##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal
    Year Ended December 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    001-35028
  ROCKVILLE FINANCIAL,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Connecticut

27-3577029(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)25 Park Street, Rockville, Connecticut

06066(Address of principal executive
    offices)

(Zip Code)   (860) 291-3600
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 Securities registered pursuant to Section 12(g) of the
    Act: None
  Title of Class

Name of Each Exchange Where RegisteredCommon Stock, no par value

NASDAQ Global Select Stock Market   o þ
  o þ
  þ o
  o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12B-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





Rockville
    Financial, Inc.
    Annual Report on
    Form 10-K
    For the Fiscal Year Ended December 31, 2010
    Table of Contents
   
 Page No.PART IForward-looking statements


3Item 1.


Business


4Item 1A.


Risk Factors


33Item 1B.


Unresolved Staff Comments


39Item 2.


Properties


39Item 3.


Legal Proceedings


40Item 4.


(Removed and reserved)


40PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


40Item 6.


Selected Financial Data


43Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


45Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


59Item 8.


Financial Statements and Supplementary Data


61Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


116Item 9A.


Controls and Procedures


116Item 9B.


Other Information


116PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


117Item 11.


Executive Compensation


117Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


117Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


117Item 14.


Principal Accounting Fees and Services


117PART IVItem 15.


Exhibits and Financial Statement Schedules


117Signatures


120EX-10.3.1EX-10.5.2EX-10.13EX-10.13.1EX-21EX-23.1EX-23.2EX-31.1EX-31.2EX-32   2




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##### Table of Contents



Part I  FORWARD-LOOKING STATEMENTS
  Form 10-K
        
    Local, regional and national business or economic conditions may
    differ from those expected.
    The effects of and changes in trade, monetary and fiscal
    policies and laws, including the U.S. Federal Reserve
    Boards interest rate policies, may adversely affect our
    business.
    The ability to increase market share and control expenses may be
    more difficult than anticipated.
    Changes in laws and regulatory requirements (including those
    concerning taxes, banking, securities and insurance) may
    adversely affect us or our businesses.
    Changes in accounting policies and practices, as may be adopted
    by regulatory agencies, the Public Company Accounting Oversight
    Board or the Financial Accounting Standards Board, may affect
    expected financial reporting.
    Future changes in interest rates may reduce our profits which
    could have a negative impact on the value of our stock.
    We are subject to lending risk and could incur losses in our
    loan portfolio despite our underwriting practices. Changes in
    real estate values could also increase our lending risk.
    Changes in demand for loan products, financial products and
    deposit flow could impact our financial performance.
    Strong competition within our market area may limit our growth
    and profitability.
    We may not manage the risks involved in the foregoing as well as
    anticipated.
    We recently opened new branches which may not become profitable
    as soon as anticipated, if at all.
    If our allowance for loan losses is not sufficient to cover
    actual loan losses, our earnings could decrease.
    Our stock value may be negatively affected by federal
    regulations restricting takeovers.
    Further implementation of our stock benefit plans could increase
    our costs, which could reduce our income.
    Because we intend to continue to increase our commercial real
    estate and commercial business loan originations, our lending
    risk may increase, and downturns in the real estate market or
    local economy could adversely affect our earnings.
    The trading volume in our stock is less than in larger publicly
    traded companies which can cause price volatility, hinder your
    ability to sell our common stock and may lower the market price
    of the stock. 3




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##### Table of Contents




    The Emergency Economic Stabilization Act (EESA) of
    2008 has and may continue to have a significant impact on the
    banking industry. The Dodd-Frank Wall Street Reform and Consumer
    Protection Act was signed into law on July 21, 2010 and is
    expected to result in dramatic regulatory changes that will
    affect the industry in general, and impact the Companys
    competitive position in ways that cant be predicted at
    this time.  Form 10-K Form 10-K.
  Item 1.
    Business  General
            Competition
   4




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##### Table of Contents



Market
    Area
    Lending
    Activities
  one-to-four
    At December 31,2010


2009


2008


2007


2006Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Real estate loans:Residential(1)

$
719,925



50.54
%

$
754,838



54.98
%

$
746,041



57.26
%

$
666,003



59.18
%

$
640,076



61.46
%Commercial


489,511



34.37



426,028



31.03



351,474



26.97



284,460



25.28



232,550



22.33Construction(2)


78,627



5.52



71,078



5.18



89,099



6.84



70,617



6.27



63,902



6.14Commercial business loans


130,303



9.15



113,240



8.25



106,684



8.19



92,869



8.25



97,234



9.34Installment and collateral


5,921



0.42



7,742



0.56



9,629



0.74



11,469



1.02



7,607



0.73Total loans


1,424,287



100.00
%


1,372,926



100.00
%


1,302,927



100.00
%


1,125,418



100.00
%


1,041,369



100.00
%Net deferred loan costs and premiuns


523







632







1,417







1,529







1,813Allowance for loan losses


(14,312
)






(12,539
)






(12,553
)






(10,620
)






(9,827
)Loans, net

$
1,410,498






$
1,361,019






$
1,291,791






$
1,116,327






$
1,033,355     (1)
    
    Residential mortgage loans include
    one-to-four
    family mortgage loans, home equity loans, and home equity lines
    of credit. Residential mortgage loans held for sale were
    $380,000 at December 31, 2010 and are not included above.
    There were no loans held for sale at December 31, 2009.(2)
    
    Construction loans include commercial and residential loans and
    are reported net of undisbursed construction funds of
    $87.5 million, $86.5 million, $93.9 million,
    $96.8 million and $93.6 million as of
    December 31, 2010, 2009, 2008, 2007 and 2006, respectively.  Residential Mortgage Loans: one-to-four one-to-four
 5




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##### Table of Contents



one-to-four loan-to-value loan-to-value one-to-four
  one-to-four one-to-four
  one-to-four
  one-to-four
  due-on-sale
  one-to-four loan-to-value
 6




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##### Table of Contents



The Wall Street
    Journal
  Commercial Real Estate Loans: loans-to-one
  face-to-face
  one-to-four
  Commercial Construction Loans: one-to-four loans-to-one one-to-four
 7




---



##### Table of Contents



Residential Construction Loans:
  loan-to-value one-to-four
      Commercial Business Loans:
  loans-to-one-borrower The Wall Street Journal,
 8




---



##### Table of Contents



Installment and Collateral Loans:
  Origination, Purchasing and Servicing of
    Loans:
  one-to-four
   9




---



##### Table of Contents



Loan
    Maturity Schedule
    Loans MaturingAfter OneWithin One


But Within


After FiveYear


Five Years


Years


Total(In thousands)Real estate loans:Residential(1)

$
2,297


$
38,535


$
679,093


$
719,925Commercial


20,488



103,607



365,416



489,511Construction


17,912



15,510



45,205



78,627Commercial business loans


37,467



50,531



42,305



130,303Installment and collateral


265



3,667



1,989



5,921Total

$
78,429


$
211,850


$
1,134,008


$
1,424,287   Loans
    Contractually Due Subsequent to December 31, 2010
    Due After December 31, 2011Fixed


Adjustable


Total(In thousands)Real estate loans:Residential(1)

$
425,473


$
292,155


$
717,628Commercial


205,483



263,540



469,023Construction


49,879



10,836



60,715Commercial business loans


43,919



48,917



92,836Installment and collateral


5,656







5,656Total loans

$
730,410


$
615,448


$
1,345,858     (1)
    
    Residential mortgage loans include
    one-to-four
    family mortgage loans, home equity loans, and home equity lines
    of credit.  Loan Approval Procedures and Authority:
    Non-performing and Problem Assets:
 10




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##### Table of Contents



case-by-case
  Classified Assets:
   11




---



##### Table of Contents



Loan
    Delinquencies
    Loans Delinquent For60-89 Days


90 Days and Over


TotalNumber


Amount


Number


Amount


Number


Amount(Dollars in thousands)At December 31, 2010Real estate loans:Residential(1)


15


$
1,634



24


$
2,952



39


$
4,586Commercial










3



2,347



3



2,347Construction


2



187



6



2,646



8



2,833Commercial business loans


2



119



5



445



7



564Installment and collateral


1



4



3



34



4



38Total


20


$
1,944



41


$
8,424



61


$
10,368At December 31, 2009Real estate loans:Residential(1)


11


$
2,072



17


$
1,970



28


$
4,042Commercial


1



421



5



2,242



6



2,663Construction










7



6,630



7



6,630Commercial business loans


3



220



3



61



6



281Installment and collateral






















Total


15


$
2,713



32


$
10,903



47


$
13,616At December 31, 2008Real estate loans:Residential(1)


9


$
1,237



14


$
1,685



23


$
2,922Commercial


2



652



2



1,202



4



1,854Construction










4



3,021



4



3,021Commercial business loans


3



923



2



372



5



1,295Installment and collateral


3



47



2



11



5



58Total


17


$
2,859



24


$
6,291



41


$
9,150     (1)
    
    Residential mortgage loans include
    one-to-four
    family mortgage loans, home equity loans, and home equity lines
    of credit. 12




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##### Table of Contents



Non-performing Assets:
  At December 31,2010


2009


2008


2007


2006(Dollars in thousands)Non-accrual loans:Real estate loans:Residential(1)

$
4,638


$
3,106


$
2,607


$
407


$
422Commercial


2,675



2,242



2,726



74



311Construction


2,646



6,630



4,385







Commercial business loans


714



61



334



692



114Installment and collateral


34



7



11



5



8Total non-accrual loans (2)


10,707



12,046



10,063



1,178



855Other accruing loans


















78Troubled debt restructurings


1,653







372



391



560Total non-performing loans


12,360



12,046



10,435



1,569



1,493Other real estate owned


990



3,061











Total non-performing assets

$
13,350


$
15,107


$
10,435


$
1,569


$
1,493Total non-performing loans to total loans


0.87
%


0.88
%


0.80
%


0.14
%


0.14
%Total non-performing assets to total assets


0.80
%


0.96
%


0.68
%


0.12
%


0.12
%     (1)
    
    Residential mortgage loans include
    one-to-four
    family mortgage loans, home equity loans, and home equity lines
    of credit.(2)
    
    The amount of income that was contractually due but not
    recognized on non-accrual loans totaled $677,000 and $233,000
    for the years ended December 31, 2010 and 2009,
    respectively.  Potential problem loans:
    Allowance
    for Loan Losses
   13




---



##### Table of Contents



General Reserve:
  Specific Reserve:
  Unallocated Reserve:
  Review of Credit Quality:
     14




---



##### Table of Contents



Schedule
    of Allowance for Loan Losses
    At or for the Years Ended December 31,2010


2009


2008


2007


2006(Dollars in thousands)Balance at beginning of year

$
12,539


$
12,553


$
10,620


$
9,827


$
8,675Provision for loan losses


4,109



1,961



2,393



749



1,681Charge-offs:Real estate(1)


(1,951
)


(1,471
)


(257
)


(21
)


(45
)Commercial business loans


(391
)


(593
)


(314
)


(76
)


(498
)Installment and collateral


(34
)


(49
)


(50
)


(76
)


(78
)Total charge-offs


(2,376
)


(2,113
)


(621
)


(173
)


(621
)Recoveries:Real estate(1)


11



8



9



5



5Commercial business loans


10



114



122



191



70Installment and collateral


19



16



30



21



17Total recoveries


40



138



161



217



92Net (charge-offs) recoveries


(2,336
)


(1,975
)


(460
)


44



(529
)Allowance at end of year

$
14,312


$
12,539


$
12,553


$
10,620


$
9,827Ratios:Allowance for loan losses to non-performing loans at end of year


115.79
%


104.09
%


120.30
%


676.86
%


658.20
%Allowance for loan losses to total loans outstanding at end of
    year


1.00
%


0.91
%


0.96
%


0.94
%


0.94
%Net charge-offs to average loans outstanding


0.17
%


0.15
%


0.04
%


0.00
%


0.05
%     (1)
    
    Real estate loans include
    one-to-four
    family residential mortgage loans, home equity loans, home
    equity lines of credit, commercial real estate and construction
    loans.  Allocation of Allowance for Loan Losses:
 15




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##### Table of Contents



At December 31,2010


2009


2008% of


% of Loans





% of


% of Loans





% of


% of LoansAllowance


Allowance


in Category


Allowance


Allowance


in Category


Allowance


Allowance


in Categoryfor Loan


for Loan


to Total


for Loan


for Loan


to Total


for Loan


for Loan


to TotalLosses


Losses


Loans


Losses


Losses


Loans


Losses


Losses


Loans(Dollars in thousands)Real estate:Residential(1)

$
4,644



32.45
%


50.54
%

$
4,243



33.84
%


54.97
%

$
3,952



31.48
%


57.26
%Commercial


5,469



38.21
%


34.37



4,662



37.18



31.03



3,978



31.69



26.97Construction


2,331



16.29
%


5.52



1,490



11.88



5.18



1,925



15.33



6.84Commercial business loans


1,653



11.55
%


9.15



1,832



14.61



8.25



2,180



17.37



8.19Installment and collateral


89



0.62
%


0.42



103



0.82



0.57



306



2.44



0.74Unallocated allowance


126



0.88
%






209



1.67







212



1.69



Total allowance for loan losses

$
14,312



100.00
%


100.00
%

$
12,539



100.00
%


100.00
%

$
12,553



100.00
%


100.00
%   At December 31,2007


2006% of


% of Loans





% of


% of LoansAllowance


Allowance


in Category


Allowance


Allowance


in Categoryfor Loan


for Loan


to Total


for Loan


for Loan


to TotalLosses


Losses


Loans


Losses


Losses


Loans(Dollars in thousands)Real estate:Residential(1)

