Hometown Bancorpinc (HTWC) 10-Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2010

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______________ to _____________

Commission file number:  000-52674

HOMETOWN BANCORP, INC.

(Exact name of registrant as specified in its charter)

United States	02-0783010
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

12 Main Street, Walden, New York 12586

(Address of principal executive offices)

(845) 778-2171

(Issuer’s telephone number)

Not Applicable

(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 Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such 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 ¨

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 ¨                       No ¨

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. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ 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 ¨                       No x

As of May 17, 2010 there were 2,326,939 shares of the registrant’s common stock outstanding.

HOMETOWN BANCORP, INC.

FORM 10-Q

Index

		Page No.
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets at March 31, 2010 and December 31, 2009 (Unaudited)	2
	Consolidated Statements of Income for the three months ended March 31, 2010 and 2009 (Unaudited)	3
	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2010 and 2009 (Unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009 (Unaudited)	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4T.	Controls and Procedures	21
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults upon Senior Securities	22
Item 4.	Removed and Reserved	22
Item 5.	Other Information	22
Item 6.	Exhibits	22
Signatures

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Hometown Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2010			2009
	(Dollars in Thousands, Except Share Data)
Assets
Cash and due from banks	$	5,834		$	6,458
Interest earning demand deposits with banks		1,054			1,654
Cash and cash equivalents		6,888			8,112
Certificates of deposit		25			-
Securities available for sale		1,002			-
Securities held to maturity (fair value at March 31, 2010 $1,260; and at December 31,
2009 $1,323)		1,231			1,290
Loans held for sale		-			1,175
Loans receivable, net of allowance for loan losses (at March 31, 2010 $1,970; and at
December 31, 2009 $1,918)		136,756			136,793
Premises and equipment, net		4,047			4,103
Restricted investments in bank stock, at cost		523			491
Other real estate owned		1,795			1,435
Accrued interest receivable and other assets		2,914			2,868
Total Assets	$	155,181		$	156,267
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	19,030		$	19,770
Interest bearing		112,127			111,978
Total Deposits		131,157			131,748
Federal Home Loan Bank advances		3,000			3,000
Advances from borrowers for taxes and insurance		582			736
Accrued interest payable		32			33
Other liabilities		902			1,461
Total Liabilities		135,673			136,978
Commitments and Contingencies		-			-
Stockholders’ Equity
Preferred stock, $0.01 par value; 3,000,000 shares authorized and unissued		-			-
Common stock, $0.01 par value; 7,000,000 shares authorized; 2,380,500 shares issued		24			24
Paid-in capital		10,083			10,088
Retained earnings		10,495			10,285
Unearned ESOP shares, at cost		(781	)		(793	)
Treasury stock, at cost, 53,561 shares at March 31, 2010 and at December 31, 2009		(311	)		(311	)
Accumulated other comprehensive loss		(2	)		(4	)
Total Stockholders’ Equity		19,508			19,289
Total Liabilities and Stockholders’ Equity	$	155,181		$	156,267

2

Hometown Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

	Three Months Ended March 31,
	2010		2009
Interest Income	(In thousands, except per share data)
Loans receivable, including fees	$	1,981	$	2,122
Securities, taxable		13		21
Other		8		3
Total Interest Income		2,002		2,146
Interest Expense
Deposits		314		563
Federal Home Loan Bank advances		6		18
Total Interest Expense		320		581
Net Interest Income		1,682		1,565
Provision for Loan Losses		50		160
Net Interest Income after Provision for Loan Losses		1,632		1,405
Non-interest Income
Banking fees and service charges		245		240
Mortgage banking income, net		141		266
Investment brokerage fees		15		17
Other		11		28
Total Non-interest Income		412		551
Non-interest Expenses
Salaries and employee benefits		978		986
Occupancy and equipment		191		201
Professional fees		64		72
Advertising and marketing		27		25
Data processing		160		145
Telephone and postage		41		51
FDIC premiums		56		24
Other real estate owned expense		44		-
Other		107		137
Total Non-interest Expenses		1,668		1,641
Income before Income Taxes		376		315
Income Tax Expense		145		122
Net Income	$	231	$	193
Net Income per common share- basic	$	0.10	$	0.09
Weighted average number of common shares outstanding
– basic		2,248		2,248

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Hometown Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2010 and 2009

(In Thousands, except share data)  (Unaudited)

