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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



(Mark One)



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



For the quarterly period ended June 30, 2005



or



| ̈ | 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 000-51525



LEGACY BANCORP, INC.

(Exact name of
registrant as specified in its charter)



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 20-3135053                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)
|                                                               | 
|99 North Street, Pittsfield, Massachusetts                     |  | 01202                            
|(Address of principal executive offices)                       |  | (Zip Code)                       



(413) 443-4421

(Registrants telephone number, including area code)



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 ̈No x



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12(b)-2 of the Exchange Act). Yes ̈No x



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



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



|                               |  |                                
|------------------------------ |  | -------------------------------
|Class                          |  | Outstanding at October 26, 2005
|(Common stock, $.01 par value) |  | 10,308,600 Shares              



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##### Table of Contents



LEGACY BANCORP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF MUTUAL BANCORP OF THE BERKSHIRES AND
SUBSIDIARY



|                               |  |                                                                                                                                                           |  |         
|------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|                               |  |                                                                                                                                                           |  | Page No.
|Part I - Financial Information
|                               |  |                                                                                                                                                          
|Item 1                         |  | Financial Statements                                                                                                                                      |  |         
|                               |  |                                                                                                                                                          
|                               |  | Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004                                                                                     |  | 4       
|                               |  |                                                                                                                                                          
|                               |  | Consolidated Statements of Income for the three months ended June 30, 2005 and 2004 and the six months ended June 30, 2005 and 2004                       |  | 5       
|                               |  |                                                                                                                                                          
|                               |  | Consolidated Statements of Changes in Retained Earnings for the three months ended June 30, 2005 and 2004 and the six months ended June 30, 2005 and 2004 |  | 6       
|                               |  |                                                                                                                                                          
|                               |  | Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and 2004                                                                     |  | 7       
|                               |  |                                                                                                                                                          
|                               |  | Notes to Consolidated Financial Statements                                                                                                                |  | 9       
|                               |  |                                                                                                                                                          
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                     |  | 9       
|                               |  |                                                                                                                                                          
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                |  | 22      
|                               |  |                                                                                                                                                          
|Item 4                         |  | Controls and Procedures                                                                                                                                   |  | 23      
|                              
|Part II - Other Information   
|                               |  |                                                                                                                                                          
|Item 2(b)                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                               |  | 24      
|                               |  |                                                                                                                                                          
|Item 6                         |  | Exhibits and Reports on Form 8-K                                                                                                                          |  | 25      



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##### Table of Contents



|Item 1: | Financial Statements
|------- | --------------------



Effective as of October 26, 2005, Legacy Bancorp, Inc., a Delaware corporation (the Registrant), became the holding company of Legacy Banks, a Massachusetts-chartered stock savings bank (the
Bank), in connection with the conversion of the holding company structure of Legacy Banks from mutual to stock form. Prior to October 26, 2005, Mutual Bancorp of the Berkshires, Inc., a Massachusetts-chartered mutual holding company
(referred to herein as the Company), owned all of the outstanding common stock of Legacy Group, Inc., the Massachusetts-chartered mid-tier bank holding company of the Bank (the Mid-Tier), and the Mid-Tier owned all of the
outstanding common stock of the Bank.



Effective as of October 26, 2005,
the Company and the Mid-Tier merged out of existence, and the Registrant consummated the sale of 9,545,000 shares of its common stock to the public at a price of $10 per share, and contributed 763,600 shares of its common stock to The Legacy Banks
Foundation in exchange for $0.01 per share, being the par value of the shares. Also on October 26, 2005, Legacy Banks issued all of its shares of common stock to the Registrant in exchange for 50% of the net proceeds of the public offering.
During the period presented in this Quarterly Report on Form 10-Q, the Registrant had not yet been formed. Therefore, the financial information presented in this report is that of Mutual Bancorp of the Berkshires, Inc. and its direct and indirect
subsidiaries.



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##### Table of Contents

MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



|                                                                                         |  |              |         |   |                  |   |        
|---------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---------------- | - | -------
|                                                                                         |  | June 30,2005 |         |   | December 31,2004
|                                                                                         |  | (Unaudited)  |         |   |                 
|ASSETS                                                                                   |  |              |         |   |                  |   |        
|                                                                                         |  |             
|Cash and due from banks                                                                  |  | $            | 13,914  |   |                  | $ | 11,879 
|Short-term investments                                                                   |  |              | 14,604  |   |                  |   | 4,919  
|                                                                                         |  |              |         |   |                  |   |        
|Cash and cash equivalents                                                                |  |              | 28,518  |   |                  |   | 16,798 
|                                                                                         |  |             
|Securities                                                                               |  |              | 129,330 |   |                  |   | 131,215
|Loans held for sale                                                                      |  |              | 873     |   |                  |   | 616    
|Loans, net of allowance for loan losses of $4,140 in 2005 (unaudited) and $3,846 in 2004 |  |              | 519,629 |   |                  |   | 504,728
|Premises and equipment, net                                                              |  |              | 14,171  |   |                  |   | 13,777 
|Accrued interest receivable                                                              |  |              | 2,839   |   |                  |   | 2,789  
|Goodwill, net                                                                            |  |              | 3,085   |   |                  |   | 3,085  
|Net deferred tax asset                                                                   |  |              | 2,391   |   |                  |   | 2,783  
|Bank-owned life insurance                                                                |  |              | 3,719   |   |                  |   | 3,886  
|Other assets                                                                             |  |              | 2,340   |   |                  |   | 1,610  
|                                                                                         |  |              |         |   |                  |   |        
|                                                                                         |  | $            | 706,895 |   |                  | $ | 681,287
|                                                                                         |  |              |         |   |                  |   |        
|LIABILITIES AND RETAINED EARNINGS                                                        |  |              |         |   |                  |   |        
|                                                                                         |  |             
|Deposits                                                                                 |  | $            | 483,224 |   |                  | $ | 450,868
|Securities sold under agreements to repurchase                                           |  |              | 4,480   |   |                  |   | 4,557  
|Federal Home Loan Bank advances                                                          |  |              | 152,400 |   |                  |   | 159,704
|Mortgagors escrow accounts                                                              |  |              | 808     |   |                  |   | 1,020  
|Accrued expenses and other liabilities                                                   |  |              | 4,933   |   |                  |   | 5,691  
|                                                                                         |  |              |         |   |                  |   |        
|Total liabilities                                                                        |  |              | 645,845 |   |                  |   | 621,840
|                                                                                         |  |              |         |   |                  |   |        
|                                                                                         |  |             
|Retained earnings                                                                        |  |              | 61,374  |   |                  |   | 59,437 
|Accumulated other comprehensive (loss) income                                            |  |              | (324    | ) |                  |   | 10     
|                                                                                         |  |              |         |   |                  |   |        
|Total retained earnings                                                                  |  |              | 61,050  |   |                  |   | 59,447 
|                                                                                         |  |              |         |   |                  |   |        
|                                                                                         |  | $            | 706,895 |   |                  | $ | 681,287
|                                                                                         |  |              |         |   |                  |   |        



See accompanying notes
to condensed consolidated financial statements



4



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##### Table of Contents

MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands)



|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|---------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                     |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |  
|                                                     |  | 2005                       |       |   | 2004                     |   |       | 2005 |  |   | 2004   |  
|                                                     |  | (Unaudited)                |       |   | (Unaudited)              |  
|Interest and dividend income:                        |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Loans, including fees                                |  | $                          | 7,588 |   |                          | $ | 6,654 |      |  | $ | 14,867 |   |  | $ | 13,272 |  
|Securities:                                          |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Taxable                                              |  |                            | 1,187 |   |                          |   | 920   |      |  |   | 2,346  |   |  |   | 1,903  |  
|Tax-Exempt                                           |  |                            | 43    |   |                          |   | 5     |      |  |   | 73     |   |  |   | 11     |  
|Short-term investments                               |  |                            | 52    |   |                          |   | 12    |      |  |   | 94     |   |  |   | 26     |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total interest and dividend income                   |  |                            | 8,870 |   |                          |   | 7,591 |      |  |   | 17,380 |   |  |   | 15,212 |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Interest expense:                                    |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Deposits                                             |  |                            | 1,968 |   |                          |   | 1,304 |      |  |   | 3,657  |   |  |   | 2,602  |  
|Federal Home Loan Bank advances                      |  |                            | 1,636 |   |                          |   | 1,331 |      |  |   | 3,289  |   |  |   | 2,665  |  
|Other borrowed funds                                 |  |                            | 19    |   |                          |   | 210   |      |  |   | 37     |   |  |   | 425    |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total interest expense                               |  |                            | 3,623 |   |                          |   | 2,845 |      |  |   | 6,983  |   |  |   | 5,692  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net interest income                                  |  |                            | 5,247 |   |                          |   | 4,746 |      |  |   | 10,397 |   |  |   | 9,520  |  
|Provision for loan losses                            |  |                            | 130   |   |                          |   | 111   |      |  |   | 377    |   |  |   | 100    |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net interest income, after provision for loan losses |  |                            | 5,117 |   |                          |   | 4,635 |      |  |   | 10,020 |   |  |   | 9,420  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Non-interest income:                                 |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Customer service fees                                |  |                            | 676   |   |                          |   | 689   |      |  |   | 1,338  |   |  |   | 1,279  |  
|Trust department fees                                |  |                            | 226   |   |                          |   | 213   |      |  |   | 439    |   |  |   | 420    |  
|Insurance fees                                       |  |                            | 29    |   |                          |   | 69    |      |  |   | 72     |   |  |   | 130    |  
|Gain (loss) on sales of securities, net              |  |                            | 35    |   |                          |   | 71    |      |  |   | 77     |   |  |   | 118    |  
|Loss on impairment of securities available for sale  |  |                            | (25   | ) |                          |   |      |      |  |   | (25    | ) |  |   |       |  
|Loss on impairment of other closely held stocks      |  |                            |      |   |                          |   | (6    | )    |  |   |       |   |  |   | (10    | )
|Gain on sales of loans, net                          |  |                            | 49    |   |                          |   | 95    |      |  |   | 69     |   |  |   | 166    |  
|Miscellaneous                                        |  |                            | 23    |   |                          |   |      |      |  |   | 46     |   |  |   | 12     |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total non-interest income                            |  |                            | 1,013 |   |                          |   | 1,131 |      |  |   | 2,016  |   |  |   | 2,115  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Non-interest expenses:                               |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Salaries and employee benefits                       |  |                            | 2,566 |   |                          |   | 2,532 |      |  |   | 5,073  |   |  |   | 4,921  |  
|Occupancy and equipment                              |  |                            | 545   |   |                          |   | 523   |      |  |   | 1,089  |   |  |   | 1,077  |  
|Data processing                                      |  |                            | 485   |   |                          |   | 463   |      |  |   | 933    |   |  |   | 948    |  
|Professional fees                                    |  |                            | 132   |   |                          |   | 159   |      |  |   | 261    |   |  |   | 270    |  
|Advertising                                          |  |                            | 197   |   |                          |   | 152   |      |  |   | 349    |   |  |   | 328    |  
|Other general and administrative                     |  |                            | 585   |   |                          |   | 634   |      |  |   | 1,191  |   |  |   | 1,230  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total non-interest expenses                          |  |                            | 4,510 |   |                          |   | 4,463 |      |  |   | 8,896  |   |  |   | 8,774  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Income before income taxes                           |  |                            | 1,620 |   |                          |   | 1,303 |      |  |   | 3,140  |   |  |   | 2,761  |  
|Provision for income taxes                           |  |                            | 622   |   |                          |   | 493   |      |  |   | 1,203  |   |  |   | 1,059  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net income                                           |  | $                          | 998   |   |                          | $ | 810   |      |  | $ | 1,937  |   |  | $ | 1,702  |  
|                                                     |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  



