	$ 16
Loans delinquent for: 60 - 89 Days	2	512
Loans delinquent for: 90 days or more	740	399
Total Past Due	743	927
Total Current	227,984	224,941
Total Loans	228,727	225,868
Non-accrual Loans	740	399
Residential loans:
Past-due and non-accrual loans
Total Loans	107,582	107,849
One- to four- family, residential loans
Past-due and non-accrual loans
Loans delinquent for: 60 - 89 Days		245
Total Past Due		245
Total Current	91,784	92,205
Total Loans	91,784	92,450
Home equity loans and lines of credit
Past-due and non-accrual loans
Loans delinquent for: 30 - 59 Days		15
Loans delinquent for: 90 days or more	473	399
Total Past Due	473	414
Total Current	15,325	14,985
Total Loans	15,798	15,399
Non-accrual Loans	473	399
Commercial loans:
Past-due and non-accrual loans
Total Loans	97,503	96,504
One-to-four family investment property
Past-due and non-accrual loans
Total Current	11,072	11,089
Total Loans	11,072	11,089
Multi-family real estate
Past-due and non-accrual loans
Total Current	13,818	14,462
Total Loans	13,818	14,462
Commercial real estate
Past-due and non-accrual loans
Loans delinquent for: 60 - 89 Days		267
Loans delinquent for: 90 days or more	267
Total Past Due	267	267
Total Current	55,621	54,005
Total Loans	55,888	54,272
Non-accrual Loans	267
Commercial business
Past-due and non-accrual loans
Total Current	16,725	16,681
Total Loans	16,725	16,681
Construction loans:
Past-due and non-accrual loans
Total Loans	23,260	21,107
One-to-four family, construction loans
Past-due and non-accrual loans
Total Current	10,575	9,848
Total Loans	10,575	9,848
Multi-family
Past-due and non-accrual loans
Total Current	8,433	7,304
Total Loans	8,433	7,304
Non-residential
Past-due and non-accrual loans
Total Current	4,252	3,955
Total Loans	4,252	3,955
Consumer
Past-due and non-accrual loans
Loans delinquent for: 30 - 59 Days	1	1
Loans delinquent for: 60 - 89 Days	2
Total Past Due	3	1
Total Current	379	407
Total Loans	$ 382	$ 408

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Loans and Servicing (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Allowance for loan losses
Beginning Balance	$ 2,396	$ 1,780
Charge-offs	(211)	(132)
Recoveries		3
(Benefit) provision		90
Ending Balance	2,185	1,741
Individually evaluated for impairment	48		333
Collectively evaluated for impairment	2,137		2,063
Loans
Individually evaluated for impairment	1,314		3,155
Collectively evaluated for impairment	227,413		222,713
Total Loans	228,727		225,868
Residential loans:
Loans
Total Loans	107,582		107,849
One- to four- family, residential loans
Allowance for loan losses
Beginning Balance	284	378
Charge-offs		(130)
(Benefit) provision	(3)	49
Ending Balance	281	297
Individually evaluated for impairment	7		7
Collectively evaluated for impairment	274		277
Loans
Individually evaluated for impairment	320		321
Collectively evaluated for impairment	91,464		92,129
Total Loans	91,784		92,450
Home equity loans and lines of credit
Allowance for loan losses
Beginning Balance	274	254
(Benefit) provision	(29)	(12)
Ending Balance	245	242
Individually evaluated for impairment	14		49
Collectively evaluated for impairment	231		225
Loans
Individually evaluated for impairment	428		428
Collectively evaluated for impairment	15,370		14,971
Total Loans	15,798		15,399
Commercial loans:
Loans
Total Loans	97,503		96,504
One-to-four family investment property
Allowance for loan losses
Beginning Balance		62	61
(Benefit) provision		5
Ending Balance	61	67	61
Collectively evaluated for impairment	61		61
Loans
Collectively evaluated for impairment	11,072		11,089
Total Loans	11,072		11,089
Multi-family real estate
Allowance for loan losses
Beginning Balance	108	40
(Benefit) provision	(4)	1
Ending Balance	104	41
Collectively evaluated for impairment	104		108
Loans
Collectively evaluated for impairment	13,818		14,462
Total Loans	13,818		14,462
Commercial real estate
Allowance for loan losses
Beginning Balance	1,056	668
Charge-offs	(211)
(Benefit) provision	16	20
Ending Balance	861	688
Individually evaluated for impairment	27		277
Collectively evaluated for impairment	834		779
Loans
Individually evaluated for impairment	566		2,406
Collectively evaluated for impairment	55,322		51,866
Total Loans	55,888		54,272
Commercial business
Allowance for loan losses
Beginning Balance		159	291
(Benefit) provision		(6)
Ending Balance	291	153	291
Collectively evaluated for impairment	291		291
Loans
Collectively evaluated for impairment	16,725		16,681
Total Loans	16,725		16,681
Construction loans:
Loans
Total Loans	23,260		21,107
One-to-four family, construction loans
Allowance for loan losses
Beginning Balance	133	149
(Benefit) provision	(36)	(20)
Ending Balance	97	129
Collectively evaluated for impairment	97		133
Loans
Collectively evaluated for impairment	10,575		9,848
Total Loans	10,575		9,848
Multi-family
Allowance for loan losses
Beginning Balance	66	34
(Benefit) provision	10	3
Ending Balance	76	37
Collectively evaluated for impairment	76		66
Loans
Collectively evaluated for impairment	8,433		7,304
Total Loans	8,433		7,304
Non-residential
Allowance for loan losses
Beginning Balance	63	25
(Benefit) provision	5	52
Ending Balance	68	77
Collectively evaluated for impairment	68		63
Loans
Collectively evaluated for impairment	4,252		3,955
Total Loans	4,252		3,955
Consumer
Allowance for loan losses
Beginning Balance	15	11
Charge-offs		(2)
Recoveries		3
(Benefit) provision	(3)	(2)
Ending Balance	12	10
Collectively evaluated for impairment	12		15
Loans
Collectively evaluated for impairment	382		408
Total Loans	382		408
Unallocated
Allowance for loan losses
Beginning Balance	45
(Benefit) provision	44
Ending Balance	89
Collectively evaluated for impairment	$ 89		$ 45

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Loans and Servicing (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Recorded Investment
Impaired loans without a valuation allowance	$ 328	$ 330
Impaired loans with a valuation allowance	986	2,825
Unpaid Principal Balance
Impaired loans without a valuation allowance	328	330
Impaired loans with a valuation allowance	986	2,928
Related Allowance
Impaired loans with a valuation allowance	48	333
Average Recorded Investment
Impaired loans without a valuation allowance	329	335
Impaired loans with a valuation allowance	1,840	2,861
Interest Income Recognized
Impaired loans without a valuation allowance	4	19
Impaired loans with a valuation allowance	12	119
One- to four- family, residential loans
Recorded Investment
Impaired loans with a valuation allowance	320	321
Unpaid Principal Balance
Impaired loans with a valuation allowance	320	321
Related Allowance
Impaired loans with a valuation allowance	7	7
Average Recorded Investment
Impaired loans with a valuation allowance	321	379
Interest Income Recognized
Impaired loans with a valuation allowance	4	13
Home equity loans and lines of credit
Recorded Investment
Impaired loans without a valuation allowance	29	29
Impaired loans with a valuation allowance	399	399
Unpaid Principal Balance
Impaired loans without a valuation allowance	29	29
Impaired loans with a valuation allowance	399	399
Related Allowance
Impaired loans with a valuation allowance	14	49
Average Recorded Investment
Impaired loans without a valuation allowance	29	31
Impaired loans with a valuation allowance	399	377
Interest Income Recognized
Impaired loans without a valuation allowance		1
Impaired loans with a valuation allowance		2
Commercial real estate
Recorded Investment
Impaired loans without a valuation allowance	299	301
Impaired loans with a valuation allowance	267	2,105
Unpaid Principal Balance
Impaired loans without a valuation allowance	299	301
Impaired loans with a valuation allowance	267	2,208
Related Allowance
Impaired loans with a valuation allowance	27	277
Average Recorded Investment
Impaired loans without a valuation allowance	300	304
Impaired loans with a valuation allowance	1,120	2,105
Interest Income Recognized
Impaired loans without a valuation allowance	4	18
Impaired loans with a valuation allowance	$ 8	$ 104

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Loans and Servicing (Details 5)	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2014 item	Dec. 31, 2013 item	Mar. 31, 2014 One- to four- family, residential loans item	Mar. 31, 2013 One- to four- family, residential loans item
Loans modified and classified as troubled debt restructures
Number of loan modifications that resulted in the classification of TDR			0	0
Number of TDRs in default of their modified terms	0	0