	Common Stock		Paid-In Capital			Retained Earnings			Unearned ESOP Shares			Treasury Stock			Accumulated Other Comprehensive Loss			Total
Balance - December 31, 2008	$	24	$	10,112		$	9,787		$	(840	)	$	(284	)	$	(5	)	$	18,794
Comprehensive income:
Net income		-		-			193			-			-			-			193
Other comprehensive loss		-		-			-			-			-			-			-
Total Comprehensive Income																			193
Treasury stock purchase
(7,061 shares)		-		-			-			-			(27	)		-			(27	)
ESOP shares committed to be
released (1,167 shares)		-		(7	)		-			12			-			-			5
Balance - March 31, 2009	$	24	$	10,105		$	9,980		$	(828	)	$	(311	)	$	(5	)	$	18,965
Balance - December 31, 2009	$	24	$	10,088		$	10,285		$	(793	)	$	(311	)	$	(4	)	$	19,289
Comprehensive income:
Net income		-		-			231			-			-			-			231
Other comprehensive income		-		-			-			-			-			2			2
Total Comprehensive Income																			233
Cash dividends declared
($0.02 per share)		-		-			(21	)		-			-			-			(21	)
ESOP shares committed to
be released (1,167 shares)		-		(5	)		-			12			-			-			7
Balance - March 31, 2010	$	24	$	10,083		$	10,495		$	(781	)	$	(311	)	$	(2	)	$	19,508

See notes to consolidated financial statements

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Hometown Bancorp, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2010			2009
	(In Thousands)
Cash Flows from Operating Activities
Net income	$	231		$	193
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		67			62
Provision for loan losses		50			160
Amortization of mortgage servicing rights		36			48
Net accretion of securities premiums and discounts		(1	)		(2	)
Net gain on sale of loans		(76	)		(205	)
Loans originated for sale		(2,689	)		(11,179	)
Proceeds from sale of loans		3,940			10,124
ESOP expense		7			5
Increase in accrued interest receivable and other assets		(82	)		(211	)
Decrease in accrued interest payable and other liabilities		(560	)		(907	)
Net Cash Provided (Used) by Operating Activities		923			(1,912	)
Cash Flows from Investing Activities
Purchases of certificates of deposit		(25	)		-
Activity in available for sale securities:
Purchases		(1,000	)
Activity in held to maturity securities:
Maturities, calls and principal repayments		60			71
Net increase in loans receivable		(373	)		(365	)
Net (increase) decrease in restricted investment in Bank stock		(32	)		22
Purchases of bank premises and equipment		(11	)		(3	)
Net Cash Used by Investing Activities		(1,381	)		(275	)
Cash Flows from Financing Activities
Net (decrease) increase in deposits		(591	)		3,234
Net decrease in Federal Home Loan Bank advances		-			(1,050	)
Decrease in advances from borrowers for taxes and insurance		(154	)		(114	)
Dividends paid		(21	)		-
Treasury stock purchased		-			(27	)
Net Cash (Used) Provided by Financing Activities		(766	)		2,043
Net Decrease in Cash and Cash Equivalents		(1,224	)		(144	)
Cash and Cash Equivalents - Beginning		8,112			3,203
Cash and Cash Equivalents - Ending	$	6,888		$	3,059
Supplementary Cash Flows Information
Interest paid	$	321		$	639
Income taxes paid	$	70		$	236
Supplemental Schedule of Noncash Investing Activities
Loans transferred to foreclosed real estate	$	360		$	83

See notes to consolidated financial statements

5

Hometown Bancorp, Inc.

Notes to the Unaudited Consolidated Financial Statements

Note 1 - Basis of Presentation

The accompanying unaudited consolidated financial statements of Hometown Bancorp, Inc. (the “Company”) and its wholly-owned subsidiary, Walden Federal Savings and Loan Association (“Walden Federal” or the “Bank”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions for Form 10-Q.  Accordingly, they do not include all of the information and footnotes necessary for a complete presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for (i) a fair presentation and (ii) to make the financial statements not misleading, have been included.  Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

The unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2009 and 2008, included in its annual report on Form 10-K.

The unaudited consolidated financial statements at March 31, 2010 and for the three months ended March 31, 2010 and 2009 include the accounts of the Company, the Bank and the Bank’s wholly-owned subsidiaries, Ever-Green Financial Services, Inc. and Valley Services, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Note 2 – Minority Stock Issuance

In June 2007, the Company completed its minority stock offering of 45% of the aggregate total voting stock of the Company.  In connection with the minority offering, 2,380,500 shares of common stock were issued, of which 1,071,225 shares were sold to the Bank’s eligible account holders and the employee stock ownership plan (the “ESOP”). At March 31, 2010, 56.3% of the Company’s outstanding common stock, or 1,309,275 shares, were owned by Hometown Bancorp MHC.

Note 3 – Directors’ Retirement Plan

The Bank provides an unfunded directors’ retirement plan for the benefit of non-employee directors.  Under the plan, directors who have attained the normal retirement age of 65 receive a retirement benefit based on their length of service upon termination.  Net periodic pension expense for the three months ended March 31, 2010 and 2009 is as follows (in thousands):

	2010		2009
Service cost	$	14	$	12
Interest cost		2		2
Amortization of past service liability		1		1
Net periodic pension expense	$	17	$	15

Note 4 – Comprehensive Income

Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains, and losses be included in net income.  However, certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities and gains and losses and past service liabilities for pension plans, are reported as a separate component of equity on the consolidated balance sheets such items, along with net income, are components of comprehensive income.

