Financial results for the three months ended June 30, 2007 included a $299,000 gain on the sale of certain loans in connection with a balance sheet restructuring initiative completed in the 2007 fiscal year.

Net income for the nine months ended June 30, 2008 was $434,000 or $.14 per basic and diluted share, as compared to a loss of $2,615,000 or ($.84) per basic and diluted share for the nine months ended June 30, 2007. Net income during the nine months ended June 30, 2007 was significantly affected by aggregate losses of $7.1 million relating to the balance sheet restructuring. During the same period, the Bank received insurance proceeds amounting to $3.4 million as a partial recovery related to the losses from a check-kiting scheme discovered in June of 2006.

President and CEO Joseph J. Bouffard commented that this was a significant period during which the Company enjoyed its third consecutive quarter of profitability and completed a conversion to a fully publicly traded company. As a result of the conversion, capital ratios were strengthened and debt was reduced at both the Bank and the holding company. Bouffard also noted that earlier in the calendar year, in recognition of the Company's improvement, the Bank's principal regulator, the Office of Thrift Supervision had rescinded a Supervisory Agreement that had been in effect since 2005. On a cautionary note Bouffard noted that although the quality of the Company's loan portfolio did not require any additions to the loan loss reserve, if the economy continued to decline additions to the allowance may be necessary in the future.

June 30, 2008 Highlights

-- Raised nearly $20 million in April 2008 by completing conversion from Mutual Holding Company structure to a fully publicly owned corporation.

-- Paid off more than $16 million in debt during the quarter ended June 30, 2008, including $6 million in Trust Preferred Securities.

-- Fiscal year to date net interest income increased by $740,000, or 7.4% compared to 2007.

-- Interest rate spread for the nine months ended June 30, 2008 improved to 2.47%, a 29% increase over the prior year.

-- In the non-interest expense category, during the quarter the Company recognized expense of $130,000 associated with a reduction in staff and reversed $89,000 in expenses previously accrued in connection with potential litigation that had been settled.

-- Nonperforming assets as a percentage of total assets at June 30, 2008 drops to .28%, a 37% improvement compared to June 30, 2007.

-- Allowance for loan losses to nonperforming loans increases to 161%.

-- Equity to assets ratio at June 30, 2008 improves to 8.4% from 5.2% at June 30, 2007. -- BCSB Bancorp, Inc.