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 275	$ 209
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses		90
Amortization of securities, net	30	29
Net change in deferred loan fees and costs	(38)	24
Depreciation and amortization expense	80	67
Decrease in accrued interest receivable	14	42
Income from bank-owned life insurance	(25)	(24)
Stock-based compensation expense	74	59
Gain on sales of loans	(13)	(199)
Loans originated for sale	(3,065)	(14,897)
Proceeds from sales of loans	2,316	16,405
Gain on sale of other real estate owned		(19)
Net change in other assets and liabilities	168	(186)
Net cash (used in) provided by operating activities	(184)	1,600
Activity in securities available for sale:
Maturities, prepayments and calls	418	1,004
Purchases		(2,077)
Maturities, prepayments and calls of securities held to maturity	64	135
Redemption of Federal Home Loan Bank stock		232
Loan originations, net	(3,070)	(2,585)
Proceeds from sale of other real estate owned		197
Purchase of premises and equipment	(69)	(28)
Net cash used in investing activities	(2,657)	(3,122)
Cash flows from financing activities:
Net change in deposits	5,489	(7,816)
Net change in Federal Home Loan Bank advances with maturities of three months or less	(1,825)	11,000
Proceeds of Federal Home Loan Bank advances with maturities greater than three months	1,000	1,000
Repayments of Federal Home Loan Bank advances with maturities greater than three months		(4,500)
Net change in mortgagors' escrow accounts	308	159
Repurchase of common stock	(288)	(267)
Cash dividends paid on common stock	(73)	(78)
Net cash provided by (used in) financing activities	4,611	(502)
Net change in cash and cash equivalents	1,770	(2,024)
Cash and cash equivalents at beginning of period	6,295	6,789
Cash and cash equivalents at end of period	8,065	4,765
Supplementary information:
Interest paid on deposit accounts	193	139
Interest paid on advances	141	165
Income taxes paid	54	61
Loans transferred to other real estate owned		$ 244

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Loans and Servicing (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014 grade	Dec. 31, 2013
Loans by risk rating
Total loans	$ 228,727	$ 225,868
Internal Loan Rating System
Number of grades in internal loan rating system	9
Not formally rated
Loans by risk rating
Total loans	107,171	107,537
Pass
Loans by risk rating
Total loans	120,496	115,239
Pass | Minimum of range
Internal Loan Rating System
Grade assigned in internal loan rating system	1
Pass | Maximum of range
Internal Loan Rating System
Grade assigned in internal loan rating system	5
Special mention
Internal Loan Rating System
Grade assigned in internal loan rating system	6
Substandard
Loans by risk rating
Total loans	1,060	3,092
Internal Loan Rating System
Grade assigned in internal loan rating system	7
Doubtful
Internal Loan Rating System
Grade assigned in internal loan rating system	8
Loss
Internal Loan Rating System
Grade assigned in internal loan rating system	9
Residential loans:
Loans by risk rating
Total loans	107,582	107,849
One- to four- family, residential loans
Loans by risk rating
Total loans	91,784	92,450
One- to four- family, residential loans | Not formally rated
Loans by risk rating
Total loans	91,464	92,129
One- to four- family, residential loans | Substandard
Loans by risk rating
Total loans	320	321
Home equity loans and lines of credit
Loans by risk rating
Total loans	15,798	15,399
Home equity loans and lines of credit | Not formally rated
Loans by risk rating
Total loans	15,325	15,000
Home equity loans and lines of credit | Substandard
Loans by risk rating
Total loans	473	399
Commercial loans:
Loans by risk rating
Total loans	97,503	96,504
One-to four-family investment property
Loans by risk rating
Total loans	11,072	11,089
One-to four-family investment property | Pass
Loans by risk rating
Total loans	11,072	11,089
Multi-family real estate
Loans by risk rating
Total loans	13,818	14,462
Multi-family real estate | Pass
Loans by risk rating
Total loans	13,818	14,462
Commercial real estate
Loans by risk rating
Total loans	55,888	54,272
Commercial real estate | Pass
Loans by risk rating
Total loans	55,621	51,900
Commercial real estate | Substandard
Loans by risk rating
Total loans	267	2,372
Commercial business
Loans by risk rating
Total loans	16,725	16,681
Commercial business | Pass
Loans by risk rating
Total loans	16,725	16,681
Construction loans:
Loans by risk rating
Total loans	23,260	21,107
One-to four-family, construction loans
Loans by risk rating
Total loans	10,575	9,848
One-to four-family, construction loans | Pass
Loans by risk rating
Total loans	10,575	9,848
Multi-family
Loans by risk rating
Total loans	8,433	7,304
Multi-family | Pass
Loans by risk rating
Total loans	8,433	7,304
Non-residential
Loans by risk rating
Total loans	4,252	3,955
Non-residential | Pass
Loans by risk rating
Total loans	4,252	3,955
Consumer
Loans by risk rating
Total loans	382	408
Consumer | Not formally rated
Loans by risk rating
Total loans	$ 382	$ 408

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Equity Incentive Plan (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2014
Additional Disclosures
Weighted average period for recognition of share-based compensation	3 years 9 months 18 days
Stock Options
Additional Disclosures
Unrecognized share-based compensation expense related to non-vested options (in dollars)	$ 222,000
Share-based compensation expense recognized (in dollars)	14,000
Tax benefit from recognized compensation expense (in dollars)	2,000
Non-vested Restricted Stock
Number of Shares
Outstanding at beginning of year (in shares)	35,751
Granted (in shares)	22,000
Vested (in shares)	(11,246)
Outstanding at end of period (in shares)	46,505
Weighted Average Grant Date Value
Outstanding at beginning of year (in dollars per share)	$ 10.83
Granted (in dollars per share)	$ 14.98
Vested (in dollars per share)	$ 10.21
Outstanding at end of period (in dollars per share)	$ 12.94
Additional Disclosures
Unrecognized share-based compensation expense related to non-vested restricted stock (in dollars)	582,000
Share-based compensation expense recognized (in dollars)	33,000
Tax benefit from recognized compensation expense (in dollars)	$ 13,000

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
ASSETS
Cash and due from banks	$ 2,905	$ 3,290
Short-term investments	5,160	3,005
Total cash and cash equivalents	8,065	6,295
Securities available for sale, at fair value	18,106	18,281
Securities held to maturity, at amortized cost	986	1,050
Federal Home Loan Bank stock, at cost	2,907	2,907
Loans held for sale	1,763	1,001
Loans, net of allowance for loan losses of $2,185,000 at March 31, 2014 and $2,396,000 at December 31, 2013	227,020	223,912
Premises and equipment, net	3,658	3,669
Accrued interest receivable	715	729
Bank-owned life insurance	2,923	2,898
Other assets	2,182	2,291
Total assets	268,325	263,033
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	181,450	175,961
Short-term Federal Home Loan Bank advances	31,000	32,825
Long-term Federal Home Loan Bank advances	23,100	22,100
Mortgagors' escrow accounts	1,538	1,230
Accrued expenses and other liabilities	2,132	1,975
Total liabilities	239,220	234,091
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value per share: 50,000,000 shares authorized; none outstanding
Common stock, $0.01 par value per share: 100,000,000 shares authorized, 1,834,101 shares issued at March 31, 2014 and 1,831,518 shares issued at December 31, 2013	18	18
Additional paid-in capital	19,273	19,212
Retained earnings	11,590	11,388
Accumulated other comprehensive loss	(214)	(389)
Unearned compensation - ESOP (92,316 shares unallocated at March 31, 2014 and 94,126 shares unallocated at December 31, 2013)	(980)	(1,001)
Unearned compensation - Restricted stock (46,505 shares non-vested at March 31, 2014 and 35,751 shares non-vested at December 31, 2013)	(582)	(286)
Total stockholders' equity	29,105	28,942
Total liabilities and stockholders' equity	$ 268,325	$ 263,033

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Unearned Compensation-ESOP	Unearned Compensation-Restricted Stock
Balance at Dec. 31, 2012	$ 30,563	$ 19	$ 20,669	$ 10,958	$ 183	$ (1,084)	$ (182)
Increase (Decrease) in Stockholders' Equity
Net income	209			209
Other comprehensive (loss) income	(19)				(19)
Cash dividends paid ($0.04 per share)	(78)			(78)
Repurchased stock related to buyback program (17,000 and 18,312 shares for the period ended March 31, 2014 and December 31, 2013 respectively)	(242)		(242)
Common stock held by ESOP allocated or committed to be allocated (1,810 shares)	23		2			21
Restricted stock granted in connection with equity incentive plan (22,000 shares)			281				(281)
Purchased stock related to vested restricted stock (2,417 and 1,933 shares for the period ended March 31, 2014 and December 31, 2013 respectively)	(25)		(25)
Share based compensation - options	11		11
Share based compensation - restricted stock	25						25
Balance at Mar. 31, 2013	30,467	19	20,696	11,089	164	(1,063)	(438)
Balance at Dec. 31, 2013	28,942	18	19,212	11,388	(389)	(1,001)	(286)
Increase (Decrease) in Stockholders' Equity
Net income	275			275
Other comprehensive (loss) income	175				175
Cash dividends paid ($0.04 per share)	(73)			(73)
Repurchased stock related to buyback program (17,000 and 18,312 shares for the period ended March 31, 2014 and December 31, 2013 respectively)	(252)		(252)
Common stock held by ESOP allocated or committed to be allocated (1,810 shares)	27		6			21
Restricted stock granted in connection with equity incentive plan (22,000 shares)			329				(329)
Purchased stock related to vested restricted stock (2,417 and 1,933 shares for the period ended March 31, 2014 and December 31, 2013 respectively)	(36)		(36)
Share based compensation - options	14		14
Share based compensation - restricted stock	33						33
Balance at Mar. 31, 2014	$ 29,105	$ 18	$ 19,273	$ 11,590	$ (214)	$ (980)	$ (582)