See accompanying notes
to condensed consolidated financial statements



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##### Table of Contents

MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY

SIX MONTHS ENDED JUNE 30, 2005 AND 2004

(Dollars in thousands)



|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------- | ------ | ------------ | ------ | -------------------------- | - | ------------------------------------- |  | ----------------- | - | --------------------------------------------- | - | - | ----------------------- | - | ------ |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                    |        | Common Stock |        | Additional Paid-in Capital |   | Unallocated Common Stock Held by ESOP |  | Retained Earnings |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total Retained Earnings |  
|                                                                                                                                    | Shares |              | Amount |                            |   |                                       |  |                  
|Balance at December 31, 2003                                                                                                        |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   | 55,883 |  |   | 452    |   |  |   | 56,335 |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|                                                                                                                                    |        |              |        |                            |   |                                       | 
|Comprehensive income:                                                                                                               |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Net income (unaudited)                                                                                                              |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   | 1,702  |  |   |       |   |  |   | 1,702  |  
|Change in net unrealized gain/loss on securities available for sale, net of reclassification adjustment and tax effects
(unaudited) |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   |       |  |   | (1,152 | ) |  |   | (1,152 | )
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Total comprehensive income (unaudited)                                                                                              |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   | 550    |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Balance at June 30, 2004 (Unaudited)                                                                                                |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   | 57,585 |  |   | (700   | ) |  |   | 56,885 |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Balance at December 31, 2004                                                                                                        |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   | 59,437 |  |   | 10     |   |  |   | 59,447 |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Comprehensive income:                                                                                                               |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Net income (unaudited)                                                                                                              |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   | 1,937  |  |   |       |   |  |   | 1,937  |  
|Change in net unrealized gain/loss on securities available for sale, net of reclassification adjustment and tax effects
(unaudited) |        |              |       |                            |   |                                      |  |                   |  |                                               |   |  |                         |   |       |  |   | (334   | ) |  |   | (334   | )
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Total comprehensive income (unaudited)                                                                                              |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   | 1,603  |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  
|Balance at June 30, 2005 (Unaudited)                                                                                                |        | $            |       |                            | $ |                                      |  | $                 |  |                                               | $ |  |                         | $ | 61,374 |  | $ | (324   | ) |  | $ | 61,050 |  
|                                                                                                                                    |        |              |        |                            |   |                                       |  |                   |   |                                               |   |   |                         |   |        |  |   |        |   |  |   |        |  



See accompanying notes
to condensed consolidated financial statements



6



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##### Table of Contents

MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)



|                                                                                  |  |                          |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Six Months EndedJune 30, |        
|                                                                                  |  | 2005                     |         |   | 2004 |  
|                                                                                  |  | (Unaudited)              |        
|Cash flows from operating activities:                                             |  |                          |         |   |      |   |         |  
|Net income                                                                        |  | $                        | 1,937   |   |      | $ | 1,702   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |         |   |      |   |         |  
|Provision for loan losses                                                         |  |                          | (377    | ) |      |   | (100    | )
|Net amortization of securities                                                    |  |                          | 139     |   |      |   | 271     |  
|Depreciation and amortization expense                                             |  |                          | 459     |   |      |   | 471     |  
|Gain on sales of securities, net                                                  |  |                          | (77     | ) |      |   | (118    | )
|Loss on impairment of securities available for sale                               |  |                          | 25      |   |      |   |        |  
|Loss on impairment of other closely held stocks                                   |  |                          |        |   |      |   | 10      |  
|Gain on sales of loans, net                                                       |  |                          | (69     | ) |      |   | (166    | )
|Loans originated for sale                                                         |  |                          | (5,290  | ) |      |   | (6,340  | )
|Proceeds from sale of loans                                                       |  |                          | 5,033   |   |      |   | 6,375   |  
|Deferred tax benefit                                                              |  |                          | 602     |   |      |   | 526     |  
|Net change in:                                                                    |  |                          |         |   |      |   |         |  
|Bank-owned life insurance                                                         |  |                          | 167     |   |      |   | (1,293  | )
|Accrued interest receivable                                                       |  |                          | (50     | ) |      |   | 195     |  
|Other assets                                                                      |  |                          | (730    | ) |      |   | (409    | )
|Accrued expenses and other liabilities                                            |  |                          | (758    | ) |      |   | (775    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash provided by operating activities                                         |  |                          | 1,011   |   |      |   | 349     |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Cash flows from investing activities:                                             |  |                          |         |   |      |   |         |  
|Activity in available-for-sale securities:                                        |  |                          |         |   |      |   |         |  
|Sales                                                                             |  |                          | 3,652   |   |      |   | 854     |  
|Maturities, prepayments and calls                                                 |  |                          | 10,021  |   |      |   | 27,042  |  
|Purchases                                                                         |  |                          | (12,193 | ) |      |   | (21,414 | )
|Purchases of Federal Home Loan Bank stock                                         |  |                          | (226    | ) |      |   | (279    | )
|Loan originations and purchases, net of principal payments                        |  |                          | (14,455 | ) |      |   | (21,863 | )
|Additions to premises and equipment                                               |  |                          | (853    | ) |      |   | (152    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash used in investing activities                                             |  |                          | (14,054 | ) |      |   | (15,812 | )
|                                                                                  |  |                          |         |   |      |   |         |  



See accompanying notes
to condensed consolidated financial statements



7



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##### Table of Contents

MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)

(Dollars in thousands)



|                                                              |  |                          |         |   |      |   |         |  
|------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                              |  | Six Months EndedJune 30, |        
|                                                              |  | 2005                     |         |   | 2004 |  
|Cash flows from financing activities:                         |  |                          |         |   |      |   |         |  
|Net increase in deposits                                      |  |                          | 32,356  |   |      |   | 16,164  |  
|Net decrease in securities sold under agreement to repurchase |  |                          | (77     | ) |      |   | (1,407  | )
|Repayment of Federal Home Loan Bank advances                  |  |                          | (76,941 | ) |      |   | (48,993 | )
|Proceeds from Federal Home Loan Bank advances                 |  |                          | 69,637  |   |      |   | 48,246  |  
|Net change in other secured borrowings                        |  |                          |        |   |      |   | 93      |  
|Net increase in mortgagors escrow accounts                   |  |                          | (212    | ) |      |   | 39      |  
|                                                              |  |                          |         |   |      |   |         |  
|Net cash provided by financing activities                     |  |                          | 24,763  |   |      |   | 14,142  |  
|                                                              |  |                          |         |   |      |   |         |  
|Net decrease in cash and cash equivalents                     |  |                          | 11,720  |   |      |   | (1,321  | )
|Cash and cash equivalents at beginning of period              |  |                          | 16,798  |   |      |   | 23,042  |  
|                                                              |  |                          |         |   |      |   |         |  
|Cash and cash equivalents at end of period                    |  | $                        | 28,518  |   |      | $ | 21,721  |  
|                                                              |  |                          |         |   |      |   |         |  
|Supplemental cash flow information:                           |  |                          |         |   |      |   |         |  
|Interest paid on deposits                                     |  | $                        | 3,620   |   |      | $ | 3,633   |  
|Interest paid on Federal Home Loan Bank advances              |  |                          | 3,269   |   |      |   | 3,299   |  
|Interest paid on other borrowed funds                         |  |                          | 37      |   |      |   | 425     |  
|Income taxes paid                                             |  |                          | 1,200   |   |      |   | 1,090   |  
|Transfers from loans to loans held for sale                   |  |                          | 6,629   |   |      |   |        |  



See accompanying notes
to condensed consolidated financial statements



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MUTUAL BANCORP OF THE BERKSHIRES AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



1. Basis of presentation



The accompanying unaudited consolidated financial statements include the accounts of Mutual Bancorp of the Berkshires (Company), its wholly-owned subsidiary,
Legacy Group, Inc. (Legacy), and its wholly-owned subsidiary, Legacy Banks (Bank). The accounts of Legacy Banks include all of its wholly-owned subsidiaries. These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP) for interim financial statements and the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by GAAP for complete financial statements. The financial information included herein as of June 30, 2005 and for the interim periods ended June 30, 2005 and 2004 is unaudited; however, in the opinion of management
the information reflects all adjustments (consisting solely of normal recurring adjustments) that are necessary for a fair presentation. The results shown for six months ended June 30, 2005 and 2004 are not necessarily indicative of the results
to be obtained for a full year.