$
2,673



25.17
%


59.18
%

$
1,051



10.70
%


61.46
%Commercial


3,387



31.89



25.28



4,241



43.16



22.33Construction


1,285



12.10



6.27



959



9.76



6.14Commercial business loans


2,102



19.79



8.25



1,959



19.93



9.34Installment and collateral


335



3.16



1.02



55



0.56



0.73Unallocated allowance


838



7.89







1,562



15.89



Total allowance for loan losses

$
10,620



100.00
%


100.00
%

$
9,827



100.00
%


100.00
%   Investment
    Activities
     16




---



##### Table of Contents



and/or
  Investment Securities Portfolio:
  At December 31,2010


2009


2008Amortized





Amortized





AmortizedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(In thousands)Available for sale:U.S. Government and government-sponsored enterprise obligations

$
35,018


$
34,327


$
7,017


$
7,052


$
2,031


$
2,048Government-sponsored residential mortgage- backed securities


67,047



70,390



72,537



75,967



117,517



120,395Corporate debt securities


5,895



4,008



5,879



4,656



4,831



4,887Other debt securities










722



731



725



739Marketable equity securities


11,282



16,722



10,509



14,345



10,678



13,181Total available for sale

$
119,242


$
125,447


$
96,664


$
102,751


$
135,782


$
141,250   other-than-temporary other-than-temporarily
  other-than-temporary other-than-temporary
  other-than-temporary other-than-temporary other-than-temporary
  other-than-temporary
 17




---



##### Table of Contents



other-than-temporary other-than-temporary other-than-temporary other-than-temporary
    U.S. Government and Government-Sponsored Enterprises:
  Government-Sponsored Enterprise Residential Mortgage-Backed
    Securities:
  one-to-four
   18




---



##### Table of Contents



sub-prime sub-prime and/or
  Corporate Bonds:
  Other Debt Securities:
  Marketable Equity Securities:
    Bank-Owned
    Life Insurance
    Portfolio Maturities and Yields:
 19




---



##### Table of Contents



More than One Year


More than Five YearsOne Year or Less


Through Five Years


Through Ten Years


More than Ten Years


Total SecuritiesWighted-





Wighted-





Wighted-





Wighted-





Wighted-Fair


Average


Fair


Average


Fair


Average


Fair


Average


Fair


AverageValue


Yield


Value


Yield


Value


Yield


Value


Yield


Value


Yield(Dollars in thousands)December 31, 2010Available for sale:Debt Securities:U.S. Government and government-sponsored enterprise obligations

$
3,017



0.21
%

$
11,880



2.35
%

$
19,430



2.01
%

$





%

$
34,327



1.97
%Mortgage-backed securities










1,921



4.38



9,559



3.87



58,910



4.81



70,390



4.67Corporate debt securities


100



4.91



2,958



0.40











950



0.85



4,008



0.62Total debt securities

$
3,117



0.36
%

$
16,759



2.24
%

$
28,989



2.62
%

$
59,860



4.75
%

$
108,725



3.67
%Marketable equity securities


































16,722Total securities available for sale

































$
125,447   Sources
    of Funds:
  General:
  Deposits:
       20




---



##### Table of Contents



At December 31,2010


2009


2008Wighted-








Wighted-








Wighted-Average








Average








AverageBalance


Percent


Yield


Balance


Percent


Yield


Balance


Percent


Yield(Dollars in thousands)Deposit type:Demand deposits

$
168,736



13.9
%


0.00
%

$
150,484



13.3
%


0.00
%

$
116,113



11.1
%


0.00
%NOW accounts


117,325



9.6



0.29



108,099



9.6



0.34



86,943



8.4



0.43Regular savings


162,090



13.3



0.33



143,601



12.7



0.30



121,527



11.7



0.60Money market and investment savings


227,007



18.6



0.52



234,737



20.8



0.65



188,110



18.0



1.78Club accounts


272







2.04



247







2.04



227







2.04Total core accounts


675,430



55.4



0.32



637,168



56.4



0.36



512,920



49.2



0.87Time deposits


543,830



44.6



1.92



491,940



43.6



2.29



529,588



50.8



3.57Total deposits

$
1,219,260



100.0
%


1.01
%

$
1,129,108



100.0
%


1.20
%

$
1,042,508



100.0
%


2.24
%     (In thousands)Three months or less

$
27,980Over three months through six months


22,275Over six months through one year


94,587Over one year through three years


53,924Over three years


18,508Total

$
217,274     At December 31,2010


2009


2008(In thousands)Interest Rate:0.00%  1.00%

$
129,405


$
56,155


$
1,9871.01%  2.00%


255,896



204,712



6322.01%  3.00%


87,706



101,412



132,3563.01%  4.00%


41,323



82,360



296,2574.01%  5.00%


26,343



42,259



87,4755.01%  6.00%


3,157



5,042



10,881Total

$
543,830


$
491,940


$
529,588  21




---



##### Table of Contents



PercentageOver One


Over Two


Over Three


Over Four








of Total TimeOne Year


Year to


Years to


Years to


Years to








Depositand Under


Two Years


Three Years


Four Years


Five Years


Thereafter


Total


Accounts(Dollars in thousands)Interest Rate:0.00%  1.00%

$
128,770


$
635


$



$



$



$



$
129,405



23.80
%1.01%  2.00%


176,915



76,900



1,984



98











255,897



47.052.01%  3.00%


47,687



5,159



9,150



7,392



18,308



10



87,706



16.133.01%  4.00%


5,036



3,680



8,557



3,031



21,019







41,323



7.604.01%  5.00%


9,417



10,457



4,593



480



90



1,305



26,342



4.845.01%  6.00%


1,606



1,264



262











25



3,157



0.58Total

$
369,431


$
98,095


$
24,546


$
11,001


$
39,417


$
1,340


$
543,830



100.00
%     Years Ended December 31,2010


2009


2008(In thousands)Beginning balance

$
978,624


$
926,395


$
851,660Net increase in deposits before interest credited


60,489



32,858



49,666Interest credited


11,411



19,371



25,069Net increase in deposits


71,900



52,229



74,735Ending balance

$
1,050,524


$
978,624


$
926,395   Borrowed
    Funds
    Subsidiary
    Activities
    SBR Mortgage Company:
  SBR Investment Corp.:
  Rockville Financial Services,
    Inc.:
 22




---



##### Table of Contents



Rockville Commercial Foreclosed Properties, Inc., Rockville
    Residential Foreclosed Properties, Inc.:
  Rockville Bank Mortgage, Inc.:
  Charitable
    Foundations
  Rockville Bank Foundation, Inc. (the New
    Foundation) (formerly known as Rockville Bank Community
    Foundation, Inc.): not-for-profit
  FEDERAL
    AND STATE TAXATION
  Federal
    Taxation
  General:
  Method of Accounting:
  Bad Debt Reserves:
  Taxable Distributions and Recapture:
 23




---



##### Table of Contents



Alternative Minimum Tax:
  Net Operating Loss Carryovers:
  Corporate Dividends-Received
    Deduction:
  State
    Taxation
  Connecticut State Taxation:
      Massachusetts State Taxation:
   24




---



##### Table of Contents



SUPERVISION
    AND REGULATION
  General
    Dodd-Frank
    Wall Street Reform and Consumer Protection Act
           25




---



##### Table of Contents



Connecticut
    Banking Laws And Supervision
  Connecticut Banking Commissioner:
  Lending Activities:
  Dividends:
  Powers:
  Assessments:
  Enforcement:
  Federal
    Regulations
  Capital Requirements:
 26




---



##### Table of Contents



one-to-four
        Prompt Corrective Regulatory Action:
   27




---



##### Table of Contents



Undercapitalized
  Transactions with Affiliates:
  Loans to Insiders:
  Enforcement:
   28




---



##### Table of Contents



Insurance
    of Deposit Accounts
        Federal
    Reserve System
    Federal
    Home Loan Bank System
   29




---



##### Table of Contents



Holding
    Company Regulation
  General:
      Dividends:
   30




---



##### Table of Contents



Financial Modernization:
  Miscellaneous
    Regulation
  Sarbanes-Oxley Act of 2002:
      Community Reinvestment Act:
 31




---



##### Table of Contents



Consumer Protection And Fair Lending
    Regulations:
  The USA Patriot Act:
  Dividend
    Waivers By Rockville Financial MHC, Inc.
    i.e.
   32




---



##### Table of Contents



Federal
    Securities Laws
    Item 1A.
    Risk
    Factors  You should consider carefully the following risk factors in
    evaluating an investment in shares of our common stock. An
    investment in our common stock is subject to risks inherent in
    our business. Before making an investment decision, you should
    carefully consider the risks and uncertainties described
    below.
  Risks
    Related to Our Business
  Our
    success depends on our key personnel, including our executive
    officers, and the loss of key personnel could disrupt our
    business.
  re-election re-nomination
  We are
    subject to lending risk and could incur losses in our loan
    portfolio despite our underwriting practices.
    
    Commercial and Industrial Loans.  Repayment is
    generally dependent upon the successful operation of the
    borrowers business.
    Commercial Real Estate Loans.  Repayment is
    dependent on income being generated in amounts sufficient to
    cover operating expenses and debt service.
    Consumer Loans.  Consumer loans are
    collateralized, if at all, with assets that may
    not          
    provide an adequate source of payment of the loan due to
    depreciation, damage or loss. 33




---



##### Table of Contents



Form 10-K.
  Because
    we intend to continue to increase our commercial real estate and
    commercial business loan originations, our lending risk will
    increase, and downturns in the real estate market or local
    economy could adversely affect our earnings.
    If
    Rockville Banks allowance for loan losses is not
    sufficient to cover actual loan losses, our earnings could
    decrease.
     34




---



##### Table of Contents



Future
    changes in interest rates may reduce our profits which could
    have a negative impact on the value of our stock.
      Continued
    or further declines in the value of certain investment
    securities could require write-downs, which would reduce our
    earnings.
  other-than-temporary
  If
    dividends paid on our investment in the Federal Home Loan Bank
    of Boston continue to be suspended, or if our investment is
    classified as
    other-than-temporarily
    impaired or as permanently impaired, our earnings and/or
    stockholders equity could decrease.
    other-than-temporarily
  Our
    stock value may be negatively affected by regulations
    restricting takeovers.
   35




---



##### Table of Contents



Rockville
    Bank has opened new branches and expects to open additional new
    branches which may incur losses during their initial years of
    operation as they generate new deposit and loan
    portfolios.
    Strong
    competition within Rockville Banks market area may limit
    our growth and profitability.
    Risks
    Related to the Financial Services Industry
  The
    United States economy remains weak and unemployment levels are
    high. A prolonged economic downturn will adversely affect our
    business and financial results.
    Passage
    of the Dodd-Frank Wall Street Reform and Consumer Protection Act
    will increase our operational and compliance
    costs.
       36




---



##### Table of Contents



Higher
    Federal Deposit Insurance Corporation insurance premiums and
    special assessments will adversely affect our
    earnings.
    We
    operate in a highly regulated environment and our business may
    be adversely affected by changes in laws and
    regulations.
     37




---



##### Table of Contents



Risks
    Related to the Offering
  Our
    failure to deploy the net proceeds of our 2011 Reorganization
    Offering effectively may have an adverse impact on our financial
    performance and the value of our common stock.
    Our
    return on equity will be low following the stock offering
    compared to our historical performance. This could negatively
    affect the trading price of our shares of common
    stock.
    The
    expansion of our existing employee stock ownership plan and
    implementation of one or more new stock benefit plans will
    increase our compensation and benefit expenses and adversely
    affect our profitability.
     38




---



##### Table of Contents



Various
    factors may make takeover attempts more difficult to
    achieve.
    
