UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549











FORM
10-Q





(Mark
One)





ý
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For
the quarterly period ended March 31, 2008





OR





o
            Transition
      report pursuant to section 13 or 15(d) of the Securities Exchange Act of
      1934





For
the transition period from ______________ to _____________





Commission
File Number 000-1405049





United Financial Bancorp,
Inc.


(Exact
name of registrant as specified in its charter)





Federal
            74-3242562(State
      or other jurisdiction of
            (I.R.S.
      Employerincorporation
      or organization)
            Identification
      Number)





95 Elm Street, West
Springfield, Massachusetts 01089


(Address
of principal executive offices)





Registrant's
telephone number, including area code: (413)
787-1700





Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes x   No
 ̈.





Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “accelerated filer”, “large accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer  ̈
            Accelerated
      filer x
            Non-accelerated
      filer  ̈
            Smaller
      reporting company  ̈





Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes  ̈   No
x.





Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:




Common
stock, $0.01 par value


17,763,747
shares outstanding as of May 8, 2008








United
Financial Bancorp, Inc.





INDEXPagePART I. FINANCIAL INFORMATIONItem 1
            Consolidated Financial Statements
    (unaudited)Consolidated Statements of ConditionMarch 31, 2008 and December 31, 2007
            1Consolidated Statements of EarningsThree Months Ended March 31, 2008 and 2007
            2Consolidated Statements of Stockholders’ Equity and
      Comprehensive IncomeThree Months Ended March 31, 2008 and 2007
            3Consolidated Statements of Cash FlowsThree Months Ended March 31, 2008 and 2007
            4Notes to Unaudited Consolidated Financial
      Statements
            5Item 2
            Management's Discussion and Analysis of Financial
      Conditionand Results of Operations
            12Item 3
            Quantitative and Qualitative Disclosures About Market
      Risk
            25Item 4
            Controls and Procedures
            25PART II. OTHER INFORMATIONItem 1
            Legal Proceedings
            25Item 1A
            Risk Factors
            25Item 2
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            26Item 3
            Defaults Upon Senior Securities
            26Item 4.
            Submission of Matters to a Vote of Security
      Holders
            26Item 5.
            Other Information
            26Item 6
            Exhibits
            27SIGNATURES
            28


Index





Exhibit
      31.1
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002
            29Exhibit
      31.2
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002
            30Exhibit
      32.1
            Statement
      of Chief Executive Officer Furnished Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            31Exhibit
      32.2
            Statement
      of Chief Financial Officer Furnished Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            32











Index


PART I.
            FINANCIAL
      INFORMATIONITEM 1.
            Consolidated
      Financial Statements





UNITED
FINANCIAL BANCORP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CONDITION


(Dollars
in thousands, except per share amounts)





March
      31,
              
              
              December
      31,2008
              
              
              2007(unaudited)ASSETSCash
      and due from banks
              
              $
              12,698
              
              
              $
              14,219Interest-bearing
      deposits
              
              
              3,086
              
              
              
              35Total
      cash and cash equivalents
              
              
              15,784
              
              
              
              14,254Short-term
      investments
              
              
              1,043
              
              
              
              1,030Securities
      available for sale, at fair value
              
              
              271,377
              
              
              
              201,257Securities
      to be held to maturity, at amortized cost  (fair value $3,658
      atMarch
      31, 2008 and $3,631 at December 31, 2007)
              
              
              3,630
              
              
              
              3,632Loans,
      net of allowance for loan losses of  $7,646 at March 31, 2008
      and$7,714
      at December 31, 2007
              
              
              819,512
              
              
              
              819,117Other
      real estate owned
              
              
              1,030
              
              
              
              880Accrued
      interest receivable
              
              
              4,580
              
              
              
              4,477Stock
      in the Federal Home Loan Bank of Boston
              
              
              10,257
              
              
              
              10,257Banking
      premises and equipment, net
              
              
              10,579
              
              
              
              10,600Bank-owned
      life insurance
              
              
              6,733
              
              
              
              6,652Other
      assets
              
              
              8,772
              
              
              
              7,125TOTAL
      ASSETS
              
              $
              1,153,297
              
              
              $
              1,079,281LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilities:Deposits:Interest-bearing
              
              $
              646,705
              
              
              $
              616,672Non-interest-bearing
              
              
              108,819
              
              
              
              102,010Total
      deposits
              
              
              755,524
              
              
              
              718,682Federal
      Home Loan Bank of Boston advances
              
              
              141,409
              
              
              
              107,997Repurchase
      agreements
              
              
              9,686
              
              
              
              13,864Escrow
      funds held for borrowers
              
              
              1,514
              
              
              
              1,356Capitalized
      lease obligation
              
              
              1,880
              
              
              
              1,890Due
      to broker
              
              
              8,410
              
              
              
              -Accrued
      expenses and other liabilities
              
              
              6,462
              
              
              
              9,372Total
      liabilities
              
              
              924,885
              
              
              
              853,161Stockholders’
      equity:Preferred
      stock, par value $0.01 per share, authorized 50,000,000
      shares;none
      issued
              
              
              -
              
              
              
              -Common
      stock, par value $0.01 per share, authorized 100,000,000
      shares;17,763,747
      shares issued at March 31, 2008 and at December 31, 2007
              
              
              178
              
              
              
              178Paid-in
      capital
              
              
              166,289
              
              
              
              165,920Retained
      earnings
              
              
              74,005
              
              
              
              73,026Unearned
      compensation
              
              
              (12,659
              )
              
              
              (12,835
              )Accumulated
      other comprehensive income (loss), net of taxes
              
              
              599
              
              
              
              (169
              )Total
      stockholders’ equity
              
              
              228,412
              
              
              
              226,120TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
              
              $
              1,153,297
              
              
              $
              1,079,281


See notes
to unaudited consolidated financial statements


1
 Index








UNITED
FINANCIAL BANCORP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)


(Dollars
in thousands, except per share amounts)


Three
      Months EndedMarch
      31,2008
              
              
              2007Interest
      and dividend income:Loans
              
              $
              12,547
              
              
              $
              11,955Investments
              
              
              2,618
              
              
              
              1,982Other
      interest-earning assets
              
              
              241
              
              
              
              375Total
      interest and dividend income
              
              
              15,406
              
              
              
              14,312Interest
      expense:Deposits
              
              
              4,973
              
              
              
              5,181Borrowings
              
              
              1,402
              
              
              
              2,175Total
      interest expense
              
              
              6,375
              
              
              
              7,356Net
      interest income before provision for loan losses
              
              
              9,031
              
              
              
              6,956Provision
      for loan losses
              
              
              184
              
              
              
              284Net
      interest income after provision for loan losses
              
              
              8,847
              
              
              
              6,672Non-interest
      income:Fee
      income on depositors’ accounts
              
              
              1,077
              
              
              
              1,038Net
      gain on sale of securities
              
              
              8
              
              
              
              14Wealth
      management income
              
              
              150
              
              
              
              121Other
      income
              
              
              284
              
              
              
              225Total
      non-interest income
              
              
              1,519
              
              
              
              1,398Non-interest
      expense:Salaries
      and benefits
              
              
              4,041
              
              
              
              3,838Occupancy
      expenses
              
              
              509
              
              
              
              491Marketing
      expenses
              
              
              358
              
              
              
              322Data
      processing expenses
              
              
              719
              
              
              
              642Professional
      fees
              
              
              443
              
              
              
              389Other
      expenses
              
              
              1,106
              
              
              
              965Total
      non-interest expense
              
              
              7,176
              
              
              
              6,647Income
      before income taxes
              
              
              3,190
              
              
              
              1,423Income
      tax expense
              
              
              1,224
              
              
              
              589Net
      income
              
              $
              1,966
              
              
              $
              834Earnings
      per share:Basic
              
              $
              0.12
              
              
              $
              0.05Diluted
              
              $
              0.12
              
              
              $
              0.05Weighted
      average shares outstanding:Basic
              
              
              16,230,847
              
              
              
              16,937,538Diluted
              
              
              16,271,404
              
              
              
              16,999,468


See notes to unaudited consolidated
financial statements.


2
 Index








UNITED
FINANCIAL BANCORP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)


FOR
      THE THREE MONTHS ENDED MARCH 31, 2008 and
2007


(Dollars
in thousands, except per share amounts)


AccumulatedCommon
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              OtherShares
              
              
              Common
              
              
              Paid-In
              
              
              Retained
              
              
              Unearned
              
              
              Treasury
              
              
              ComprehensiveOutstanding
              
              
              Stock
              
              
              Capital
              
              
              Earnings
              
              
              Compensation
              
              
              Stock
              
              
              Income
      (Loss)
              
              
              TotalBalances
      at December 31, 2006
              
              
              17,154,550
              
              
              $
              172
              
              
              $
              75,520
              
              
              $
              70,406
              
              
              $
              (5,772
              )
              
              $
              (664
              )
              
              $
              (1,951
              )
              
              $
              137,711Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              834
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              834Other
      comprehensive income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              443
              
              
              
              443Total
      comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,277Cash
      dividends declared ($0.06 per share)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (442
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (442
              )Treasury
      stock purchases
              
              
              (58,416
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (849
              )
              
              
              -
              
              
              
              (849
              )Stock-based
      compensation
              
              
              -
              
              
              
              -
              
              
              
              628
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              628ESOP
      shares committed to be released
              
              
              -
              
              
              
              -
              
              
              
              49
              
              
              
              -
              
              
              
              111
              
              
              
              -
              
              
              
              -
              
              
              
              160Balances
      at March 31, 2007
              
              
              17,096,134
              
              
              $
              172
              
              
              $
              76,197
              
              
              $
              70,798
              
              
              $
              (5,661
              )
              
              $
              (1,513
              )
              
              $
              (1,508
              )
              