6

The components of other comprehensive income (loss) and related tax effects for the three months ended March 31, 2010 and 2009 are as follows:

	Three Months Ended March, 31
	2010			2009
	(In Thousands)
Unrealized holding gains (losses) on securities available for sale	$	2		$	(3	)
Reclassification adjustment for Directors’ retirement plan pension
gains and past service liability recognized in pension expense		1			1
Other comprehensive income (loss) before tax		3			(2	)
Income tax effect		(1	)		2
Net of Tax Amount	$	2		$	-

At March 31, 2010 and 2009, the components of accumulated other comprehensive loss are as follows:

	2010			2009
	(In Thousands)
Unrealized gain on securities available for sale (net of tax effect
2010 $1; 2009 $0)	$	1		$	-
Net losses and past service liability for the Directors’ retirement
plan (net of tax effect 2010 ($2); 2009 ($2))		(3	)		(5	)
	$	(2	)	$	(5	)

Note 5 – Employee Stock Ownership Plan (“ESOP”)

The Bank has an ESOP which acquired 93,315 shares of the Company’s common stock in the 2007 stock offering with funds provided by a loan from the Company. The stock acquired by the ESOP is shown as a reduction of stockholders’ equity in the accompanying consolidated balance sheets. The Company committed to release 1,167 shares to the ESOP during the three months ended March 31, 2010 and 2009, respectively. The Company recognized $7,000 and $5,000 of compensation expense related to this plan for the three months ended March 31, 2010 and 2009, respectively. Unallocated ESOP shares are not “outstanding” for purposes of earnings per share calculations.

Note 6 – Net Income Per Share

Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. The Company has a simple capital structure as it has not granted any restricted stock awards or stock options and, during the three months ended March 31, 2010 and 2009, had no potentially dilutive common stock equivalents. Unallocated shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released.

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Note 7 – Dividends

On January 22, 2010, the Board of Directors declared a quarterly cash dividend of $0.02 per share of Hometown Bancorp, Inc. common stock. The dividend reflects an annual cash dividend rate of $0.08 per share. The dividend was payable to stockholders of record as of February 5, 2010, and was paid on February 19, 2010. Hometown Bancorp MHC which holds approximately 56.3% of the Company’s total outstanding shares waived receipt of the dividend on its shares.

Note 8 – Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period.  Actual results could differ from those estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses.

Note 9 - Recent Accounting Pronouncements

ASU 2010-06

The FASB has issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. Specifically, ASU 2010-06 amends Codification Subtopic 820-10 to now require:

· A reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and

· In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements.

In addition, ASU 2010-06 clarifies the requirements of the following existing disclosures:

· For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and

· A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements.

ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. For the portions adopted, this update did not have a significant impact to the consolidated financial statements. The Company does not expect that the update that is not effective will have any impact on its consolidated financial statements. There were no transfers in and out of Level 1 and Level 2 during the quarter ended March 31, 2010.

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Note 10 – Securities

The amortized cost of securities and their approximate fair values are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
Available for Sale:
March 31, 2010:
U.S. Government agencies	$	1,000	$	2	$	-	$	1,002

Held to Maturity:
March 31, 2010:
U.S. Government agencies	$	750	$	1	$	-	$	751
Mortgage-backed securities		481		28		-		509
	$	1,231	$	29	$	-	$	1,260

December 31, 2009:
U.S. Government agencies	$	750	$	2	$	-	$	752
Mortgage-backed securities		540		31		-		571
	$	1,290	$	33	$	-	$	1,323

The amortized cost and fair value of securities as of March 31, 2010, by contractual maturity, are shown below.  Expected maturities may differ from contractual maturities because the borrowers may have the right to prepay obligations with or without any penalties.

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Due in one year or less	$	-	$	-	$	-	$	-
Due after one year through five years		1,000		1,002		750		751
Due after five years through ten years		-		-		-		-
Due after ten years		-		-		-		-
Mortgage-backed securities		-		-		481		509
	$	1,000	$	1,002	$	1,231	$	1,260

At March 31, 2010 and December 31, 2009, the Company had no securities in an unrealized loss position.