    Connecticut Banking Regulations.  Connecticut
    banking regulations prohibit, for a period of three years
    following the completion of a conversion, the direct or indirect
    acquisition of more than 10.0% of any class of our equity
    securities without the prior approval of the Connecticut Banking
    Commissioner.
    Certificate of Incorporation.  Provisions of
    the certificate of incorporation and bylaws of Rockville
    Financial may make it more difficult and expensive to pursue a
    takeover attempt that management opposes, even if the takeover
    is favored by a majority of our shareholders. These provisions
    also would make it more difficult to remove our current Board of
    Directors or management, or to elect new directors.
    Specifically, our certificate of incorporation prohibits for a
    period of five years following the completion of a conversion,
    subject to certain limitations, the direct or indirect
    acquisition of more than 10.0% of any class of our equity
    securities without the prior approval of the Connecticut Banking
    Commissioner. Additional provisions include the election of
    directors to staggered terms of four years, the prohibition of
    cumulative voting in the election of directors and the
    requirement that a director may be removed from office only upon
    the affirmative vote of at least two-thirds of the directors
    then in office or by the affirmative vote of the holders of at
    least 80.0% of the voting power of the issued and outstanding
    shares entitled to vote for the election of directors. Our
    bylaws also contain provisions regarding the timing and content
    of shareholder proposals and nominations and qualification for
    service on the Board of Directors.
    Issuance of stock options.  We intend to adopt
    one or more stock benefit plans no earlier than six months after
    the completion of the conversion and offering, pursuant to which
    we will grant stock options to key employees and directors that
    will require payments to these persons in the event of a change
    in control of New Rockville Financial. These payments may have
    the effect of increasing the costs of acquiring New Rockville
    Financial, thereby discouraging future takeover attempts.
    Employment and change in control
    agreements.  Rockville Financial has employment
    agreements with certain of its executive and other officers that
    will remain in effect following the stock offering. Rockville
    Financial intends to enter into an employment agreement and
    change in control agreement with its new Chief Executive Officer
    and new Chief Operating Officer following the stock offering.
    These agreements may have the effect of increasing the costs of
    acquiring Rockville Financial, thereby discouraging future
    takeover attempts.  Our
    contribution to the charitable foundation will adversely affect
    net income.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties   39




---



##### Table of Contents



sub-leases
    Office Locations:

Number of Offices:Hartford County, Connecticut


13New London County, Connecticut


1Tolland County, Connecticut


8Total


22     Item 3.
    Legal
    Proceedings    Item 4.
    Removed
    and Reserved  Part II
  Item 5.
    Market
    For The Registrants Common Equity and Related Stockholder
    Matters    Common Stock (per Share)Market PriceDividendsHigh

Low

Declared2010:First Quarter

$
12.42


$
8.82


$
0.06Second Quarter


12.64



10.50



0.06Third Quarter


12.91



11.06



0.06Fourth Quarter


12.47



10.50



0.0652009:First Quarter

$
14.46


$
6.17


$
0.05Second Quarter


12.50



8.44



0.05Third Quarter


14.79



9.88



0.05Fourth Quarter


11.68



9.68



0.05    40




---



##### Table of Contents



Repurchase
    of Equity Securities During 2010:
    (1)
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans    Number ofSecuritiesRemainingWeighted-


Available forNumber of


Average


Future IssuanceSecurities


Exercise


Under EquityTo Be Issued


Price of


CompensactionUpon Exercise


Outstanding


Plans (Excludingof Options,


Options,


SecuritiesWarrants


Warrants


Reflected inand Rights


and Rights


Column (A))Plan Category

(A)


(B)


(C)Equity compensation plans approved by security holders


557,885


$
12.80



304,690Equity compensation plans not approved by security holders










Total


557,885


$
12.80



304,690   Dividends:
   41




---



##### Table of Contents



Performance
    Graph:
      
  S&P 500

12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009


12/31/2010Price Index


1248.29



1418.30



1468.36



903.25



1115.1



1257.64Capital Appreciation


2
%


6
%


(4
)%


(23
)%


5
%


10
%UnannualizedDividend Yield


0.49
%


0.51
%


0.50
%


0.61
%


0.54
%


0.53
%Total Quarterly Return


2.08
%


6.69
%


(3.33
)%


(21.94
)%


6.02
%


10.73
%105.7



122.4



129.1



81.4



102.9



111.9   KRX

12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009


12/31/2010Price Index


95.80



101.18



76.46



59.90



45.39



53.66Capital Appreciation






3
%


(14
)%


(17
)%


4
%


15
%UnannualizedDividend Yield






0.70
%


0.80
%


0.72
%


0.51
%


0.48
%Total Quarterly Return






4.11
%


(13.57
)%


(16.12
)%


4.73
%


15.51
%100.0



108.5



84.7



69.1



53.8



64.8   RCKB

12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009


12/31/2010Price


13.05



17.85



12.20



13.97



10.50



12.22Capital Appreciation


(2
)%


23
%


(14
)%


(11
)%


(2
)%


6
%UnannualizedDividend Yield


0.00
%


0.28
%


0.28
%


0.32
%


0.47
%


0.57
%Total Quarterly Return


(2.17
)%


23.46
%


(14.17
)%


(10.98
)%


(1.86
)%


6.92
%124.5



171.2



118.3



137.5



105.3



100.5  42




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
  At December 31,2010


2009


2008


2007


2006(In thousands)Selected Financial Condition Data:Total assets

$
1,678,073


$
1,571,134


$
1,533,073


$
1,327,012


$
1,232,836Available for sale securities


125,447



102,751



141,250



136,372



132,467Held to maturity securities


13,679



19,074



24,138







Federal Home Loan Bank stock


17,007



17,007



17,007



11,168



9,836Loans receivable, net


1,410,498



1,361,019



1,291,791



1,116,327



1,033,355Cash and cash equivalents


60,708



19,307



14,901



23,998



22,381Deposits


1,219,260



1,129,108



1,042,508



951,038



884,511Mortgagors and investors escrow accounts


6,131



6,385



6,077



5,568



5,320Advances from the Federal Home Loan Bank


261,423



263,802



322,882



201,741



178,110Total stockholders equity


166,428



157,428



145,777



156,373



155,064Allowance for loan losses


14,312



12,539



12,553



10,620



9,827Non-performing loans(1)


12,360



12,046



10,435



1,569



1,493     (1)
    
    Non-performing loans include loans for which the Bank does not
    accrue interest (non-accrual loans), loans 90 days past due
    and still accruing interest and loans that have gone through
    troubled debt restructurings.  43




---



##### Table of Contents



Years Ended December 31,2010


2009


2008


2007


2006(Dollars in thousands, except per share amounts)Selected Operating Data:Interest and dividend income

$
75,699


$
76,062


$
77,545


$
73,877


$
63,952Interest expense


22,161



29,775



34,946



35,577



27,649Net interest income


53,538



46,287



42,599



38,300



36,303Provision for loan losses


4,109



1,961



2,393



749



1,681Net interest income after provision for loan losses


49,429



44,326



40,206



37,551



34,622Non-interest income (loss)


9,404



6,972



(8,987
)


5,194



4,625Non-interest expense


39,850



36,631



33,762



30,301



29,025Income (loss) before income taxes


18,983



14,667



(2,543
)


12,444



10,222Income tax expense (benefit)


6,732



4,935



(956
)


4,116



3,368Net income (loss)

$
12,251


$
9,732


$
(1,587
)

$
8,328


$
6,854Net income (loss)

$
12,251


$
9,732


$
(1,587
)

$
8,328


$
6,854Earnings per shareBasic

$
0.66


$
0.53


$
(0.09
)

$
0.44


$
0.36Diluted

$
0.66


$
0.53


$
(0.09
)

$
0.44


$
0.36Dividends per share

$
0.245


$
0.20


$
0.20


$
0.16


$
0.08   44




---



##### Table of Contents



At or for the Years Ended December 31,2010

2009

2008

2007

2006Selected Financial Ratios and Other Data:Performance Ratios:Return on average assets


0.76
%


0.63
%


(0.11
)%


0.65
%


0.59
%Return on average equity


7.48



6.44



(1.03
)


5.32



4.42Interest rate spread(1)


3.19



2.73



2.63



2.52



2.75Net interest margin(2)


3.49



3.10



3.09



3.13



3.30Non-interest expense to average assets


2.48



2.36



2.35



2.37



2.52Efficiency ratio(3)


63.31



68.78



100.45



69.67



70.92Average interest-earning assets to average interest-bearing
    liabilities


120.68



118.55



118.50



120.77



122.01Dividend payout ratio


0.37



0.38







0.36



0.22Capital Ratios:Capital to total assets at end of year


9.92



10.02



9.51



11.78



12.58Average capital to average assets


10.21



9.74



10.76



12.27



13.47Total capital to risk-weighted assets


13.73



14.07



14.16



16.60



18.00Tier I capital to risk-weighted assets


12.62



12.98



12.88



15.49



16.87Tier I capital to total average assets


10.39



10.15



10.43



11.74



12.75Asset Quality Ratios:Allowance for loan losses as a percent of total loans


1.00



0.91



0.96



0.94



0.94Allowance for loan losses as a percent of non-performing loans


115.79



104.09



120.30



676.86



658.20Net charge-offs to average outstanding loans during the period


0.17



0.16



0.04







0.05Non-performing loans as a percent of total loans


0.87



0.88



0.80



0.14



0.14Non-performing assets as a percent of total assets


0.80



0.96



0.68



0.12



0.12Other Data:Number of full service offices


18



18



17



16



14Number of limited service offices


4



4



4



4



4     (1)
    
    Represents the difference between the weighted-average yield on
    average interest-earning assets and the weighted-average cost of
    interest-bearing liabilities.(2)
    
    Represents net interest income as a percent of average
    interest-earning assets.(3)
    
    Represents non-interest expense divided by the sum of net
    interest income and non-interest income.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation  Overview
     45




---



##### Table of Contents



Critical
    Accounting Policies
    other-than-temporary
  other-than-temporary
  Net Interest Income Analysis: Average Balance Sheets,
    Interest and Yields/Costs:
 46




---



##### Table of Contents



Years Ended December 31,2010


2009


2008Interest








Interest








InterestAverage


and


Yield/


Average


and


Yield/


Average


and


Yield/Balance


Dividends


Cost


Balance


Dividends


Cost


Balance


Dividends


Cost(Dollars in thousands)Interest-earning assets:Loans receivable, net

$
1,378,032


$
70,677



5.13
%

$
1,333,770


$
69,517



5.21
%

$
1,193,416


$
68,458



5.74
%Total investment securities


126,111



5,012



3.97



140,494



6,544



4.66



168,913



8,580



5.08Federal Home Loan Bank stock


17,007











17,007











13,812



473



3.42Other earning assets


13,556



10



0.07



931



1



0.11



2,376



34



1.43Total interest-earning assets


1,534,706



75,699



4.93



1,492,202



76,062



5.10



1,378,517



77,545



5.63Non-interest-earning assets


68,992











59,606











57,255Total assets

$
1,603,698










$
1,551,808










$
1,435,772Interest-bearing liabilities:NOW and money market accounts

$
346,702



1,541



0.44


$
312,439



2,494



0.80


$
249,038



4,728



1.90Savings accounts(1)


160,192



544



0.34



136,981



607



0.44



128,467



824



0.64Time deposits


496,584



9,532



1.92



524,041



16,270



3.10



514,222



19,517



3.80Total interest-bearing deposits


1,003,478



11,617



1.16



973,461



19,371



1.99



891,727



25,069



2.81Advances from the FederalHome Loan Bank


268,274



10,544



3.93



285,258



10,404



3.65



271,545



9,877



3.64Total interest-bearing liabilities


1,271,752



22,161



1.74
%


1,258,719



29,775



2.37
%


1,163,272



34,946



3.00
%Non-interest-bearing liabilities


168,193











142,017











117,983Total liabilities


1,439,945











1,400,736











1,281,255Stockholders equity


163,753











151,072











154,517Total liabilities and stockholders equity

$
1,603,698










$
1,551,808










$
1,435,772Net interest income





$
53,538










$
46,287










$
42,599Net interest rate spread(2)










3.19
%










2.73
%










2.63
%Net interest-earning assets(3)

$
262,954










$
233,483










$
215,245Net interest margin(4)










3.49
%










3.10
%










3.09
%Average interest-earning assets to average interest-bearing
    liabilities


120.68
%










118.55
%










118.50
%     (1)
    
    Includes mortgagors and investors escrow accounts(2)
    
    Net interest rate spread represents the difference between the
    yield on average interest-earning assets and the cost of average
    interest-bearing liabilities.(3)
    
    Net interest-earning assets represent total interest-earning
    assets less total interest-bearing liabilities.(4)
    
    Net interest margin represents the annualized net interest
    income divided by average total interest-earning assets. 47




---



##### Table of Contents



Rate
    Volume Analysis
    Year Ended December 31, 2010


Year Ended December 31, 2009Compared to December 31, 2009


Compared to December 31, 2008Increase (Decrease)





Increase (Decrease)Due To





Due ToVolume


Rate


Net


Volume


Rate


Net(In thousands)Interest and dividend income:Loans receivable

$
2,283


$
(1,123
)

$
1,160


$
7,637


$
(6,578
)

$
1,059Securities interest, dividends & income from other
    assets


(81
)


(1,442
)


(1,523
)


(1,210
)


(1,332
)


(2,542
)Total earning assets


2,202



(2,565
)


(363
)


6,427



(7,910
)


(1,483
)Interest expense:NOW and money market accounts


250



(1,203
)


(953
)


991



(3,225
)


(2,234
)Savings accounts


93



(156
)


(63
)


52



(269
)


(217
)Time deposits


(813
)


(5,925
)


(6,738
)


367



(3,614
)


(3,247
)Total interest-bearing deposits


(470
)


(7,284
)


(7,754
)


1,410



(7,108
)


(5,698
)FHLBB Advances


(641
)


781



140



500



27



527Total interest-bearing liabilities


(1,111
)


(6,503
)


(7,614
)


1,910



(7,081
)


(5,171
)Change in net interest income

$
3,313


$
3,938


$
7,251


$
4,517


$
(829
)

$
3,688   Comparison
    of Operating Results for the Year Ended December 31, 2010
    to the Year Ended December 31, 2009
   48