              $
              138,485Balances
      at December 31, 2007
              
              
              17,763,747
              
              
              $
              178
              
              
              $
              165,920
              
              
              $
              73,026
              
              
              $
              (12,835
              )
              
              $
              -
              
              
              $
              (169
              )
              
              $
              226,120Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,966
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,966Other
      comprehensive income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              768
              
              
              
              768Total
      comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,734Net
      costs from issuance of common stockpursuant
      to second-step conversion
              
              
              -
              
              
              
              -
              
              
              
              (26
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (26
              )Cash
      dividends declared ($0.06 per share)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (987
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (987
              )Stock-based
      compensation
              
              
              -
              
              
              
              -
              
              
              
              375
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              375ESOP
      shares committed to be released
              
              
              -
              
              
              
              -
              
              
              
              20
              
              
              
              -
              
              
              
              176
              
              
              
              -
              
              
              
              -
              
              
              
              196Balances
      at March 31, 2008
              
              
              17,763,747
              
              
              $
              178
              
              
              $
              166,289
              
              
              $
              74,005
              
              
              $
              (12,659
              )
              
              $
              -
              
              
              $
              599
              
              
              $
              228,412




The
components of comprehensive income and related tax effects are as
follows:





Three
      Months Ended March 31,2008
              
              
              2007Change
      in unrealized holding gains on available-for-sale
    securities
              
              $
              1,225
              
              
              $
              749Reclassification
      adjustment for gains realized in income
              
              
              (8
              )
              
              
              (14
              )Net
      change in unrealized gains
              
              
              1,217
              
              
              
              735Tax
      effect
              
              
              449
              
              
              
              292Other
      comprehensive income
              
              $
              768
              
              
              $
              443





At March
31, 2008, the components of accumulated other comprehensive income, net of tax,
was comprised of  an unrealized gain on securities available for sale
of approximately $1.3 million and a loss of $681,000 related to  a
pension liability adjustment.





See notes to unaudited consolidated
financial statements.


3
 Index


UNITED
FINANCIAL BANCORP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)


FOR THE
THREE MONTHS ENDED MARCH 31, 2008 and 2007


(Dollars
in thousands)





2008
              
              
              2007Cash
      flows from operating activities:Net
      income
              
              $
              1,966
              
              
              $
              834Adjustments
      to reconcile net income to net cash provided by (used in)
      operatingactivities:Provision
      for loan losses
              
              
              184
              
              
              
              284ESOP
      expense
              
              
              196
              
              
              
              160Stock-based
      compensation
              
              
              375
              
              
              
              628Amortization
      of premiums and discounts
              
              
              32
              
              
              
              (9
              )Depreciation
      and amortization
              
              
              194
              
              
              
              230Amortization
      of intangible assets
              
              
              8
              
              
              
              8Net
      gain on sale of other real estate owned
              
              
              -
              
              
              
              (14
              )Net
      gain on sale of securities
              
              
              (8
              )
              
              
              (14
              )Increase
      in cash surrender value of bank-owned life insurance
              
              
              (81
              )
              
              
              (169
              )Increase
      in accrued interest receivable
              
              
              (103
              )
              
              
              (110
              )Increase
      in other assets
              
              
              (2,104
              )
              
              
              (124
              )Decrease
      in accrued expenses and other liabilities
              
              
              (2,887
              )
              
              
              (878
              )Net
      cash (used in) provided by operating activities
              
              
              (2,228
              )
              
              
              826Cash
      flows from investing activities:Purchases
      of securities available for sale
              
              
              (116,039
              )
              
              
              (5,129
              )Proceeds
      from sales of securities available for sale
              
              
              26,434
              
              
              
              2,684Proceeds
      from maturities, calls and principal repayments of securities available
      for sale
              
              
              29,090
              
              
              
              21,967Purchases
      of securities held to maturity
              
              
              -
              
              
              
              (675
              )Investment
      in short term time deposits
              
              
              (13
              )
              
              
              -Purchases
      of Federal Home Loan Bank of Boston stock
              
              
              -
              
              
              
              (611
              )Proceeds
      from sales of other real estate owned
              
              
              -
              
              
              
              576Net
      loan originations and principal repayments
              
              
              (729
              )
              
              
              (24,009
              )Purchases
      of property and equipment
              
              
              (170
              )
              
              
              (147
              )Net
      cash used in investing activities
              
              
              (61,427
              )
              
              
              (5,344
              )Cash
      flows from financing activities:Net
      increase in deposits
              
              
              36,842
              
              
              
              31,253Increase
      (decrease) in short term borrowings
              
              
              11,145
              
              
              
              (20,000
              )Proceeds
      of Federal Home Loan Bank of Boston long term advances
              
              
              25,000
              
              
              
              15,000Repayments
      of Federal Home Loan Bank of Boston long term advances
              
              
              (2,733
              )
              
              
              (2,635
              )Net
      decrease in repurchase agreements
              
              
              (4,178
              )
              
              
              (1,600
              )Net
      increase in escrow funds held for borrowers
              
              
              158
              
              
              
              416Treasury
      stock purchases
              
              
              -
              
              
              
              (849
              )Cash
      dividends paid
              
              
              (987
              )
              
              
              (442
              )Costs
      from issuance of common stock pursuant to second-step
      conversion
              
              
              (26
              )
              
              
              -Payments
      on capitalized lease obligation
              
              
              (36
              )
              
              
              -Net
      cash provided by financing activities
              
              
              65,185
              
              
              
              21,143Increase
      in cash and cash equivalents
              
              
              1,530
              
              
              
              16,625Cash
      and cash equivalents at beginning of period
              
              
              14,254
              
              
              
              25,419Cash
      and cash equivalents at end of  period
              
              $
              15,784
              
              
              $
              42,044Supplemental
      Disclosure of Cash Flow Information:Cash
      paid during the period:Interest
      on deposits, borrowings and other interest bearing
    liabilities
              
              $
              6,349
              
              
              $
              7,351Income
      taxes – net
              
              
              5,801
              
              
              
              877Non-cash
      item:Capitalized
      lease asset and obligation
              
              $
              -
              
              
              $
              1,932Transfer
      of loans to other real estate owned
              
              
              150
              
              
              
              -Trade
      date accounting for securities purchased
              
              
              8,410
              
              
              
              -




See notes to unaudited consolidated
financial statements.


4
 Index


UNITED
FINANCIAL BANCORP, INC. AND SUBSIDIARY


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2008


Dollars
in Thousands (except per share amounts)







NOTE
A – BASIS OF PRESENTATION





The
consolidated financial statements include the accounts of United Financial
Bancorp, Inc. and its wholly owned subsidiary, United Bank. The consolidated
financial statements also include the accounts of United Bank’s wholly owned
subsidiary, UCB Securities, Inc., which is engaged in buying, selling and
holding investment securities. These entities are collectively referred to
herein as “the Company.” All significant intercompany accounts and transactions
have been eliminated in consolidation.





The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) and with general practices within the banking industry. In the opinion
of management, the accompanying unaudited interim consolidated financial
statements reflect all adjustments, consisting of normal recurring adjustments,
which are necessary for the fair presentation of the Company’s financial
condition as of March 31, 2008 and the results of operations for the three
months ended March 31, 2008 and 2007.  The interim results of
operations presented herein are not necessarily indicative of the results to be
expected for the entire year. These financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto for
the year ended December 31, 2007 included in the Company’s Annual Report on Form
10-K, which was filed by the Company with the Securities and Exchange
Commission.





Amounts
reported for prior periods are reclassified as necessary to conform to the
current period presentation.





NOTE
B – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS





In
June 2006, the
EITF released Issue 06-4,“Accounting for
Deferred Compensation and Postretirement Benefit Aspects of Endorsement
Split-Dollar Life Insurance Arrangements”. EITF 06-4 addresses accounting for
split-dollar life insurance arrangements whereby the employer purchases a policy
to insure the life of an employee, and separately enters into an agreement to
split the policy benefits between the employer and the employee. This EITF
states that an obligation arises as a result of a substantive agreement with an
employee to provide future postretirement benefits. Under EITF 06-4, the
obligation is not settled upon entering into an insurance arrangement. Since the
obligation is not settled, a liability should be recognized in accordance with
applicable authoritative guidance. EITF 06-4 is effective for fiscal years
beginning after December 15, 2007. The adoption of this Interpretation as of
January 1, 2008, had no material impact on the Company’s financial condition or
results of operations.





In March
2007, the FASB ratified EITF Issue No. 06-10, “Accounting for Collateral
Assignment Split-Dollar Life Insurance Agreements,” which provides guidance for
determining a liability for the postretirement benefit obligation as well as
recognition and measurement of the associated asset on the basis of the terms of
the collateral assignment agreement. EITF 06-10 is effective for fiscal years
beginning after December 15, 2007. The adoption of this Interpretation as of
January 1, 2008, had no material effect on the Company’s results of operations
or financial condition.





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS
157 defines fair value, establishes a U.S. GAAP framework for measuring fair
value, and expands financial statement disclosures about fair value
measurements. The Company adopted SFAS No.157 on January 1, 2008. The adoption
of this Standard had no material effect on the Company’s results of operations
or financial condition.





5
 Index





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” ("SFAS 159"), which provides
companies with an option to report selected financial assets and liabilities at
fair value. The objective of SFAS 159 is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. SFAS 159 establishes presentation
and disclosure requirements designed to facilitate comparisons between companies
that choose different measurement attributes for similar types of assets and
liabilities and to more easily understand the effect of the company’s choice to
use fair value on its earnings. SFAS 159 also requires entities to display the
fair value of the selected assets and liabilities on the face of the balance
sheet. SFAS 159 does not eliminate disclosure requirements of other accounting
standards, including fair value measurement disclosures in SFAS 157. This
Statement is effective as of the beginning of an entity’s first fiscal year
beginning after November 15, 2007. The Company did not elect fair value
treatment for any financial assets or liabilities upon the adoption of this
Standard at January 1, 2008.