There were no sales of investments for the three months ended March 31, 2010 and 2009. At March 31, 2010 and December 31, 2009, securities with a carrying value of none and $100,000, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

Note 11 – Mortgage Servicing Rights

At March 31, 2010 and December 31, 2009, one-to-four family residential mortgage loans serviced for others amounted to approximately $87.4 million and $86.7 million, respectively.  Advances from borrowers for taxes and insurance related to loans serviced for others amounted to approximately $347,000 and $532,000, respectively, at March 31, 2010 and December 31, 2009.  These loans and related advances are not included in the accompanying consolidated balance sheets. Mortgage servicing rights balances are include in accrued interest receivable and other assets on the consolidated balance sheets.

9

The following summarizes activity pertaining to mortgage servicing rights for the three months ended March 31, 2010 and 2009:

	Three Months Ended March 31, 2010			Three Months Ended March 31, 2009
	(In Thousands)
Balance, beginning	$	397		$	310
Capitalized during the quarter		46			50
Amortization		(36	)		(48	)
Balance, ending	$	407		$	312

Note 12 – Fair Value Measurements and Fair Values of Financial Instruments

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy under ASC 820 are as follows:

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

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

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

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurement by level within the fair value hierarchy used at March 31, 2010 are as follows:

Description	Carrying Value		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)
Securities available for sale	$	1,002	$	-	$	1,002	$	-
Forward sales contract	$	16	$	-	$	16	$	-

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For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2009 are as follows:

Description	Carrying Value		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)
Forward sales contract	$	6	$	-	$	6	$	-

Fair values of available for sale securities are based on quoted market prices of comparable instruments. When necessary, the Company utilizes matrix pricing from a third party pricing vendor to determine fair value pricing. Matrix prices are based on quoted prices for securities with similar coupons, ratings, and maturities, rather than on specific bids and offers for the designated security.

The Company enters into forward sales contracts to sell certain residential real estate loans. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other assets or other liability section of the consolidated balance sheet. The fair value of these forward sales contracts is primarily measured by obtaining pricing from certain government-sponsored entities. The pricing is derived from market observable inputs that can generally be verified and do not typically involve significant judgment by the Company and therefore, are classified as Level 2 in the fair value hierarchy.

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2010 are as follows:

Description	Carry Value		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)
Impaired loans	$	1,646	$	-	$	-	$	1,646

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2009 are as follows:

Description	Carry Value		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)
Impaired loans	$	1,695	$	-	$	-	$	1,695

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Fair value of impaired loans is generally determined based upon independent third party appraisals of the properties or other indications of value based on recent comparable sales of similar properties, or discounted cash flows based upon expected proceeds. These assets are included in Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value consists of loan balances less their valuation allowances as determined under ASC 310-10. At March 31, 2010, impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $1.6 million, net of a valuation allowance of $708,000. At December 31, 2009, impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $1.7 million, net of a valuation allowance of $633,000.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities.  Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.  The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at March 31, 2010 and December 31, 2009:

Cash and Cash Equivalents

The carrying amounts reported in the consolidated balance sheet for these instruments approximate the fair value.

Certificates of Deposit

Thecarrying amounts reported in the consolidated balance sheet for certificates of deposit approximate the fair value.

Securities

Fair values of available for sale securities are based on quoted market prices of comparable instruments. When necessary, the Company utilizes matrix pricing from a third party pricing vendor to determine fair value pricing. Matrix prices, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

Loans Held for Sale

Fair values for loans held for sale are based on existing commitments from investors or prevailing market prices.

Loans Receivable

For variable-rate loans that reprice frequently and which entail no significant changes in credit risk, fair values are based on carrying values.  The fair value of fixed-rate loans are estimated using discounted cash flow analyses at interest rates currently offered in the market for loans with similar terms to borrowers of similar credit quality.

Impaired Loans

Impaired loans are those that are accounted for under ASC 310-10 in which the Company has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third party appraisals of the properties or other indications of value based on recent comparable sales of similar properties, or discounted cash flows based upon expected proceeds. These assets are included in Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value consists of loan balances less their valuation allowances.

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Restricted Investments in Bank Stock

The carrying amount of Federal Home Loan Bank and Atlantic Central Bankers Bank stock approximates fair value.

Accrued Interest Receivable and Payable

The carrying amount of accrued interest receivable and payable approximates fair value.

Mortgage Servicing Rights

The Company accounts for mortgage servicing rights (“MSR’s”) at amortized cost. The Company performs a valuation of fair value to determine if there is any impairment. Fair value for MSR’s is determined using a static discounted cash flow valuation approach. This approach consists of projecting servicing cash flows under static interest-rate scenarios and discounting these cash flows using risk-adjusted rates. The model assumptions used in the valuation of MSR’s include mortgage prepayment speeds and discount rates. The fair value of MSR’s is primarily affected by changes in prepayments that result from shifts in mortgage interest rates.

Deposits

Fair values for demand deposits, savings accounts and certain money market deposits are, by definition, equal to the amount payable on demand at the reporting date.  Fair values of fixed-maturity certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on similar instruments with similar maturities.