---



##### Table of Contents



Income
    Statement Summary
  Years Ended December 31,2010


2009


$ Change(In thousands)Net interest income

$
53,538


$
46,287


$
7,251Provision for loan losses


4,109



1,961



2,148Non-interest income


9,404



6,972



2,432Non-interest expense


39,850



36,631



3,219Income before income taxes


18,983



14,667



4,316Income tax provision


6,732



4,935



1,797Net income

$
12,251


$
9,732


$
2,519   Earnings
    Summary
    other-than-temporary
       49




---



##### Table of Contents



other-than-temporary
    Net Interest Income:
  Interest and Dividend Income:
  Interest Expense:
  Provision for Loan Losses:
  Non-interest Income: Other-than-temporary
 50




---



##### Table of Contents



other-than-temporary other-than-temporary
    Non-interest Expense:
    Years Ended December 31,2010


2009


$ Change


% Change(Dollars in thousands)Salaries and employee benefits

$
20,032


$
18,571


$
1,461



7.9
%Service bureau fees


4,048



3,872



176



4.6Occupancy and equipment


4,292



4,380



(88
)


(2.0
)Professional fees


1,807



1,131



676



59.8Marketing and promotions


1,450



1,156



294



25.4FDIC assessments


1,616



2,222



(606
)


(27.3
)Other real estate owned


1,435



69



1,366



1,979.7Other


5,170



5,230



(60
)


(1.2
)Total non-interest expense

$
39,850


$
36,631


$
3,219



8.8
%     (1)
    
    Includes Directors fees and expenses for the years ended
    December 31, 2010 and 2009 of $803,000 and $769,000,
    respectively.         51




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##### Table of Contents



Years Ended December 31,2010

2009

$ Change

% Change(Dollars in thousands)Directors fees and expenses

$
803


$
769


$
34



4.4
%Collections


375



463



(88
)


(19.0
)Off-balance sheet provision (credit)


(285
)


(47
)


(238
)


(506.4
)Telephone


216



174



42



24.1Postage


418



395



23



5.8Courier


317



331



(14
)


(4.2
)Dues and subscriptions


230



215



15



7.0Service charges


165



188



(23
)


(12.2
)Printing and forms


356



328



28



8.5Other


2,575



2,414



161



6.7Total other non-interest expense

$
5,170


$
5,230


$
(60
)


(1.1
)%     Income Tax Expense:
  Comparison
    of Operating Results for the Year Ended December 31, 2009
    to the Year Ended December 31, 2008
   52




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##### Table of Contents



Income
    Statement Summary
  Years Ended December 31,2009


2008


$ Change


% Change(Dollars in thousands)Net interest income

$
46,287


$
42,599


$
3,688



8.7
%Provision for loan losses


1,961



2,393



(432
)


(18.1
)Non-interest income (loss)


6,972



(8,987
)


15,959



177.6Non-interest expense


36,631



33,762



2,869



8.5Income (Loss) before income taxes


14,667



(2,543
)


17,210



676.8Provision (Benefit) for income taxes


4,935



(956
)


5,891



616.2Net income (loss)

$
9,732


$
(1,587
)

$
11,319



713.2
%   Earnings
    Summary
  General:
  other-than-temporary
      sub-division
 53




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##### Table of Contents



other-than-temporary
    Net Interest Income:
  Interest and Dividend Income:
  Interest Expense:
  Provision for Loan Losses:
 54




---



##### Table of Contents



sub-division
  Non-interest Income (Loss): Other-than-temporary
  other-than-temporary other-than-temporary Other-than-temporary
    Non-interest Expense:
    Years Ended December 31,2009


2008


$ Change


% Change(Dollars in thousands)Salaries and employee benefits

$
18,571


$
17,150


$
1,421



8.3
%Service bureau fees


3,872



3,808



64



1.7Occupancy and equipment


4,380



4,103



277



6.8Professional fees


1,131



1,484



(353
)


(23.8
)Marketing and promotions


1,156



1,315



(159
)


(12.1
)FDIC assessments


2,222



654



1,568



239.8Other(1)


5,299



5,248



51



1.0Total non-interest expense

$
36,631


$
33,762


$
2,869



8.5
%     (1)
    
    Includes Directors fees and expenses for the years ended
    December 31, 2009 and 2008 of $769,000 and $829,000,
    respectively.       55




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##### Table of Contents



Year Ended December 31,2009


2008


$ Change


% Change(Dollars in thousands)Directors fees and expenses

$
769


$
829


$
(60
)


(7.2
)%Collections


463



29



434



1518.9Off-balance sheet provision


(47
)


230



(277
)


(120.4
)Telephone


174



202



(28
)


(13.9
)Postage


395



383



12



3.1Courrier


331



344



(13
)


(3.8
)Dues and subscritions


215



228



(13
)


(5.7
)Service charges


188



183



5



2.7Printing and forms


328



431



(103
)


(23.9
)Other


2,483



2,389



94



3.9Total other non-interest expense

$
5,299


$
5,248


$
51



1.0
%     Income Tax Expense:
  Comparison
    of Financial Condition at December 31, 2010 and
    December 31, 2009
  Summary:
  Securities:
 56




---



##### Table of Contents



Lending Activities:
      Deposits:
  Liquidity and Capital Resources:
       57




---



##### Table of Contents



Contractual
    Obligations
  More than


More thanOne Year


Three YearsOne Year


Through


Through


Over FiveTotal


or Less


Three Years


Five Years


Years(In thousands)Federal Home Loan Bank advances(1)

$
261,423


$
73,320


$
100,400


$
65,912


$
21,791Interest expense payable on Federal Home Loan Bank Advances


25,531



8,814



11,408



3,671



1,638Operating leases(2)


13,064



791



1,499



1,338



9,436Other liabilities(3)


1,561



121



268



308



864Total Contractual Obligations

$
301,579


$
83,046


$
113,575


$
71,229


$
33,729     (1)
    
    Secured under a blanket security agreement on qualifying assets,
    principally, mortgage loans.(2)
    
    Represents non-cancelable operating leases for offices and
    office equipment.(3)
    
    Consists of estimated benefit payments over the next ten years
    to retirees under unfunded nonqualified pension plans. 58




---



##### Table of Contents



Other
    Commitments
  More than


More thanOne Year


Three YearsOne Year


Through


Through


Over FiveTotal


or Less


Three Years


Five Years


Years(Dollars in thousands)Real estate loan commitments(1)

$
48,620


$
31,022


$



$
12,500


$
5,098Commercial business loan commitments(1)


20,373



4,612



5,650



955



9,156Commercial business loan lines of credit


60,587



10,815



3,744



30



45,998Unused portion of home equity lines of credit(2)


143,904



1,214



5,230



30,805



106,655Unused portion of construction loans


87,544



46,908



17,531



650



22,455Unused checking overdraft lines of credit(3)


94















94Standby letters of credit


10,368



8,904



864



600



Total Other Commitments

$
371,490


$
103,475


$
33,019


$
45,540


$
189,456       (1)
    
    Commitments for loans are extended to customers for up to
    180 days after which they expire.(2)
    
    Unused portions of home equity lines of credit are available to
    the borrower for up to 10 years.(3)
    
    Unused portion of checking overdraft lines of credit are
    available to customers in good standing.  Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Management
    of Market and Interest Rate Risk
  General:
  one-to-four
 59




---



##### Table of Contents



Quantitative
    Analysis:
  Income Simulation:
  Percentage Increase (Decrease)in EstimatedNet Interest Income Over12 Months400 basis point increase in rates


8.21
%50 basis point decrease in rates


(3.33
)    60




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  ROCKVILLE
    FINANCIAL, INC.
  CONSOLIDATED
    FINANCIAL STATEMENTS
  TABLE OF
    CONTENTS
  PageREPORT OF MANAGEMENT ON INTERNAL CONTROL OVER
    FINANCIAL REPORTING


62REPORTS OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRMS Wolf & Company, P.C.


63 Deloitte & Touche, LLP


65CONSOLIDATED FINANCIAL STATEMENTS:Consolidated Statements of Condition as of
    December 31, 2010 and 2009


66Consolidated Statements of Operations for the
    Years Ended December 31, 2010, 2009 and 2008


67Consolidated Statements of Changes in
    Stockholders Equity for the Years Ended December 31,
    2010, 2009 and 2008


68Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2010, 2009 and 2008


69Notes to Consolidated Financial Statements


71  61




---



##### Table of Contents



REPORT OF
    MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTING            /s/ William J. McGurk

/s/ John T. LundWilliam J. McGurk

John T. LundPresident, Chief Executive Officer

Senior Vice President, Chief Financialand Director

Officer and Treasurer    62




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                     63




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                 64




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                65




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Consolidated Statements of Condition
 December 31,
    2010 and 2009
  2010


2009(In thousands, except share data)ASSETS:CASH AND CASH EQUIVALENTS:Cash and due from banks

$
16,692


$
18,507Short-term investments


44,016



800Total cash and cash equivalents


60,708



19,307AVAILABLE FOR SALE SECURITIES  at fair value


125,447



102,751HELD TO MATURITY SECURITIES  at amortized cost


13,679



19,074LOANS HELD FOR SALE


380



LOANS RECEIVABLE (net of allowance for loan losses of $14,312 in
    2010 and $12,539 in 2009)


1,410,498



1,361,019FEDERAL HOME LOAN BANK STOCK, at cost


17,007



17,007ACCRUED INTEREST RECEIVABLE


4,176



4,287DEFERRED TAX
    ASSET-Net


11,327



10,608PREMISES AND
    EQUIPMENT-Net


14,912



15,863GOODWILL


1,149



1,070CASH SURRENDER VALUE OF BANK-OWNED LIFE INSURANCE


10,459



10,076OTHER REAL ESTATE OWNED


990



3,061PREPAID FDIC ASSESSMENTS


3,875



5,884OTHER ASSETS


3,466



1,127$
1,678,073


$
1,571,134LIABILITIES AND STOCKHOLDERS EQUITY:LIABILITIES:DEPOSITS:Non-interest-bearing

$
168,736


$
150,484Interest-bearing


1,050,524



978,624Total deposits


1,219,260



1,129,108MORTGAGORS AND INVESTORS ESCROW ACCOUNTS


6,131



6,385ADVANCES FROM THE FEDERAL HOME LOAN BANK


261,423



263,802ACCRUED EXPENSES AND OTHER LIABILITIES


24,831



14,411TOTAL LIABILITIES


1,511,645



1,413,706COMMITMENTS AND CONTINGENCIES (Note 16)STOCKHOLDERS EQUITY:Preferred stock (no par value; 1,000,000 shares authorized;
    no shares issued and outstanding at December 31, 2010 and
    2009)






Common stock (no par value; 29,000,000 shares authorized;
    19,551,057 and 19,554,774 shares issued and 18,863,375 and
    18,855,948 outstanding at December 31, 2010 and 2009,
    respectively)


85,249



85,249Additional paid in capital


4,789



4,082Unearned compensation  ESOP


(3,478
)


(4,178
)Treasury stock, at cost (687,682 and 698,826 shares at
    December 31, 2010 and 2009, respectively)


(9,495
)


(9,663
)Retained earnings


90,645



82,971Accumulated other comprehensive loss, net of tax


(1,282
)


(1,033
)TOTAL STOCKHOLDERS EQUITY


166,428



157,428$
1,678,073


$
1,571,134    66




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Consolidated Statements of Operations
 Years
    Ended December 31, 2010, 2009 and 2008
  2010


2009


2008(In thousands, except share data)INTEREST AND DIVIDEND INCOME:Loans

$
70,677


$
69,517


$
68,458Securities-interest


4,558



6,116



7,406Securities-dividends


454



428



1,647Interest-bearing deposits


10



1



34Total interest and dividend income


75,699



76,062



77,545INTEREST EXPENSE:Deposits


11,617



19,371



25,069Borrowed funds


10,544



10,404



9,877Total interest expense


22,161



29,775



34,946Net interest income


53,538



46,287



42,599PROVISION FOR LOAN LOSSES


4,109



1,961



2,393Net interest income after provision for loan losses


49,429



44,326



40,206NON-INTEREST INCOME (LOSS):Total
    other-than-temporary
    impairment losses on equity securities






(362
)


(13,315
)Total
    other-than-temporary
    impairment losses on debt securities










(1,566
)Portion of impairment losses recognized in other comprehensive
    loss










Net impairment losses recognized in earnings






(362
)


(14,881
)Service charges and fees


7,377



5,221



5,131Net gain from sale of securities


190



936



381Net gain from sale of loans


1,746



782



Other income


91



395



382Total non-interest income (loss)


9,404



6,972



(8,987
)NON-INTEREST EXPENSE:Salaries and employee benefits


20,032



18,571



17,150Service bureau fees


4,048



3,872



3,808Occupancy and equipment


4,292



4,380



4,103Professional fees


1,807



1,131



1,484Marketing and promotions


1,450



1,156



1,315FDIC assessments


1,616



2,222



654Other real estate owned


1,435



69



Other


5,170



5,230



5,248Total non-interest expense


39,850



36,631



33,762INCOME (LOSS) BEFORE INCOME TAXES


18,983



14,667



(2,543
)INCOME TAX PROVISION (BENEFIT)


6,732



4,935



(956
)NET INCOME (LOSS)