In
December 2007, the FASB issued proposed FASB Staff Position (“FSP”) 157-b,
“Effective Date of FASB Statement No. 157,” which would permit a one-year
deferral in applying the measurement provisions of SFAS No. 157 to
non-financial assets and non-financial liabilities (non-financial items) that
are not recognized or disclosed at fair value in an entity’s financial
statements on a recurring basis (at least annually). Therefore, if the change in
fair value of a non-financial item is not required to be recognized or disclosed
in the financial statements on an annual basis or more frequently, the effective
date of application of SFAS No. 157 to that item is deferred until fiscal
years beginning after November 15, 2008. This deferral would not apply,
however, to an entity that applies SFAS No. 157 in interim or annual
financial statements before proposed FSP 157-b is finalized. In February 2008,
the FASB finalized the provisions of proposed FSP 157-b, issuing FSP 157-2 as
authoritative guidance. The Company is currently evaluating the impact, if any,
that the adoption of FSP 157-2 will have on its Consolidated Financial
Statements.





NOTE
C – CRITICAL ACCOUNTING POLICIES





In
preparing the financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities as of the date of the balance
sheet as well as revenues and expenses for the reporting period. Actual results
could differ from these estimates.





The
allowance for loan losses is a critical accounting estimate because it is highly
susceptible to change from period to period. Arriving at an appropriate level
for the allowance for loan losses necessarily involves a high degree of
judgment. While management uses available information to recognize losses on
loans, future additions to the allowance for loans may be necessary based on
changes in the factors considered in evaluating the adequacy of the allowance,
including prior loss experience, current economic conditions and their effect on
borrowers, the character and size of the portfolio, trends in nonperforming
loans and delinquency rates and the performance of individual loans in relation
to contractual terms.





The
assessment of whether a valuation allowance for the Company’s deferred tax
assets is required is also a critical accounting estimate.  In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of such assets will not be
realized.  This assessment is made each reporting period based upon an
estimate of future taxable income during the periods in which existing temporary
differences become deductible.











6
 Index


NOTE
D – EARNINGS PER SHARE





Earnings
per share have been computed in accordance with SFAS No. 128,
“Earnings Per Share.” Basic earnings per share have been calculated by dividing
net income by weighted average shares outstanding before any dilution and are
adjusted to exclude the weighted average number of unallocated shares held by
the ESOP and unvested restricted stock awards. Diluted earnings per share have
been calculated by dividing net income by weighted average shares outstanding
after giving effect to the potential dilution that could occur if potential
common shares were converted into common stock using the treasury stock
method.





The
calculation of basic and diluted earnings per common share for the periods
indicated is presented below.





Three
      Months Ended March 31,2008
              
              
              2007Net
      income
              
              $
              1,966
              
              
              $
              834Weighted
      average common shares applicable to basic EPS (1)
              
              
              16,230,847
              
              
              
              16,937,538Effect of dilutive potential
      common shares(2, 3)
              
              
              40,557
              
              
              
              61,930Weighted
      average common shares applicable to diluted EPS
              
              
              16,271,404
              
              
              
              16,999,468Earnings
      per share:Basic
              
              $
              0.12
              
              
              $
              0.05Diluted
              
              $
              0.12
              
              
              $
              0.05(1) In
      December 2007, the Company completed a second step conversion and
      offering in which each outstanding minorityshare was exchanged for 1.04079 shares and 9,564,570 shares were sold in a
      subscription and syndicate offering. All sharedata in prior periods have been adjusted by the exhange
    ratio.(2) For
      the three months ended March 31, 2008 and March 31, 2007, options to
      purchase 785,275 and 778,510 shares,respectively, were outstanding but not included in the computation of
      earnings per share because they were antidilutive.(3) Includes
      incremental shares related to stock options and restricted
      stock.





NOTE
E – LOANS




The
components of loans were as follows at March 31, 2008 and December 31,
2007:




March
      31,
            
            
            December
      31,2008
            
            
            2007One-to-four
      family residential real estate
            
            $
            343,480
            
            
            $
            339,470Commercial
      real estate
            
            
            213,322
            
            
            
            214,776Construction
            
            
            41,002
            
            
            
            42,059Home
      equity
            
            
            115,931
            
            
            
            116,241Commercial
      and industrial
            
            
            81,385
            
            
            
            81,562Automobile
            
            
            21,170
            
            
            
            22,461Consumer
            
            
            8,697
            
            
            
            8,126Total
      loans
            
            
            824,987
            
            
            
            824,695Net
      deferred loan costs and fees
            
            
            2,171
            
            
            
            2,136Allowance
      for loan losses
            
            
            (7,646
            )
            
            
            (7,714
            )Loans,
      net
            
            $
            819,512
            
            
            $
            819,117


7
 Index





NOTE
F – NON-PERFORMING ASSETS





The table
below sets forth the amounts and categories of non-performing assets at the
dates indicated.





At
      March 31,
                
                
                At
      December 31,2008
                
                
                2007Non-accrual
      loans:Residential
      mortgages
                
                $
                1,348
                
                
                $
                328Commercial
      mortgages
                
                
                526
                
                
                
                553Construction
                
                
                485
                
                
                
                577Home
      equity
                
                
                -
                
                
                
                52Commercial
      and industrial
                
                
                271
                
                
                
                275Automobile
                
                
                -
                
                
                
                -Other
      consumer
                
                
                49
                
                
                
                -Total
      non-accrual loans
                
                
                2,679
                
                
                
                1,785Accruing
      loans 90 days or more past due
                
                
                -
                
                
                
                -Total
      non-performing loans
                
                
                2,679
                
                
                
                1,785Other
      real estate owned
                
                
                1,030
                
                
                
                880Total
      non-performing assets
                
                $
                3,709
                
                
                $
                2,665Ratios:Total
      non-performing loans to total loans
                
                
                0.32
                %
                
                
                0.22
                %Total
      non-performing assets to total assets
                
                
                0.32
                %
                
                
                0.25
                %




NOTE
G – ALLOWANCE FOR LOAN LOSSES





A summary
of the activity in the allowance for loan losses is as follows:





For
      the Three Months Ended March 31,2008
              
              
              2007Balance
      at beginning of period
              
              $
              7,714
              
              
              $
              7,218Provision
      for loan losses
              
              
              184
              
              
              
              284Charge-offs
              
              
              (253
              )
              
              
              (76
              )Recoveries
              
              
              1
              
              
              
              -Balance
      at end of period
              
              $
              7,646
              
              
              $
              7,426Ratios:Net
      charge-offs to average loansoutstanding
      (annualized)
              
              
              0.12
              %
              
              
              0.04
              %Allowance
      for loan losses to non-performingloans
      at end of period
              
              
              285.41
              %
              
              
              570.35
              %Allowance
      for loan losses to totalloans
      at end of period
              
              
              0.93
              %
              
              
              0.94
              %


8
 Index





NOTE
H – COMMITMENTS





Financial
instruments with off-balance sheet risk at March 31, 2008 and December 31, 2007
were as follows:





March
      31,
              
              
              December
      31,2008
              
              
              2007Unused
      lines of credit
              
              $
              146,948
              
              
              $
              146,579Amounts
      due mortgagors
              
              
              25,791
              
              
              
              31,168Standby
      letters of credit
              
              
              1,314
              
              
              
              1,627Commitments
      to originate loans
              
              
              23,959
              
              
              
              15,890





NOTE
I – DEPOSITS





Deposit accounts, by type, are
summarized as follows atMarch 31, 2008and December 31,
2007:





March
      31,
              
              
              December
      31,2008
              
              
              2007Demand
              
              $
              108,819
              
              
              $
              102,010NOW
              
              
              34,159
              
              
              
              35,207Regular
      savings
              
              
              75,469
              
              
              
              65,711Money
      market
              
              
              177,879
              
              
              
              168,107Certificates
      of deposit
              
              
              359,198
              
              
              
              347,647$
              755,524
              
              
              $
              718,682





NOTE
J – CONTINGENCIES




The
Company is a defendant in certain claims and legal actions arising in the
ordinary course of business. In the opinion of management, after consultation
with legal counsel, the ultimate disposition of these matters is not expected to
have a material adverse effect on the Company’s financial condition, results of
operations or cash flows.





9
 Index


NOTE  K  -
FAIR VALUES OF ASSETS AND LIABILITIES





Effective
January 1, 2008, the Company adopted Statement of Financial Accounting Standards
No. 157 (“SFAS 157”), Fair Value Measurements, which provides a framework for
measuring fair value under generally accepted accounting
principles.




The
Company also adopted SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities, including an amendment of FASB Statement No. 115.
SFAS 159 allows an entity the irrevocable option to elect fair value for the
initial and subsequent measurement for certain financial assets and liabilities
on a contract-by-contract basis. The Company did not elect fair value treatment
for any financial assets or liabilities upon adoption.




In
accordance with SFAS 157, the Company groups its financial assets and financial
liabilities measured at fair value in three levels, based on the markets in
which the assets and liabilities are traded and the reliability of the
assumptions used to determine fair value.




Level 1 –
Valuations for assets and liabilities traded in active exchange markets, such as
the New York Stock Exchange. Level 1 also includes U.S. Treasury, other U.S.
government and agency mortgage-backed securities that are traded by dealers or
brokers in active markets.  Valuations are obtained from readily
available pricing sources for market transactions involving identical assets or
liabilities.




Level 2 –
Valuations for assets and liabilities traded in less active dealer or broker
markets. Valuations are obtained from third party pricing services for identical
or comparable assets or liabilities.