These consolidated interim financial
statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Registration Statement on Form S-1 of Legacy Bancorp, Inc.



2. Loan Commitments and other Contingencies



Outstanding loan commitments and other contingencies totaled $98.0 million at June 30, 2005, compared to $107.4 million as of December 31, 2004. Loan
commitments and other contingencies primarily consist of commitments to originate new loans as well as the outstanding unused portions of lines of credit.



|Item 2: | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------



The following analysis discusses the changes in financial position and results of operations of Mutual Bancorp of the Berkshires, Inc and
subsidiary, and should be read in conjunction with their unaudited consolidated interim financial statements and the notes thereto, appearing in Part I, Item 1 of this document.



Forward-Looking Statements



Certain statements herein constitute forward-looking statements and actual results may differ from those contemplated by these statements. Forward-looking
statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like believe, expect, anticipate, estimate, and intend or
future or conditional verbs such as will, would, should, could, or may. Certain factors that could cause actual results to differ materially from expected results include changes in the
interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the businesses in which the Company is engaged and changes in the securities market.



Critical Accounting Policies



Critical accounting policies are those that involve significant judgments and assessments by
management, and which could potentially result in materially different results under different assumptions and conditions. We consider the following to be critical accounting policies:



Allowance for Loan Losses. The determination of the allowance for loan losses is considered critical due to the high degree of
judgment involved, the subjectivity of the underlying assumptions used, and the potential for changes in the economic environment that could result in material changes in the amount of the allowance for loan losses considered necessary. The



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allowance is evaluated on a regular basis by management and is based on a periodic review of the collectibility of the loans in light of historical
experience, the nature and size of the loan portfolio, adverse situations that may affect borrowers ability to repay, the estimated value of any underlying collateral and prevailing economic conditions.



Income Taxes. Mutual Bancorp uses the asset and liability method of accounting
for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases. A valuation allowance related to deferred tax assets is established when, in managements judgment, it is more likely than not that all or a portion of such deferred tax assets will not be realized.



This discussion has highlighted those accounting policies that management considers to be
critical; however all accounting policies are important, and therefore you are encouraged to review each of the policies included in Note 1 to the consolidated financial statements in the Registration Statement on Form S-1 of Legacy Bancorp, Inc.,
to gain a better understanding of how our financial performance is measured and reported.



Comparison of Financial Condition At June 30, 2005 (unaudited) and December 31, 2004



Overview:Total assets increased by $25.6 million, or 3.8%, from $681.3 million at December 31, 2004 to $706.9 million at June 30, 2005. This
increase was primarily due to growth in the loan portfolio of $15.2 million to $520.5 million at June 30, 2005, which is in line with our growth strategy. Cash and short term investments also increased by $11.7 million to $28.5 million at
June 30, 2005, as discussed below.



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Investment Activities: Cash and short term investments increased by $11.7 million, or 69.6% from $16.8
million at December 31, 2004 to $28.5 million at June 30, 2005. This was primarily due to an increase in overnight federal funds sold, which increased by $9.6 million to $14.4 million at June 30, 2005, and was made possible by funds
provided by recent deposit growth. Investment securities decreased $1.9 million, or 1.4%, to $129.3 million at June 30, 2005. The Bank decreased its holdings of corporate bonds and mortgage-backed securities, replacing them with additional
federal agency bonds and municipal investments which had attractive tax-equivalent yields. At June 30, 2005, the Companys available-for-sale portfolio amounted to $118.2 million, or 16.7% of total assets. The following table sets forth at
the dates indicated information regarding the amortized cost and market values of the Companys investment securities.



|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|----------------------------------------- |  | ---------------------- | ------- | -------------------- | - | -------------- |  | ---------- | ------- |  | - | -------
|                                          |  | At June 30, 2005       |         | At December 31, 2004
|                                          |  | Amortized Cost         |         | Fair Value           |   | Amortized Cost |  | Fair Value
|                                          |  | (Dollars in Thousands)
|Securities available for sale:            |  |                        |         |                      |   |                |  |            |         |  |   |        
|U.S. Government and agency obligations    |  | $                      | 47,445  |                      | $ | 46,977         |  | $          | 42,504  |  | $ | 42,263 
|Municipal bonds                           |  |                        | 5,516   |                      |   | 5,570          |  |            | 3,575   |  |   | 3,565  
|Corporate bonds and other obligations     |  |                        | 7,127   |                      |   | 7,222          |  |            | 12,448  |  |   | 12,696 
|Mortgage-backed securities                |  |                        | 54,801  |                      |   | 54,222         |  |            | 58,657  |  |   | 58,253 
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Total debt securities                     |  |                        | 114,889 |                      |   | 113,991        |  |            | 117,184 |  |   | 116,777
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Marketable equity securities:             |  |                        |         |                      |   |                |  |            |         |  |   |        
|Common stock                              |  |                        | 3,774   |                      |   | 4,190          |  |            | 3,045   |  |   | 3,514  
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Total securities available for sale       |  |                        | 118,663 |                      |   | 118,181        |  |            | 120,229 |  |   | 120,291
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Securities held to maturity:              |  |                        |         |                      |   |                |  |            |         |  |   |        
|Other bonds                               |  |                        | 161     |                      |   | 161            |  |            | 161     |  |   | 161    
|Mortgage-backed securities                |  |                        | 1       |                      |   | 1              |  |            | 2       |  |   | 2      
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|                                          |  |                        | 162     |                      |   | 162            |  |            | 163     |  |   | 163    
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Restricted equity securities:             |  |                        |         |                      |   |                |  |            |         |  |   |        
|Federal Home Loan Bank of Boston stock    |  |                        | 9,056   |                      |   | 9,056          |  |            | 8,830   |  |   | 8,830  
|Savings Bank Life Insurance and DIF stock |  |                        | 1,709   |                      |   | 1,709          |  |            | 1,709   |  |   | 1,709  
|Other restricted equity securities        |  |                        | 222     |                      |   | 222            |  |            | 222     |  |   | 222    
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Total restricted equity securities        |  |                        | 10,987  |                      |   | 10,987         |  |            | 10,761  |  |   | 10,761 
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        
|Total securities                          |  | $                      | 129,812 |                      | $ | 129,330        |  | $          | 131,153 |  | $ | 131,215
|                                          |  |                        |         |                      |   |                |  |            |         |  |   |        



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Lending Activities:Total Loans, including loans held for sale, at June 30, 2005 were $520.5 million,
an increase of $15.2 million, or 3.0%, from $505.3 million at December 31, 2004. The following table sets forth the composition of the Companys loan portfolio (not including loans held for sale) in dollar amounts and as a percentage of
the respective portfolio at the dates indicated.



|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|------------------------------ |  | ---------------------- | ------- | - | -------------------- | ------ | - | ------ | - | ------- | ------- |  | ------ | -
|                               |  | At June 30, 2005       |         |   | At December 31, 2004 |       
|                               |  | Amount                 |         |   | Percent              |        |   | Amount |   |         | Percent | 
|                               |  | (Dollars in Thousands) |        
|Mortgage loans on real estate: |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Residential                    |  | $                      | 278,572 |   |                      | 53.20  | % |        | $ | 276,318 |         |  | 54.36  | %
|Commercial                     |  |                        | 155,887 |   |                      | 29.77  |   |        |   | 141,616 |         |  | 27.86  |  
|Home equity                    |  |                        | 54,907  |   |                      | 10.49  |   |        |   | 55,078  |         |  | 10.83  |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|                               |  |                        | 489,366 |   |                      | 93.46  |   |        |   | 473,012 |         |  | 93.05  |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Other loans:                   |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Commercial                     |  |                        | 24,860  |   |                      | 4.75   |   |        |   | 24,856  |         |  | 4.89   |  
|Consumer and other             |  |                        | 9,363   |   |                      | 1.79   |   |        |   | 10,482  |         |  | 2.06   |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|                               |  |                        | 34,223  |   |                      | 6.54   |   |        |   | 35,338  |         |  | 6.95   |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Total loans                    |  |                        | 523,589 |   |                      | 100.00 | % |        |   | 508,350 |         |  | 100.00 | %
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Other Items:                   |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Net deferred loan costs        |  |                        | 180     |   |                      |        |   |        |   | 224     |         |  |        |  
|Allowance for loan losses      |  |                        | (4,140  | ) |                      |        |   |        |   | (3,846  | )       |  |        |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  
|Total Loans, net               |  | $                      | 519,629 |   |                      |        |   |        | $ | 504,728 |         |  |        |  
|                               |  |                        |         |   |                      |        |   |        |   |         |         |  |        |  



An increase in commercial and
commercial real estate loans of $14.3 million and an increase in residential mortgages of $2.3 million accounted for the increase in net loans, offset in part by a decrease of $1.1 million in other consumer loans. The overall increase was primarily
the result of the Banks significant business development efforts in the Albany, New York area, which helped to geographically diversify our loan mix.