$
12,251


$
9,732


$
(1,587
)Earnings per share:Basic

$
0.66


$
0.53


$
(0.09
)Diluted

$
0.66


$
0.53


$
(0.09
)Weighted-average shares outstanding:Basic

$
18,537,498


$
18,469,092


$
18,428,158Diluted

$
18,551,398


$
18,473,665


$
18,428,158    67




---



##### Table of Contents



Rockville
    Financial, Inc. and SubsidiariesConsolidated Statements of
    Changes in Stockholders EquityFor the Years Ended December 31,
    2010, 2009 and 2008
    (In thousands, Except Share Data)
  AccumulatedAdditional


Unearned











Other


TotalCommon Stock


Paid-in


Compensation


Retained


Treasury Stock


Comprehensive


StockholdersShares


Amount


Capital


 ESOP


Earnings


Shares


Amount


Income (Loss)


Equity(In thousands)Balance at December 31, 2007


19,568,284


$
85,249


$
3,009


$
(5,734
)

$
81,383



496,730


$
(7,293
)

$
(241
)

$
156,373Comprehensive income (loss):Net loss


















(1,587
)














(1,587
)Change in net unrealized gain on securities available for sale,
    net of reclassification adjustments and tax effects






























420



420Change in accumulated other comprehensive loss related to
    employee benefit plans, net of reclassification adjustments and
    tax effects






























(4,272
)


(4,272
)Total comprehensive loss


































(5,439
)Common stock repurchased






















291,082



(3,787
)






(3,787
)Share-based compensation expense










1,956



699



















2,655Treasury stock issued










(1,371
)










(92,559
)


1,371







Cancellation of shares for tax withholding










(214
)






















(214
)Dividends paid, $0.20 per common share


















(3,691
)














(3,691
)SFAS 158 pension remeasurement


















(120
)














(120
)Balance at December 31, 2008


19,568,284



85,249



3,380



(5,035
)


75,985



695,253



(9,709
)


(4,093
)


145,777Cumulative effect of adjustment to retained earnings relating to
    impairment of securities


















1,034











(1,034
)


Comprehensive income:Net income


















9,732















9,732Change in net unrealized gain on securities available for sale,
    net of reclassification adjustments and tax effects






























1,441



1,441Change in accumulated other comprehensive loss related to
    employee benefit plans, net of reclassification adjustments and
    tax effects






























2,653



2,653Total comprehensive income


































13,826Common stock repurchased






















20,000



(198
)






(198
)Share-based compensation expense










827























827ESOP shares released or committed to be release










71



857



















928Forfeited unvested restricted stock


(9,200
)






























Treasury stock issued










(152
)






(92
)


(16,427
)


244







Cancellation of shares for tax withholding


(4,310
)






(44
)






















(44
)Dividends paid, $0.20 per common share


















(3,688
)














(3,688
)Balance at December 31, 2009


19,554,774



85,249



4,082



(4,178
)


82,971



698,826



(9,663
)


(1,033
)


157,428Comprehensive income (loss):Net income


















12,251















12,251Change in net unrealized gain on securities available for sale,
    net of reclassification adjustments and tax effects






























17



17Change in accumulated other comprehensive loss related to
    employee benefit plans, net of reclassification adjustments and
    tax effects






























(266
)


(266
)Total comprehensive income


































12,002Share-based compensation expense










775























775ESOP shares released or committed to be release










103



700



















803Treasury stock issued










(125
)






(43
)


(11,144
)


168







Cancellation of shares for tax withholding


(3,717
)






(46
)






















(46
)Dividends paid, $0.245 per common share


















(4,534
)














(4,534
)Balance at December 31, 2010


19,551,057


$
85,249


$
4,789


$
(3,478
)

$
90,645



687,682


$
(9,495
)

$
(1,282
)

$
166,428    68




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Consolidated Statements of Cash Flows
 Years
    Ended December 31, 2010, 2009 and 2008
  2010


2009


2008(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
12,251


$
9,732


$
(1,587
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Amortization and accretion of premiums and discounts on
    investments, net


(171
)


(160
)


(59
)Share-based compensation expense


775



827



1,743Amortization of ESOP expense


803



928



912Provision for loan losses


4,109



1,961



2,393Net gain from sale of securities


(190
)


(936
)


(381
)Other-than-temporary
    impairment of securities






362



14,881Loans originated for sale


(71,443
)


(43,958
)


Proceeds from sales of loans


71,063



43,958



Losses (gains) on sale of OREO


441



(16
)


Write-downs of OREO


866







Depreciation and amortization


1,435



1,608



1,502Loss on disposal of equipment


1



34



3Deferred income tax benefit


(674
)


(1,242
)


(5,528
)Increase in cash surrender value of bank-owned life insurance


(383
)


(371
)


(383
)Net change in:Deferred loan fees and premiums


(109
)


784



113Accrued interest receivable


111



349



(480
)Prepaid FDIC assessment


2,009



(5,884
)


Other assets


(2,339
)


(192
)


2,484Accrued expenses and other liabilities


9,905



2,602



167Net cash provided by operating activities


28,460



10,386



15,780CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of available for sale securities


399



21,171



5,870Proceeds from calls and maturities of available for sale
    securities


29,723



2,500



14,850Principal payments on available for sale mortgage-backed
    securities


21,166



25,525



17,596Principal payments on held to maturity mortgage-backed securities


5,470



5,135



1,842Purchases of available for sale securities


(73,580
)


(8,091
)


(57,030
)Purchases of held to maturity securities










(25,948
)Purchase of Federal Home Loan Bank stock










(5,839
)Proceeds from sales of portfolio loans






161



8,175Proceeds from sale of OREO


5,120



1,859



Purchase of loans






(2,529
)


(26,212
)Loan originations, net of principal payments


(57,835
)


(74,509
)


(159,933
)Purchases of premises and equipment


(461
)


(1,100
)


(3,558
)Net cash used in investing activities


(69,998
)


(29,878
)


(230,187
)    69




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Consolidated
    Statements of Cash Flows  (Continued)
 Years
    Ended December 31, 2010, 2009 and 2008
  2010


2009


2008(In thousands)CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in non-interest-bearing deposits


18,252



34,371



16,735Net increase in interest-bearing deposits


71,900



52,229



74,735Net (decrease) increase in mortgagors and investors
    escrow accounts


(254
)


308



509Net (decrease) increase in short-term Federal Home Loan Bank
    advances


(15,000
)


(51,000
)


38,000Poceeds from long-term Federal Home Loan Bank advances


37,800



8,112



113,320Repayments of long-term Federal Home Loan Bank advances


(25,179
)


(16,192
)


(30,179
)Common stock repurchased






(198
)


(4,119
)Cancellation of shares for tax withholding


(46
)


(44
)


Cash dividends paid on common stock


(4,534
)


(3,688
)


(3,691
)Net cash provided by financing activities


82,939



23,898



205,310NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


41,401



4,406



(9,097
)CASH AND CASH EQUIVALENTS  Beginning of year


19,307



14,901



23,998CASH AND CASH EQUIVALENTS  End of year

$
60,708


$
19,307



14,901SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the year for:Interest

$
22,235


$
29,901


$
34,683Income taxes, net


9,520



4,401



1,751Transfer of loans to other real estate owned


4,356



4,904



Due to broker, investment purchase


10,534







    70




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes
    to Consolidated Financial Statements
  Note 1.
    MUTUAL
    HOLDING COMPANY REORGANIZATION AND MINORITY STOCK
    ISSUANCE        Note 2.
    BASIS OF
    PRESENTATION, PRINCIPLES OF CONSOLIDATION AND SIGNIFICANT
    ACCOUNTING POLICIES        Use of Estimates:
 71




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  other-than-temporary
  Acquisition:
  Cash and Cash Equivalents:
  Securities:
    other-than-temporary
  other-than-temporary,
   72




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Federal Home Loan Bank Stock:
  Loans
    Held For Sale:
    Loans:
            Interest and Fees on Loans:
   73




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Allowance for Loan Losses:
  General
    component:
      Residential first and second mortgages loan-to-value debt-to-income
  Commercial real estate
  Construction loans
 74




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Commercial loans
  Consumer loans
  Allocated
    component:
    case-by-case
    Unallocated
    component:
       75




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
            Servicing
     76




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Derivative Loan Commitments:
  Forward Loan Sale Commitments:
    Other Real Estate Owned:
  Reserve for Off-Balance Sheet Commitments:
  Bank-Owned Life Insurance:
  Transfers of Financial Assets:
 77




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Premises and Equipment:
  Advertising Costs:
  Impairment of Long-Lived Assets:
  Goodwill:
  Income Taxes:
    Pension and Other Post-Retirement
    Benefits:
 78




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Treasury Stock: first-in,
  Service Charges and Fee Income:
  Fair Values of Financial Instruments:
  Cash and Due from Banks, Short-Term Investments, Accrued
    Interest Receivable and Mortgagors and Investors
    Escrow Accounts
  Securities
  Loans Held for Sale
  Loans Receivable
  Deposits
  Advances from the Federal Home Loan Bank of
    Boston
  Off-Balance Sheet Instruments
 79




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Earnings per Common Share:
    ESOP Expenses:
  Share-Based Compensation:
  Segment Information:
  Note 3.
    RECENT
    ACCOUNTING PRONOUNCEMENTS  Receivables, Topic 310: No. 2011-01, No. 2010-20 2010-20.
 80




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Receivables, Topic 310: No. 2010-20,
  Fair Value Measurements and Disclosures, Topic
    820: 2010-06
  Note 4.
    EARNINGS
    PER SHARE    Years Ended December 31,2010


2009


2008(In thousands)Net income (loss) available to common stockholders

$
12,251


$
9,732


$
(1,587
)Weighted-average basic shares outstanding


18,537



18,469



18,428Effect of dilutive options


14



5



Average number of common shares outstanding used to calculate
    diluted earnings per common share


18,551



18,474



18,428    81




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Note 5.
    FAIR
    VALUE MEASUREMENT    Level 1:
  Level 2:
  Level 3:
    Items Measured
    at Fair Value on a Recurring Basis:
    Available for Sale
    Securities:
 82




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Assets Recorded at Fair Value on a Recurring Basis:
  December 31, 2010QuotedPrices inActiveMarkets for


Other


SignificantIdentical


Observable


UnobservableTotal


Assets


Inputs


InputsFair Value


(Level 1)


(Level 2)


(Level 3)(In thousands)Available for Sale Securities:U.S Government and government-sponsored enterprise obligations

$
34,327


$
3,017


$
31,310


$
Government-sponsored residential mortgage- backed securities


70,390







70,390



Corporate debt securities


4,008







4,008



Marketable equity securities


16,722



16,649







73Total assets measured at fair value

$
125,447


$
19,666


$
105,708


$
73December 31, 2009Available for Sale Securities:U.S Government and government-sponsored enterprise obligations

$
7,052


$
2,018


$
5,034


$
Government-sponsored residential mortgage- backed securities


75,967







75,967



Corporate debt securities


4,656







4,656



Other debt securities


731







731



Marketable equity securities


14,345



14,272







73Total assets measured at fair value

$
102,751


$
16,290


$
86,388


$
73       2010


2009(In thousands)Balance at beginning of year

$
73


$
2,114Total gains or losses (realized/unrealized):Included in earnings-realized






Included in earnings-unrealized






Included in other comprehensive income






43Purchases, sales, issuances and settlements, net






Transfers in and/or out of Level 3






(2,084
)Balance at end of year

$
73


$
73Change in unrealized gains relating to instruments still held at
    year end

$



$
43  83




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Items Measured
    at Fair Value on a Non-Recurring Basis:
    lower-of-cost-or-market
  Other Real Estate Owned: deed-in-lieu
  Impaired Loans:
  Assets Recorded at Fair Value on a Non-recurring
    Basis:
  December 31, 2010QuotedPrices inActiveMarkets for


Other


SignificantIdentical


Observable


UnobservableAssets


Inputs


Inputs


TotalTotal


(Level 1)


(Level 2)


(Level 3)


Gains/(Losses)(In thousands)Impaired loans

$
2,648


$



$



$
4,004


$
(1,356
)Other real estate owned


990











990



Total assets measured at fair value

$
3,638


$



$



$
4,994


$
(1,356
)December 31, 2009Impaired loans

$
5,473


$



$



$
5,473


$
(381
)Other real estate owned


3,061











3,061



Total assets measured at fair value

$
8,534


$



$



$
8,534


$
(381
)   Fair
    Value of Financial Instruments
    84




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2010

2009Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(In thousands)Financial assets:Cash and cash equivalents

$
60,708


$
60,708


$
19,307


$
19,307Available for sale securities


125,447



125,447



102,751



102,751Held to maturity securities


13,679



14,638



19,074



20,011Loans held for sale


380



380







Loans
    receivable-net


1,410,498



1,415,387



1,361,019



1,360,789FHLBB stock


17,007



17,007



17,007



17,007Accrued interest receivable


4,176



4,176



4,287



4,287Financial liabilities:Deposits


1,219,260



1,200,517



1,129,108



1,135,815Mortgagors and investors escrow accounts


6,131



6,131



6,385



6,385Advances from the FHLBB


261,423



274,557



263,802



276,619   Note 6.
    RESTRICTIONS
    ON CASH AND DUE FROM BANKS   85




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Note 7.
    INVESTMENT
    SECURITIES    Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(In thousands)December 31, 2010Available for sale:Debt securities:U.S. Government and government-sponsored enterprise obligations