Level 3 –
Valuations for assets and liabilities that are derived from other valuation
methodologies, including option pricing models, discounted cash flow models and
similar techniques, and not based on market exchange, dealer, or broker traded
transactions.  Level 3 valuations incorporate certain assumptions and
projections in determining the fair value assigned to such assets and
liabilities.




Assets
and liabilities measured at fair value on a recurring basis, are summarized
below:




At
      March 31, 2008Assets/LiabilitiesLevel
      1
              
              
              Level
      2
              
              
              Level
      3
              
              
              at
      Fair ValueAssets:Securities
      available for sale
              
              $
              263,415
              
              
              $
              7,962
              
              
              $
              -
              
              
              $
              271,377Mortgage
      servicing rights
              
              
              -
              
              
              
              -
              
              
              
              135
              
              
              
              135Total
      assets
              
              $
              263,415
              
              
              $
              7,962
              
              
              $
              135
              
              
              $
              271,512





The table
below presents the changes in Level 3 assets and liabilities measured at fair
value on a recurring basis.




Balance
      as of January 1, 2008
                
                $
                136Total
      realized/unrealized gains (losses) included in net income
                
                
                (1
                )Purchases,
      sales, issuances and settlements
                
                
                -Transfers
      in and out of Level 3
                
                
                -Balance
      as of March 31, 2008
                
                $
                135




The fair
value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. If a quoted market price is available for an
instrument, the fair value to be disclosed for that instrument is the product of
the number of trading units of the instrument times that market
price.


10
 Index


Also, the
Company may be required, from time to time, to measure certain other financial
assets on a nonrecurring basis in accordance with GAAP. These adjustments to
fair value usually result from application of lower-of-cost-or-fair value
accounting or write-downs of individual assets. In the first quarter of 2008,
one loan was written down to fair value and transferred to OREO at
$150,000.





NOTE  L  -
INCOME TAXES





The
Company’s federal income tax returns for 2005 and 2006  are currently
under examination by the Internal Revenue Service (“IRS”).  During the
quarter ended March 31, 2008, the IRS proposed certain adjustments challenging
the methodology used by the Company to estimate the fair market value of its
residential mortgage portfolio under Internal Revenue Code (IRC) Sec.
475.  The Company intends to defend its method for estimating fair
value.




The
change in fair value calculated under IRC Sec. 475 is considered a temporary
difference in the Company’s FAS109 deferred income tax calculations. In
accordance with FASB Interpretation (FIN) No. 48 “Accounting for Uncertainty in
Income Taxes” the Company determined in the first quarter of 2008 that a portion
of the deferred tax liability related to the mark-to-market temporary difference
for residential mortgage loans should be reclassified as an uncertain tax
position. This reclassification from the Company’s previously recorded deferred
tax liability account amounted to $2.2 million and was required as, in
management’s judgment, it is no longer more likely than not that the related tax
deduction would be treated as currently deductible by the IRS upon resolution of
the pending examination. This reclassification has no impact on the
reported results of operations for the quarter ended March 31, 2008. In
addition, the Company recorded an interest accrual of $168,000 associated with
the proposed adjustment. At December 31, 2007 the Company determined that it had
no uncertain tax positions.
  The
Company reports interest and penalties associated with tax
obligations  in other non-interest expense.




In
connection with the IRS examination,  the Company remitted a $1.6
million tax payment  in the first quarter of 2008 to suspend the
potential accrual of additional interest that may result upon
ultimate resolution of the fair market value measurement issue under
examination.  As the examination process and subsequent appeal
alternatives are not yet complete, the timing of the resolution of
the examination cannot be determined at this
time.


11
 Index





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





Forward-Looking
Statements





From time to time, the Company may
publish forward-looking statements relating to such matters as anticipated
financial performance, business prospects, technological developments, new
products, and similar matters.  The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements
provided that the Company notes that a variety of factors could cause the
Company’s actual results to differ materially from the anticipated results
expressed in the Company’s forward-looking statements. Factors that may cause
actual results to differ materially from those projected in the forward-looking
statements include, but are not limited to, general economic conditions that are
less favorable than expected, changes in market interest rates that result in
reduced interest margins, risks in the loan portfolio, including prepayments
that are greater than expected, the enactment of legislation or regulatory
changes that have a less than favorable impact on the business of the Company,
and significant increases in competitive pressures. Forward-looking statements
speak only as of the date they are made and the Company does not undertake to
update forward-looking statements to reflect circumstances or events that occur
after the date of the forward-looking statements or to reflect the occurrence of
unanticipated events. Accordingly, past results and trends should not be used by
investors to anticipate future results or trends.





Comparison
of Financial Condition at March 31, 2008 and December 31, 2007




Total
assets increased $74.0 million, or 6.9%, to $1.2 billion at March 31, 2008 from
$1.1 billion at December 31, 2007 reflecting growth in securities available
for sale, funded by increases in both deposits ($36.8 million) and Federal Home
Loan Bank advances ($33.4 million). Securities available for sale increased
$70.1 million, or 34.8%, to $271.4 million at March 31, 2008 from $201.3 million
at December 31, 2007, due to purchases of debt securities available for
sale totaling $124.4 million, partially offset by sales, calls and maturities of
certain debt securities and repayments of mortgage-backed securities. The
significant increase in securities available for sale was due to the
implementation of a strategy to deploy excess capital. During the quarter,
management purchased agency mortgage-backed securities with predictable cash
flows and an average spread to treasury securities in excess of 200 basis
points. At March 31, 2008, outstanding loan balances totaled $825.0 million,
essentially flat in comparison to the prior year end as a result of payoffs of
several large credits and sluggish loan activity. Origination volume moderated
in the first quarter of 2008, reflecting a slowdown in the real estate market,
weaker demand for all loan types and a very competitive lending
environment.




Total
deposits increased $36.8 million, or 5.1%, to $755.5 million at March 31, 2008
compared to $718.7 million at December 31, 2007 mainly due to competitive
products and pricing, superior customer service, targeted promotional activities
and our new East Longmeadow branch, which opened in January 2008. Core deposit
balances grew $25.3 million, or 6.8%, to $396.3 million at March 31, 2008 from
$371.0 million at December 31, 2007.


12
 Index





Total
stockholders’ equity increased $2.3 million, or 1.0%, to $228.4 million at March
31, 2008 from $226.1 million at December 31, 2007 as a result of net
income of $2.0 million for the three months ended March 31, 2008, an increase of
$768,000 in net unrealized income on securities available for sale, stock-based
compensation totaling $375,000 and ESOP compensation expense of $196,000. These
increases were partially offset by payments of cash dividends amounting to
$987,000.





Credit
Quality





The
Company actively manages asset quality through its underwriting practices and
collection operations and it does not offer residential mortgage loans to
subprime or Alt-A borrowers. Non-performing assets totaled $3.7 million, or
0.32% of total assets, at March 31, 2008 compared to $2.7 million, or 0.25% of
total assets, at December 31, 2007. Net loan charge-offs for the three months
ended March 31, 2008 totaled $252,000 compared to $76,000 in the same period of
2007. Commercial and industrial loan charge-offs represented $114,000, or 45%,
of the total charge-offs, and the majority of such charge-offs related to one
commercial relationship.




Delinquent Loans.The following table sets forth our loan delinquencies by type, by amount
and by percentage of total loans outstanding at the date indicated.





Loans
      Delinquent For60
      - 89 Days
              
              
              90
      Days and Over
              
              
              TotalNumber
              
              
              Amount
              
              
              Number
              
              
              Amount
              
              
              Number
              
              
              Amount(Dollars
      in thousands)At March 31,
      2008Residential
      mortgages
              
              
              3
              
              
              $
              353
              
              
              
              7
              
              
              $
              1,348
              
              
              
              10
              
              
              $
              1,701Commercial
      mortgage
              
              
              11
              
              
              
              1,775
              
              
              
              4
              
              
              
              526
              
              
              
              15
              
              
              
              2,301Construction
              
              
              2
              
              
              
              376
              
              
              
              3
              
              
              
              485
              
              
              
              5
              
              
              
              861Home
      equity
              
              
              9
              
              
              
              402
              
              
              
              -
              
              
              
              -
              
              
              
              9
              
              
              
              402Commercial
      and industrial
              
              
              18
              
              
              
              1,111
              
              
              
              8
              
              
              
              271
              
              
              
              26
              
              
              
              1,382Automobile
              
              
              3
              
              
              
              18
              
              
              
              -
              
              
              
              -
              
              
              
              3
              
              
              
              18Other
      consumer
              
              
              -
              
              
              
              -
              
              
              
              1
              
              
              
              49
              
              
              
              1
              
              
              
              49Total
              
              
              46
              
              
              $
              4,035
              
              
              
              23
              
              
              $
              2,679
              
              
              
              69
              
              
              $
              6,714At December 31,
      2007Residential
      mortgages
              
              
              2
              
              
              $
              595
              
              
              
              4
              
              
              $
              328
              
              
              
              6
              
              
              $
              923Commercial
      mortgage
              
              
              11
              
              
              
              1,546
              
              
              
              5
              
              
              
              555
              
              
              
              16
              
              
              
              2,101Construction
              
              
              -
              
              
              
              -
              
              
              
              3
              
              
              
              578
              
              
              
              3
              
              
              
              578Home
      equity
              
              
              11
              
              
              
              489
              
              
              
              3
              
              
              
              52
              
              
              
              14
              
              
              
              541Commercial
      and industrial
              
              
              20
              
              
              
              948
              
              
              
              10
              
              
              
              272
              
              
              
              30
              
              
              
              1,220Automobile
              
              
              5
              
              
              
              46
              
              
              
              -
              
              
              
              -
              
              
              
              5
              
              
              
              46Other
      consumer
              
              
              4
              
              
              
              58
              
              
              
              -
              
              
              
              -
              
              
              
              4
              
              
              
              58Total
              
              
              53
              
              
              $
              3,682
              
              
              
              25
              
              
              $
              1,785
              
              
              
              78
              
              
              $
              5,467










13
 Index


Classified
Assets.The following table shows the aggregate amount of our
classified assets at the date indicated for both loans and foreclosed assets.
The amount of assets classified as “substandard” in the table includes three
commercial lending relationships, one of which is not making payments in
accordance with contractual loan terms.