Federal Home Loan Bank Advances

The carrying amount of Federal Home Loan Bank Advances approximates fair value.

Off-Balance Sheet Financial Instruments

Fair values of commitments to extend credit and letters of credit are estimated using the fees currently charged to enter into similar agreements, taking into account market interest rates, the remaining terms, and present credit worthiness of the counterparties.  At March 31, 2010 and December 31, 2009, the fair value of these instruments was not material.

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The estimated fair values of the Company’s financial instruments at March 31, 2010 and December 31, 2009 were as follows:

	March 31,				December 31,
	2010				2009
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	6,888	$	6,888	$	8,112	$	8,112
Certificates of deposit		25		25		-		-
Securities available for sale		1,002		1,002		-		-
Securities held to maturity		1,231		1,260		1,290		1,323
Loans held for sale		-		-		1,175		1,175
Loans receivable, net		136,756		141,861		136,793		141,703
Restricted investments in bank stock		523		523		491		491
Accrued interest receivable		595		595		613		613
Mortgage servicing rights		407		711		397		646
Financial liabilities:
Non-interest bearing demand accounts		19,030		19,030		19,770		19,770
NOW accounts		7,856		7,856		7,395		7,395
Money market accounts		11,114		11,114		10,526		10,526
Savings accounts		17,294		17,294		15,868		15,868
Certificates of deposit		75,863		76,372		78,189		78,790
Federal Home Loan Bank advances		3,000		3,000		3,000		3,000
Accrued interest payable		32		32		33		33
Off-balance sheet financial instruments:
Commitments to extend credit		-		-		-		-
Letters of credit		-		-		-		-

Note 13 – Subsequent Events

On April 26, 2010, the Board of Directors declared a quarterly cash dividend of $0.02 per share of Hometown Bancorp, Inc. common stock. The dividend will be payable to stockholders of record as of May 7, 2010, and will be paid on or about May 21, 2010. Hometown Bancorp MHC, which holds approximately 56.3% of the Company’s total outstanding stock, will waive receipt of the dividend on its shares.

The Company has evaluated subsequent events through the date that the consolidated financial statements were issued.

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

Management’s discussion and analysis of the financial condition and results of operations is intended to assist in understanding our financial condition and results of operations.  The information contained in this section should be read in conjunction with the unaudited consolidated financial statements and the notes thereto, appearing in Part I, Item 1 of this report.

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Forward-Looking Statements

This quarterly report contains forward-looking statements that are based on assumptions and may describe our future plans, strategies and expectations.  These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions.

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse effect on our operations include, but are not limited to, changes in interest rates, national and regional economic conditions, legislative and regulatory changes, monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality and composition of our loan and investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in our market area, changes in real estate market values in our area, and changes in relevant accounting principles and guidelines.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  Except as required by applicable law or regulation, we do not undertake, and specifically disclaim any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets, liabilities or on income to be critical accounting policies.  We have identified the allowance for loan losses as our critical accounting policy.

Allowance for Loan Losses.  The allowance for loan losses is established through provisions for loan losses charged against income.  Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated.  Management’s periodic evaluation of the adequacy of the allowance is based on the Bank’s past loan loss experience, known and inherent credit risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors.  This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific and general components.  The specific component relates to loans that are classified as either doubtful, substandard, or special mention.  For such loans that are also classified as impaired, a specific allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying amount of that loan.  The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors.

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.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.  Impairment is measured on a loan by

15

loan basis for commercial, commercial real estate, construction and land loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.  Accordingly, the Bank does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are the subject of a restructuring agreement or are non-performing.

General

Walden Federal operates from six offices in Orange County, New York. Walden Federal is primarily engaged in the business of attracting deposits from the general public and using those funds to originate one- to four-family real estate, multi-family and commercial real estate loans and construction, land, commercial and consumer loans, which, with the exception of long-term (more than 10 year term) fixed-rate one- to four-family real estate loans, we primarily hold for investment.  In addition, a segment of our lending business involves the purchase and sale of loan participation interests.  We also offer insurance and investment services through Walden Federal.

Balance Sheet Analysis

Overview.  Total assets decreased $1.1 million, or 0.7%, to $155.2 million at March 31, 2010. The decrease was due primarily to a decrease in cash and cash equivalents of $1.2 million and a decrease in loans held for sale of $1.2 million, offset by an increase of $1.0 million in securities available for sale. Loans net, decreased $37,000, to $136.8 million at March 31, 2010.