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assets measured at fair value on a recurring basis
Securities available for sale	$ 18,106	$ 18,281
State and municipal
Assets measured at fair value on a recurring basis
Securities available for sale	2,444	2,394
Residential mortgage-backed securities
Assets measured at fair value on a recurring basis
Securities available for sale	15,662	15,887
Level 2
Assets measured at fair value on a recurring basis
Securities available for sale	18,106	18,281
Total Assets at Fair Value
Assets measured at fair value on a recurring basis
Securities available for sale	18,106	18,281
Recurring basis | Level 2
Assets measured at fair value on a recurring basis
Securities available for sale	18,106	18,281
Recurring basis | Level 2 | State and municipal
Assets measured at fair value on a recurring basis
Securities available for sale	2,444	2,394
Recurring basis | Level 2 | Residential mortgage-backed securities
Assets measured at fair value on a recurring basis
Securities available for sale	15,662	15,887
Recurring basis | Total Assets at Fair Value
Assets measured at fair value on a recurring basis
Securities available for sale	18,106	18,281
Recurring basis | Total Assets at Fair Value | State and municipal
Assets measured at fair value on a recurring basis
Securities available for sale	2,444	2,394
Recurring basis | Total Assets at Fair Value | Residential mortgage-backed securities
Assets measured at fair value on a recurring basis
Securities available for sale	$ 15,662	$ 15,887

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Equity Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2014

Equity Incentive Plan

Schedule of activity for stock options

	Stock Options
	Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	52,924		$	11.12
Granted	22,000		$	14.98
Outstanding at end of period	74,924		$	12.26
Exercisable at end of period	28,426
Weighted average fair value of options granted during the period	$	5.31

Schedule of options outstanding and exercisable

Options Outstanding				Options Exercisable
Number	Weighted-Average	Weighted		Number	Weighted
Outstanding	Remaining	Average		Exercisable	Average
as of 03/31/2014	Contractual Life	Exercise Price		as of 03/31/2014	Exercise Price
10,712	5.90 Years	$	9.33	9,559	$	9.33
12,166	6.90 Years	$	9.55	9,213	$	9.55
10,896	7.90 Years	$	9.58	5,277	$	9.58
19,150	8.90 Years	$	14.00	4,377	$	14.00
22,000	9.90 Years	$	14.98	—	$	—
74,924	8.30 Years	$	12.26	28,426	$	10.17

Schedule of activity for non-vested restricted stock

	Non-vested
	Restricted Stock
	Number of Shares		Weighted Average Grant Date Value
Outstanding at beginning of year	35,751		$	10.83
Granted	22,000		$	14.98
Vested	(11,246	)	$	10.21
Outstanding at end of period	46,505		$	12.94

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Capitalized mortgage servicing rights
Moving average term of U.S. Treasury rate used to estimate the discount rate in order to determine the fair value of servicing rights	10 years
Percentage added to the moving average 10-year U.S. Treasury rate to estimate the discount rate used to determine the fair value of servicing rights	5.00%
Short-term FHLB advances
Maturity period of short-term FHLB advances	90 days
Non-recurring basis | Impaired Loans
Fair value measurements
Adjustments to Fair Value	$ (48)	$ (333)
Non-recurring basis | Level 3 | Impaired Loans
Fair value measurements
Assets at Fair Value	938	2,492
Non-recurring basis | Assets at Fair Value | Impaired Loans
Fair value measurements
Assets at Fair Value	$ 938	$ 2,492

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Earnings Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Common Share
Net income available to common stockholders (in dollars)	$ 275	$ 209
Basic common shares:
Weighted average shares outstanding	1,791,850	1,908,514
Less: Weighted average unallocated ESOP shares	(93,490)	(100,731)
Add: Weighted average unvested restricted shares with non-forfeitable dividend rights	40,174	35,191
Basic weighted average common shares outstanding	1,738,534	1,842,974
Dilutive potential common shares	6,352	4,010
Diluted weighted average common shares outstanding	1,744,886	1,846,984
Basic earnings per share (in dollars per share)	$ 0.16	$ 0.11
Diluted earnings per share (in dollars per share)	$ 0.16	$ 0.11
Options to purchase shares included in the computation of diluted earnings per share (in shares)	52,924	40,681
Options to purchase shares not included in the computation of diluted earnings per share (in shares)	22,000	22,000

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash dividend paid (in dollars per share)	$ 0.04	$ 0.04
Repurchased stock related to buyback program (in shares)	17,000	18,312
Common stock held by ESOP allocated or committed to be allocated (in shares)	1,810	1,810
Restricted stock granted in connection with equity incentive plan (in shares)	22,000	22,000
Purchased stock related to vested restricted stock (in shares)	2,417	1,933

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Loans, allowance for loan losses (in dollars)	$ 2,185	$ 2,396
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	1,834,101	1,831,518
Unearned compensation - ESOP shares unallocated	92,316	94,126
Non-vested Restricted Stock
Unearned compensation - Restricted stock shares non-vested	46,505	35,751

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Equity Incentive Plan

3 Months Ended

Mar. 31, 2014

Equity Incentive Plan

Equity Incentive Plan

(9) Equity Incentive Plan

At March 31, 2014, the Company had one equity incentive plan, which was described more fully in Note 12 of the consolidated financial statements and notes thereto for the year ended December 31, 2013.

The following table presents the activity for the plan for the three months ended March 31, 2014.

	Stock Options
	Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	52,924		$	11.12
Granted	22,000		$	14.98
Outstanding at end of period	74,924		$	12.26
Exercisable at end of period	28,426
Weighted average fair value of options granted during the period	$	5.31

Options Outstanding				Options Exercisable
Number	Weighted-Average	Weighted		Number	Weighted
Outstanding	Remaining	Average		Exercisable	Average
as of 03/31/2014	Contractual Life	Exercise Price		as of 03/31/2014	Exercise Price
10,712	5.90 Years	$	9.33	9,559	$	9.33
12,166	6.90 Years	$	9.55	9,213	$	9.55
10,896	7.90 Years	$	9.58	5,277	$	9.58
19,150	8.90 Years	$	14.00	4,377	$	14.00
22,000	9.90 Years	$	14.98	—	$	—
74,924	8.30 Years	$	12.26	28,426	$	10.17

	Non-vested
	Restricted Stock
	Number of Shares		Weighted Average Grant Date Value
Outstanding at beginning of year	35,751		$	10.83
Granted	22,000		$	14.98
Vested	(11,246	)	$	10.21
Outstanding at end of period	46,505		$	12.94

As of March 31, 2014, unrecognized share-based compensation expense related to non-vested options amounted to $222,000 and the unrecognized share-based compensation expense related to non-vested restricted stock amounted to $582,000. Both amounts are expected to be recognized over a weighted average period of 3.8 years.

For the three months ended March 31, 2014, the Company recognized compensation expense for stock options of $14,000 with a related tax benefit of $2,000. The related tax benefit applies only to non-qualified stock options. For the three months ended March 31, 2014, the Company recognized compensation expense for restricted stock awards of $33,000 with a related tax benefit of $13,000.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	May 08, 2014
Document and Entity Information
Entity Registrant Name	Georgetown Bancorp, Inc.
Entity Central Index Key	0001542299
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,834,101
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Common Share

Schedule of computation of earnings per common share

	Three Months Ended
	March 31,
	2014			2013
Net income available to common stockholders	$	275,000		$	209,000
Basic common shares:
Weighted average shares outstanding	1,791,850			1,908,514
Less: Weighted average unallocated ESOP shares	(93,490		)	(100,731		)
Add: Weighted average unvested restricted shares with non-forfeitable dividend rights	40,174			35,191
Basic weighted average common shares outstanding	1,738,534			1,842,974
Dilutive potential common shares	6,352			4,010
Diluted weighted average common shares outstanding	1,744,886			1,846,984
Basic earnings per share	$	0.16		$	0.11
Diluted earnings per share	$	0.16		$	0.11

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Interest and dividend income:
Loans, including fees	$ 2,630	$ 2,156
Securities	137	54
Short-term investments	1	2
Total interest and dividend income	2,768	2,212
Interest expense:
Deposits	194	140
Short-term Federal Home Loan Bank advances	15	4
Long-term Federal Home Loan Bank advances	130	151
Total interest expense	339	295
Net interest and dividend income	2,429	1,917
Provision for loan losses		90
Net interest and dividend income, after provision for loan losses	2,429	1,827
Non-interest income:
Customer service fees	141	133
Mortgage banking income, net	42	421
Income from bank-owned life insurance	25	24
Net gain on sale of other real estate owned		19
Other	35	24
Total non-interest income	243	621
Non-interest expenses:
Salaries and employee benefits	1,239	1,197
Occupancy and equipment expenses	252	231
Data processing expenses	172	186
Professional fees	144	87
Advertising expenses	88	75
FDIC insurance	43	40
Other general and administrative expenses	299	295
Total non-interest expenses	2,237	2,111
Income before income taxes	435	337
Income tax provision	160	128
Net income	$ 275	$ 209
Weighted-average number of common shares outstanding:
Basic (in shares)	1,738,534	1,842,974
Diluted (in shares)	1,744,886	1,846,984
Earnings per share:
Basic (in dollars per share)	$ 0.16	$ 0.11
Diluted (in dollars per share)	$ 0.16	$ 0.11