At
      March 31,
              
              
              At
      December 31,2008
              
              
              2007(In
      thousands)Residential Real Estate(1):Substandard
      assets
              
              $
              1,753
              (2)
              
              $
              1,278All
      Other Loans:Special
      mention assets
              
              
              13,339
              
              
              
              13,800Substandard
      assets
              
              
              16,468
              
              
              
              19,377Doubtful
      assets
              
              
              265
              
              
              
              244Loss
      assets
              
              
              -
              
              
              
              -Foreclosed
      Assets:Other
      real estate owned
              
              
              1,030
              
              
              
              880Total
      classified assets
              
              $
              32,855
              
              
              $
              35,579(1) Includes
      one-to-four family loans and home equity loans and lines of
      credit.(2) Includes
      eight residential loans, four of which are in foreclosure or
      liquidation proceedings.




Comparison
of Operating Results for the Three Months Ended March 31, 2008and
2007





Overview


Our
results of operations depend primarily on our net interest income. Net interest
income is the difference between the interest income earned on interest-earning
assets, consisting primarily of loans, investment securities and other
interest-earning assets, and the interest paid on interest-bearing liabilities,
consisting primarily of deposits and Federal Home Loan Bank
advances.





Our
results of operations also are affected by provisions for loan losses,
non-interest income and non-interest expense. Non-interest income consists
primarily of deposit account fees, wealth management fees, increases in the cash
surrender value of bank-owned life insurance and miscellaneous other income.
Non-interest expense consists primarily of compensation and employee benefits,
data processing, occupancy, marketing and public relations, professional
services, postage, printing, office supplies, and other operating expenses. Our
results of operations also may be affected significantly by general and local
economic and competitive conditions, changes in market interest rates,
governmental policies and actions of regulatory authorities.





Net
Income.The Company’s net income was $2.0 million, or $0.12
per diluted share, for the first quarter of 2008 compared to net income of
$834,000, or $0.05 per diluted share, for the same period in 2007. The Company’s
improved results were largely due to a significant increase in net interest
income, driven by net interest margin expansion and growth in average earning
assets largely funded by net cash proceeds of $82.7 million from the Company’s
December 2007 second-step stock offering. The quarterly operating performance
was also favorably impacted by an increase in fee income from deposit and wealth
management accounts and a lower provision for loan losses, partially offset by
expansion in non-interest expenses.


14
 Index


Average balances
and yields.  The following table sets forth average balance
sheets, average yields and costs, and certain other information for the periods
indicated. No tax-equivalent yield adjustments were made, as the effect thereof
was not material. All average balances are daily average balances. Non-accrual
loans were included in the computation of average balances, but have been
reflected in the table as loans carrying a zero yield.




Three
      Months Ended March 31,2008
                
                
                
                2007Interest
                
                
                
                
                
                
                
                
                InterestAverage
                
                
                and
                
                
                Yield/
                
                
                Average
                
                
                and
                
                
                Yield/Balance
                
                
                Dividends
                
                
                Cost
                
                
                Balance
                
                
                Dividends
                
                
                Cost(Dollars
      in thousands)Interest-earning
      assets:Loans:Residential
      real estate
                
                $
                348,753
                
                
                $
                4,921
                
                
                
                5.64
                %
                
                $
                336,891
                
                
                $
                4,744
                
                
                
                5.63
                %Commercial
      real estate
                
                
                248,963
                
                
                
                4,021
                
                
                
                6.46
                %
                
                
                225,188
                
                
                
                3,704
                
                
                
                6.58
                %Home
      equity
                
                
                117,254
                
                
                
                1,794
                
                
                
                6.12
                %
                
                
                115,715
                
                
                
                1,873
                
                
                
                6.47
                %Commercial
      and industrial
                
                
                82,382
                
                
                
                1,389
                
                
                
                6.74
                %
                
                
                68,716
                
                
                
                1,257
                
                
                
                7.32
                %Consumer
      and other
                
                
                30,950
                
                
                
                422
                
                
                
                5.45
                %
                
                
                29,791
                
                
                
                377
                
                
                
                5.06
                %Total
      loans
                
                
                828,302
                
                
                
                12,547
                
                
                
                6.06
                %
                
                
                776,301
                
                
                
                11,955
                
                
                
                6.16
                %Investment
      securities
                
                
                211,880
                
                
                
                2,618
                
                
                
                4.94
                %
                
                
                180,491
                
                
                
                1,982
                
                
                
                4.39
                %Other
      interest-earning assets
                
                
                21,796
                
                
                
                241
                
                
                
                4.42
                %
                
                
                28,320
                
                
                
                375
                
                
                
                5.30
                %Total
      interest-earning assets
                
                
                1,061,978
                
                
                
                15,406
                
                
                
                5.80
                %
                
                
                985,112
                
                
                
                14,312
                
                
                
                5.81
                %Noninterest-earning
      assets
                
                
                33,888
                
                
                
                
                
                
                
                
                
                
                
                31,257Total
      assets
                
                $
                1,095,866
                
                
                
                
                
                
                
                
                
                
                $
                1,016,369Interest-bearing
      liabilities:Savings
      accounts
                
                $
                67,550
                
                
                
                166
                
                
                
                0.98
                %
                
                $
                64,922
                
                
                
                139
                
                
                
                0.86
                %Money
      market accounts
                
                
                174,802
                
                
                
                1,009
                
                
                
                2.31
                %
                
                
                174,194
                
                
                
                1,356
                
                
                
                3.11
                %NOW
      accounts
                
                
                31,926
                
                
                
                41
                
                
                
                0.51
                %
                
                
                34,130
                
                
                
                44
                
                
                
                0.52
                %Certificates
      of deposit
                
                
                354,031
                
                
                
                3,757
                
                
                
                4.24
                %
                
                
                323,984
                
                
                
                3,642
                
                
                
                4.50
                %Total
      interest-bearing deposits
                
                
                628,309
                
                
                
                4,973
                
                
                
                3.17
                %
                
                
                597,230
                
                
                
                5,181
                
                
                
                3.47
                %FHLB
      advances
                
                
                116,519
                
                
                
                1,301
                
                
                
                4.47
                %
                
                
                170,727
                
                
                
                2,023
                
                
                
                4.74
                %Other
      interest-bearing liabilities
                
                
                11,592
                
                
                
                101
                
                
                
                3.49
                %
                
                
                12,635
                
                
                
                152
                
                
                
                4.81
                %Total
      interest-bearing liabilities
                
                
                756,420
                
                
                
                6,375
                
                
                
                3.37
                %
                
                
                780,592
                
                
                
                7,356
                
                
                
                3.77
                %Demand
      deposits
                
                
                101,785
                
                
                
                
                
                
                
                
                
                
                
                94,302Other
      noninterest-bearing liabilities
                
                
                10,248
                
                
                
                
                
                
                
                
                
                
                
                3,179Total
      liabilities
                
                
                868,453
                
                
                
                
                
                
                
                
                
                
                
                878,073Stockholders'
      equity
                
                
                227,413
                
                
                
                
                
                
                
                
                
                
                
                138,296Total
      liabilities and stockholders' equity
                
                $
                1,095,866
                
                
                
                
                
                
                
                
                
                
                $
                1,016,369Net
      interest income
                
                
                
                
                
                $
                9,031
                
                
                
                
                
                
                
                
                
                
                $
                6,956Interest
      rate spread(1)
                
                
                
                
                
                
                
                
                
                
                2.43
                %
                
                
                
                
                
                
                
                
                
                
                2.04
                %Net
      interest-earning assets(2)
                
                $
                305,558
                
                
                
                
                
                
                
                
                
                
                $
                204,520Net
      interest margin(3)
                
                
                
                
                
                
                
                
                
                
                3.40
                %
                
                
                
                
                
                
                
                
                
                
                2.82
                %Average
      interest-earning assets toaverage
      interest-bearing liabilities
                
                
                
                
                
                
                
                
                
                
                140.40
                %
                
                
                
                
                
                
                
                
                
                
                126.20
                %




(1) Net
interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average
interest-bearing  liabilities.


(2) Net
interest-earning assets represents total interest-earning assets less total
interest-bearing liabilities.


(3) Net
interest margin represents annualized net interest income divided by average
total interest-earning assets.





15
 Index





Rate/Volume
Analysis.  The following table presents the effects of changing
rates and volumes on our net interest income for the periods indicated. The rate
column shows the effects attributable to changes in rate (changes in rate
multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume multiplied by prior rate). The net column
represents the sum of the prior columns. For purposes of this table, changes
attributable to both rate and volume, which cannot be segregated, have been
allocated proportionately, based on the changes due to rate and the changes due
to volume.