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Non-performing Assets:The table below sets forth the amounts and categories of our non-performing assets
at the dates indicated. No interest income from these loans was recorded in net income for the six months ended June 30, 2005. At June 30, 2005 and December 31, 2004, the Bank has one troubled debt restructuring (a loan for which a
portion of interest or principal has been forgiven or the loan modified at an interest rate less than current market rates). The balance of this loan was $773,000 and $891,000 at June 30, 2005 and December 31, 2004, respectively.



|                                                          |  |                        |       |   |                      |   |       |  
|--------------------------------------------------------- |  | ---------------------- | ----- | - | -------------------- | - | ----- | -
|                                                          |  | At June 30, 2005       |       |   | At December 31, 2004 |  
|                                                          |  | (Dollars in Thousands) |      
|Non-accrual loans:                                        |  |                        |       |   |                      |   |       |  
|Residential mortgage                                      |  | $                      | 50    |   |                      | $ | 123   |  
|Commercial mortgage                                       |  |                        | 569   |   |                      |   | 1,229 |  
|Commercial                                                |  |                        | 590   |   |                      |   | 388   |  
|Home equity, consumer and other                           |  |                        |      |   |                      |   | 29    |  
|                                                          |  |                        |       |   |                      |   |       |  
|Total non-accrual loans                                   |  |                        | 1,209 |   |                      |   | 1,769 |  
|                                                          |  |                        |       |   |                      |   |       |  
|Loans greater than 90 days delinquent and still accruing: |  |                        |       |   |                      |   |       |  
|Residential mortgage                                      |  |                        |      |   |                      |   |      |  
|Commercial mortgage                                       |  |                        |      |   |                      |   |      |  
|Commercial                                                |  |                        |      |   |                      |   |      |  
|Home equity, consumer and other                           |  |                        |      |   |                      |   |      |  
|                                                          |  |                        |       |   |                      |   |       |  
|Total loans 90 days delinquent and still accruing         |  |                        |      |   |                      |   |      |  
|                                                          |  |                        |       |   |                      |   |       |  
|Total non-performing assets                               |  | $                      | 1,209 |   |                      | $ | 1,769 |  
|                                                          |  |                        |       |   |                      |   |       |  
|Ratios:                                                   |  |                        |       |   |                      |   |       |  
|Non-performing loans to total loans                       |  |                        | 0.23  | % |                      |   | 0.35  | %
|Non-performing assets to total assets                     |  |                        | 0.17  | % |                      |   | 0.26  | %



Allowance for Loan
Losses. In originating loans, the Bank recognizes that losses will be experienced on loans and that the risk of loss will vary with many factors, including the type of loan being made, the creditworthiness of the borrower over the term of
the loan, general economic conditions and, in the case of a secured loan, the quality of the security for the loan over the term of the loan. The Bank maintains an allowance for loan losses to absorb losses inherent in the loan portfolio, and as
such, this allowance represents managements best estimate of the probable known and inherent credit losses in the loan portfolio as of the date of the financial statements.



The allowance for loan losses is evaluated on a regular basis by management and is based upon managements periodic review of the
collectibility of the loans in light of historical experience, portfolio volume and mix, geographic and large borrower concentrations, estimated credit losses based on internal and external portfolio reviews, adverse situations that may affect the
borrowers ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information
becomes available.



The allowance consists of allocated, general and
unallocated components. The allocated component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows
or collateral value or observable market price of the impaired loan is lower than the carrying value of the loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. An
unallocated component is maintained to cover uncertainties that could affect managements estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in
the methodologies for estimating allocated and general losses in the portfolio.



A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan
agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Impairment is measured on a loan-by-loan basis for
commercial loans by either the present value of expected future cash flows discounted at the loans effective interest rate or



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the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for
impairment. Accordingly, the Bank generally does not separately identify individual consumer and residential loans for impairment disclosures. At June 30, 2005, impaired loans totaled $2.5 million, including one loan with a valuation allowance
of $179,000.



While the Bank believes that it has established adequate
allocated and general allowances for losses on loans, adjustments to the allowance may be necessary if future conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination
process, the Banks regulators periodically review the allowance for loan losses. These regulatory agencies may require the Bank to recognize additions to the allowance based on their judgments of information available to them at the time of
their examination, thereby negatively affecting the Banks financial condition and earnings.



The following table sets forth activity in the Banks allowance for loan losses for the periods indicated:



|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------ |  | --------------------------------------- | ------ | - | ------------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                   |  | At or for theThree Months EndedJune 30, |        |   | At or for theSix Months EndedJune 30, |  
|                                                                   |  | 2005                                    |        |   | 2004                                  |   |        | 2005 |  |   | 2004   |  
|                                                                   |  | (Dollars in Thousands)                  |       
|Balance at beginning of period                                     |  | $                                       | 4,009  |   |                                       | $ | 3,843  |      |  | $ | 3,846  |   |  | $ | 4,420  |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Charge-offs:                                                       |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Mortgage loans on real estate:                                     |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Other loans:                                                       |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Commercial business                                                |  |                                         | (23    | ) |                                       |   | (25    | )    |  |   | (101   | ) |  |   | (684   | )
|Consumer and other                                                 |  |                                         | (22    | ) |                                       |   | (18    | )    |  |   | (51    | ) |  |   | (35    | )
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Total other loans                                                  |  |                                         | (45    | ) |                                       |   | (43    | )    |  |   | (152   | ) |  |   | (719   | )
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Total charge-offs                                                  |  |                                         | (45    | ) |                                       |   | (43    | )    |  |   | (152   | ) |  |   | (719   | )
|Recoveries:                                                        |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Mortgage loans on real estate                                      |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Other loans:                                                       |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Commercial business                                                |  |                                         | 14     |   |                                       |   | 1      |      |  |   | 24     |   |  |   | 99     |  
|Consumer and other                                                 |  |                                         | 31     |   |                                       |   | 5      |      |  |   | 45     |   |  |   | 17     |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Total other loans                                                  |  |                                         | 45     |   |                                       |   | 6      |      |  |   | 69     |   |  |   | 116    |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Total recoveries                                                   |  |                                         | 45     |   |                                       |   | 6      |      |  |   | 69     |   |  |   | 116    |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Net charge-offs                                                    |  |                                         |       |   |                                       |   | (37    | )    |  |   | (83    | ) |  |   | (603   | )
|Provision for loan losses                                          |  |                                         | 131    |   |                                       |   | 111    |      |  |   | 377    |   |  |   | 100    |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Balance at end of period                                           |  | $                                       | 4,140  |   |                                       | $ | 3,917  |      |  | $ | 4,140  |   |  | $ | 3,917  |  
|                                                                   |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Ratios:                                                            |  |                                         |        |   |                                       |   |        |      |  |   |        |   |  |   |        |  
|Net charge-offs to average loans outstanding (annualized)          |  |                                         | 0.00   | % |                                       |   | -0.03  | %    |  |   | -0.03  | % |  |   | -0.26  | %
|Allowance for loan losses to non-performing loans at end of period |  |                                         | 342.43 | % |                                       |   | 247.44 | %    |  |   | 342.43 | % |  |   | 247.44 | %
|Allowance for loan losses to total loans at end of period          |  |                                         | 0.79   | % |                                       |   | 0.80   | %    |  |   | 0.79   | % |  |   | 0.80   | %



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Deposits: The following table sets forth the Banks deposit accounts (including escrow deposits) for
the periods indicated.



|                           |  |                        |         |         |                   |   |         |   |         |  |        |  
|-------------------------- |  | ---------------------- | ------- | ------- | ----------------- | - | ------- | - | ------- |  | ------ | -
|                           |  | June 30, 2005          |         |         | December 31, 2004 |  
|                           |  | Balance                |         | Percent |                   |   | Balance |   | Percent | 
|                           |  | (Dollars in Thousands) |        
|Deposit type:              |  |                        |         |         |                   |   |         |   |         |  |        |  
|Demand deposits            |  | $                      | 52,111  |         | 10.77             | % |         | $ | 48,057  |  | 10.63  | %
|Regular savings            |  |                        | 70,114  |         | 14.49             |   |         |   | 73,567  |  | 16.28  |  
|LifePath Savings           |  |                        | 70,583  |         | 14.58             |   |         |   | 62,309  |  | 13.79  |  
|Money market deposits      |  |                        | 66,339  |         | 13.71             |   |         |   | 63,473  |  | 14.05  |  
|NOW deposits               |  |                        | 42,230  |         | 8.72              |   |         |   | 39,036  |  | 8.64   |  
|                           |  |                        |         |         |                   |   |         |   |         |  |        |  
|Total transaction accounts |  |                        | 301,377 |         | 62.26             |   |         |   | 286,442 |  | 63.39  |  
|Certificates of deposit    |  |                        | 182,655 |         | 37.74             |   |         |   | 165,446 |  | 36.61  |  
|                           |  |                        |         |         |                   |   |         |   |         |  |        |  
|Total deposits             |  | $                      | 484,032 |         | 100.00            | % |         | $ | 451,888 |  | 100.00 | %
|                           |  |                        |         |         |                   |   |         |   |         |  |        |  



Deposits increased $32.1 million, or
7.1%, to $484.0 million at June 30, 2005 from $451.9 million at December 31, 2004. This increase was due to increases in certificates of deposit, certain money market accounts and LifePath Savings Account. Certificates of deposit,
including brokered certificates, increased by $17.2 million, or 10.4%, to $182.7 million, and our LifePath Savings accounts increased by $8.3 million, or 13.3%, to $70.6 million at June 30, 2005. LifePath Savings accounts, introduced in January
2004, pay a high interest rate similar to a money market rate and are made available, along with certain special benefits, to clients who maintain certain minimum balances and deposit accounts with the Bank. Our various money market accounts
increased by $2.9 million, or 4.5% to $66.3 million at June 30, 2005. The increase in deposits is attributable to our competitive rates and focused marketing efforts.



Borrowings are primarily from the Federal Home Loan Bank of Boston and have decreased $7.3 million, or 4.6%, to $156.9 million
at June 30, 2005. The success in attracting new deposits has allowed the Bank to repay shorter term borrowings as they have matured.