$
35,018


$



$
691


$
34,327Government-sponsored residential mortgage-backed securities


67,047



3,358



15



70,390Corporate debt securities


5,895







1,887



4,008Total debt securities


107,960



3,358



2,593



108,725Marketable equity securities, by sector:Banks


1,256



3,366



9



4,613Consumer and household products


1,134



67



24



1,177Food and beverage service


1,151



326



30



1,447Government-sponsored enterprises


283



58



63



278Healthcare/pharmaceutical


387







44



343Industrial


695



313



20



988Integrated utilities


742



93







835Mutual funds


2,666



100







2,766Oil and gas


754



608







1,362Technology/Semiconductor


228



142







370Telecommunications


662



103



5



760Transportation


294



57







351Other industries


1,030



420



18



1,432Total marketable equity securities


11,282



5,653



213



16,722Total securities available for sale

$
119,242


$
9,011


$
2,806


$
125,447Held to maturity:Debt securities:Government-sponsored residential mortgage-backed

$
13,679


$
959


$



$
14,638   86




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(In thousands)December 31, 2009Available for sale:Debt securities:U.S. Government and government-sponsored enterprise obligations

$
7,017


$
36


$
1


$
7,052Government-sponsored residential mortgage-backed securities


72,537



3,431



1



75,967Corporate debt securities


5,879







1,223



4,656Other debt securities


722



9







731Total debt securities


86,155



3,476



1,225



88,406Marketable equity securities, by sector:Banks


1,256



2,470



173



3,553Consumer and household products


839



40



17



862Food and beverage service


948



158



41



1,065Government-sponsored enterprises


284



217







501Healthcare/pharmaceutical


387



3



19



371Industrial


639



134



13



760Integrated utilities


742



69







811Miscellaneous


1,030



263



6



1,287Mutual funds


2,621



62







2,683Oil and gas


754



353



12



1,095Technology/Semiconductor


342



173







515Telecommunications


354







15



339Transportation


313



190







503Total marketable equity securities


10,509



4,132



296



14,345Total securities available for sale

$
96,664


$
7,608


$
1,521


$
102,751Held to maturity:Debt securities:Government-sponsored residential mortgage-backed securities

$
19,074


$
937


$



$
20,011    87




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Available for Sale


Held to MaturityAmortized


Fair


Amortized


FairCost


Value


Cost


Value(In thousands)Maturity:Within 1 year

$
3,120


$
3,117


$



$
Over 1 year to 5 years


14,966



14,838







Over 5 years to 10 years


19,999



19,430







Over 10 years


2,828



950







40,913



38,335







Mortgage-backed securities


67,047



70,390



13,679



14,638Total debt securities

$
107,960


$
108,725


$
13,679


$
14,638           Less Than Twelve Months


Over Twelve Months


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


Losses(In thousands)December 31, 2010:Available for Sale:U.S. Government and government-sponsored enterprises

$
34,327


$
691


$



$



$
34,327


$
691Government-sponsored residential mortgage-backed securities


5,046



14



30



1



5,076



15Corporate debt










3,908



1,887



3,908



1,887Total debt securities


39,373



705



3,938



1,888



43,311



2,593Marketable equity securities


1,097



152



624



61



1,721



213Total

$
40,470


$
857


$
4,562


$
1,949


$
45,032


$
2,806 88




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Less Than Twelve Months


Over Twelve Months


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


Losses(In thousands)December 31, 2009:Available for Sale:U.S. Government and government-sponsored enterprises

$
2,018


$
1


$



$



$
2,018


$
1Government-sponsored residential mortgage-backed securities










58



1



58



1Corporate debt










4,556



1,223



4,556



1,223Total debt securities


2,018



1



4,614



1,224



6,632



1,225Marketable equity securities


1,097



184



1,099



112



2,196



296Total

$
3,115


$
185


$
5,713


$
1,336


$
8,828


$
1,521       U.S. Government and government-sponsored enterprises and
    Mortgage-backed securities. other-than-temporarily
  Corporate Debt Securities. other-than-temporarily
  Marketable Equity Securities. other-than-temporarily
  other-than-temporary other-than-temporarily
 89




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    other-than-temporary other-than-temporary
  Note 8.
    LOANS AND
    ALLOWANCE FOR LOAN LOSSES    December 31,2010


2009(In thousands)Real estate loans:Residential

$
719,925


$
754,838Commercial


489,511



426,028Construction


78,627



71,078Total real estate loans


1,288,063



1,251,944Commercial business loans


130,303



113,240Installment loans


4,036



5,783Collateral loans


1,885



1,959Total loans


1,424,287



1,372,926Net deferred loan costs and premiums


523



632Allowance for loan losses


(14,312
)


(12,539
)Loans  net

$
1,410,498


$
1,361,019      90




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2010


2009


2008(In thousands)Recorded investment in impaired loans for which there is a
    related allowance for loan losses

$
2,233


$
5,854


$
2,840Recorded investment in impaired loans for which there is no
    related allowance for loan losses


10,127



6,192



7,595Total impaired loans

$
12,360


$
12,046


$
10,435Valuation allowance related to impaired loans

$
358


$
381


$
473Average recorded investment in impaired loans

$
13,112


$
13,356


$
5,358Interest income recognized on impaired loans on a cash basis

$
343


$
250


$
508     Credit
    Quality Information
    Loans rated 1  5:
  Loans rated 6:
  Loans rated 7: and/or
  Loans rated 8:
  Loans rated 9:
   91




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    InstallmentResidential


Commercial








andReal Estate


Real Estate


Construction


Commercial


Collateral(In thousands)Loans rated 1  5

$
711,949


$
451,723


$
70,647


$
125,280


$
5,876Loans rated 6


2,047



22,838



2,960



1,869



11Loans rated 7


5,929



14,950



5,020



3,154



34Loans rated 8


















Loans rated 9


















$
719,925


$
489,511


$
78,627


$
130,303


$
5,921       December 31,2010


2009


2008(In thousands)Balance, beginning of year

$
12,539


$
12,553


$
10,620Provision for loan losses


4,109



1,961



2,393Loans charged-off


(2,376
)


(2,113
)


(621
)Recoveries of loans previously charged-off


40



138



161Balance, end of year

$
14,312


$
12,539


$
12,553     InstallmentResidential


Commercial








andReal Estate


Real Estate


Construction


Commercial


Collateral


Unallocated


Total(In thousands)Amount of allowance for loan losses for loans deemed to be
    impaired

$
156


$
21


$



$
176


$
5


$



$
358Amount of allowance for loan losses for loans not deemed to be
    impaired


4,532



5,448



1,653



2,120



76



125



13,954Loans deemed to be impaired


5,976



2,990



2,646



714



34







12,360Loans not deemed to be impaired as of


713,949



486,521



75,981



129,589



5,887







1,411,927  92




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Past Due 9030-59 Days


60-89 Days


Greater than


Total


Days or More


Loans onPast Due


Past Due


90 Days


Past Due


and Still Accruing


Non-accrual(In thousands)Real estate loans:Residential

$
7,899


$
1,634


$
2,952


$
12,486


$



$
5,976Commercial










2,347



2,347







2,990Construction


1,101



187



2,646



3,934







2,646Commercial business loans


200



119



445



764







714Installment and collateral


11



4



34



48







34Total

$
9,211


$
1,944


$
8,424


$
19,579


$



$
12,360     December 31, 2010UnpaidRecorded


Principal


RelatedInvestment


Balance


Allowance(In thousands)Impaired loans without a valuation allowance:Real estate loans:Residential

$
4,804


$
4,804


$
Commercial


2,393



2,393



Construction


2,646



2,646



Commercial business loans


277



277



Installment and collateral


7



7



Total


10,127



10,127



Impaired loans with a valuation allowance:Real estate loans:Residential


1,016



1,172



156Commercial


576



597



21Construction










Commercial business loans


261



437



176Installment and collateral


22



27



5Total


1,875



2,233



358Total

$
12,002


$
12,360


$
358  93




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years Ended December 31,2010


2009(In thousands)Balance, beginning of year

$
3,719


$
4,050Loans to related parties who terminated service during the year






(261
)Additional loans and advances


860



868Repayments


(590
)


(938
)Balance, end of year

$
3,989


$
3,719       Loan
    Servicing
        Years Ended December 31,2010


2009(In thousands)Mortgage servicing rights:Balance at beginning of year

$
475


$
68Additions


497



446Disposals






Amortization


114



39Balance at year end

$
858


$
475Fair value of mortgage servicing assets at year end

$
1,011


$
481   Note 9.
    OTHER
    REAL ESTATE OWNED   94




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Years EndedDecember 31,2010


2009(In thousands)Balance at beginning of year

$
3,061


$
Additions


4,356



4,904Write-downs


(866
)


Proceeds from sales


(5,120
)


(1,859
)Loss (Gain) on sale


(441
)


16Balance at end of year

$
990


$
3,061   Note 10.
    PREMISES
    AND EQUIPMENT    December 31,


Estimated2010


2009


Useful Lives(In thousands)Land and improvements

$
440


$
236



N/ABuildings


15,371



15,675



39.5 yearsFurniture and equipment


9,454



9,483



3 -10 yearsLeasehold improvements


3,882



3,762



5 -10 years29,147



29,156Accumulated depreciation and amortization


(14,235
)


(13,293
)$
14,912


$
15,863    95




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Note 11.
    DEPOSITS    December 31,2010


2009(In thousands)Demand and NOW

$
286,061


$
258,583Regular savings


162,090



143,601Money market and investment savings


227,007



234,737Club accounts


272



247Time deposits


543,830



491,940$
1,219,260


$
1,129,108       (In thousands)2011

$
369,4312012


98,0952013


24,5462014


11,0012015


39,417Thereafter


1,340$
543,830       December 31,2010


2009


2008(In thousands)Non-time deposits

$
4,064


$
3,101


$
5,552Time deposits


7,553



16,270



19,517$
11,617


$
19,371


$
25,069   Note 12.
    FEDERAL
    HOME LOAN BANK BORROWINGS AND STOCK   96




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2010


2009Weighted





WeightedAverage





AverageAmount


Rate


Amount


Rate(Dollars in thousands)2010

$





%

$
40,170



2.78
%2011


73,320



3.70



73,320



3.702012


37,400



4.21



37,400



4.212013


63,000



4.12



63,000



4.122014


26,912



4.13



26,912



4.132015


39,000



2.95







Thereafter


21,791



3.61



23,000



4.12$
261,423



3.80
%

$
263,802



3.81
%     Note 13.
    PENSION
    PLANS AND OTHER POST-RETIREMENT BENEFITS:         97




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Other Post-RetirementPension Plans


BenefitsDecember 31,


December 31,2010


2009


2010


2009(In thousands)Change in Benefit Obligation:Benefit obligation at beginning of year

$
21,842


$
20,529


$
2,189


$
1,753Service cost


831



904



17



11Interest cost


1,275



1,237



122



107Plan participants contributions










26



26Amendments(1)


455



118







(1
)Actuarial loss (gain)


1,394



(585
)


201



406Benefits paid


(411
)


(361
)


(115
)


(113
)Benefit obligation at end of year

$
25,386


$
21,842


$
2,440


$
2,189Change in Plan Assets:Fair value of plan assets at beginning of year

$
17,385


$
13,032


$



$
Actual return on plan assets


2,499



3,687







Employer contributions


928



1,027



90



88Plan participants contributions










25



25Benefits paid


(411
)


(361
)


(115
)


(113
)Fair value of plan assets at end of year

$
20,401


$
17,385


$



$
Funded Status:Funded status at end of year

$
(4,985
)

$
(4,457
)

$
(2,440
)

$
(2,189
)Amounts Recognized in the Consolidated Statements of
    Condition:Accrued expenses and other liabilities

$
(4,985
)

$
(4,457
)

$
(2,440
)

$
(2,189
)Amounts Recognized in Accumulated Other Comprehensive Income
    (Loss) Consist of:Prior service cost (credit)

$
376


$
(116
)

$
10


$
28Net loss


6,817



7,022



859



716Total accumulated other comprehensive loss


7,193



6,906



869



744Deferred tax asset


(2,451
)


(2,348
)


(296
)


(253
)Net impact on accumulated other comprehensiveloss

$
4,742


$
4,558


$
573


$
491     (1)
    
    Includes amendments to the pension plans for the addition of
    four executive management personnel into the plans. 98




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Pension Plans


Other Post-Retirement Benefits2010


2009


2008


2010


2009


2008(In thousands)Components of Net Periodic Pension Cost:Service cost

$
831


$
904


$
870


$
17


$
11


$
9Interest cost


1,275



1,237



1,123



122



107



99Expected return on plan assets


(1,459
)


(1,050
)


(1,335
)










Amortization of net actuarial losses


558



956



408



59



24



19Amortization of prior service cost


(37
)


321



312



18



20



19Settlement charge










117











Net periodic benefit cost


1,168



2,368



1,495



216



162



146Change in Plan Assets and Benefit Obligations Recognized in
    Other Comprehensive Income (Loss):Net loss (gain)


354



(3,221
)