Three
      Months Ended March 312008
      vs. 2007Increase
      (Decrease) Due toVolume
              
              
              Rate
              
              
              Net(In
      thousands)Interest-earning
      assets:Loans:Residential
      real estate
              
              $
              167
              
              
              $
              10
              
              
              $
              177Commercial
      real estate
              
              
              385
              
              
              
              (68
              )
              
              
              317Home
      equity
              
              
              25
              
              
              
              (104
              )
              
              
              (79
              )Commercial
      and industrial
              
              
              236
              
              
              
              (104
              )
              
              
              132Consumer
      and other
              
              
              15
              
              
              
              30
              
              
              
              45Total
      loans
              
              
              828
              
              
              
              (236
              )
              
              
              592Investment
      securities
              
              
              370
              
              
              
              266
              
              
              
              636Other
      interest-earning assets
              
              
              (78
              )
              
              
              (56
              )
              
              
              (134
              )Total
      interest-earning assets
              
              
              1,120
              
              
              
              (26
              )
              
              
              1,094Interest-bearing
      liabilities:Savings
      accounts
              
              
              6
              
              
              
              21
              
              
              
              27Money
      market accounts
              
              
              5
              
              
              
              (352
              )
              
              
              (347
              )NOW
      accounts
              
              
              (3
              )
              
              
              -
              
              
              
              (3
              )Certificates
      of deposit
              
              
              326
              
              
              
              (211
              )
              
              
              115Total
      interest-bearing deposits
              
              
              334
              
              
              
              (542
              )
              
              
              (208
              )FHLB
      advances
              
              
              (611
              )
              
              
              (111
              )
              
              
              (722
              )Other
      interest-bearing liabilities
              
              
              (12
              )
              
              
              (39
              )
              
              
              (51
              )Total
      interest-bearing liabilities
              
              
              (289
              )
              
              
              (692
              )
              
              
              (981
              )Change
      in net interest income
              
              $
              1,409
              
              
              $
              666
              
              
              $
              2,075




Net Interest
Income Before Provision for Loan Losses.Net interest income
before provision for loan losses increased $2.1 million, or 29.8%, to
$9.0 million for the three months ended March 31, 2008 from the same period
in 2007 as a result of net interest margin expansion and reflecting growth in
average earning assets. Net interest margin increased 58 basis points to 3.40%
for the three-month period ended March 31, 2008 compared to 2.82% for the same
period in 2007 due to the use of net proceeds from the Company’s second-step
offering completed in December 2007 to fund asset growth as well as a
significant decrease in the cost of deposits as a result of the 300 basis points
reduction in the federal funds rate from 5.25% at September 1, 2007 to 2.25% at
March 31, 2008.


16
 Index





Interest
Income.  Interest income increased $1.1 million, or 7.6%, to
$15.4 million for the three months ended March 31, 2008 from $14.3 million for
the prior year period reflecting expansion in total average interest-earning
asset balances. Total average interest-earning asset balances increased $76.9
million, or 7.8%, to $1.1 billion for the three months ended March 31, 2008
mainly due to loan growth and purchases of mortgage-backed securities. Total
average loans increased $52.0 million, or 6.7%, to $828.3 million for the first
quarter of 2008 as a result of strong origination activity in the residential
real estate, commercial real estate and commercial and industrial portfolios,
partially offset by scheduled amortization and prepayments of existing loans.
Total average investment securities increased by $31.4 million, or 17.4%, to
$211.9 million due to the purchases of bonds, partially offset by maturities,
calls, sales and principal repayments of existing securities. The yield on
average interest-earning assets decreased by one basis point to 5.80% for the
first quarter of 2008 in connection with the lower interest rate environment.
The decrease in market rates contributed to the downward repricing of a portion
of the Company’s existing assets and to lower rates for new assets. Since a
significant amount of the Company’s average interest-earning assets are fixed
rate and the impact of Federal Reserve Board actions was less pronounced on the
long end of the yield curve, the effect of the deflation in market rates was
limited. The impact of the decrease in market rates was offset by the purchases
of higher yielding mortgage backed securities.




Interest
Expense.Interest expense decreased $981,000, or 13.3%, to
$6.4 million for the three months ended March 31, 2008 from
$7.4 million for the prior year period due to decreases in average
interest-bearing liabilities and the average rate paid for such interest-bearing
liabilities. Average interest-bearing liabilities decreased $24.2 million,
or 3.1%, to $756.4 million for the three months ended March 31, 2008 from
$780.6 million for the prior year period reflecting a reduction in FHLB
advances partially offset by growth in interest-bearing deposits. Total average
FHLB advances decreased $54.2 million, or 31.8%, to $116.5 million reflecting
the use of proceeds from the second step offering to pay-down certain
outstanding borrowings. Total average interest-bearing deposits increased $31.2
million, or 5.2%, to $628.3 million for the first quarter of 2008 as compared to
$597.2 million for the three months ended March 31, 2007, mainly attributable to
an increase in certificate of deposit balances. The average rate paid on
interest-bearing liabilities declined 40 basis points to 3.37% for the three
months ended March 31, 2008 reflecting the impact of lower market rates related
to the recent interest rate decreases initiated by the Federal Reserve Board.
Since a large portion of the Company’s interest-bearing liabilities are
short-term, the impact of the decrease in market rates was
significant.




Provision for
Loan Losses.The provision for loan losses decreased $100,000 to $184,000
for the three months ended March 31, 2008 as compared to $284,000 for the three
months ended March 31, 2007 mainly as a result of a slowdown in loan growth and
a decline in classified and impaired loans. The allowance for loan losses is
based on management’s estimate of the probable losses inherent in the portfolio,
considering the impact of certain factors.  Among the factors
management may consider are prior loss experience,  current economic
conditions and their effect on borrowers, the character and size of the
portfolio, trends in nonperforming loans and delinquency rates and the
performance of individual loans in relation to contractual terms.  The
provision for loan losses reflects adjustments to the allowance based on
management’s review of the loan portfolio in light of those conditions. The
allowance for loan losses was $7.6 million, or 0.93%, of loans outstanding
at March 31, 2008.


17
 Index





Non-interest
Income.  Non-interest income increased $121,000, or 8.7%, to
$1.5 million for the three months ended March 31, 2008 from $1.4 million
for the comparable period in 2007 mainly due to increases of $39,000, or 3.8%,
in fee income from deposit accounts and growth in wealth management income of
$29,000, or 24.0%, as a result of new accounts opened due to successful business
development efforts. These results also include a $49,000 gain in the first
quarter of 2008 from VISA Inc.’s redemption of its Class B stock as part of its
initial public offering. Prior to its IPO, VISA Inc. issued these shares to its
members in a reorganization based upon transaction volume.




Non-interest
Expense.  Non-interest expense increased $529,000, or 8.0%, to
$7.2 million for the three months ended March 31, 2008 from
$6.6 million for the prior year period primarily reflecting growth in
salaries and benefits and a $168,000 estimated interest accrual related to
proposed IRS adjustments in connection with the Company’s 2005 and 2006 tax
returns. Total salaries and benefits increased $203,000, or 5.3%, mainly due to
staffing costs for the new East Longmeadow branch opened in the first quarter of
2008, new employees hired to support and facilitate the growth of the Company, a
higher cash incentive accrual associated with improved financial performance and
annual wage increases. Other increases include $54,000, or 13.9%, in
professional services, $77,000, or 12.0%, in data processing expenses and
$36,000, or 11.2%, in marketing expenses.




Income Tax
Expense.Income tax expense
increased $635,000 to $1.2 million for three months ended March 31, 2008 from
$589,000 for the comparable 2007 period. This increase was mainly due to higher
income before income taxes, partially offset by a reduction in the effective tax
rate to 38.5% for the first quarter of 2008 compared to 39.3% for the same
period last year.





18
 Index





Market
Risk, Liquidity and Capital Resources





Market
Risk





The
majority of our assets and liabilities are monetary in nature. Consequently, our
most significant form of market risk is interest rate risk (“IRR”). Our assets,
consisting primarily of mortgage loans, have longer maturities than our
liabilities, consisting primarily of deposits. As a result, a principal part of
our business strategy is to manage IRR and reduce the exposure of our net
interest income (“NII”) to changes in market interest rates. Accordingly, our
Board of Directors has established an Asset/Liability Management Committee which
is responsible for evaluating the IRR inherent in our assets and liabilities,
for determining the level of risk that is appropriate given our business
strategy, operating environment, capital, liquidity and performance objectives,
and for managing this risk consistent with the guidelines approved by the Board
of Directors.  With the assistance of an IRR management consultant,
the committee monitors the level of IRR on a regular basis and generally meets
at least on a quarterly basis to review our asset/liability policies and IRR
position.





We have
sought to manage our IRR in order to minimize the exposure of our earnings and
capital to changes in interest rates. As part of our ongoing asset-liability
management, we currently use the following strategies to manage our IRR:
(i) using alternative funding sources, such as advances from the Federal
Home Loan Bank of Boston, to “match fund” certain longer-term one- to
four-family residential mortgage loans; (ii) continued emphasis on
increasing core deposits; (iii) offering adjustable rate and shorter-term
home equity loans, commercial real estate loans, construction loans and
commercial and industrial loans; (iv) offering a variety of consumer loans,
which typically have shorter-terms and (v ) investing in mortgage-backed
securities with variable rates or fixed rates with shorter durations. Shortening
the average maturity of our interest-earning assets by increasing our
investments in shorter-term loans and securities, as well as loans and
securities with variable rates of interest, helps to better match the maturities
and interest rates of our assets and liabilities, thereby reducing the exposure
of our NII to changes in market interest rates.





Net
interest income at-risk measures the risk of a decline in earnings due to
potential short-term and long term changes in interest rates. The table below
represents an analysis of our IRR as measured by the estimated changes in NII,
resulting from an instantaneous and sustained parallel shift in the yield curve
(+200 and -200 basis points) at March 31, 2008 and December 31,
2007.




