VSB Bancorp, Inc. Fourth Quarter 2008 and Full Year 2008 Results of Operations

Market Wire, January, 2009

                            VSB Bancorp, Inc.
              Consolidated Statements of Financial Condition
                            December 31, 2008
                                (unaudited)


                                              December 31,   December 31,
                                                  2008           2007
                                              -------------  -------------
Assets:

  Cash and cash equivalents                   $  21,240,223  $  17,696,879
  Investment securities, available for sale     120,288,588    117,814,117
  Loans receivable                               66,246,652     62,373,078
    Allowance for loan loss                        (987,876)      (927,161)
                                              -------------  -------------
    Loans receivable, net                        65,258,776     61,445,917
  Bank premises and equipment, net                3,695,822      3,931,679
  Accrued interest receivable                       723,473        799,249
  Deferred taxes                                    525,839        991,297
  Other assets                                      925,007      1,114,431
                                              -------------  -------------
      Total assets                            $ 212,657,728  $ 203,793,569
                                              =============  =============

Liabilities and stockholders' equity:

Liabilities:
  Deposits:
    Demand and checking                       $  58,598,579  $  62,525,053
    NOW                                          17,636,154     16,931,113
    Money market                                 22,829,789     20,534,721
    Savings                                      12,412,561     11,349,111
    Time                                         76,323,494     64,738,564
                                              -------------  -------------
      Total Deposits                            187,800,577    176,078,562
  Escrow deposits                                   308,872        255,881
  Subordinated debt                                       -      5,155,000
  Accounts payable and accrued expenses           1,344,512      1,420,321
                                              -------------  -------------
      Total liabilities                         189,453,961    182,909,764
                                              -------------  -------------

Stockholders' equity:
  Common stock, ($.0001 par value, 3,000,000
   shares authorized, 1,882,461 issued and
   outstanding at December 31, 2008 and
   1,900,509 issued and outstanding December
   31, 2007)                                            192            190
  Additional paid in capital                      9,234,854      9,107,119
  Retained earnings                              14,679,299     13,226,395
  Treasury shares, at cost (41,423 shares at
   December 31, 2008)                              (395,891)             -
  Unearned ESOP shares                             (901,750)    (1,070,827)
  Accumulated other comprehensive gain (loss),
   net of taxes of $483,735 and ($330,668),
   respectively                                     587,063       (379,072)
                                              -------------  -------------
    Total stockholders' equity                   23,203,767     20,883,805
                                              -------------  -------------
      Total liabilities and stockholders'
       equity                                 $ 212,657,728  $ 203,793,569
                                              =============  =============



                            VSB Bancorp, Inc.
                  Consolidated Statements of Operations
                            December 31, 2008
                                (unaudited)


                               Three      Three       Twelve      Twelve
                               months     months      months      months
                               ended      ended       ended       ended
                              Dec. 31,   Dec. 31,    Dec. 31,    Dec. 31,
                               2008        2007        2008        2007
                             ---------- ----------  ----------  ----------
Interest and dividend
 income:
  Loans receivable           $1,384,880 $1,406,313  $5,078,576  $5,980,133
  Investment securities       1,409,470  1,389,200   5,699,228   5,303,886
  Other interest earning
   assets                        12,331    185,240     237,490     994,334
                             ---------- ----------  ----------  ----------
     Total interest income    2,806,681  2,980,753  11,015,294  12,278,353

Interest expense:
  NOW                            30,521     34,945     127,066     131,634
  Money market                   78,019    118,086     310,714     439,236
  Savings                        19,084     23,586      76,011      97,900
  Subordinated debt                   -     89,040     214,685     356,159
  Time                          349,853    573,703   1,615,142   2,436,688
                             ---------- ----------  ----------  ----------
     Total interest expense     477,477    839,360   2,343,618   3,461,617
Net interest income           2,329,204  2,141,393   8,671,676   8,816,736
Provision (benefit) for loan
 loss                           160,000     40,000     285,000      (5,000)
                             ---------- ----------  ----------  ----------
     Net interest income
      after provision for
      loan loss               2,169,204  2,101,393   8,386,676   8,821,736
Non-interest income:
  Loan fees                      10,973     20,945      66,259      84,603
  Service charges on deposits   550,566    475,277   2,120,769   1,794,699
  Net rental income (loss)       13,774    (14,172)     37,662     (15,048)
  Other income                   31,501     75,149     176,225     309,138
                             ---------- ----------  ----------  ----------
     Total non-interest
      income                    606,814    557,199   2,400,915   2,173,392
Non-interest expenses:
  Salaries and benefits         869,583    908,733   3,514,898   3,800,954
  Occupancy expenses            377,009    321,614   1,469,898   1,353,636
  Legal expense                   1,393     51,570     189,118     102,320
  Professional fees              70,100     54,200     256,500     207,200
  Computer expense               68,938     56,906     245,014     258,881
  Director fees                  48,300     55,700     217,450     216,150
  Other expenses                368,214    361,200   1,446,716   1,335,250
                             ---------- ----------  ----------  ----------
     Total non-interest
      expenses                1,803,537  1,809,923   7,339,594   7,274,391

       Income before income
        taxes                   972,481    848,669   3,447,997   3,720,737
                             ---------- ----------  ----------  ----------
Provision (benefit) for
 income taxes:
  Current                       358,708    303,719   1,870,198   1,533,554
  Deferred                       12,953     31,795    (353,945)    139,957
                             ---------- ----------  ----------  ----------
     Total provision for
      income taxes              371,661    335,514   1,516,253   1,673,511

              Net income     $  600,820 $  513,155  $1,931,744  $2,047,226
                             ========== ==========  ==========  ==========

Basic income per common
 share                       $     0.32 $     0.27  $     1.04  $     1.12
                             ========== ==========  ==========  ==========

Diluted net income per share $     0.32 $     0.26  $     1.03  $     1.09
                             ========== ==========  ==========  ==========

Book value per common share  $    12.33 $    10.99  $    12.33  $    10.99
                             ========== ==========  ==========  ==========