Total stockholders’ equity increased $219,000 during the three months ended March 31, 2010 to $19.5 million due primarily to net income of $231,000, partially offset by dividends declared of approximately $21,000.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

Loans.  At March 31, 2010, total loans, net, were $136.8 million, or 88.1% of total assets as compared with $136.8 million, or 87.5% of total assets at December 31, 2009.  In the three months ended March 31, 2010, the loan portfolio declined $37,000. The primary reasons for the decline in loans during the first quarter of 2010 were decreases of $2.3 million in construction mortgages, decreases of $1.0 million in commercial business loans and decreases of $632,000 in commercial real estate loans, offset by increases of $3.8 million in residential mortgages.

Nonperforming Assets.  The following table provides information with respect to our non-performing assets at the dates indicated.  There were no accruing loans past due 90 days or more as of March 31, 2010 or December 31, 2009.

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(Dollars in thousands)	March 31, 2010			December 31, 2009
Nonaccrual loans:
One- to four-family residential real estate	$	2,850		$	2,600
Construction		599			599
Multi-family and commercial real estate		—			360
Land		2,030			2,004
Commercial		—			—
Consumer		—			—
Total		5,479			5,563
Other real estate owned		1,795			1,435
Other nonperforming assets		—			—
Total nonperforming assets		7,274			6,998
Troubled debt restructurings		1,076			1,076
Troubled debt restructurings and
total nonperforming assets	$	8,350		$	8,074
Total nonperforming loans to total loans		3.95	%		4.01	%
Total nonperforming loans to total assets		3.53			3.56
Total nonperforming assets and troubled
debt restructurings to total assets		5.38			5.17

The $5.5 million in nonperforming loans at quarter end were comprised of $2.9 million in one-to four-family residential real estate loans, $2.0 million of land loans (which included $1.7 million of loans extended to two residential subdivisions) and two loans to builders for construction of unsold homes totaling $599,000.

Securities.  The investment securities portfolio was $2.2 million, or 1.4% of total assets, at March 31, 2010 compared to $1.3 million or 0.8% of total assets, at December 31, 2009.  Our investment portfolio consists primarily of U.S. Government agency securities and GNMA and FHLMC mortgage-backed securities. The increase in investment securities was the result of a purchase of a $1.0 million U.S. Government agency bond during the quarter ended March 31, 2010, which was partially offset by a decrease of $60,000 due to principal repayments on the mortgage-backed securities.

Other real estate owned. Other real estate owned totaled $1.8 million at March 31, 2010 compared to $1.4 million at December 31, 2009. During the quarter ended March 31, 2010, we foreclosed on a commercial building with a carrying value of $360,000. Other real estate owned consisted of two residential properties, one residential building lot and three commercial buildings at March 31, 2010.

Deposits.  Our primary source of funds is retail deposit accounts, which are comprised of noninterest-bearing demand accounts, interest-bearing demand accounts, money market accounts, savings accounts and certificates of deposit.  During the three months ended March 31, 2010, deposits decreased $591,000, or 0.4% to $131.2 million at March 31, 2010. The decrease in deposits consisted primarily of declines in certificates of deposit which decreased by $2.3 million and non-interest checking which decreased by $740,000. This decrease was offset in part by an increase in savings accounts of $1.4 million and an increase in money market and interest checking accounts of approximately $1.0 million.

Borrowings.We utilize borrowings from the Federal Home Loan Bank of New York to supplement our supply of funds for loans and investments.  We are able to utilize borrowings when necessary or advantageous as an alternative to deposits when a pricing advantage exists, as a temporary source of funds to meet liquidity needs or to manage our asset and liability position. We had borrowings at March 31, 2010 and December 31, 2009 of $3.0 million, respectively.

Stockholders’ Equity.  Total stockholders’ equity increased $219,000 from $19.3 million at December 31, 2009 to $19.5 million at March 31, 2010. Equity increased primarily due to net income of $231,000 for the three months ended March 31, 2010, partially offset by dividends declared of approximately $21,000 during the first quarter of 2010.

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Results of Operations for the Three Months Ended March 31, 2010 and 2009

Financial Highlights. Net income increased $38,000, or 19.7%, to $231,000 for the three months ended March 31, 2010 compared to $193,000 for the same period in the prior year. The increase in the first quarter net income was primarily due to higher net interest income and a decrease in the provision for loan losses partially offset by a decrease in non-interest income and a slight increase in non-interest expense for the quarter ended March 31, 2010.

Net Interest Income.  Net interest income increased by $117,000, or 7.5%, to $1.7 million for the three months ended March 31, 2010 compared to $1.6 million for the prior year period, primarily as a result of a reduction in interest expense partially offset by a decrease in interest income on loans, securities and other interest income.

Interest income on loans decreased $141,000, or 6.6%, to $2.0 million during the three months ended March 31, 2010 as the average yield on the loan portfolio decreased 32 basis points to 5.78% for the three months ended March 31, 2010, and the average balance of the loan portfolio decreased $1.9 million, or 1.4%, to $137.2 million. The decrease in the average balance of the loan portfolio was due primarily to a decrease in construction mortgages and commercial business loans, offset by an increase in one- to four-family residential real estate loans. The decrease in the average yield on loans was mostly the result of the decreases in market interest rates over the last year on new originations.