Net
      Interest Income At-RiskEstimated
      Increase (Decrease)
              
              Estimated
      Increase (Decrease)Change
      in Interest Rates
              
              in
      NII
              
              in
      NII(Basis
      Points)
              
              (March
      31, 2008)
              
              (December
      31, 2007)-100
              
              0.5%
              
              1.7%Stable
              
              0.0%
              
              0.0%+200
              
              (1.2)%
              
              (4.2)%


19
 Index


The preceding income simulation
analysis does not represent a forecast of NII and should not be relied upon as
being indicative of expected operating results. These hypothetical estimates are
based upon numerous assumptions, which are subject to change, including: the
nature and timing of interest rate levels including the yield curve shape,
prepayments on loans and securities, deposit decay rates, pricing decisions on
loans and deposits, reinvestment/replacement of asset and liability cash flows,
and others. Also, as market conditions vary prepayment/refinancing
levels likely deviating from those assumed, the varying impact of interest rate
changes on caps and floors embedded in adjustable rate loans, early withdrawal
of deposits, changes in product preferences, and other internal/external
variables.





Net Portfolio
Value Simulation Analysis.  The Office of
Thrift Supervision requires the computation of amounts by which the net present
value of an institution’s cash flow from assets, liabilities and off balance
sheet items (the institution’s net portfolio value or “NPV”) would change in the
event of a range of assumed changes in market interest rates.  The
Office of Thrift Supervision provides all institutions that file a Consolidated
Maturity/Rate Schedule as a part of their quarterly Thrift Financial Report an
interest rate sensitivity report of net portfolio value.  The Office
of Thrift Supervision simulation model uses a discounted cash flow analysis and
an option-based pricing approach to measuring the interest rate sensitivity of
net portfolio value.  Historically, the Office of Thrift Supervision
model estimated the economic value of each type of asset, liability and
off-balance sheet contract under the assumption that the United States Treasury
yield curve increases or decreases instantaneously by 100 to 300 basis points in
100 basis point increments.  However, given the current low level of
market interest rates, we did not prepare a net portfolio value calculation for
an interest rate decrease of greater than 100 basis points.  A basis
point equals one-hundredth of one percent, and 200 basis points equals two
percent.  An increase in interest rates from 3% to 5% would mean, for
example, a 200 basis point increase in the “Change in Interest Rates” column
below.  The Office of Thrift Supervision provides us the results of
the interest rate sensitivity model, which is based on information we provide to
the Office of Thrift Supervision to estimate the sensitivity of our net
portfolio value.





The tables below set forth, at the
dates indicated, the estimated changes in our net portfolio value that would
result from the designated instantaneous changes in the United States Treasury
yield curve. Computations of prospective effects of hypothetical interest rate
changes are based on numerous assumptions, including relative levels of market
interest rates, loan prepayments and deposit decay, and should not be relied
upon as indicative of actual results. This data is for United Bank and its
subsidiary only and does not include any yield curve changes in the assets of
United Financial Bancorp, Inc.





March
      31, 2008NPV
      as a Percentage of PresentValue
      of Assets  (3)Estimated
      Increase (Decrease) inChange
      in
              
              
              
              NPV
              
              
              
              IncreaseInterest
      Rates
              
              Estimated
              
              
              
              
              
              
              
              (Decrease)(basis
      points) (1)
              
              NPV  (2)
              
              Amount
              
              Percent
              
              NPV
      Ratio (4)
              
              (basis
      points)(Dollars
      in thousands)+300
              
              $     95,614
              
              $      (71,965)
              
              (43)%
              
              9.21%
              
              (526)+200
              
              121,249
              
              (46,330)
              
              (28)
              
              11.28
              
              (329)+100
              
              147,242
              
              (20,337)
              
              (12)
              
              13.22
              
              (135)0
              
              167,579
              
              
              
              
              
              14.57-100
              
              181,892
              
              14,313
              
              9
              
              15.41
              
              83
 (1)
              Assumes
      an instantaneous uniform change in interest rates at all
      maturities.(2)
              NPV
      is the discounted present value of expected cash flows from assets,
      liabilities and off-balance sheet contracts.(3)
              Present
      value of assets represents the discounted present value of incoming cash
      flows on interest-earning assets.(4)
              NPV
      ratio represents NPV divided by the present value of
    assets.





20
 Index





December
      31, 2007NPV
      as a Percentage of PresentValue
      of Assets  (3)Change
      in
              
              
              
              Estimated
      Increase (Decrease) inNPV
              
              
              
              IncreaseInterest
      Rates
              
              Estimated
              
              
              
              
              
              
              
              (Decrease)(basis
      points) (1)
              
              NPV  (2)
              
              Amount
              
              Percent
              
              NPV
      Ratio (4)
              
              (basis
      points)(Dollars
      in thousands)+300
              
              $    108,167
              
              $      (64,752)
              
              (37)%
              
              11.24%
              
              (504)+200
              
              130,569
              
              (42,351)
              
              (24)
              
              13.13
              
              (316)+100
              
              153,090
              
              (19,829)
              
              (11)
              
              14.88
              
              (140)0
              
              172,919
              
              
              
              
              
              16.29-100
              
              186,881
              
              13,962
              
              8
              
              17.14
              
              86(1)
              Assumes
      an instantaneous uniform change in interest rates at all
      maturities.(2)
              NPV
      is the discounted present value of expected cash flows from assets,
      liabilities and off-balance sheet contracts.(3)
              Present
      value of assets represents the discounted present value of incoming cash
      flows on interest-earning assets.(4)
              NPV
      ratio represents NPV divided by the present value of
    assets.





The
tables above indicate that at March 31, 2008 and December 31, 2007, in the event
of a 100 basis point decrease in interest rates, we would experience a 9% and
8%, respectively, increase in net portfolio value.  In the event of a
300 basis point increase in interest rates, we would experience a 42% and 37%,
respectively, decrease in net portfolio value.





Certain
shortcomings are inherent in the methodology used in the above interest rate
risk measurement. Modeling changes in net portfolio value require making certain
assumptions that may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates. In this regard, the net
portfolio value table presented assumes that the composition of our
interest-sensitive assets and liabilities existing at the beginning of a period
remains constant over the period being measured and assumes that a particular
change in interest rates is reflected uniformly across the yield curve
regardless of the duration or repricing of specific assets and liabilities.
Accordingly, although the net portfolio value table provides an indication of
our interest rate risk exposure at a particular point in time, such measurements
are not intended to and do not provide a precise forecast of the effect of
changes in market interest rates on our net interest income and will differ from
actual results.





Liquidity




Liquidity is the ability to meet
current and future financial obligations of a short-term nature. Our primary
sources of funds consist of deposit inflows, advances from the Federal Home Loan
Bank of Boston, loan and mortgage-backed securities repayments and maturities
and sales of loans and other investment securities. While maturities and
scheduled amortization of loans and securities are predictable sources of funds,
deposit flows and mortgage prepayments are greatly influenced by market interest
rates, economic conditions and competition. Our Asset/Liability Management
Committee is responsible for establishing and monitoring our liquidity targets
and strategies in order to ensure that sufficient liquidity exists for meeting
the borrowing needs of our customers as well as unanticipated contingencies. We
seek to maintain a liquidity ratio of 10% or greater. At March 31, 2008 our
liquidity ratio was 33.47%, compared to 26.13% at December 31,
2007.




We regularly adjust our investments in
liquid assets based upon our assessment of (1) expected loan demand, (2)
expected deposit flows, (3) yields available on interest-earning deposits and
securities, and (4) the objectives of our asset/liability management program.
Excess liquid assets are generally invested in interest-earning deposits and
short- and intermediate-term securities.


21
 Index





Our most liquid assets are cash and
cash equivalents. The levels of these assets are dependent on our operating,
financing, lending and investing activities during any given period. At March
31, 2008, cash and cash equivalents totaled $15.8 million. Securities classified
as available-for-sale, which provide additional sources of liquidity, totaled
$251.2 million, excluding those pledged as collateral for various purposes, at
March 31, 2008. In addition, at March 31, 2008, we had the ability to borrow a
total of approximately $465.0 million from the Federal Home Loan Bank of
Boston.  On that date, we had $141.4 million in advances
outstanding.





Our cash
flows are derived from operating activities, investing activities and financing
activities as reported in our Consolidated Statements of Cash Flows included in
our Consolidated Financial Statements.





At March
31, 2008, we had $24.0 million in loan commitments outstanding.  In
addition to commitments to originate loans, we had $146.9 million in unused
lines of credit to borrowers and $25.8 million to be disbursed under existing
construction loan commitments. Certificates of deposit due within one year of
March 31, 2008 totaled $294.4 million, or 39.0% of total deposits. If these
deposits do not remain with us, we will be required to seek other sources of
funds, including other certificates of deposit and Federal Home Loan Bank
advances. Depending on market conditions, we may be required to pay higher rates
on such deposits or other borrowings than we currently pay on the certificates
of deposit due on or before March 31, 2009. We believe however, based on past
experience, that a significant portion of our certificates of deposit will
remain with us. We have the ability to attract and retain deposits by adjusting
the interest rates offered.





Our
primary investing activities are the origination of loans and the purchase of
securities.  For the three months ended March 31, 2008, we originated
$59.9 million of loans and purchased $124.4 million of securities. In the
comparable 2007 period, we originated $77.9 million of loans and purchased $5.1
million of securities.





Financing
activities consist primarily of activity in deposit accounts and Federal Home
Loan Bank advances. We experienced a net increase in total deposits of $36.8
million and $31.3 million for the three months ended March 31, 2008 and 2007,
respectively.  Deposit flows are affected by the overall level of
interest rates, the interest rates and products offered by us and our local
competitors and other factors.





Liquidity
management is both a daily and long-term function of business management. If we
require funds beyond our ability to generate them internally, borrowing
agreements exist with the Federal Home Loan Bank, which provides an additional
source of funds. Federal Home Loan Bank advances increased by $33.4 million
during the three months ended March 31, 2008 and decreased $7.6 million during
the comparable  2007 period. Federal Home Loan Bank advances have
primarily been used to fund loan demand and to purchase securities. We have also
used Federal Home Loan Bank advances to “match-fund” certain longer-term one- to
four-family residential mortgage loans and commercial real estate loans. The
Bank’s unused borrowing capacity with the FHLBB, excluding its $12.4 million
line of credit, was approximately $311.2 at March 31, 2008 and $273.4 at
December 31, 2007. At March 31, 2008 and December 31, 2007, the Bank had no
borrowing against the line of credit.