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2014

Recent Accounting Pronouncements

Recent Accounting Pronouncements

(4)           Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-04, “Liabilities (Topic 405):  Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.”  The objective of the amendments in this ASU is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP.  Examples of obligations within the scope of this ASU include debt arrangements, other contractual obligations, and settled litigation and judicial rulings.  The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013; and should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASU scope that exist at the beginning of an entity’s fiscal year of adoption.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In April 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205):  Liquidation Basis of Accounting.”  The amendments in this ASU are being issued to clarify when an entity should apply the liquidation basis of accounting.  The guidance provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting.  Additionally, the amendments require disclosures about an entity’s plan for liquidation, the methods and significant assumptions used to measure assets and liabilities, the type and amount of costs and income accrued, and the expected duration of the liquidation process.  The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein.  Entities should apply the requirements prospectively from the day that liquidation becomes imminent.  Early adoption is permitted.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-10, “Derivatives and Hedging (Topic 815) — Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) (“OIS”) as a Benchmark Interest Rate for Hedge Accounting Purposes.”  The amendments in this ASU permit the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to Treasury Obligations of the U.S. government (“UST”) and the London Interbank Offered Rate (“LIBOR”).  The amendments also remove the restriction on using different benchmark rates for similar hedges.  The amendments apply to all entities that elect to apply hedge accounting of the benchmark interest rate under Topic 815.  The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013.  The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, “Income Taxes — Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.”  The amendments in this ASU provide guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  The amendments in this ASU are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.  The amendments apply to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.  The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU 2014-01, “Investments - Equity Method and Joint Ventures (Topic 323):  Accounting for Investments in Qualified Affordable Housing Projects.”  The amendments in this ASU apply to all reporting entities that invest in qualified affordable housing projects through limited liability entities that are flow-through entities for tax purposes as follows:

1. For reporting entities that meet the conditions for and that elect to use the proportional amortization method to account for investments in qualified affordable housing projects, all amendments in this ASU apply.

2. For reporting entities that do not meet the conditions for or that do not elect the proportional amortization method, only the amendments in this ASU that are related to disclosures apply.

The amendments in this ASU permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323.  The amendments in this ASU should be applied retrospectively to all periods presented.  A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments.  The amendments in this ASU are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014.  Early adoption is permitted.  The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40):  Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.”  The objective of the amendments in this ASU is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized.  The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the amendments require interim and annual disclosure of both (i) the amount of foreclosed residential real estate property held by the creditor and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.  For entities other than public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015.  An entity can elect to adopt the amendments in this ASU using either a modified retrospective transition method or a prospective transition method.   The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This ASU changes the criteria for reporting discontinued operations and modifies related disclosure requirements. The new guidance is effective on a prospective basis for fiscal years beginning on or after December 15, 2014, and interim periods within those years. The Company anticipates that the adoption of this guidance will not have a material impact on its consolidated financial statements.

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2014

Earnings Per Common Share

Earnings Per Common Share

(3)           Earnings Per Common Share

The Company has adopted the Earnings Per Share (“EPS”) guidance included in Accounting Standards Codification (“ASC”) 260-10. As presented below, basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For purposes of computing diluted EPS, the treasury stock method is used.

Unallocated ESOP shares are not deemed outstanding for earnings per share calculations.

Earnings per common share have been computed based on the following.

	Three Months Ended
	March 31,
	2014			2013
Net income available to common stockholders	$	275,000		$	209,000
Basic common shares:
Weighted average shares outstanding	1,791,850			1,908,514
Less: Weighted average unallocated ESOP shares	(93,490		)	(100,731		)
Add: Weighted average unvested restricted shares with non-forfeitable dividend rights	40,174			35,191
Basic weighted average common shares outstanding	1,738,534			1,842,974
Dilutive potential common shares	6,352			4,010
Diluted weighted average common shares outstanding	1,744,886			1,846,984
Basic earnings per share	$	0.16		$	0.11
Diluted earnings per share	$	0.16		$	0.11

Options to purchase 52,924 shares, representing outstanding options that were granted in 2010, 2011, 2012 and 2013, were included in the computation of diluted earnings per share for the three-month period ended March 31, 2014. Options to purchase 22,000 shares, representing outstanding options that were granted in 2014, were not included in the computation of diluted earnings per share for the three-month period ended March 31, 2014, because to do so would have been antidilutive.  Options to purchase 40,681 shares, representing outstanding options that were granted in 2010, 2011 and 2012, were included in the computation of diluted earnings per share for the three-month period ended March 31, 2013. Options to purchase 22,000 shares, representing outstanding options that were granted in 2013, were not included in the computation of diluted earnings per share for the three-month period ended March 31, 2013, because to do so would have been antidilutive.

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Corporate Structure (Details)	1 Months Ended
	Jun. 30, 2012 Georgetown Bancorp, MHC	Jan. 31, 2005 The bank
Conversion and reorganization to stock holding company
Percentage of common stock owned	56.70%	100.00%

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Securities (Tables)

3 Months Ended

Mar. 31, 2014

Securities

Summary of securities

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At March 31, 2014
Securities available for sale
State and municipal	$	2,493	$	20	$	(69	)	$	2,444
Residential mortgage-backed securities	15,945		71		(354		)	15,662
Total securities available for sale	$	18,438	$	91	$	(423	)	$	18,106
Securities held to maturity
Residential mortgage-backed securities	$	986	$	79	$	—		$	1,065

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At December 31, 2013
Securities available for sale
State and municipal	$	2,505	$	4	$	(115	)	$	2,394
Residential mortgage-backed securities	16,381		67		(561		)	15,887
Total securities available for sale	$	18,886	$	71	$	(676	)	$	18,281
Securities held to maturity
Residential mortgage-backed securities	$	1,050	$	86	$	—		$	1,136

Schedule of maturities of debt securities

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Over ten years	$	2,493	$	2,444	$	—	$	—
Residential mortgage-backed securities	15,945		15,662		986		1,065
	$	18,438	$	18,106	$	986	$	1,065

Schedule of securities with gross unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position

	Less Than Twelve Months					Greater Than Twelve Months
	Gross					Gross
	Unrealized			Fair		Unrealized		Fair
	Losses			Value		Losses		Value
	(In thousands)
At March 31, 2014:
Securities available for sale
State and municipal	$	(69	)	$	1,323	$	—	$	—
Residential mortgage-backed securities	(354		)	14,256		—		—
Total temporarily impaired securities	$	(423	)	$	15,579	$	—	$	—
At December 31, 2013
Securities available for sale
State and municipal	$	(115	)	$	1,827	$	—	$	—
Residential mortgage-backed securities	(561		)	13,389		—		—
Total temporarily impaired securities	$	(676	)	$	15,216	$	—	$	—

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Secured Borrowings and Collateral

3 Months Ended

Mar. 31, 2014

Secured Borrowings and Collateral

Secured Borrowings and Collateral

(7) Secured Borrowings and Collateral

Federal Home Loan Bank advances

At March 31, 2014, all Federal Home Loan Bank (“FHLB”) of Boston advances were secured by a blanket security agreement on qualified collateral, principally first mortgage loans on owner-occupied residential property in the amount of $82.7 million, and mortgage-backed securities with a fair value of $16.7 million.

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Securities

3 Months Ended

Mar. 31, 2014

Securities

Securities

(5)           Securities

A summary of securities is as follows.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At March 31, 2014
Securities available for sale
State and municipal	$	2,493	$	20	$	(69	)	$	2,444
Residential mortgage-backed securities	15,945		71		(354		)	15,662
Total securities available for sale	$	18,438	$	91	$	(423	)	$	18,106
Securities held to maturity
Residential mortgage-backed securities	$	986	$	79	$	—		$	1,065

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
At December 31, 2013
Securities available for sale
State and municipal	$	2,505	$	4	$	(115	)	$	2,394
Residential mortgage-backed securities	16,381		67		(561		)	15,887
Total securities available for sale	$	18,886	$	71	$	(676	)	$	18,281
Securities held to maturity
Residential mortgage-backed securities	$	1,050	$	86	$	—		$	1,136

All residential mortgage-backed securities have been issued by government-sponsored enterprises.

The amortized cost and estimated fair value of debt securities by contractual maturity at March 31, 2014 is as follows. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In thousands)
Over ten years	$	2,493	$	2,444	$	—	$	—
Residential mortgage-backed securities	15,945		15,662		986		1,065
	$	18,438	$	18,106	$	986	$	1,065

There were no sales of securities for the three months ended March 31, 2014 and 2013.

Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position, is as follows.

	Less Than Twelve Months					Greater Than Twelve Months
	Gross					Gross
	Unrealized			Fair		Unrealized		Fair
	Losses			Value		Losses		Value
	(In thousands)
At March 31, 2014:
Securities available for sale
State and municipal	$	(69	)	$	1,323	$	—	$	—
Residential mortgage-backed securities	(354		)	14,256		—		—
Total temporarily impaired securities	$	(423	)	$	15,579	$	—	$	—
At December 31, 2013
Securities available for sale
State and municipal	$	(115	)	$	1,827	$	—	$	—
Residential mortgage-backed securities	(561		)	13,389		—		—
Total temporarily impaired securities	$	(676	)	$	15,216	$	—	$	—

Each reporting period, the Company evaluates all securities classified as available-for-sale or held-to-maturity with a decline in fair value below the amortized cost of the investment to determine whether or not the impairment is deemed to be other-than-temporary (“OTTI”).

At March 31, 2014 12 securities classified as available for sale had an unrealized loss with aggregate depreciation of 2.59% from the securities amortized cost basis.  The unrealized losses on the Company’s investments in state and municipal bonds and residential mortgage backed securities were primarily caused by changes in interest rates and not by credit quality.  Many of these investments are guaranteed by the U.S. Government or its agencies and as management has not decided to sell these securities, nor is it likely that the Company will be required to sell these securities, no declines are deemed to be other than temporary.

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Loans and Servicing

3 Months Ended

Mar. 31, 2014

Loans and Servicing

Loans and Servicing

(6)           Loans and Servicing

Loans

A summary of loans is as follows.

	At					At
	March 31,					December 31,
	2014					2013
	Amount			Percent		Amount			Percent
	(Dollars in thousands)
Residential loans:
One- to four-family	$	91,784		40.13	%	$	92,450		40.93	%
Home equity loans and lines of credit	15,798			6.91		15,399			6.82
Total residential mortgage loans	107,582			47.04		107,849			47.75
Commercial loans:
One- to four-family investment property	11,072			4.84		11,089			4.91
Multi-family real estate	13,818			6.04		14,462			6.40
Commercial real estate	55,888			24.42		54,272			24.02
Commercial business	16,725			7.31		16,681			7.39
Total commercial loans	97,503			42.61		96,504			42.72
Construction loans:
One- to four-family	10,575			4.62		9,848			4.36
Multi-family	8,433			3.70		7,304			3.24
Non-residential	4,252			1.86		3,955			1.75
Total construction loans	23,260			10.18		21,107			9.35
Consumer	382			0.17		408			0.18
Total loans	228,727			100.00	%	225,868			100.00	%
Other items:
Net deferred loan costs	478					440
Allowance for loan losses	(2,185		)			(2,396		)
Total loans, net	$	227,020				$	223,912

An analysis of the allowance for loan losses at and for the three months ended March 31, 2014 and 2013 and at December 31, 2013 is below. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Residential						Commercial											Construction
	One- to four- family			Home equity loans and lines of credit			One- to four- family investment property		Multi-family real estate			Commercial real estate			Commercial business			One- to four- family			Multi-family		Non- residential		Consumer			Unallocated		Total
	(In thousands)
Allowance for loan losses
Three months ended March 31, 2014
Beginning Balance	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Charge-offs	—			—			—		—			(211		)	—			—			—		—		—			—		(211		)
Recoveries	—			—			—		—			—			—			—			—		—		—			—		—
(Benefit) provision	(3		)	(29		)	—		(4		)	16			—			(36		)	10		5		(3		)	44		—
Ending Balance	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Three months ended March 31, 2013
Beginning Balance	$	378		$	254		$	62	$	40		$	668		$	159		$	149		$	34	$	25	$	11		$	—	$	1,780
Charge-offs	(130		)	—			—		—			—			—			—			—		—		(2		)	—		(132		)
Recoveries	—			—			—		—			—			—			—			—		—		3			—		3
Provision (benefit)	49			(12		)	5		1			20			(6		)	(20		)	3		52		(2		)	—		90
Ending Balance	$	297		$	242		$	67	$	41		$	688		$	153		$	129		$	37	$	77	$	10		$	—	$	1,741
At March 31, 2014
Allowance for loan losses
Individually evaluated for impairment	$	7		$	14		$	—	$	—		$	27		$	—		$	—		$	—	$	—	$	—		$	—	$	48
Collectively evaluated for impairment	274			231			61		104			834			291			97			76		68		12			89		2,137
	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Loans
Individually evaluated for impairment	$	320		$	428		$	—	$	—		$	566		$	—		$	—		$	—	$	—	$	—		$	—	$	1,314
Collectively evaluated for impairment	91,464			15,370			11,072		13,818			55,322			16,725			10,575			8,433		4,252		382			—		227,413
	$	91,784		$	15,798		$	11,072	$	13,818		$	55,888		$	16,725		$	10,575		$	8,433	$	4,252	$	382		$	—	$	228,727
At December 31, 2013
Allowance for loan losses
Individually evaluated for impairment	$	7		$	49		$	—	$	—		$	277		$	—		$	—		$	—	$	—	$	—		$	—	$	333
Collectively evaluated for impairment	277			225			61		108			779			291			133			66		63		15			45		2,063
	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Loans
Individually evaluated for impairment	$	321		$	428		$	—	$	—		$	2,406		$	—		$	—		$	—	$	—	$	—		$	—	$	3,155
Collectively evaluated for impairment	92,129			14,971			11,089		14,462			51,866			16,681			9,848			7,304		3,955		408			—		222,713
	$	92,450		$	15,399		$	11,089	$	14,462		$	54,272		$	16,681		$	9,848		$	7,304	$	3,955	$	408		$	—	$	225,868

The following is a summary of past-due and non-accrual loans at March 31, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Loans delinquent for:												90 days
					90 days		Total		Total		Total		or more		Non-accrual
	30 - 59 Days		60 - 89 Days		or more		Past Due		Current		Loans		and accruing		Loans
	(In thousands)
At March 31, 2014:
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	91,784	$	91,784	$	—	$	—
Home equity loans and lines of credit	—		—		473		473		15,325		15,798		—		473
Commercial loans:
One- to four-family investment property	—		—		—		—		11,072		11,072		—		—
Multi-family real estate	—		—		—		—		13,818		13,818		—		—
Commercial real estate	—		—		267		267		55,621		55,888		—		267
Commercial business	—		—		—		—		16,725		16,725		—		—
Construction loans:
One- to four-family	—		—		—		—		10,575		10,575		—		—
Multi-family	—		—		—		—		8,433		8,433		—		—
Non-residential	—		—		—		—		4,252		4,252		—		—
Consumer	1		2		—		3		379		382		—		—
Total	$	1	$	2	$	740	$	743	$	227,984	$	228,727	$	—	$	740
At December 31, 2013:
Residential loans:
One- to four-family	$	—	$	245	$	—	$	245	$	92,205	$	92,450	$	—	$	—
Home equity loans and lines of credit	15		—		399		414		14,985		15,399		—		399
Commercial loans:
One- to four-family investment property	—		—		—		—		11,089		11,089		—		—
Multi-family real estate	—		—		—		—		14,462		14,462		—		—
Commercial real estate	—		267		—		267		54,005		54,272		—		—
Commercial business	—		—		—		—		16,681		16,681		—		—
Construction loans:
One- to four-family	—		—		—		—		9,848		9,848		—		—
Multi-family	—		—		—		—		7,304		7,304		—		—
Non-residential	—		—		—		—		3,955		3,955		—		—
Consumer	1		—		—		1		407		408		—		—
Total	$	16	$	512	$	399	$	927	$	224,941	$	225,868	$	—	$	399

The following is an analysis of impaired loans at March 31, 2014 and December 31, 2013.

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
At March 31, 2014
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		29		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	299		299		—		300		4
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	328	$	328	$	—	$	329	$	4
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	320	$	320	$	7	$	321	$	4
Home equity loans and lines of credit	399		399		14		399		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	267		267		27		1,120		8
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	986	$	986	$	48	$	1,840	$	12
At December 31, 2013
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		31		1
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	301		301		—		304		18
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	330	$	330	$	—	$	335	$	19
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	321	$	321	$	7	$	379	$	13
Home equity loans and lines of credit	399		399		49		377		2
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	2,105		2,208		277		2,105		104
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	2,825	$	2,928	$	333	$	2,861	$	119

There were no loan modifications made that resulted in the classification of a troubled debt restructure (“TDR”) during the three months ended March 31, 2014 and 2013.

At March 31, 2014 and December 31, 2013 there were no TDRs in default of their modified terms.

