VSB Bancorp, Inc. Announces Cash Dividend

Raffaele M. Branca, President and Chief Executive Officer, reported, “Ourdividend payout ratio is 18.5% on fourth quarter 2008 earnings. We havemaintained the dividend level at a rate that is manageable by our Company,even in this economic recession.”

VSB Bancorp, Inc. is the one-bank holding company for Victory State Bank.Victory State Bank, a Staten Island based commercial bank, commencedoperations on November 17, 1997. The Bank’s initial capitalization of $7.0million was primarily raised in the Staten Island community. The Bancorp’stotal equity increased to $23.2 million by December 31, 2008. The Bankoperates five full service locations in Staten Island, the main office at4142 Hylan Boulevard in Great Kills and branches on Forest Avenue in WestBrighton, Hyatt Street in St. George, Hylan Boulevard in Dongan Hills andBay Street in Rosebank.

The payment of dividends is at the discretion of the Board of Directors andnothing contained herein should be interpreted as a commitment to payfuture dividends.

Statements contained in this press release, which are not historical facts,are forward-looking statements, as defined in the Private SecuritiesLitigation Reform Act of 1995. Such forward-looking statements are subjectto risks and uncertainties, which could cause actual results to materiallydiffer from those currently, anticipated. Those risks and uncertaintiesinclude, among other things, possible future changes in (i) the local,regional or national economy, (ii) market interest rates, (iii) customerpreferences; (iv) competition or (v) federal or state laws.

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