Retained Earnings increased by $1.6 million to $61.1 million at June 30, 2005, an increase of 2.7%. This change resulted from net income of $1.9
million for the six months ended June 30, 2005, offset by an increase in our unrealized loss on available for sale securities by $334,000 to a balance of $325,000. Our ratio of capital to total assets was 8.64% as of June 30, 2005,
compared to 8.73% as of December 31, 2004.



Comparison of Operating
Results For the Three Months Ended June 30, 2005 and June 30, 2004



Net Income for the three months ended June 30, 2005 was $998,000, a 23.2% increase from $810,000 for the same period in 2004. This increase was primarily due to an increase in net interest income of $501,000 for the three months ended
June 30, 2005, offset primarily by a decrease of $118,000 in non-interest income and an increase in non-interest expenses and income taxes of $176,000.



Analysis of Net Interest Income



Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the
relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.



The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily
average balances. The yields set forth below include the effect of deferred fees, and discounts and premiums that are amortized or accreted to interest income or expense. Legacy does not accrue interest on



15



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##### Table of Contents

loans on non-accrual status, however, the balance of these loans is included in the total average balance, which has the effect of lowering average loan
yields.



|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|--------------------------------------------------------------- |  | -------------------------------- | ------- | -------- | -------------------------------- | -------------- |  | ------ | --------------------------- |  | -------- | ------- | -------------- | - | ----- |  | ------ | -
|                                                                |  | Three Months Ended June 30, 2005 |         |          | Three Months Ended June 30, 2004 |               
|                                                                |  | Average Outstanding Balance      |         | Interest |                                  | Yield/ Rate(1) |  |        | Average Outstanding Balance |  | Interest |         | Yield/ Rate(1) |  
|                                                                |  | (Dollars in thousands)           |        
|Interest-earning assets:                                        |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Loans - Net(2)                                                  |  | $                                | 518,092 |          | $                                | 7,588          |  | 5.86   | %                           |  | $        | 478,216 |                | $ | 6,654 |  | 5.57   | %
|Investment securities                                           |  |                                  | 128,148 |          |                                  | 1,230          |  | 3.84   | %                           |  |          | 115,716 |                |   | 925   |  | 3.20   | %
|Interest-earning deposits                                       |  |                                  | 7,591   |          |                                  | 52             |  | 2.74   | %                           |  |          | 5,611   |                |   | 12    |  | 0.86   | %
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total interest-earning assets                                   |  |                                  | 653,831 |          |                                  | 8,870          |  | 5.43   | %                           |  |          | 599,543 |                |   | 7,591 |  | 5.06   | %
|Non-interest-earning assets                                     |  |                                  | 37,421  |          |                                  |                |  |        |                             |  |          | 34,808  |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total assets                                                    |  | $                                | 691,252 |          |                                  |                |  |        |                             |  | $        | 634,351 |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Interest-bearing liabilities:                                   |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Savings deposits                                                |  | $                                | 70,769  |          |                                  | 76             |  | 0.43   | %                           |  | $        | 81,460  |                |   | 84    |  | 0.41   | %
|LifePath Savings                                                |  |                                  | 70,086  |          |                                  | 384            |  | 2.19   | %                           |  |          | 36,183  |                |   | 170   |  | 1.88   | %
|Money market                                                    |  |                                  | 60,781  |          |                                  | 230            |  | 1.51   | %                           |  |          | 73,896  |                |   | 154   |  | 0.83   | %
|NOW accounts                                                    |  |                                  | 38,838  |          |                                  | 20             |  | 0.21   | %                           |  |          | 37,149  |                |   | 14    |  | 0.15   | %
|Certificates of deposits                                        |  |                                  | 178,259 |          |                                  | 1,258          |  | 2.82   | %                           |  |          | 149,511 |                |   | 882   |  | 2.36   | %
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total deposits                                                  |  |                                  | 418,733 |          |                                  | 1,968          |  | 1.88   | %                           |  |          | 378,199 |                |   | 1,304 |  | 1.38   | %
|Borrowed Funds                                                  |  |                                  | 158,211 |          |                                  | 1,655          |  | 4.18   | %                           |  |          | 146,618 |                |   | 1,541 |  | 4.20   | %
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total interest-bearing liabilities                              |  |                                  | 576,944 |          |                                  | 3,623          |  | 2.51   | %                           |  |          | 524,817 |                |   | 2,845 |  | 2.17   | %
|Non-interest bearing liabilities                                |  |                                  | 53,709  |          |                                  |                |  |        |                             |  |          | 51,362  |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total liabilities                                               |  |                                  | 630,653 |          |                                  |                |  |        |                             |  |          | 576,179 |                |   |       |  |        |  
|Equity                                                          |  |                                  | 60,599  |          |                                  |                |  |        |                             |  |          | 58,172  |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Total liabilities and equity                                    |  | $                                | 691,252 |          |                                  |                |  |        |                             |  | $        | 634,351 |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Net interest income                                             |  |                                  |         |          | $                                | 5,247          |  |        |                             |  |          |         |                | $ | 4,746 |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Net interest rate spread(3)                                     |  |                                  |         |          |                                  |                |  | 2.92   | %                           |  |          |         |                |   |       |  | 2.89   | %
|Net interest-earning assets(4)                                  |  | $                                | 76,887  |          |                                  |                |  |        |                             |  | $        | 74,726  |                |   |       |  |        |  
|                                                                |  |                                  |         |          |                                  |                |  |        |                             |  |          |         |                |   |       |  |        |  
|Net interest margin(5)                                          |  |                                  |         |          |                                  |                |  | 3.21   | %                           |  |          |         |                |   |       |  | 3.17   | %
|Average interest-earning assets to interest-bearing liabilities |  |                                  |         |          |                                  |                |  | 113.33 | %                           |  |          |         |                |   |       |  | 114.24 | %



|(1) | Yields and rates for the three months ended June 30, 2005 and 2004 are annualized.
|--- | ----------------------------------------------------------------------------------



|(2) | Includes loans held for sale.
|--- | -----------------------------



|(3) | Net interest rate spread represents the difference between the yield on total average interest-earning assets and the cost of total average interest-bearing
liabilities for the three months ended June 30, 2005 and 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
|--- | -------------------------------------------------------------------------------------------------------------



|(5) | Net interest margin represents net interest income divided by average total interest-earning assets.
|--- | ----------------------------------------------------------------------------------------------------



The following table presents the dollar amount of changes in interest income and interest
expense for the major categories of the Banks interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-



16



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earning assets and interest-bearing liabilities with respect to (i) changes attributable to changes in volume (i.e., changes in average balances
multiplied by the prior-period average rate) and (ii) changes attributable to rate (i.e., changes in average rate multiplied by prior-period average balances). The changes attributable to the combined impact of volume and rate have been
allocated proportionately to the changes due to volume and the changes due to rate.



|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|---------------------------------- |  | ---------------------------------------- | --- | - | ------------------------ | - | --- | - |  | - | ----- | -
|                                   |  | Three Months Ended June 30,2005 vs. 2004 |    
|                                   |  | Increase(Decrease) Due to                |     |   | TotalIncrease (Decrease) |  
|                                   |  | Volume                                   |     |   | Rate                     |   |    
|                                   |  | (Dollars in thousands)                   |    
|Interest-earning assets:           |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Loans - Net                        |  | $                                        | 575 |   |                          | $ | 359 |   |  | $ | 934   |  
|Investment securities              |  |                                          | 106 |   |                          |   | 199 |   |  |   | 305   |  
|Interest-earning deposits          |  |                                          | 5   |   |                          |   | 35  |   |  |   | 40    |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Total interest-earning assets      |  |                                          | 686 |   |                          |   | 593 |   |  |   | 1,279 |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Interest-bearing liabilities:      |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Savings deposits                   |  |                                          | (13 | ) |                          |   | 5   |   |  |   | (8    | )
|LifePath Savings                   |  |                                          | 182 |   |                          |   | 32  |   |  |   | 214   |  
|Money market                       |  |                                          | (21 | ) |                          |   | 97  |   |  |   | 76    |  
|NOW accounts                       |  |                                          | 1   |   |                          |   | 5   |   |  |   | 6     |  
|Certificates of deposits           |  |                                          | 187 |   |                          |   | 189 |   |  |   | 376   |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Total deposits                     |  |                                          | 336 |   |                          |   | 328 |   |  |   | 664   |  
|Borrowed Funds                     |  |                                          | 121 |   |                          |   | (7  | ) |  |   | 114   |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Total interest-bearing liabilities |  |                                          | 457 |   |                          |   | 321 |   |  |   | 778   |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  
|Change in net interest income      |  | $                                        | 229 |   |                          | $ | 272 |   |  | $ | 501   |  
|                                   |  |                                          |     |   |                          |   |     |   |  |   |       |  



Net interest incomefor
the three months ended June 30, 2005 was $5.2 million, an increase of $501,000, or 10.6% over the same period of 2004, primarily due to an increase in our average loans outstanding of $39.9 million, or 8.3%, and an increase in the average
balance of investment securities of $12.4 million, or 10.7%, for the three months ended June 30, 2005 over the same period of 2004, as well as a slight increase in our net interest margin.



Interest incomefor the three months ended June 30, 2005 increased $1.3
million, or 16.8%, to $8.9 million over the same period of 2004. This increase was primarily due to an increase in average interest earning assets of $55.9 million for the three months ended June 30, 2005, which is consistent with our growth
strategy. For the three months ended June 30, 2005, average outstanding loans increased $39.9 million, or 8.3%, and the average balance of investment securities increased $12.4 million, or 10.7%, over the three month period ended June 30,
2004, which provided additional interest income of $575,000 and $106,000, respectively, for the three months ended June 30, 2005. The average yield on interest earning assets increased 37 basis points to 5.43% for the three months ended
June 30, 2005, compared to 5.06% for the same period in 2004, accounting for additional interest income of $593,000.