The following table represents the Company’s loans by risk rating at March 31, 2014 and December 31, 2013. For additional information please refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	Residential				Commercial								Construction
	One- to four- family		Home equity loans and lines of credit		One- to four- family investment property		Multi-family real estate		Commercial real estate		Commercial business		One- to four- family		Multi-family		Non- residential		Consumer		Total
	(In thousands)
At March 31, 2014
Classification:
Not formally rated	$	91,464	$	15,325	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	382	$	107,171
Pass	—		—		11,072		13,818		55,621		16,725		10,575		8,433		4,252		—		120,496
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	320		473		—		—		267		—		—		—		—		—		1,060
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	91,784	$	15,798	$	11,072	$	13,818	$	55,888	$	16,725	$	10,575	$	8,433	$	4,252	$	382	$	228,727
At December 31, 2013
Classification:
Not formally rated	$	92,129	$	15,000	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	408	$	107,537
Pass	—		—		11,089		14,462		51,900		16,681		9,848		7,304		3,955		—		115,239
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	321		399		—		—		2,372		—		—		—		—		—		3,092
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	92,450	$	15,399	$	11,089	$	14,462	$	54,272	$	16,681	$	9,848	$	7,304	$	3,955	$	408	$	225,868

Credit Quality Information

The Bank utilizes a nine grade internal loan rating system for all commercial and construction loans as follows:

Loans rated 1 - 5:  Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 6:  Loans in this category are considered “special mention.” These loans have risk profiles that are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 7:  Loans in this category are considered “substandard.” These loans have a well defined weakness that jeopardizes the liquidation of the debt and is inadequately protected by the current sound worth and paying capacity of the borrower or pledged collateral. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Loans rated 8:  Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 9:  Loans in this category are considered a “loss.” The loan has been determined to be uncollectible and the chance of loss is inevitable. Loans in this category will be charged-off.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on all commercial and construction loans.

Loans serviced for others and mortgage servicing rights

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $117.0 million and $117.7 million at March 31, 2014 and December 31, 2013, respectively.

The risks inherent in the mortgage servicing assets relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The fair value of servicing rights was $1.4 million at March 31, 2014 and 2013, and was determined using the moving average 10-year, U.S. Treasury rate plus 5.0%, adjusted to reflect the current credit spreads and conditions in the market as a discount rate. Prepayment assumptions, which are impacted by loan rates and terms, are calculated using a moving average of prepayment data published by the Securities Industry and Financial Markets Association and an independent third party proprietary analysis of prepayment rates embedded in liquid mortgage securities markets and modeled against the serviced loan portfolio by the independent third party valuation specialist.

The following summarizes mortgage servicing rights capitalized and amortized, along with the aggregate activity-related valuation allowances.

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Mortgage servicing rights:
Balance at beginning of period	$	1,084		$	910
Additions	24			227
Amortization	(84		)	(79		)
Balance at end of period	1,024			1,058
Valuation allowances:
Balance at beginning of period	26			20
Additions	—			—
Recoveries	(17		)	(15		)
Balance at end of period	9			5
Mortgage servicing assets, net	$	1,015		$	1,053
Fair value of mortgage servicing assets	$	1,392		$	1,403

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

Fair Value Measurements

(8) Fair Value Measurements

The Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

Level l - Valuation is based on quoted prices in active markets for identical assets or liabilities. Level l assets and liabilities generally include debt and equity securities that are traded in an active exchange market. At March 31, 2014, the Company had no assets or liabilities valued using Level 1 measurements.

Level 2 - Valuation is based on observable inputs other than Level l prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

All of the Company’s securities that are measured at fair value are included in Level 2 and are based on pricing models from independent, third party pricing services that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data. There are no liabilities measured at fair value. All of the Company’s impaired loans and other real estate owned that are measured at fair value are included in Level 3 and are based on the appraised value of the underlying collateral considering discounting factors, if deemed appropriate, and adjusted for selling costs. These appraised values may be discounted based on management’s historical knowledge, expertise or changes in market conditions from time of valuation. The Company did not have any significant transfers of assets or liabilities to or from Levels 1 and 2 of the fair value hierarchy during the three month period ended March 31, 2014.

Assets and liabilities measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013 are summarized below.

							Assets
	Level 1		Level 2		Level 3		at Fair Value
	(In thousands)
At March 31, 2014
Assets
Securities available for sale
State and municipal	$	—	$	2,444	$	—	$	2,444
Residential mortgage-backed securities	—		15,662		—		15,662
Total securities available for sale	$	—	$	18,106	$	—	$	18,106
At December 31, 2013
Assets
Securities available for sale
State and municipal	$	—	$	2,394	$	—	$	2,394
Residential mortgage-backed securities	—		15,887		—		15,887
Total securities available for sale	$	—	$	18,281	$	—	$	18,281

The Company may also be required, from time to time, to measure certain other financial assets on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. Assets measured at fair value on a non-recurring basis at March 31, 2014 and December 31, 2013 are summarized below. The fair value adjustments relate to the amount of write-down recorded or related allowance recorded as of March 31, 2014 and December 31, 2013.

							Assets		Adjustments
	Level 1		Level 2		Level 3		at Fair Value		to Fair Value
	(In thousands)
At March 31, 2014
Impaired loans	$	—	$	—	$	938	$	938	$	(48	)
At December 31, 2013
Impaired loans	$	—	$	—	$	2,492	$	2,492	$	(333	)

The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments.

Cash and cash equivalents: The carrying amounts of cash and short-term investments approximate fair values.

Securities: Fair values for the Company’s debt securities are based on pricing models that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

Federal Home Loan Bank stock: Fair value is based on redemption provisions of the FHLB of Boston. The FHLB stock has no quoted market value.

Loans held for sale: Fair value is based on committed secondary market prices.

Loans: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Capitalized mortgage servicing rights: Fair value is based on a quarterly, independent third-party valuation model that calculates the present value of estimated future net servicing income. The model utilizes a variety of assumptions, the most significant of which are loan prepayment assumptions and the discount rate used to discount future cash flows. Prepayment assumptions, which are impacted by loan rates and terms, are calculated using a moving average of prepayment data published by the Securities Industry and Financial Markets Association and a third party proprietary analysis of prepayment rates embedded in liquid mortgage securities markets and modeled against the serviced loan portfolio by the independent third party valuation specialist. The discount rate is the moving average 10-year, U.S. Treasury rate plus 5.0% and adjusted to reflect the current credit spreads and conditions in the market. Other assumptions include delinquency rates, foreclosure rates, servicing cost inflation, and annual unit loan cost. All assumptions are adjusted periodically to reflect current circumstances and all are obtained from independent market sources.

Deposits: The fair values for non-certificate accounts are, by definition, equal to the amount payable on demand at the reporting date which is the carrying amount. Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-term FHLB advances: The fair value of short-term FHLB advances approximates carrying value, as they generally mature within 90 days.

Long-term FHLB advances: The fair value for long-term FHLB advances is estimated using discounted cash flow analyses based on current market borrowing rates for similar types of borrowing arrangements.

Accrued interest:  The carrying amounts of accrued interest approximate fair value.

Off-balance-sheet instruments:  Fair values for off-balance-sheet, credit-related financial instruments 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. At March 31, 2014 and December 31, 2013, the fair value of commitments outstanding is not significant since fees charged are not material.

The estimated fair values and related carrying amounts of the Company’s financial instruments at March 31, 2014 and December 31, 2013 are as follows.

	March 31, 2014
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	8,065	$	8,065	$	—	$	—	$	8,065
Securities available for sale	18,106		—		18,106		—		18,106
Securities held to maturity	986		—		1,065		—		1,065
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,763		1,781		—		—		1,781
Loans, net	227,020		—		—		226,722		226,722
Accrued interest receivable	715		715		—		—		715
Capitalized mortgage servicing rights	1,015		—		1,392		—		1,392
Financial liabilities:
Deposits	$	181,450	$	—	$	181,965	$	—	$	181,965
Short-term FHLB advances	31,000		31,000		—		—		31,000
Long-term FHLB advances	23,100		—		23,410		—		23,410
Mortgagers’ escrow accounts	1,538		1,538		—		—		1,538
Accrued interest payable	51		51		—		—		51

	December 31, 2013
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	6,295	$	6,295	$	—	$	—	$	6,295
Securities available for sale	18,281		—		18,281		—		18,281
Securities held to maturity	1,050		—		1,136		—		1,136
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,001		1,019		—		—		1,019
Loans, net	223,912		—		—		223,659		223,659
Accrued interest receivable	729		729		—		—		729
Capitalized mortgage servicing rights	1,058		—		1,361		—		1,361
Financial liabilities:
Deposits	$	175,961	$	—	$	176,405	$	—	$	176,405
Short-term FHLB advances	32,825		32,825		—		—		32,825
Long-term FHLB advances	22,100		—		22,405		—		22,405
Mortgagors’ escrow accounts	1,230		1,230		—		—		1,230
Accrued interest payable	45		45		—		—		45

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Secured Borrowings and Collateral (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
First mortgage loans on owner-occupied residential property
Secured borrowings and collateral
Amount of qualified collateral pledged on FHLB Boston advances	$ 82.7
Mortgage-backed securities
Secured borrowings and collateral
Amount of qualified collateral pledged on FHLB Boston advances	$ 16.7