Interest income on investment securities decreased $8,000 for the three months ended March 31, 2010 to $13,000 compared to the prior year period, as the average balance of the securities portfolio decreased during the three months ended March 31, 2010 to $2.1 million compared to $2.5 million in the prior year period. The average yield on investment securities decreased 86 basis points to 2.53% for the three months ended March 31, 2010.

Interest expense on deposits decreased from $563,000 for the three months ended March 31, 2009, to $314,000 for the three months ended March 31, 2010, a decrease of $249,000, or 44.2%. The primary reason for the decrease was maturing certificates of deposit repricing to lower interest rates. Decreases in market interest rates since 2007, combined with the shift in the deposit mix, decreased the average cost of deposits to 1.12%, for the three months ended March 31, 2010, compared to 2.09% for the three months ended March 31, 2009. The decrease in yields on deposits was offset by an increase in the average balance of interest-bearing deposits during the three months ended March 31, 2010 of $4.7 million, or 4.4% to $112.3 million, compared with $107.5 million in the prior year period, due primarily to an increase in average balances of savings and interest-bearing demand deposit accounts of $3.4 million and certificates of deposit of $2.2 million, offset by a decrease in money market accounts of $801,000.

Interest expense on borrowings decreased to $6,000 for the three months ended March 31, 2010 compared to $18,000 for the prior year period. The average balance of borrowings during the three months ended March 31, 2010 decreased to $3.0 million, compared with $6.0 million in the prior year period. The average cost of borrowings decreased 41 basis points to 0.80%, for the three months ended March 31, 2010, compared to 1.21% for the three months ended March 31, 2009.

For the three months ended March 31, 2010, our net interest margin increased 41 basis points to 4.77% from 4.36% for the prior year period. The interest rate spread increased by 64 basis points to 4.57% for the three months ended March 31, 2010 from 3.93% for the prior year period.  The increase both in our interest rate spread and in our net interest margin for the quarter was primarily due to low short-term interest rates which resulted in the downward repricing of many of the Company’s interest-bearing liabilities.

The following table summarizes average balances and average yields and costs of interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2010 and 2009.

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	Three Months Ended March 31,
	2010								2009
(Dollars in thousands)	Average Balance			Interest and Dividends		Yield/ Cost			Average Balance			Interest and Dividends		Yield/ Cost
Assets:
Interest-earning assets:
Loans	$	137,190		$	1,981		5.78	%	$	139,090		$	2,122		6.10	%
Investment securities		2,059			13		2.53			2,477			21		3.39
Other interest-earning assets		1,728			8		1.85			1,904			3		0.63
Total interest-earning assets		140,977			2,002		5.68			143,471			2,146		5.98
Non-interest-earning assets		15,754								6,880
Total assets	$	156,731							$	150,351
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	7,570			4		0.21		$	6,587			4		0.24
Money market accounts		10,749			21		0.78			11,550			32		1.11
Savings accounts		16,672			25		0.60			14,290			20		0.56
Certificates of deposit		77,302			264		1.37			75,122			507		2.70
Borrowings		3,000			6		0.80			5,951			18		1.21
Total interest-bearing liabilities		115,293			320		1.11			113,500			581		2.05
Non-interest-bearing demand deposits		20,069								16,006
Other non-interest-bearing liabilities		1,834								1,975
Total liabilities		137,196								131,481
Stockholders’ equity		19,535								18,870
Total liabilities and stockholders’ equity	$	156,731							$	150,351
Net interest income				$	1,682							$	1,565
Interest rate spread							4.57								3.93
Net interest margin							4.77								4.36
Average interest-earning assets to
average interest-bearing liabilities		122.28	%							126.41	%

Provision for Loan Losses.  The provision for loan losses for the quarter ended March 31, 2010 was $50,000, a decrease of $110,000 as compared to the quarter ended March 31, 2009. The decrease was as a result of a reduction in construction and commercial loans during the first quarter of 2010, which have a higher risk component in our allowance calculation compared to the increase in nonperforming loans and weakening economic conditions in the first quarter of 2009. There were net recoveries of approximately $2,000 during the first quarter of 2010 compared to net charge-offs of $37,000 during the prior year period.

Non-Interest Income.  Non-interest income was $412,000 for the quarter ended March 31, 2010 compared to $551,000 for the quarter ended March 31, 2009. The primary reason for the decrease in non-interest income for the quarter ended March 31, 2010, was mortgage banking income, net, which decreased by $125,000. This was a result of decreased volume of loans sold and unfunded loans committed to be sold during the first quarter of 2010. Rental income decreased by $9,000 as a result of an unoccupied rental space in our Newburgh office during the first quarter of 2010 compared to the first quarter of 2009. These decreases were partially offset by increases in banking fees and service charges of $5,000 in our core deposit accounts.

