Georgetown Bancorp, Inc. Reports Results for Quarter Ended December 31, 2006.

GEORGETOWN, Mass. -- Georgetown Bancorp, Inc. (OTCBB: GTWN) (the "Company"), holding company for Georgetown Savings Bank (the "Bank"), reported a net loss for the three months ended December 31, 2006 of $99,000, or $.04 per basic and diluted share compared to a net loss of $57,000 or $.02 per basic and diluted share for the three months ended December 31, 2005. The net loss for the six months ended December 31, 2006 was $185,000 or $.07 per basic and diluted share versus a net loss of $23,000 or $.01 per basic and diluted share for the six months ended December 31, 2005.

Robert E. Balletto, President and Chief Executive Officer, said, "I am pleased to report that we have been successful in our recruiting of a proven, senior commercial lender with the hiring of Charles R. Shediac (see press release dated December 12, 2006). We have further strengthened our ability to generate commercial business and build a residential mortgage banking operation by hiring Karen Cohn. The addition of these two professionals is expected to improve operating results in future periods through increased commercial loan and deposit volume, as well as providing a new source of non-interest income in the form of mortgage banking fees. We continue to be encouraged about the long-term outlook for increasing shareholder value based on the investments we have made and continue to make in personnel, infrastructure and technology."

Net interest income decreased $99,000, or 9.5% to $940,000 for the three months ended December 31, 2006, from $1.0 million for the same period in 2005. The decrease in net interest income was primarily a result of the decrease in net interest margin to 2.40% during the three months ended December 31, 2006, from 2.71% for the same period in 2005. Net interest income decreased $177,000, or 8.3% to $1.9 million for the six months ended December 31, 2006, from $2.1 million for the six months ended December 31, 2005. The decrease in net interest income was primarily a result of the decrease in net interest margin to 2.47% during the six months ended December 31, 2006, from 2.79% for the same period in 2005.

The provision for loan losses for the three months ended December 31, 2006 was $41,000 compared to a provision of $25,000 for the three months ended December 31, 2005. The provision for loan losses for the six months ended December 31, 2006 was $105,000 compared to a provision of $58,000 for the six months ended December 31, 2005.

Non-interest income for the three months ended December 31, 2006 increased $55,000 or 51.9% to $162,000, compared to $107,000 for the three months ended December 31, 2005. Non-interest income for the six months ended December 31, 2006 increased $121,000 or 55.8% to $337,000, compared to $216,000 for the six months ended December 31, 2005. The increase in the three and six months ended December 31, 2006 was primarily due to income generated from the Bank's Overdraft Privilege Program, which was launched in April 2006.

Non-interest expense for the three months ended December 31, 2006 decreased $4,000 or 0.3% to $1.2 million. The decrease in expenses was primarily due to a reduction of $44,000 or 48.4% in advertising expense, reflecting branch opening expeditures in 2005, partially offset by $34,000 in current period expense related to personnel restructurings. Non-interest expense for the six months ended December 31, 2006 increased $134,000 or 5.8% to $2.5 million, from $2.3 million for the same period in 2005. The increase was primarily due to recruitment and personnel restructuring expenses of $111,000 and from additional operating expenses related to the North Andover office, which opened in December 2005.

Total assets decreased by $4.5 million, or 2.7%, to $164.4 million at December 31, 2006 from $168.9 million at June 30, 2006. Net loans receivable decreased $2.0 million or 1.5%, to $126.8 million at December 31, 2006, from $128.8 million at June 30, 2006. The decrease was primarily due to a $4.2 million or 43.9% decrease in construction loans, which completed their construction phase and were paid off, partially offset by a $2.4 million or 20.6% increase in commercial real estate loans. Total interest earning assets decreased $4.4 million or 2.8% to $154.3 million at December 31, 2006, from $158.7 million at June 30, 2006.

Total deposits decreased $2.1 million or 2.2%, to $94.4 million at December 31, 2006 from $96.6 million at June 30, 2006. The decrease was primarily due to the payoff of a $2.0 million brokered deposit. Increases in certificates of deposit and NOW accounts were offset by decreases in money market and savings accounts.

Total borrowings from the FHLB decreased $574,000 or 1.1%, to $50.6 million at December 31, 2006 from $51.2 million at June 30, 2006.

Total stockholders' equity decreased $699,000 or 3.8% to $18.0 million at December 31, 2006, compared to $18.7 million at June 30, 2006, which represented 10.92% and 11.05% of total assets, respectively, at those dates. The decrease in total stockholders' equity was primarily due to the repurchase of 78,000 shares of the Company's stock at a cost of $751,000.

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About Georgetown Savings Bank

Founded in 1868, Georgetown Savings Bank, with branches in Georgetown, MA, North Andover, MA and Rowley, MA, serves the financial needs of Essex County and southern New Hampshire residents and businesses. To learn more about Georgetown Savings Bank, visit www.georgetownsb.com or call 978-352-8600.

Forward-looking statements

This news release 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," "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.