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

Summary of assets and liabilities measured at fair value on a recurring basis

							Assets
	Level 1		Level 2		Level 3		at Fair Value
	(In thousands)
At March 31, 2014
Assets
Securities available for sale
State and municipal	$	—	$	2,444	$	—	$	2,444
Residential mortgage-backed securities	—		15,662		—		15,662
Total securities available for sale	$	—	$	18,106	$	—	$	18,106
At December 31, 2013
Assets
Securities available for sale
State and municipal	$	—	$	2,394	$	—	$	2,394
Residential mortgage-backed securities	—		15,887		—		15,887
Total securities available for sale	$	—	$	18,281	$	—	$	18,281

Schedule of assets measured at fair value on a non-recurring basis

							Assets		Adjustments
	Level 1		Level 2		Level 3		at Fair Value		to Fair Value
	(In thousands)
At March 31, 2014
Impaired loans	$	—	$	—	$	938	$	938	$	(48	)
At December 31, 2013
Impaired loans	$	—	$	—	$	2,492	$	2,492	$	(333	)

Schedule of estimated fair values and related carrying amounts of the Company's financial instruments

	March 31, 2014
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	8,065	$	8,065	$	—	$	—	$	8,065
Securities available for sale	18,106		—		18,106		—		18,106
Securities held to maturity	986		—		1,065		—		1,065
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,763		1,781		—		—		1,781
Loans, net	227,020		—		—		226,722		226,722
Accrued interest receivable	715		715		—		—		715
Capitalized mortgage servicing rights	1,015		—		1,392		—		1,392
Financial liabilities:
Deposits	$	181,450	$	—	$	181,965	$	—	$	181,965
Short-term FHLB advances	31,000		31,000		—		—		31,000
Long-term FHLB advances	23,100		—		23,410		—		23,410
Mortgagers’ escrow accounts	1,538		1,538		—		—		1,538
Accrued interest payable	51		51		—		—		51

	December 31, 2013
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	6,295	$	6,295	$	—	$	—	$	6,295
Securities available for sale	18,281		—		18,281		—		18,281
Securities held to maturity	1,050		—		1,136		—		1,136
FHLB stock	2,907		2,907		—		—		2,907
Loans held for sale	1,001		1,019		—		—		1,019
Loans, net	223,912		—		—		223,659		223,659
Accrued interest receivable	729		729		—		—		729
Capitalized mortgage servicing rights	1,058		—		1,361		—		1,361
Financial liabilities:
Deposits	$	175,961	$	—	$	176,405	$	—	$	176,405
Short-term FHLB advances	32,825		32,825		—		—		32,825
Long-term FHLB advances	22,100		—		22,405		—		22,405
Mortgagors’ escrow accounts	1,230		1,230		—		—		1,230
Accrued interest payable	45		45		—		—		45

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Securities (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 item	Dec. 31, 2013
Available for Sale, Amortized cost
Over 10 years	$ 2,493
Total	18,438
Available for Sale, Fair Value
Over 10 years	2,444
Fair Value	18,106	18,281
Held to maturity, Amortized Cost
Total	986
Held to Maturity, Fair Value
Securities without single maturity date	1,065
Securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position
Less Than Twelve Months, Gross Unrealized Losses	(423)	(676)
Less Than Twelve Months, Fair Value	15,579	15,216
Number of available-for-sale securities in unrealized loss position	12
Additional disclosures
Available for sale securities in unrealized loss position, aggregate depreciation rate (as a percent)	2.59%
Residential mortgage-backed securities
Available for Sale, Amortized cost
Securities without single maturity date	15,945
Available for Sale, Fair Value
Securities without single maturity date	15,662
Fair Value	15,662	15,887
Held to maturity, Amortized Cost
Securities without single maturity date	986
Held to Maturity, Fair Value
Securities without single maturity date	1,065
Fair Value	1,065	1,136
Securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position
Less Than Twelve Months, Gross Unrealized Losses	(354)	(561)
Less Than Twelve Months, Fair Value	14,256	13,389
State and municipal
Available for Sale, Fair Value
Fair Value	2,444	2,394
Securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position
Less Than Twelve Months, Gross Unrealized Losses	(69)	(115)
Less Than Twelve Months, Fair Value	$ 1,323	$ 1,827

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 275	$ 209
Net unrealized gain (loss) on securities available for sale	273	(29)
Income tax (provision) benefit	(98)	10
Other comprehensive income (loss), net of tax	175	(19)
Comprehensive income	$ 450	$ 190

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Corporate Structure

3 Months Ended

Mar. 31, 2014

Corporate Structure

Corporate Structure

(2)           Corporate Structure

In conjunction with its reorganization into the mutual holding company structure, on January 5, 2005, the Bank (i) converted to a stock savings bank as the successor to the Bank in its mutual form; (ii) organized Georgetown Bancorp, Inc. (“Georgetown Federal”) as a federally-chartered corporation that owned 100% of the common stock of the Bank (in stock form); and (iii) organized Georgetown Bancorp, MHC as a federally-chartered mutual holding company that owned 56.7% of the Common Stock of Georgetown Federal as of June 30, 2012. On November 28, 2011, the Boards of Directors of Georgetown Federal, Georgetown Bancorp, MHC and the Bank each unanimously adopted a Plan of Conversion or Reorganization of the Mutual Holding Company pursuant to which Georgetown Bancorp, MHC undertook a “second-step” conversion and now ceases to exist. Georgetown Bancorp, MHC reorganized from a two-tier mutual holding company structure to a fully public stock holding company structure effective July 11, 2012, and, as a result, the Bank is now the wholly-owned subsidiary of the Company.

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Loans and Servicing (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Loans
Total loans	$ 228,727	$ 225,868
Other items:
Net deferred loan costs	478	440
Allowance for loan losses	(2,185)	(2,396)	(1,741)	(1,780)
Total loans, net	227,020	223,912
Total loans (as a percent)	100.00%	100.00%
Residential loans:
Loans
Total loans	107,582	107,849
Other items:
Total loans (as a percent)	47.04%	47.75%
One- to four- family, residential loans
Loans
Total loans	91,784	92,450
Other items:
Allowance for loan losses	(281)	(284)	(297)	(378)
Total loans (as a percent)	40.13%	40.93%
Home equity loans and lines of credit
Loans
Total loans	15,798	15,399
Other items:
Allowance for loan losses	(245)	(274)	(242)	(254)
Total loans (as a percent)	6.91%	6.82%
Commercial loans:
Loans
Total loans	97,503	96,504
Other items:
Total loans (as a percent)	42.61%	42.72%
One-to-four family investment property
Loans
Total loans	11,072	11,089
Other items:
Allowance for loan losses	(61)	(61)	(67)	(62)
Total loans (as a percent)	4.84%	4.91%
Multi-family real estate
Loans
Total loans	13,818	14,462
Other items:
Allowance for loan losses	(104)	(108)	(41)	(40)
Total loans (as a percent)	6.04%	6.40%
Commercial real estate
Loans
Total loans	55,888	54,272
Other items:
Allowance for loan losses	(861)	(1,056)	(688)	(668)
Total loans (as a percent)	24.42%	24.02%
Commercial business
Loans
Total loans	16,725	16,681
Other items:
Allowance for loan losses	(291)	(291)	(153)	(159)
Total loans (as a percent)	7.31%	7.39%
Construction loans:
Loans
Total loans	23,260	21,107
Other items:
Total loans (as a percent)	10.18%	9.35%
One-to-four family, construction loans
Loans
Total loans	10,575	9,848
Other items:
Allowance for loan losses	(97)	(133)	(129)	(149)
Total loans (as a percent)	4.62%	4.36%
Multi-family
Loans
Total loans	8,433	7,304
Other items:
Allowance for loan losses	(76)	(66)	(37)	(34)
Total loans (as a percent)	3.70%	3.24%
Non-residential
Loans
Total loans	4,252	3,955
Other items:
Allowance for loan losses	(68)	(63)	(77)	(25)
Total loans (as a percent)	1.86%	1.75%
Consumer
Loans
Total loans	382	408
Other items:
Allowance for loan losses	$ (12)	$ (15)	$ (10)	$ (11)
Total loans (as a percent)	0.17%	0.18%

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Equity Incentive Plan (Details) (USD $)	3 Months Ended
	Mar. 31, 2014 item
Equity Incentive Plan
Number of equity incentive plans	1
Stock Options
Number of Shares
Outstanding at beginning of year (in shares)	52,924
Granted (in shares)	22,000
Outstanding at end of period (in shares)	74,924
Exercisable at end of period (in shares)	28,426
Weighted Average Exercise Price
Outstanding at beginning of year (in dollars per share)	$ 11.12
Granted (in dollars per share)	$ 14.98
Outstanding at end of period (in dollars per share)	$ 12.26
Weighted average fair value of options granted during the period (in dollars per share)	$ 5.31

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Loans and Servicing (Tables)