Interest expenseincreased $778,000, or 27.3%, to $3.6 million for the three months ended June 30, 2005 as compared to $2.8 million during the same
period in 2004. $457,000 of this increase was due to an increase in average interest bearing liabilities of $52.1 million, or 9.9%, at June 30, 2005. The average cost of funds also increased to 2.51% for the three month period ended
June 30, 2005, an increase of 34 basis points from a cost of funds of 2.17% for the same period in 2004, which increased interest expense by $321,000. Deposit growth, especially LifePath Savings accounts, certificates of deposit, and



17



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increased borrowings from the Federal Home Loan Bank generated this increased interest expense while allowing us to fund our loan growth and maintain
liquidity.



Provision for loan loss expense increased to $130,000
for the three months ended June 30, 2005, compared to $111,000 for the three months ended June 30, 2004, primarily as of a result of the increase in commercial real estate loans. Provisions for loan loss are affected by loan growth, loan
mix, and our evaluation of the loan portfolio, all of which impacted the increase. At June 30, 2005, our total allowance for loan losses was $4.1 million, or 0.79% of total loans, compared to $3.9 million or 0.80% of total loans, at
June 30, 2004.



Non-interest incometotaled
$1.0 million for the three months ended June 30, 2005, a decrease of $118,000 from the same period a year ago. This decrease is primarily a result of less income from gains on sale of stock, gains on sale of mortgages and fee income from the
sale of annuities. These decreases were mostly offset by increased income from checking accounts, bank owned life insurance and fiduciary income fees from our Legacy Portfolio Management division.



Non-interest expense increased $47,000, or 1.1%, to $4.5 million for the three
months ended June 30, 2005. Salaries and employee benefits expenses increased $34,000, or 1.3%, to $2.6 million for the three months ended June 30, 2005. This increase is a result of merit increases for salaries and increased retirement
expenses, offset by a slight reduction in staff. Increases in data processing, occupancy and advertising were generally offset by decreases to professional fees, insurance and other expenses.



Income tax expense increased $129,000 to $622,000 for the three months ended
June 30, 2005, due to an increase in taxable income of $317,000 for the three months ended June 30, 2005 as compared to the same period in 2004. Our combined federal and state effective tax rate was 38.4% and 37.8% respectively, for each
period.



Comparison of Operating Results For The Six Months Ended
June 30, 2005 (unaudited) and June 30, 2004 (unaudited)



Net
income for the six months ended June 30, 2005 was $1.9 million, a 13.8% increase from $1.7 million for the same period in 2004. This increase was primarily due to an increase in net interest income of $877,000 for the six months ended
June 30, 2005, offset primarily by an increase of $277,000 in the loan loss provisions and an increase in non-interest expenses of $122,000.



Analysis of Net Interest Income



Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the
relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.



18



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The following tables set forth average balance sheets, average yields and costs, and certain other information for the
periods indicated. All average balances are daily average balances. The yields set forth below include the effect of deferred fees, and discounts and premiums that are amortized or accreted to interest income or expense. Legacy does not accrue
interest on loans on non-accrual status, however, the balance of these loans is included in the total average balance, which has the effect of lowering average loan yields.



|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|--------------------------------------------------------------- |  | ------------------------------ | ------- | -------- | ------------------------------ | ------------- |  | ------ | ------------------------- |  | -------- | ------- | ------------- | - | ------ |  | ------ | -
|                                                                |  | Six Months Ended June 30, 2005 |         |          | Six Months Ended June 30, 2004 |              
|                                                                |  | AverageOutstandingBalance      |         | Interest |                                | Yield/Rate(1) |  |        | AverageOutstandingBalance |  | Interest |         | Yield/Rate(1) |  
|                                                                |  | (Dollars in thousands)         |        
|Interest-earning assets:                                        |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Loans - Net(2)                                                  |  | $                              | 515,049 |          | $                              | 14,867        |  | 5.77   | %                         |  | $        | 472,569 |               | $ | 13,272 |  | 5.62   | %
|Investment securities                                           |  |                                | 128,497 |          |                                | 2,419         |  | 3.77   | %                         |  |          | 116,451 |               |   | 1,914  |  | 3.29   | %
|Interest-earning deposits                                       |  |                                | 7,583   |          |                                | 94            |  | 2.48   | %                         |  |          | 6,169   |               |   | 26     |  | 0.84   | %
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total interest-earning assets                                   |  |                                | 651,129 |          |                                | 17,380        |  | 5.34   | %                         |  |          | 595,189 |               |   | 15,212 |  | 5.11   | %
|Non-interest-earning assets                                     |  |                                | 36,907  |          |                                |               |  |        |                           |  |          | 34,863  |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total assets                                                    |  | $                              | 688,036 |          |                                |               |  |        |                           |  | $        | 630,052 |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Interest-bearing liabilities:                                   |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Savings deposits                                                |  | $                              | 71,532  |          |                                | 153           |  | 0.43   | %                         |  | $        | 84,925  |               |   | 178    |  | 0.42   | %
|LifePath Savings                                                |  |                                | 68,548  |          |                                | 735           |  | 2.14   | %                         |  |          | 23,884  |               |   | 231    |  | 1.93   | %
|Money market                                                    |  |                                | 59,190  |          |                                | 389           |  | 1.31   | %                         |  |          | 78,137  |               |   | 346    |  | 0.89   | %
|NOW accounts                                                    |  |                                | 38,193  |          |                                | 39            |  | 0.20   | %                         |  |          | 35,804  |               |   | 24     |  | 0.13   | %
|Certificates of deposits                                        |  |                                | 172,867 |          |                                | 2,341         |  | 2.71   | %                         |  |          | 150,204 |               |   | 1,823  |  | 2.43   | %
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total deposits                                                  |  |                                | 410,330 |          |                                | 3,657         |  | 1.78   | %                         |  |          | 372,954 |               |   | 2,602  |  | 1.40   | %
|Borrowed Funds                                                  |  |                                | 164,254 |          |                                | 3,326         |  | 4.05   | %                         |  |          | 148,349 |               |   | 3,090  |  | 4.17   | %
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total interest-bearing liabilities                              |  |                                | 574,584 |          |                                | 6,983         |  | 2.43   | %                         |  |          | 521,303 |               |   | 5,692  |  | 2.18   | %
|Non-interest bearing liabilities                                |  |                                | 53,098  |          |                                |               |  |        |                           |  |          | 51,286  |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total liabilities                                               |  |                                | 627,682 |          |                                |               |  |        |                           |  |          | 572,589 |               |   |        |  |        |  
|Equity                                                          |  |                                | 60,354  |          |                                |               |  |        |                           |  |          | 57,463  |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Total liabilities and equity                                    |  | $                              | 688,036 |          |                                |               |  |        |                           |  | $        | 630,052 |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Net interest income                                             |  |                                |         |          | $                              | 10,397        |  |        |                           |  |          |         |               | $ | 9,520  |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Net interest rate spread(3)                                     |  |                                |         |          |                                |               |  | 2.91   | %                         |  |          |         |               |   |        |  | 2.93   | %
|Net interest-earning assets(4)                                  |  | $                              | 76,545  |          |                                |               |  |        |                           |  | $        | 73,886  |               |   |        |  |        |  
|                                                                |  |                                |         |          |                                |               |  |        |                           |  |          |         |               |   |        |  |        |  
|Net interest margin(5)                                          |  |                                |         |          |                                |               |  | 3.19   | %                         |  |          |         |               |   |        |  | 3.20   | %
|Average interest-earning assets to interest-bearing liabilities |  |                                |         |          |                                |               |  | 113.32 | %                         |  |          |         |               |   |        |  | 114.17 | %



|(1) | Yields and rates for the six months ended June 30, 2005 and 2004 are annualized.
|--- | --------------------------------------------------------------------------------



|(2) | Includes loans held for sale.
|--- | -----------------------------



|(3) | Net interest rate spread represents the difference between the yield on total average interest-earning assets and the cost of total average interest-bearing
liabilities for the six months ended June 30, 2005 and 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
|--- | -------------------------------------------------------------------------------------------------------------



|(5) | Net interest margin represents net interest income divided by average total interest-earning assets.
|--- | ----------------------------------------------------------------------------------------------------



The following table presents the dollar amount of changes in interest income and interest
expense for the major categories of the Banks interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to (i) changes
attributable to changes in volume (i.e., changes in average balances multiplied by the prior-period average rate) and (ii) changes attributable to rate (i.e., changes in average rate



19



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##### Table of Contents

multiplied by prior-period average balances). The changes attributable to the combined impact of volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.



|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|---------------------------------- |  | -------------------------------------- | ----- | - | ------------------------- | - | --- | - |  | - | ----- | -
|                                   |  | Six Months Ended June 30,2005 vs. 2004 |      
|                                   |  | Increase (Decrease) Due to             |       |   | Total Increase (Decrease) |  
|                                   |  | Volume                                 |       |   | Rate                      |   |    
|                                   |  | (Dollars in thousands)                 |      
|Interest-earning assets:           |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Loans - Net                        |  | $                                      | 1,230 |   |                           | $ | 365 |   |  | $ | 1,595 |  
|Investment securities              |  |                                        | 210   |   |                           |   | 295 |   |  |   | 505   |  
|Interest-earning deposits          |  |                                        | 7     |   |                           |   | 61  |   |  |   | 68    |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Total interest-earning assets      |  |                                        | 1,447 |   |                           |   | 721 |   |  |   | 2,168 |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Interest-bearing liabilities:      |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Savings deposits                   |  |                                        | (29   | ) |                           |   | 4   |   |  |   | (25   | )
|LifePath Savings                   |  |                                        | 476   |   |                           |   | 28  |   |  |   | 504   |  
|Money market                       |  |                                        | (45   | ) |                           |   | 88  |   |  |   | 43    |  
|NOW accounts                       |  |                                        | 2     |   |                           |   | 13  |   |  |   | 15    |  
|Certificates of deposits           |  |                                        | 294   |   |                           |   | 224 |   |  |   | 518   |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Total deposits                     |  |                                        | 698   |   |                           |   | 357 |   |  |   | 1,055 |  
|Borrowed Funds                     |  |                                        | 241   |   |                           |   | (5  | ) |  |   | 236   |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Total interest-bearing liabilities |  |                                        | 939   |   |                           |   | 352 |   |  |   | 1,291 |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  
|Change in net interest income      |  | $                                      | 508   |   |                           | $ | 369 |   |  | $ | 877   |  
|                                   |  |                                        |       |   |                           |   |     |   |  |   |       |  



Net interest income for
the six months ended June 30, 2005 was $10.4 million, an increase of $877,000 over the same period of 2004, primarily due to an increase in our average loans outstanding of $42.5 million for the six months ended June 30, 2005 over the same
period of 2004, and the relative stability of our net interest margin.