7,150



203



404



120Change in prior service cost (credit)


455



118











(1
)


Amortization of net loss


(558
)


(956
)


(408
)


(60
)


(24
)


(19
)Amortization of prior service (credit) cost


36



(321
)


(312
)


(18
)


(19
)


(19
)Adjustment for change in measurement date










(39
)










Total recognized in other comprehensive income (loss)


287



(4,380
)


6,391



125



360



82Total recognized in net periodic benefit cost and other
    comprehensive income (loss)

$
1,455


$
(2,012
)

$
7,886


$
341


$
522


$
228     Other Post-Pension


RetirementPlans


Benefits(In thousands)Net actuarial losses

$
572


$
75Prior service (credit) costs


(10
)


10Net amount recognized

$
562


$
85   Assumptions
    2010

2009Discount rate

6.00%/5.55%(1)

6.00%/5.55%(2)Rate of compensation increase

4.0%

4.0%  99




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (1)
    
    The discount rate was 6.00% for the Pension Plan and was 5.55%
    for the Supplemental and SERP plans with measurement dates of
    December 31, 2010.(2)
    
    The discount rate was 6.00% for the Pension Plan and was 5.55%
    for the Supplemental and SERP plans with measurement dates of
    December 31, 2009.    Supplemental PlansPension Plan


and SERPs2010


2009


2010


2009(In thousands)Projected benefit obligation

$
20,617


$
17,855


$
4,769


$
3,987Accumulated benefit obligation


17,597



14,835



4,769



3,750Fair value of plan assets


20,401



17,385







     2010

2009

2008Discount rate(1)

6.00%/6.55%

6.00%/6.40%

6.30%/6.20%Expected long-term rate of return on plan assets

8.25%

8.25%

8.25%Rate of compensation increase

4.50%

4.50%

4.50%     (1)
    
    The discount rate was 6.00% for the Pension Plan and 6.55% for
    the supplemental and
    SERP          
    plans with measurement dates of December 31, 2010.        Assumed
    Healthcare Trend Rates
   100




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    1%

1%Increase

Decrease(In thousands)Effect on post-retirement benefit obligation

$
284


$
(240
)Effect on total service and interest


18



(15
)   Plan
    Assets
    December 31, 2010Level 1


Level 2


Level 3


Fair Value(In thousands)Asset CategoryDomestic equity funds

$
10,574


$



$



$
10,574International equity funds


2,043











2,043Fixed income funds


203











203Domestic bond funds


5,517











5,517International bond funds


1,029











1,029Real estate REIT index funds


1,035











1,035Total

$
20,401


$



$



$
20,401         Contributions
   101




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Estimated
    Future Benefit Payments
    Other Post-Pension

RetirementYears Ending December 31,

Plans

Benefits(In thousands)2011

$
4,399


$
1212012


714



1292013


756



1392014


788



1492015


874



159Years
    2016-2020


5,996



864   401(k) Plan:
  Note 14.
    SHARE-BASED
    COMPENSATION         102




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Stock
    Options:
    WeightedAverageWeighted


RemainingAverage


Contractual


AggregateStock


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValueStock options outstanding at December 31, 2009


445,875


$
13.18Granted


112,010



11.25Exercised






Forfeited or expired






Stock options outstanding at December 31, 2010


557,885


$
12.80



7.3


$
514Stock options vested and exercisable at December 31, 2010


428,977


$
13.38



7.6


$
     WeightedAverageNumber of


Grant DateShares


Fair ValueUnvested as of December 31, 2009


115,635


$
3.04Granted


112,010



4.55Vested


(98,737
)


3.97Forfeited, expired or canceled






Unvested as of December 31, 2010


128,908


$
3.64        103




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2010

2009

2008Weighted per share average fair value of options granted

$
4.55


$
3.05


$
2.72Assumptions:Risk-free interest rate


1.84
%


2.23
%


3.24
%Expected volatility


51.54
%


29.85
%


22.11
%Expected dividend yield


2.31
%


2.16
%


1.67
%Expected life of options granted


6.0 years



6.0 years



6.0 years                   Options Outstanding

Exercisable OptionsWeightedAverageWeighted




Remaining




WeightedAverage




Contractual




AverageExercise




Life




ExercisePrices

Shares


(In Years)

Shares


Prices$9.24


126,250


8.3


81,580


$9.2411.25


112,010


9.9


59,922


11.2511.98


121,125


7.2


94,875


11.9814.35


78,000


6.7


72,100


14.3517.77


120,500


6.0


120,500


17.77   Restricted
    Stock:
   104




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageNumber of


Grant DateShares


Fair ValueUnvested as of December 31, 2009


41,695


$
13.47Granted


11,144



11.25Vested


(25,189
)


15.17Forfeited, expired or canceled






Unvested as of December 31, 2010


27,650


$
11.03         Employee Stock Ownership Plan:
     105




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Note 15.
    INCOME
    TAXES    2010


2009


2008(In thousands)Current

$
7,406


$
6,177


$
4,572Deferred


(674
)


(1,242
)


(5,528
)Total income tax expense (benefit)

$
6,732


$
4,935


$
(956
)     December 31,2010


2009(In thousands)Deferred tax assets:Allowance for loan losses

$
5,009


$
4,389Investment security losses


4,939



5,127Pension, deferred compensation and post-retirement liabilities


2,719



2,433Stock incentive award plan


575



471Other


563



606Gross deferred tax assets


13,805



13,026Deferred tax liabilities:Unrealized gains on securities


(2,172
)


(2,129
)Other


(306
)


(289
)Gross deferred tax liabilities


(2,478
)


(2,418
)Net deferred tax asset

$
11,327


$
10,608        106




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2010


2009


2008(In thousands)Provision for income tax at statutory rate

$
6,644


$
4,986


$
(865
)Increase (decrease) resulting from:State income taxes


136







Increase in cash surrender value of bank-owned Life Insurance


(134
)


(126
)


(130
)Dividend received deduction


(89
)


(76
)


(234
)Tax exempt interest and disallowed interest expense


(5
)


(11
)


(16
)Excess book basis of Employee Stock Ownership Plan


14



40



42Compensation deduction limit










243Other, net


166



122



4Total provision (benefit) for income taxes

$
6,732


$
4,935


$
(956
)   Note 16.
    COMMITMENTS
    AND CONTINGENCIES  Leases:
    (In thousands)2011

$
7912012


7592013


7402014


6732015


664Thereafter


9,437$
13,064    107




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (In thousands)2011

$
3272012


3182013


3182014


3182015


318Thereafter


210$
1,809     Employment and Change in Control
    Agreements: ,
    Change in Control Severance Plan:
 108




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Legal Matters:
  Financial Instruments With Off-Balance Sheet
    Risk:
    December 31,2010


2009(In thousands)Commitments to extend credit:Future loan commitments

$
68,993


$
36,650Undisbursed construction loans


87,544



86,492Undisbursed home equity lines of credit


143,904



125,511Undisbursed commercial lines of credit


60,587



57,713Standby letters of credit


10,368



10,555Unused checking overdraft lines of credit


94



94$
371,490


$
317,015   case-by-case
  Note 17.
    REGULATORY
    MATTERS   109




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
          MinimumTo Be WellRequired

Capitalized UnderMinimum

Prompt CorrectiveActual

Ratios

Action ProvisionsAmount

Ratio

Amount

Ratio

Amount

Ratio(Dollars in thousands)Rockville Bank:December 31, 2010Total capital to risk weighted assets

$
167,793



12.7
%

$
105,530



8.0
%

$
131,913



10.0
%Tier I capital to risk-weighted assets


153,090



11.6



52,744



4.0



79,116



6.0Tier I capital to adjusted total average assets


153,090



9.1



67,515



4.0



84,394



5.0December 31, 2009Total capital to risk weighted assets

$
158,870



13.1
%

$
96,976



8.0
%

$
121,220



10.0
%Tier I capital to risk-weighted assets


145,654



12.0



48,488



4.0



72,732



6.0Tier I capital to adjusted total average assets


145,654



9.3



62,478



4.0



78,097



5.0Rockville Financial, Inc:December 31, 2010Total capital to risk weighted assets

$
181,178



13.7
%

$
105,566



8.0
%


N/A



N/ATier I capital to risk-weighted assets


166,475



12.6


$
52,765



4.0



N/A



N/ATier I capital to adjusted total average assets


166,475



10.4


$
64,090



4.0



N/A



N/ADecember 31, 2009Total capital to risk weighted assets

$
170,559



14.1
%

$
96,976



8.0
%


N/A



N/ATier I capital to risk-weighted assets


157,343



13.0



48,489



4.0



N/A



N/ATier I capital to adjusted total average assets


157,343



10.1



62,028



4.0



N/A



N/A  110




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Note 18.
    ACCUMULATED
    OTHER COMPREHENSIVE (LOSS) INCOME    CumulativeEffectUnrealized


AdjustmentGains on


of a


AccumulatedMinimum


Available-


Change in


OtherPension


for Sale


Accounting


ComprehensiveLiability


Securities


Principle(1)


Loss(In thousands)December 31, 2007

$
(3,430
)

$
3,189


$



$
(241
)Change


(4,272
)


420







(3,852
)December 31, 2008


(7,702
)


3,609







(4,093
)Change


2,653



1,441



(1,034
)


3,060December 31, 2009


(5,049
)


5,050



(1,034
)


(1,033
)Change


(266
)


17







(249
)December 31, 2010

$
(5,315
)

$
5,067


$
(1,034
)

$
(1,282
)     (1)
    
    The effect of the adoption of FASB Staff Position
    FAS 115-2
    (ASC 320)    Years Ended December 31,2010


2009


2008(In thousands)Net income (loss) as reported

$
12,251


$
9,732


$
(1,587
)Unrealized gain on securities available for sale


118



2,184



637Income tax expense


(101
)


(743
)


(217
)Net unrealized gain on securities available for sale


17



1,441



420Benefit plans amortization


(412
)


4,019



(6,474
)Income tax (expense) benefit


146



(1,366
)


2,202Net benefit plans amortization


(266
)


2,653



(4,272
)Other comprehensive (loss) income, net of tax


(249
)


4,094



(3,852
)Total comprehensive income (loss)

$
12,002


$
13,826


$
(5,439
)  111




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Note 19.
    PARENT
    COMPANY FINANCIAL INFORMATION    Condensed
    Statements of Condition
  December 31,2010


2009(In thousands)Assets:Cash and due from banks

$
5,477


$
5,129Accrued interest receivable


1



1Deferred tax
    asset-net


32



23Investment in Rockville Bank


153,043



145,739Due from Rockville Bank


5,668



5,002Other assets


2,431



1,724Total Assets

$
166,652


$
157,618Liabilities and Stockholders Equity:Accrued expenses and other liabilities

$
224


$
190Stockholders equity


166,428



157,428Total Liabilities and Stockholders Equity

$
166,652


$
157,618   Condensed
    Statements of Operations
  Years Ended December 31,2010


2009


2008(In thousands)Interest and dividend income:Interest on investments

$
16


$
46


$
224Net interest income


16



46



224Non-interest income


123







Non-interest expenses:General and administrative


519



512



568Total non-interest expense


519



512



568Loss before tax benefit and equity in undistributed net income
    (loss) of Rockville Bank


(380
)


(466
)


(344
)Income tax benefit


78



157



116Loss before equity in undistributed net income (loss) of
    Rockville Bank


(302
)


(309
)


(228
)Equity in undistributed net income (loss) of  Rockville Bank


12,553



10,041



(1,359
)Net income (loss)

$
12,251


$
9,732


$
(1,587
)  112




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Condensed
    Statements of Cash Flows
  For the Years Ended December 31,2010


2009


2008(In thousands)Cash flows from operating activities:Net income (loss)

$
12,251


$
9,732


$
(1,587
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Share-based compensation and ESOP expense


1,578



1,755



2,655Undistributed (income) loss of Rockville Bank


(12,553
)


(10,041
)


1,359Deferred tax (provision) benefit


(9
)


(5
)


289Net change in:Accrued interest receivable






4



13Due from Rockville Bank


(666
)


(704
)


(1,457
)Other assets


(707
)


910



594Accrued expenses and other liabilities


34



22



45Net cash (used in) provided by operating activities


(72
)


1,673



1,911Cash flows from investing activities:Dividend from Rockville Bank


5,000







Capital investment in Rockville Bank










(10,000
)Net cash provided by (used in) investing activities


5,000







(10,000
)Cash flows from financing activities:Acquisition of common stock






(198
)


(4,119
)Cancellation of shares for tax withholding


(46
)


(44
)


Cash dividends paid on common stock


(4,534
)


(3,688
)


(3,691
)Net cash used in financing activities


(4,580
)


(3,930
)


(7,810
)Net increase (decrease) in cash and cash equivalents


348



(2,257
)


(15,899
)Cash and cash equivalents  beginning of year


5,129



7,386



23,285Cash and cash equivalents  end of year

$
5,477


$
5,129


$
7,386Supplemental disclosures of cash flow information:Cash paid for income taxes

$
9,600


$
4,401


$
1,751    113




---



##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Note 20.
    SELECTED
    QUARTERLY CONSOLIDATED INFORMATION
    (UNAUDITED):    December 31,