22
 Index


Off-Balance
Sheet Arrangements and Aggregate Contractual Obligations





Commitments





As a
financial services provider, we routinely are a party to various financial
instruments with off-balance-sheet risks, such as commitments to extend credit,
standby letters of credit and unused lines of credit. While these contractual
obligations represent our future cash requirements, a significant portion of
commitments to extend credit may expire without being drawn upon. Such
commitments are subject to the same credit policies and approval process
accorded to loans made by us. We consider commitments to extend credit in
determining our allowance for loan losses.





Contractual
Obligations





In the
ordinary course of our operations, we enter into certain contractual
obligations. Such obligations include operating leases for premises and
equipment. The following table summarizes our significant fixed and determinable
contractual obligations and other funding needs by payment date at March 31,
2008. The payment amounts represent those amounts due to the recipient and do
not include any unamortized premiums or discounts or other similar carrying
amount adjustments.





Payments
      Due by PeriodLess
      Than
              
              
              One
      to Three
              
              
              Three
      to Five
              
              
              More
      thanOne
      Year
              
              
              Years
              
              
              Years
              
              
              Five
      Years
              
              
              TotalContractual
      Obligations:Certificates
      of deposit
              
              $
              294,413
              
              
              $
              59,630
              
              
              $
              5,155
              
              
              $
              -
              
              
              $
              359,198Federal
      Home Loan Bank advances
              
              
              27,496
              
              
              
              48,658
              
              
              
              39,990
              
              
              
              25,265
              
              
              
              141,409Repurchase
      agreements
              
              
              9,686
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              9,686Standby
      letters of credit
              
              
              1,314
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,314Operating
      leases
              
              
              625
              
              
              
              1,214
              
              
              
              947
              
              
              
              4,377
              
              
              
              7,163Capitalized
      lease
              
              
              146
              
              
              
              292
              
              
              
              292
              
              
              
              2,615
              
              
              
              3,345Future
      benefits to be paid under retirement plans
              
              
              196
              
              
              
              -
              
              
              
              3,257
              
              
              
              610
              
              
              
              4,063Total
              
              $
              333,876
              
              
              $
              109,794
              
              
              $
              49,641
              
              
              $
              32,867
              
              
              $
              526,178Commitments
      to extend credit
              
              $
              198,012
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              198,012


23
 Index


Capital
Resources




United
Bank is subject to various regulatory capital requirements, including a
risk-based capital measure. The risk-based capital guidelines include both a
definition of capital and a framework for calculating risk-weighted assets by
assigning balance sheet assets and off-balance sheet items to broad risk
categories. At March 31, 2008, the Bank exceeded all regulatory capital
requirements. United Bank is considered “well capitalized” under regulatory
requirements.





As
      of March 31, 2008:Total
      risk-based capital
              
              
              20.03
              %Tier
      1 risk-based capital
              
              
              19.07
              %Tier
      1 (core) capital
              
              
              13.19
              %Tangible
      equity
              
              
              13.19
              %As
      of December 31, 2007:Total
      risk-based capital
              
              
              20.25
              %Tier
      1 risk-based capital
              
              
              19.25
              %Tier
      1 (core) capital
              
              
              14.00
              %Tangible
      equity
              
              
              14.00
              %


24
 Index





ITEM
3.  Quantitative and Qualitative Disclosures About Market
Risk





The information required by this item
is included above in Item 2, Management’s Discussion and Analysis of Financial
Condition and Results of Operations, under the caption “Market Risk, Liquidity
and Capital Resources.”








ITEM
4.  Controls and Procedures





Under the
supervision and with the participation of the Company’s management, including
the Company’s Chief Executive Officer and Chief Financial Officer, the Company
has evaluated the effectiveness of the design and operation of its disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under
the Exchange Act) as of the end of the period covered by this report. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, the
Company’s disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms and in a timely
manner alerting them to material information relating to the Company (or its
consolidated subsidiary) required to be filed in its periodic SEC
filings.





No change in our internal controls over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934) occurred during the most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.  In the ordinary course of
business, we routinely enhance our internal controls and procedures for
financial reporting by either upgrading our current systems or implementing new
systems. Changes have been made and will be made to our internal controls and
procedures for financial reporting as a result of these efforts.





PART
II.  OTHER INFORMATION





ITEM
1.    Legal Proceedings





At March
31, 2008, the Company was not involved in any legal proceedings, the outcome of
which would be material to the Company’s financial condition or results of
operations.





ITEM
1A.  Risk Factors





As of
March 31, 2008, there have been no material changes to the risk factors set
forth in our Annual Report on Form 10-K for the year ended December 31,
2007.








25
 Index








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





(a)
No unregistered securities were sold by the Company during the quarter ended
March 31, 2008.





(b)
On December 3, 2007, United Financial Bancorp, Inc. completed its stock offering
in connection with the second-step conversion of United Mutual Holding
Company.  A total of 9,564,570 shares were sold in the subscription
offering, community offering and syndicated offering combined. Expenses related
to the offering were approximately $5.4 million. Net proceeds of the offering
were approximately $90.2 million. Fifty percent of the net proceeds of the stock
offering were contributed to United Bank, the Company’s wholly owned subsidiary.
Additionally, $7.4 million, an amount necessary to allow the ESOP to purchase up
to 754,000 shares of United Financial Bancorp, Inc. common stock in the open
market, was loaned to the ESOP. The remaining net proceeds were retained at the
holding company level. Initially, both United Financial Bancorp, Inc. and United
Bank have invested the net proceeds from the stock offering in short-term
investments and mortgage-backed and asset-backed securities until these proceeds
are deployed for other purposes.





(c)
Not applicable





ITEM
3.  Defaults Upon Senior Securities





Not
applicable.





ITEM
4.  Submissionof Matters to a Vote of Security
Holders





Not
applicable.





ITEM
5.  Other Information





Not
applicable.


26
 Index











ITEM
      6.
            Exhibits.3.1
            Articles
      of Incorporation of United Financial Bancorp, Inc. (1)3.2
            Bylaws
      of United Financial Bancorp, Inc. (2)4
            Form
      of Common Stock Certificate of United Financial Bancorp, Inc.
      (1)10.1
            Form
      of Employee Stock Ownership Plan (3)10.2
            Employment
      Agreement by and between United Bank and Richard B. Collins
      (4)10.3
            Change
      in Control Agreement by and between United Bank and Keith E. Harvey
      (4)10.4
            Change
      in Control Agreement by and between United Bank and J. Jeffrey Sullivan
      (4)10.5
            Change
      in Control Agreement by and between United Bank and Mark A. Roberts
      (4)10.6
            United
      Bank 2007 Supplemental Retirement Plan for Senior Executives
      (4)10.7
            Split
      Dollar Life Insurance Agreement by and between United Bank and Richard B.
      Collins (5)10.8
            Split
      Dollar Life Insurance Agreement by and between United Bank and Keith E.
      Harvey (5)10.9
            Split
      Dollar Life Insurance Agreement by and between United Bank and John J.
      Patterson (5)10.10
            United
      Bank 2006 Stock-Based Incentive Plan (6)10.11
            United
      Bank 2007 Annual Incentive Plan (7)10.12
            United
      Bank 2007 Director Retirement Plan (8)10.13
            Directors
      Fee Continuation Plan (3)10.14
            Deferred
      Income Agreement by and between United Bank and Donald G. Helliwell
      (3)10.15
            Deferred
      Income Agreement by and between United Bank and Robert W. Bozenhard, Jr.
      (3)10.16
            Deferred
      Income Agreement by and between United Bank and George W. Jones
      (3)11
            Statement
      Regarding Computation of Per Share Earnings (refer to Note D of Part
      I,Item
      1- Consolidated Financial Statements21
            Subsidiaries
      of Registrant (1)31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200231.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200232.1
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 200232.2
            Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002(1)
            Incorporated
      by reference to the Registration Statement on Form S-1 of United Financial
      Bancorp, Inc. (File No. 333-144245), originally filed with the Securities
      and Exchange Commission on June 29, 2007.(2)
            Incorporated
      by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
      the Securities and Exchange Commission on April 22,
  2008.(3)
            Incorporated
      by reference to the Registration Statement on Form S-1 of United Financial
      Bancorp, Inc. (File No. 333-123371), originally filed with the
      Securities and Exchange Commission on March 16,
  2005.(4)
            Incorporated
      by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
      the Securities and Exchange Commission on November 29,
    2007.(5)
            Incorporated
      by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
      the Securities and Exchange Commission on January 2,
  2008.(6)
            Incorporated
      by reference to Appendix B to the proxy statement for the 2006 Annual
      Meeting of Stockholders of United Financial Bancorp, Inc. (File No.
      000-51369), filed by United Financial Bancorp, Inc. under the Securities
      Exchange Act of 1934, on June 12, 2006.(7)
            Incorporated
      by reference to the Form 10-K of United Financial Bancorp, Inc. filed with
      the Securities and Exchange Commission on March 17,
  2008.(8)
            Incorporated
      by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
      the Securities and Exchange Commission on November 21,
    2007.





27
 Index








SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed by the undersigned thereunto duly
authorized.






United Financial Bancorp, Inc.Date:
      May
      8, 2008
            By:           /s/ Richard B.
      CollinsRichard B. CollinsChairman,
      President and Chief Executive OfficerDate:
      May
      8, 2008
            By:           /s/ Mark A.
      RobertsMark A. RobertsExecutive
      Vice President and Chief Financial
Officer










28