Interest incomeincreased $2.2 million, or 14.3%, to $17.4 million. This increase was primarily due to an increase in average interest earning assets of $55.9 million for the six months ended June 30, 2005, which is
consistent with our growth strategy. For the six months ended June 30, 2005, average outstanding loans increased $42.5 million and the average balance of investment securities increased $12.0 million over the six month period ended
June 30, 2004, which provided additional interest income of $1.6 million and $506,000, respectively, for the six months ended June 30, 2005. The average yield on interest earning assets increased 23 basis points to 5.34% for the six months
ended June 30, 2005, compared to 5.11% for the same period in 2004, which is a result of the higher interest rate environment.



Interest expenseincreased $1.3 million, or 22.7%, to $7.0 million for the six months ended June 30, 2005. This increase was primarily due to an
increase in average interest bearing liabilities of $53.3 million, or 10.2%, for the six months ended June 30, 2005. The average cost of funds also increased to 2.43% for the six month period ended June 30, 2005, an increase of 25 basis
points from a cost of funds of 2.18% for the same period in 2004. Deposit growth, especially LifePath Savings accounts, business money market accounts and municipal money market accounts, and increased borrowings from the Federal Home Loan Bank
generated this increased interest expense while allowing us to fund our loan growth and maintain liquidity.



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##### Table of Contents

Provision for loan loss expense was $377,000 for the six months ended June 30, 2005, compared to
$100,000 for the six months ended June 30, 2004, primarily as of a result of the increase in commercial real estate loans. Provisions for loan loss are affected by loan growth, loan mix, and our evaluation of the loan portfolio, all of which
impacted the increase. At June 30, 2005, our total allowance for loan losses was $4.0 million, or 0.76% of total loans, compared to $3.5 million or 0.72% of total loans at June 30, 2004.



Non-interest incometotaled $2.0 million for the six months ended June 30,
2005, a decrease of $99,000 from the same period a year ago. This decrease is a result of less income from gains on sale of stock, gains on sale of mortgages and fee income from the sale of annuities. These decreases were mostly offset by increased
income from checking accounts, bank owned life insurance and fiduciary income fees from our Legacy Portfolio Management division.



Non-interest expense increased $122,000, or 1.4%, to $8.9 million for the six months ended June 30, 2005. Salaries and employee benefits
expenses increased $152,000, or 3.1%, to $5.1 million for the six months ended June 30, 2005. This increase is a result of merit increases for salaries and increased retirement expenses, offset by a slight reduction in staff. Data processing
expenses decreased slightly by $14,000, and no real estate foreclosure expenses were incurred during the six months ended June 30, 2005, compared to $23,000 in such expenses for the same period in 2004.



Income tax expense increased $144,000 to $1.2 million, or 13.6% for the six
months ended June 30, 2005, due to an increase in taxable income of $379,000 for the six months ended June 30, 2005. Our combined federal and state effective tax rate was 38.3% for both periods.



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##### Table of Contents

Minimum Regulatory Capital Requirements: As of June 30, 2005, the most recent notification from the
Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1
risk-based, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes have changed the Banks category. Upon the consummation of the Companys
public offering, the Company expects its capital ratios to be significantly higher. For further discussion of the public offering, see Part II, Item 2(b) of this report. The Companys and Banks capital amounts and ratios as of
June 30, 2005 (unaudited) and December 31, 2004 are also presented in the table.



|                                        |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|--------------------------------------- |  | ------ | ------ | ----- | --------------------------- | - | ------ | ------------------------------------------------------------------------ | ------ |  | --- | ------ |  | ----- | ------ |  | ---- | -
|                                        |  | Actual |        |       | Minimum Capital Requirement |   |        | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions |       
|                                        |  | Amount |        | Ratio |                             |   | Amount |                                                                          | Ratio  |  |     | Amount |  | Ratio |       
|June 30, 2005:                          |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Total capital to risk weighted assets:  |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  | $      | 62,758 |       | 13.2                        | % |        |                                                                          | 37,929 |  | 8.0 | %      |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 60,776 |       | 12.6                        |   |        |                                                                          | 37,889 |  | 8.0 |        |  | $     | 47,361 |  | 10.0 | %
|Tier 1 capital to risk weighted assets: |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  |        | 58,241 |       | 12.3                        |   |        |                                                                          | 18,964 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 56,259 |       | 11.9                        |   |        |                                                                          | 18,944 |  | 4.0 |        |  |       | 28,417 |  | 6.0  |  
|Tier 1 capital to average assets:       |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  |        | 58,241 |       | 8.5                         |   |        |                                                                          | 27,525 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 56,259 |       | 8.2                         |   |        |                                                                          | 20,585 |  | 3.0 |        |  |       | 34,308 |  | 5.0  |  
|December 31, 2004:                      |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Total capital to risk weighted assets:  |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  | $      | 60,592 |       | 13.0                        | % |        | $                                                                        | 37,319 |  | 8.0 | %      |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 58,603 |       | 12.6                        |   |        |                                                                          | 37,285 |  | 8.0 |        |  | $     | 46,607 |  | 10.0 | %
|Tier 1 capital to risk weighted assets: |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  |        | 56,352 |       | 12.1                        |   |        |                                                                          | 18,659 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 54,363 |       | 11.7                        |   |        |                                                                          | 18,643 |  | 4.0 |        |  |       | 27,964 |  | 6.0  |  
|Tier 1 capital to average assets:       |  |        |        |       |                             |   |        |                                                                          |        |  |     |        |  |       |        |  |      |  
|Company                                 |  |        | 56,352 |       | 8.3                         |   |        |                                                                          | 27,269 |  | 4.0 |        |  |       | N/A    |  | N/A  |  
|Legacy Banks                            |  |        | 54,363 |       | 8.0                         |   |        |                                                                          | 20,391 |  | 3.0 |        |  |       | 33,984 |  | 5.0  |  



|Item 3: | Quantitative and Qualitative Disclosures About Risk Management
|------- | --------------------------------------------------------------



There have been no material changes in the Companys market risk during the six months ended June 30, 2005. See disclosures as of April 30, 2005 in the
section entitled Managements Discussion and Analysis of Financial Condition and Results of Operation in the Companys Registration Statement on Form S-1 (File No. 333-126481), as amended.



Contractual Obligations.The following tables present information
indicating various contractual obligations and commitments of the Bank as of June 30, 2005 and the respective maturity dates:



|                                               |  |               |         |                        |   |                                        |  |                                          |        |                 |   |        |  |   |       
|---------------------------------------------- |  | ------------- | ------- | ---------------------- | - | -------------------------------------- |  | ---------------------------------------- | ------ | --------------- | - | ------ |  | - | ------
|                                               |  | June 30, 2005
|                                               |  | Total         |         | One Year or Less       |   | More than One Year through Three Years |  | More than Three Years through Five Years |        | Over Five Years
|                                               |  |               |         | (Dollars in Thousands) |   |                                       
|Federal Home Loan Bank of Boston advances      |  | $             | 152,400 |                        | $ | 27,500                                 |  | $                                        | 53,780 |                 | $ | 29,356 |  | $ | 41,764
|Securities sold under agreements to repurchase |  |               | 4,480   |                        |   | 4,480                                  |  |                                          |       |                 |   |       |  |   |      
|                                               |  |               |         |                        |   |                                        |  |                                          |        |                 |   |        |  |   |       
|Total contractual obligations                  |  | $             | 156,880 |                        | $ | 31,980                                 |  | $                                        | 53,780 |                 | $ | 29,356 |  | $ | 41,764
|                                               |  |               |         |                        |   |                                        |  |                                          |        |                 |   |        |  |   |       