September 30,


June 30,


March 31,


December 31,


September 30,


June 30,


March 31,2010


2010


2010


2010


2009


2009


2009


2009(In thousands, except per share data)Interest and dividend income

$
19,069


$
19,069


$
18,620


$
18,941


$
18,940


$
18,684


$
19,114


$
19,324Interest expense


5,641



5,516



5,461



5,543



6,517



7,384



7,813



8,061Net interest income


13,428



13,553



13,159



13,398



12,423



11,300



11,301



11,263Provision for loan losses


995



1,302



909



903



658



700



304



299Net interest income after provision for loan losses


12,433



12,251



12,250



12,495



11,765



10,600



10,997



10,964Non-interest income(1)


2,606



2,746



2,365



1,687



1,590



1,809



2,582



991Non-interest expense(2)


10,947



9,876



9,392



9,635



8,970



8,842



9,715



9,104Income before income taxes


4,092



5,121



5,223



4,547



4,385



3,567



3,864



2,851Provision for income taxes


1,418



1,862



1,759



1,693



1,503



1,227



1,270



935Net income

$
2,674


$
3,259


$
3,464


$
2,854


$
2,882


$
2,340


$
2,594


$
1,916Basic and diluted earnings per share

$
0.14


$
0.18


$
0.19


$
0.15


$
0.16


$
0.13


$
0.14


$
0.10Stock price (per share):High

$
12.47


$
12.91


$
12.64


$
12.42


$
11.68


$
14.79


$
12.50


$
14.46Low

$
10.50


$
11.06


$
10.50


$
8.82


$
9.68


$
9.88


$
8.44


$
6.17     (1)
    
    In the first quarter of 2009, non-interest income included
    other-than-temporary
    impairment charges of $65,000 related to one mutual fund and
    $292,000 related to three equity securities. No material charges
    were taken in the remainder of 2009. There were no
    other-than-temporary
    charges taken in 2010. Refer to Note 7 
    Investment Securities for additional information on
    other-than-temporary
    impairments. In 2010, quarterly gains of loans held for sale
    were $159,000, $364,000, $669,000 and $554,000 for the first
    quarter through the fourth quarter, respectively. In the second
    quarter of 2009, the Company recorded $867,000 of security gains
    and $289,000 of gains on the sale of
    one-to-four
    family fixed rate residential loans.(2)
    
    In the fourth quarter of 2010, increases in salaries and
    benefits expense of $495,000 due to additional bonus option and
    restricted stock expense , professional fees of $293,000, due to
    regulatory compliance reviews and marketing and promotions
    expense of $285,000 resulting from additional marketing
    promotions were noted over the prior quarter.  Note 21.
    Second
    Step Conversion   114




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##### Table of Contents



Rockville
    Financial, Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   115




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Regulation S-K.
  Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures:
  13a-15(e).
  Managements
    Report on Internal Control Over Financial Reporting:
      
    Pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with accounting principles generally accepted in the
    United States of America, and that our receipts and expenditures
    are being made only in accordance with authorizations of the
    Companys management and Directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on our financial
    statements.        Item 9B.
    Other
    Information   116




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##### Table of Contents



Part III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
  Item 11.
    Executive
    Compensation  Form 10-K
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Form 10-K
  Item 14.
    Principal
    Accountant Fees and Services  Form 10-K
 Part IV  Item 15.
    Exhibits,
    Financial Statements and Financial Statement
    Schedules  10-K,
  Page No.1.


Financial StatementsReport of Management on Internal Control Over
    Financial Reporting


62Reports of Independent Registered Public
    Accounting Firms


63Consolidated Statements of Condition


66Consolidated Statements of Operations


67Consolidated Statements of Changes in
    Stockholders Equity


68Consolidated Statements of Cash Flows


69Notes to Consolidated Financial Statements


71     Regulation S-X
 117




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##### Table of Contents



3.
    Exhibits:  2
.1

Amended and Restated Plan of Conversion and Reorganization
    (incorporated herein by reference to Exhibit 2.1 to the
    Registration Statement filed on the
    Form S-1
    for Rockville Financial New, Inc. on September 16, 2010)3
.1

Certificate of Incorporation of Rockville Financial New, Inc.
    (incorporated herein by reference to Exhibit 3.1 to the
    Registration Statement on the
    Form S-1
    filed for Rockville Financial New, Inc. on September 16,
    2010)3
.1.1

Amendment of Certificate of Incorporation of Rockville Financial
    New, Inc. (incorporated herein by reference to
    Exhibit 3.1.1 to the Registration Statement on the
    Form S-1
    filed for Rockville Financial New, Inc. on September 16,
    2010)3
.2

Bylaws of Rockville Financial New, Inc. (incorporated herein by
    reference to Exhibit 3.2 to the Registration Statement on
    the
    Form S-1
    filed for Rockville Financial New, Inc. on September 16,
    2010)4
.1

Form of Common Stock Certificate of Rockville Financial New,
    Inc. (incorporated herein by reference to Exhibit 4.1 to
    the Registration Statement on the
    Form S-1
    filed for Rockville Financial New, Inc. on September 16,
    2010)10
.1

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and William J.
    McGurk, effective January 1, 2009 (incorporated by
    reference to Exhibit 10.1 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on
    March 11, 2009)10
.1.1

Rockville Bank Extension Notice Agreement by and among Rockville
    Financial, Inc., Rockville Bank and William J. McGurk, effective
    January 1, 2010 (incorporated by reference to
    Exhibit 10.1.1 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009 filed on
    March 10, 2010)10
.1.2

Advisory Agreement entered into by and between Rockville Bank
    and William J. McGurk (incorporated herein by reference to
    Exhibit 10.1 to the Current Report on the Companys
    Form 8-K
    filed on January 26, 2011)10
.2

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and Joseph F.
    Jeamel, Jr., effective January 1, 2009 (incorporated by
    reference to Exhibit 10.2 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on
    March 11, 2009)10
.2.1

Rockville Bank Extension Notice Agreement by and among Rockville
    Financial, Inc., Rockville Bank and Joseph F. Jeamel, Jr.,
    effective January 1, 2010 (incorporated by reference to
    Exhibit 10.2.1 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009 filed on
    March 10, 2010)10
.3

Employment Agreement by and among Rockville Financial, Inc.,
    Rockville Bank and John T. Lund, effective January 4, 2010
    (incorporated herein by reference to Exhibit 3.1 to the
    Current Report on the Companys
    Form 8-K
    filed on January 7, 2010)10
.3.1.

Supplemental Executive Retirement Agreement of Rockville Bank by
    and among John T. Lund effective December 6, 2010 filed
    herewith10
.3.2

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and John L. Lund,
    effective January 1, 2011 (incorporated herein by reference
    to Exhibit 10.15 to the Current Report on the
    Companys
    Form 8-K
    filed on January 10, 2011)10
.4

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and Christopher
    E. Buchholz, effective January 1, 2009 (incorporated by
    reference to Exhibit 10.4 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on
    March 11, 2009)10
.4.1

Rockville Bank Extension Notice Agreement by and among Rockville
    Financial, Inc., Rockville Bank and Christopher E.
    Buchholz, effective January 1, 2010 (incorporated by
    reference to Exhibit 10.4.1 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2009 filed on
    March 10, 2010)
 118




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##### Table of Contents



10
.4.2

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank Christopher E.
    Buchholz, effective January 1, 2011 (incorporated herein by
    reference to Exhibit 10.3 to the Current Report on the
    Companys
    Form 8-K
    filed on January 10, 2011)10
.5

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and Richard J.
    Trachimowicz, effective January 1, 2009 (incorporated by
    reference to Exhibit 10.5 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2008 filed on
    March 11, 2009)10
.5.1

Rockville Bank Extension Notice Agreement by and among Rockville
    Financial, Inc., Rockville Bank and Richard J. Trachimowicz,
    effective January 1, 2010 (incorporated by reference to
    Exhibit 10.5.1 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2009 filed on
    March 10, 2010)10
.5.2

Supplemental Executive Retirement Agreement of Rockville Bank by
    and among Richard J. Trachimowicz effective December 6,
    2010 filed herewith10
.5.3

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and Richard J.
    Trachimowicz, effective January 1, 2011 (incorporated
    herein by reference to Exhibit 10.5 to the Current Report
    on the Companys
    Form 8-K
    filed on January 10, 2011)10
.6

Supplemental Savings and Retirement Plan of Rockville Bank as
    amended and restated effective December 31, 2007
    (incorporated herein by reference to Exhibit 10.5 to the
    Current Report on
    Form 8-K
    filed for Rockville Financial, Inc. filed on December 18,
    2007)10
.7

Rockville Bank Officer Incentive Compensation Plan (incorporated
    herein by reference to Exhibit 10.2.3 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2005 filed on
    March 31, 2006)10
.8

Rockville Bank Supplemental Executive Retirement Agreement for
    Joseph F. Jeamel, Jr. (incorporated herein by reference to
    Exhibit 10.9 to the Registration Statement filed on
    Form S-1
    filed for Rockville Financial, Inc. filed on December 17,
    2004)10
.8.1

First Amendment to the Supplemental Executive Retirement
    Agreement for Joseph F. Jeamel, Jr. (incorporated herein by
    reference to Exhibit 10.7.1 to the Current Report on
    Form 8-K
    filed for Rockville Financial, Inc. filed on December 18,
    2007)10
.9

Executive Split Dollar Life Insurance Agreement for Joseph F.
    Jeamel, Jr. (incorporated herein by reference to
    Exhibit 10.11 to the Registration Statement filed on
    Form S-1
    filed for Rockville Financial, Inc. filed on December 17,
    2004)10
.10

Rockville Bank Supplemental Executive Retirement Plan as amended
    and restated effective December 31, 2007 (incorporated
    herein by reference to Exhibit 10.9 to the Current Report
    on
    Form 8-K
    filed for Rockville Financial, Inc. filed on December 18,
    2007)10
.11

Rockville Financial, Inc. 2006 Stock Incentive Award Plan
    (incorporated herein by reference to Appendix B in the
    Definitive Proxy Statement on Form 14A for Rockville
    Financial, Inc. filed on July 3, 2006)10
.12

Employment Agreement by and among Rockville Financial, Inc.,
    Rockville Bank and William H.W. Crawford IV, effective
    January 3, 2011 (incorporated herein by reference to
    Exhibit 10.15 to the Current Report on the Companys
    Form 8-K
    filed on January 6, 2011)10
.13

Supplemental Executive Retirement Agreement of Rockville Bank by
    and among Mark A. Kucia effective December 6, 2010 filed
    herewith10
.13.1

Employment Agreement as amended and restated by and among
    Rockville Financial, Inc., Rockville Bank and Mark A. Kucia,
    effective January 1, 2011 filed herewith14


Rockville Financial, Inc., Rockville Bank, Standards of Conduct
    Policy  Employees (incorporated herein by reference
    to Exhibit 14 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2007 filed on
    March 17, 2008)21


Subsidiaries of Rockville Financial, Inc. and Rockville Bank
    filed herewith.23
.1

Consent of Independent Registered Public Accounting Firm,
    Wolf & Company, P.C. filed herewith.23
.2

Consent of Independent Registered Public Accounting Firm,
    Deloitte & Touche, LLP filed herewith.31
.1

Rule 13a-14(a)/15d-14(a)
    Certification of the Chief Executive Officer filed herewith.31
.2

Rule 13a-14(a)/15d-14(a)
    Certification of the Chief Financial Officer filed herewith.32
.0

Section 1350 Certification of the Chief Executive Officer
    and Chief Financial Officer attached hereto
  119




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##### Table of Contents



SIGNATURES        By:
    /s/  William
    J. McGurk   
    By:
    /s/  John
    T. Lund   
  120




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##### Table of Contents



Signatures

Title

Date/s/  William
    J. McGurkWilliam
    J. McGurk

President, Chief Executive Officer and Director
    (Principal Executive Officer)

March 10, 2011/s/  John
    T. LundJohn
    T. Lund

Senior Vice President, Chief Financial Officer and Treasurer
    (Principal Financial and Accounting Officer)

March 10, 2011/s/  Michael
    A. BarsMichael
    A. Bars

Vice Chairman

March 10, 2011/s/  C.
    Perry ChilbergC.
    Perry Chilberg

Director

March 10, 2011/s/  William
    H.W. Crawford IVWilliam
    H.W. Crawford IV

Senior Executive Vice President and Director

March 10, 2011/s/  David
    A. EngelsonDavid
    A. Engelson

Director

March 10, 2011/s/  Pamela
    J. GuenardPamela
    J. Guenard

Director

March 10, 2011/s/  Joseph
    F. Jeamel, Jr.Joseph
    F. Jeamel, Jr.

Director

March 10, 2011/s/  Kristen
    A. JohnsonKristen
    A. Johnson

Director

March 10, 2011/s/  Raymond
    H. Lefurge, Jr.Raymond
    H. Lefurge, Jr.

Chairman

March 10, 2011/s/  Thomas
    S. MasonThomas
    S. Mason

Director

March 10, 2011/s/  Peter
    F. OlsonPeter
    F. Olson

Director

March 10, 2011/s/  Rosemarie
    Novello PapaRosemarie
    Novello Papa

Director

March 10, 2011/s/  Richard
    M. TkaczRichard
    M. Tkacz

Director

March 10, 2011  121