Non-Interest Expenses.  Non-interest expense increased by $27,000 and was $1.7 million for the quarter ended March 31, 2010, compared to $1.6 million for the quarter ended March 31, 2009. Non-interest expense increased primarily due to increases in other real estate owned expenses of $44,000, FDIC deposit insurance premium increases of $32,000 and data processing expense of $15,000. These increases were partially offset by decreases in salaries and employee benefits and occupancy and equipment expenses of $18,000 and other expenses of $30,000.

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Income Tax Expense. Income tax expense was $145,000 for the three months ended March 31, 2010 as compared to $122,000 for the three months ended March 31, 2009. Higher levels of pre-tax income resulted in an increase in income tax expense. The effective tax rate was 38.6% for the three months ended March 31, 2010 and 38.7% for the three months ended March 31, 2009.

Liquidity and Capital Management

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, maturities of and payments on investment securities and borrowings from the Federal Home Loan Bank of New York.  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 (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management policy.

Our most liquid assets are cash and cash equivalents.  The levels of these assets depend on our operating, financing, lending and investing activities during any given period.  At March 31, 2010, cash and cash equivalents totaled $6.9 million.  In addition, at March 31, 2010, we had arrangements to borrow up to $24.8 million from the Federal Home Loan Bank of New York.  On March 31, 2010, we had short-term advances outstanding of $3.0 million with the Federal Home Loan Bank. As of March 31, 2010, we have an unused $2.0 million federal funds line from Atlantic Central Bankers Bank.

A significant use of our liquidity is the funding of loan originations.  At March 31, 2010, we had $12.6 million in loan commitments outstanding, which primarily consisted of $1.9 million in unadvanced portions of construction loans, $1.0 million in commitments to fund one- to four-family residential real estate loans, $1.4 million in commercial real estate loans, $2.1 million in unused home equity lines of credit and $5.2 million in unused commercial lines of credit.  Historically, many of the commitments expire without being fully drawn; therefore, the total amount of commitments does not necessarily represent future cash requirements.  Another significant use of our liquidity is the funding of deposit withdrawals.  Certificates of deposit due within one year of March 31, 2011 totaled $69.4 million, or 91.5% of certificates of deposit.  The large percentage of certificates of deposit that mature within one year reflects customers’ hesitancy to invest their funds for long periods in the recent low interest rate environment.  If these maturing deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit and borrowings.  Depending on market conditions, we may be required to pay higher than market rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before March 31, 2010.  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.

Capital Management.  We are subject to various regulatory capital requirements administered by the Office of Thrift Supervision, 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, 2010, the Bank exceeded all of our regulatory capital requirements and is considered “well capitalized” under regulatory guidelines.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with accounting principles generally accepted in the United States of America, are not recorded in our financial statements.  These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines and letters of credit.

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For the three months ended March 31, 2010, we did not engage in any 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 Qualitative Disclosures About Market Risk

Not applicable because the Company is a smaller reporting company.

Item 4T.  Controls and Procedures

The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rule 13(a)-15(e) that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Hometown Bancorp is not involved in any pending legal proceedings.  Walden Federal is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business.  Such routine legal proceedings, in the aggregate, are believed by management to be immaterial to its consolidated financial condition and results of operations.

Item 1A. Risk Factors

Not applicable because the Company is a smaller reporting company.

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

None

Item 3.  Defaults upon Senior Securities

Not Applicable.

Item 4.  Removed and Reserved

Item 5.  Other Information

None.

Item 6.  Exhibits

3.1 Charter of Hometown Bancorp, Inc. (1)

3.2 Bylaws of Hometown Bancorp, Inc. (2)

4.0 Stock Certificate of Hometown Bancorp, Inc. (1)

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.0 Section 1350 Certification

_________________________________

(1) Incorporated by reference into this document from the Exhibits filed with the Securities and Exchange Commission on the Registration Statement on Form SB-2, and any amendments thereto, Registration No. 333-141351.

(2) Incorporated by reference into this document from Exhibit 3.2 of the Form 8-K filed with the Securities and Exchange Commission on July 25, 2008 (File No. 000-52674).

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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.

		HOMETOWN BANCORP, INC.
Dated: May 17, 2010	By:	/s/ Thomas F. Gibney
		Thomas F. Gibney
		President and Chief Executive Officer
		(principal executive officer)
Dated: May 17, 2010	By:	/s/ Stephen W. Dederick
		Stephen W. Dederick
		Vice President and
		Chief Financial Officer
		(principal financial and accounting officer)