3 Months Ended

Mar. 31, 2014

Loans and Servicing

Summary of loans

	At					At
	March 31,					December 31,
	2014					2013
	Amount			Percent		Amount			Percent
	(Dollars in thousands)
Residential loans:
One- to four-family	$	91,784		40.13	%	$	92,450		40.93	%
Home equity loans and lines of credit	15,798			6.91		15,399			6.82
Total residential mortgage loans	107,582			47.04		107,849			47.75
Commercial loans:
One- to four-family investment property	11,072			4.84		11,089			4.91
Multi-family real estate	13,818			6.04		14,462			6.40
Commercial real estate	55,888			24.42		54,272			24.02
Commercial business	16,725			7.31		16,681			7.39
Total commercial loans	97,503			42.61		96,504			42.72
Construction loans:
One- to four-family	10,575			4.62		9,848			4.36
Multi-family	8,433			3.70		7,304			3.24
Non-residential	4,252			1.86		3,955			1.75
Total construction loans	23,260			10.18		21,107			9.35
Consumer	382			0.17		408			0.18
Total loans	228,727			100.00	%	225,868			100.00	%
Other items:
Net deferred loan costs	478					440
Allowance for loan losses	(2,185		)			(2,396		)
Total loans, net	$	227,020				$	223,912

Schedule of analysis of the allowance for loan losses

	Residential						Commercial											Construction
	One- to four- family			Home equity loans and lines of credit			One- to four- family investment property		Multi-family real estate			Commercial real estate			Commercial business			One- to four- family			Multi-family		Non- residential		Consumer			Unallocated		Total
	(In thousands)
Allowance for loan losses
Three months ended March 31, 2014
Beginning Balance	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Charge-offs	—			—			—		—			(211		)	—			—			—		—		—			—		(211		)
Recoveries	—			—			—		—			—			—			—			—		—		—			—		—
(Benefit) provision	(3		)	(29		)	—		(4		)	16			—			(36		)	10		5		(3		)	44		—
Ending Balance	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Three months ended March 31, 2013
Beginning Balance	$	378		$	254		$	62	$	40		$	668		$	159		$	149		$	34	$	25	$	11		$	—	$	1,780
Charge-offs	(130		)	—			—		—			—			—			—			—		—		(2		)	—		(132		)
Recoveries	—			—			—		—			—			—			—			—		—		3			—		3
Provision (benefit)	49			(12		)	5		1			20			(6		)	(20		)	3		52		(2		)	—		90
Ending Balance	$	297		$	242		$	67	$	41		$	688		$	153		$	129		$	37	$	77	$	10		$	—	$	1,741
At March 31, 2014
Allowance for loan losses
Individually evaluated for impairment	$	7		$	14		$	—	$	—		$	27		$	—		$	—		$	—	$	—	$	—		$	—	$	48
Collectively evaluated for impairment	274			231			61		104			834			291			97			76		68		12			89		2,137
	$	281		$	245		$	61	$	104		$	861		$	291		$	97		$	76	$	68	$	12		$	89	$	2,185
Loans
Individually evaluated for impairment	$	320		$	428		$	—	$	—		$	566		$	—		$	—		$	—	$	—	$	—		$	—	$	1,314
Collectively evaluated for impairment	91,464			15,370			11,072		13,818			55,322			16,725			10,575			8,433		4,252		382			—		227,413
	$	91,784		$	15,798		$	11,072	$	13,818		$	55,888		$	16,725		$	10,575		$	8,433	$	4,252	$	382		$	—	$	228,727
At December 31, 2013
Allowance for loan losses
Individually evaluated for impairment	$	7		$	49		$	—	$	—		$	277		$	—		$	—		$	—	$	—	$	—		$	—	$	333
Collectively evaluated for impairment	277			225			61		108			779			291			133			66		63		15			45		2,063
	$	284		$	274		$	61	$	108		$	1,056		$	291		$	133		$	66	$	63	$	15		$	45	$	2,396
Loans
Individually evaluated for impairment	$	321		$	428		$	—	$	—		$	2,406		$	—		$	—		$	—	$	—	$	—		$	—	$	3,155
Collectively evaluated for impairment	92,129			14,971			11,089		14,462			51,866			16,681			9,848			7,304		3,955		408			—		222,713
	$	92,450		$	15,399		$	11,089	$	14,462		$	54,272		$	16,681		$	9,848		$	7,304	$	3,955	$	408		$	—	$	225,868

Summary of past-due and non-accrual loans

	Loans delinquent for:												90 days
					90 days		Total		Total		Total		or more		Non-accrual
	30 - 59 Days		60 - 89 Days		or more		Past Due		Current		Loans		and accruing		Loans
	(In thousands)
At March 31, 2014:
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	91,784	$	91,784	$	—	$	—
Home equity loans and lines of credit	—		—		473		473		15,325		15,798		—		473
Commercial loans:
One- to four-family investment property	—		—		—		—		11,072		11,072		—		—
Multi-family real estate	—		—		—		—		13,818		13,818		—		—
Commercial real estate	—		—		267		267		55,621		55,888		—		267
Commercial business	—		—		—		—		16,725		16,725		—		—
Construction loans:
One- to four-family	—		—		—		—		10,575		10,575		—		—
Multi-family	—		—		—		—		8,433		8,433		—		—
Non-residential	—		—		—		—		4,252		4,252		—		—
Consumer	1		2		—		3		379		382		—		—
Total	$	1	$	2	$	740	$	743	$	227,984	$	228,727	$	—	$	740
At December 31, 2013:
Residential loans:
One- to four-family	$	—	$	245	$	—	$	245	$	92,205	$	92,450	$	—	$	—
Home equity loans and lines of credit	15		—		399		414		14,985		15,399		—		399
Commercial loans:
One- to four-family investment property	—		—		—		—		11,089		11,089		—		—
Multi-family real estate	—		—		—		—		14,462		14,462		—		—
Commercial real estate	—		267		—		267		54,005		54,272		—		—
Commercial business	—		—		—		—		16,681		16,681		—		—
Construction loans:
One- to four-family	—		—		—		—		9,848		9,848		—		—
Multi-family	—		—		—		—		7,304		7,304		—		—
Non-residential	—		—		—		—		3,955		3,955		—		—
Consumer	1		—		—		1		407		408		—		—
Total	$	16	$	512	$	399	$	927	$	224,941	$	225,868	$	—	$	399

Schedule of analysis of impaired loans

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
	(In thousands)
At March 31, 2014
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		29		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	299		299		—		300		4
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	328	$	328	$	—	$	329	$	4
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	320	$	320	$	7	$	321	$	4
Home equity loans and lines of credit	399		399		14		399		—
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	267		267		27		1,120		8
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	986	$	986	$	48	$	1,840	$	12
At December 31, 2013
Impaired loans without a valuation allowance
Residential loans:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines of credit	29		29		—		31		1
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	301		301		—		304		18
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total impaired with no related allowance	$	330	$	330	$	—	$	335	$	19
Impaired loans with a valuation allowance
Residential loans:
One- to four-family	$	321	$	321	$	7	$	379	$	13
Home equity loans and lines of credit	399		399		49		377		2
Commercial loans:
One- to four-family investment property	—		—		—		—		—
Multi-family real estate	—		—		—		—		—
Commercial real estate	2,105		2,208		277		2,105		104
Commercial business	—		—		—		—		—
Construction loans:
One- to four-family	—		—		—		—		—
Multi-family	—		—		—		—		—
Non-residential	—		—		—		—		—
Consumer	—		—		—		—		—
Total with an allowance recorded	$	2,825	$	2,928	$	333	$	2,861	$	119

Schedule of loans by risk rating

	Residential				Commercial								Construction
	One- to four- family		Home equity loans and lines of credit		One- to four- family investment property		Multi-family real estate		Commercial real estate		Commercial business		One- to four- family		Multi-family		Non- residential		Consumer		Total
	(In thousands)
At March 31, 2014
Classification:
Not formally rated	$	91,464	$	15,325	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	382	$	107,171
Pass	—		—		11,072		13,818		55,621		16,725		10,575		8,433		4,252		—		120,496
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	320		473		—		—		267		—		—		—		—		—		1,060
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	91,784	$	15,798	$	11,072	$	13,818	$	55,888	$	16,725	$	10,575	$	8,433	$	4,252	$	382	$	228,727
At December 31, 2013
Classification:
Not formally rated	$	92,129	$	15,000	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	408	$	107,537
Pass	—		—		11,089		14,462		51,900		16,681		9,848		7,304		3,955		—		115,239
Special mention	—		—		—		—		—		—		—		—		—		—		—
Substandard	321		399		—		—		2,372		—		—		—		—		—		3,092
Doubtful	—		—		—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—		—		—
Total loans	$	92,450	$	15,399	$	11,089	$	14,462	$	54,272	$	16,681	$	9,848	$	7,304	$	3,955	$	408	$	225,868

Summary of mortgage servicing rights capitalized and amortized, along with the aggregate activity-related valuation allowances

	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Mortgage servicing rights:
Balance at beginning of period	$	1,084		$	910
Additions	24			227
Amortization	(84		)	(79		)
Balance at end of period	1,024			1,058
Valuation allowances:
Balance at beginning of period	26			20
Additions	—			—
Recoveries	(17		)	(15		)
Balance at end of period	9			5
Mortgage servicing assets, net	$	1,015		$	1,053
Fair value of mortgage servicing assets	$	1,392		$	1,403