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##### Table of Contents

Loan Commitments and other contingencies.Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition established in the contract and generally have fixed expiration dates or other termination clauses. The following table presents certain information about Legacy Banks loan commitments
and other contingencies outstanding as of June 30, 2005:



|                                               |  |                        |        |                  |   |                                        |  |                                          |       |                 |   |       |  |   |       
|---------------------------------------------- |  | ---------------------- | ------ | ---------------- | - | -------------------------------------- |  | ---------------------------------------- | ----- | --------------- | - | ----- |  | - | ------
|                                               |  | Total                  |        | One Year or Less |   | More than One Year through Three Years |  | More than Three Years Through Five Years |       | Over Five years
|                                               |  | (Dollars in Thousands)
|Commitments to grant loans(1)                  |  | $                      | 15,705 |                  | $ | 15,705                                 |  | $                                        |      |                 | $ |      |  | $ |      
|Commercial loan lines-of-credit                |  |                        | 9,441  |                  |   | 9,441                                  |  |                                          |      |                 |   |      |  |   |      
|Unused portion of home equity loans(2)         |  |                        | 57,268 |                  |   | 210                                    |  |                                          | 1,220 |                 |   | 1,598 |  |   | 54,240
|Unused portion of construction loans(3)        |  |                        | 8,143  |                  |   | 8,143                                  |  |                                          |      |                 |   |      |  |   |      
|Unused portion of overdraft lines-of-credit(4) |  |                        | 4,716  |                  |   |                                       |  |                                          |      |                 |   |      |  |   | 4,716 
|Unused portion of personal lines-of-credit(5)  |  |                        | 447    |                  |   |                                       |  |                                          |      |                 |   |      |  |   | 447   
|Standby letters of credit(6)                   |  |                        | 721    |                  |   | 721                                    |  |                                          |      |                 |   |      |  |   |      
|Other commitments and contingencies            |  |                        | 1,587  |                  |   |                                       |  |                                          | 1,587 |                 |   |      |  |   |      
|                                               |  |                        |        |                  |   |                                        |  |                                          |       |                 |   |       |  |   |       
|Total loan commitments                         |  | $                      | 98,028 |                  | $ | 34,220                                 |  | $                                        | 2,807 |                 | $ | 1,598 |  | $ | 59,403
|                                               |  |                        |        |                  |   |                                        |  |                                          |       |                 |   |       |  |   |       



|(1) | Commitments for loans are extended to customers for up to 60 days after which they expire.
|--- | ------------------------------------------------------------------------------------------



|(2) | Unused portions of home equity loans are available to the borrower for up to 10 years.
|--- | --------------------------------------------------------------------------------------



|(3) | Unused portions of construction loans are available to the borrower for up to one year for development loans and up to one year for other construction loans.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Unused portion of checking overdraft lines-of-credit are available to customers in good standing indefinitely.
|--- | ----------------------------------------------------------------------------------------------------------------



|(5) | Unused portion of personal lines-of-credit are available to customers in good standing indefinitely.
|--- | ------------------------------------------------------------------------------------------------------



|(6) | Standby letters of credit are generally available for less than one year.
|--- | -------------------------------------------------------------------------



Off-Balance Sheet Arrangements: Other than loan commitments, the Bank does not have any off-balance sheet arrangements that
have or are reasonably likely to have a current or future material effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



|Item 4: | Controls and Procedures
|------- | -----------------------



Disclosure Controls and Procedures. The Companys management, under the supervision and with the participation of the Companys Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)), as of the end of the period covered by this report. Based on such evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that as of end of the period covered by this report, the
Companys disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange
Act.



Internal Control Over Financial Reporting. There were no changes
in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to
materially affect, the Companys internal control over financial reporting.



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##### Table of Contents



PART II - OTHER INFORMATION



|Item 2(b) | Unregistered Sales of Equity Securities and Use of Proceeds
|--------- | -----------------------------------------------------------



Legacy Bancorp, Inc. (the Registrant) was formed in connection with the conversion of the holding company structure of Legacy Banks from mutual to stock form.
Prior to completion of the conversion, Mutual Bancorp of the Berkshires, Inc. (the Company) owned all of the common stock of Legacy Group, Inc. (the Mid-Tier) and the Mid-Tier owned all of the common stock of Legacy Banks, a
Massachusetts-chartered stock savings bank. The Mid-Tier and Mutual Bancorp ceased to exist as a result of the conversion, and the Registrant became the owner of all of the outstanding common stock of Legacy Banks.



In connection with the conversion, on or about September 12, 2005, the Registrant
commenced a public offering of 9,545,000 shares of its common stock in a subscription offering for a purchase price of $10.00 per share pursuant to a Registration Statement on Form S-1 (No. 333-126481) which was declared effective by the Securities
and Exchange Commission on September 12, 2005. In accordance with the Plan and pursuant to the registration statement, first priority rights to subscribe for shares of the Registrants common stock was offered to eligible depositors of
Legacy Banks. Such depositors subscribed for all of the stock offered for sale. In addition, the Registrant contributed 763,600 shares to The Legacy Banks Foundation, a 509(a) private foundation established in connection with the conversion. Ryan
Beck & Co., LLC (Ryan Beck) was engaged to assist in the marketing of the common stock. For their services, Ryan Beck received an advisory fee of $25,000 and a marketing fee of $912,257, representing 1% of the dollar amount of
common stock sold in the offering other than (i) shares purchased by officers, directors and employees or their immediate families and (ii) shares contributed to the Legacy Banks Foundation, for which no fee was paid. In addition, Ryan
Beck & Co. was reimbursed $95,000 for expenses, including attorney fees.



The stock offering, which expired on October 11, 2005 and was consummated on October 26, 2005, resulted in the sale of 9,545,000 shares for gross proceeds of approximately $95.5 million. Expenses related to the offering were
approximately $2.8 million, including the expenses paid to Ryan Beck described above, none of which was paid to officers or directors of the Registrant or associates of such persons. No underwriting discounts, commissions or finders fees were paid
in connection with the offering. Net proceeds of the offering were approximately $92.7 million. As a result of completion of the offering, 10,308,600 shares are outstanding, representing 9,545,000 shares sold at $10 per share, and 763,600 shares
contributed to The Legacy Banks Foundation for payment of the $.01 par value per share.



50% of the net proceeds of the offering was retained by the Registrant, and 50% was contributed to Legacy Banks in exchange for all of the outstanding common stock of Legacy Banks. All of such proceeds will initially be invested in
short-term investments with maturities of ninety days or less. Upon maturity of the short-term investments, the resulting funds will be re-invested predominately in investment securities with maturities of five years or less. During the remainder of
2005, the offering proceeds will be used to repay loans to the Federal Home Loan Bank of Boston, or used to fund loan growth.



|Item 5: | Other Information
|------- | -----------------



Employment Agreements



Legacy Bancorp, Inc. and Legacy Banks, respectively, entered into employment agreements with J. Williar Dunlaevy, Michael A. Christopher, Steven F. Pierce, Stephen M.
Conley and Richard M. Sullivan on October 26, 2005. The agreements provide for an annual base salary, subject to increase, among other benefits. They also guarantee customary corporate indemnification and insurance coverage under a standard
directors and officers insurance policy throughout the employment term. The initial term of the agreement for Mr. Dunlaevy and Mr. Christopher is three years, and the initial term of the agreement with Messrs. Conley, Pierce
and Sullivan is two years. Copies of these employment agreements were filed as exhibits to our Registration Statement on Form S-1 (No. 333-126481) filed July 8, 2005, as amended, and have been incorporated by reference as exhibits to this
report.



Employee Severance Compensation
Plan



On October 26, 2005, Legacy Bancorp established an employee
severance compensation plan, which provides eligible employees with severance pay benefits and other benefits in the event that their employment is terminated within a year after a change in control of Legacy Bancorp or Legacy Banks. Copies of this
plan was filed as an exhibit to our Registration



24



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##### Table of Contents

Statement on Form S-1 (No. 333-126481) filed July 8, 2005, as amended, and has been incorporated by reference as an exhibit to this report.



Employee Stock Ownership Plan



On October 26, 2005, Legacy Banks established an employee stock ownership plan for its
employees. Employees with three months of service and who have attained age 21 will be eligible to participate in Legacy Banks employee stock ownership plan. The employee stock ownership plan will borrow from a subsidiary of Legacy Bancorp
(the ESOP Subsidiary) to fund purchases of common stock of Legacy Bancorp on the open market. The loan from the ESOP Subsidiary to the employee stock ownership plan will be repaid principally from Legacy Banks contributions to the
employee stock ownership plan over a period of 15 years and the collateral for the loan will be the stock purchased by the employee stock ownership plan. The interest rate for the employee stock ownership plan loan from the ESOP Subsidiary is fixed
at 6.75%. First Bankers Trust Services has been appointed by Legacy Banks to serve as the trustee of the trust funding the Legacy Banks employee stock ownership plan.



Upon the completion of one year of service, the account balances of employee stock ownership plan participants will become 20% vested. The
vested percentage of participants account balances will thereupon be increased by an additional 20% for each additional year of service, until account balances reach 100% vesting upon the completion of five years of service. Credit is given
for years of service with Legacy Banks or any of its affiliates prior to the adoption of the employee stock ownership plan. In the event of a change in control, as defined in the employee stock ownership plan, however, participants will
become immediately fully vested in their account balances. Participants will also become fully vested in their account balances upon death, disability, retirement, termination of this plan, or the permanent and complete discontinuance of
contributions by Legacy Banks and any of its affiliates to this plan. Benefits may be payable upon retirement or separation from service.



Copies of the employee stock ownership plan document, the employee stock ownership plan loan document and the employee stock ownership plan trust agreement were filed as
exhibits to our Registration Statement on Form S-1 (No. 333-126481) filed July 8, 2005, as amended, and have been incorporated by reference as exhibits to this report.



|Item 6: | Exhibits
|------- | --------



See Index to Exhibits immediately following the signature page.



25



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##### Table of Contents



SIGNATURES



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



|                       |  |  |  |                                                  
|---------------------- |  |  |  | -------------------------------------------------
|                       |  |  |  | LEGACY BANCORP, INC.                             
|                       |  | 
|Date: October 27, 2005 |  |  |  | /s/    J. WILLIAR
DUNLAEVY                       
|                       |  |  |  | J. Williar Dunlaevy                              
|                       |  |  |  | Chief Executive Officer and Chairman of the Board



|                       |  |  |  |                                                                                            
|---------------------- |  |  |  | -------------------------------------------------------------------------------------------
|                       |  | 
|Date: October 27, 2005 |  |  |  | /s/    STEPHEN M. CONLEY                                                                   
|                       |  |  |  | Stephen M. Conley                                                                          
|                       |  |  |  | Senior Vice President, Chief Financial Officer and Treasurer (Principal Accounting Officer)



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##### Table of Contents



INDEX TO EXHIBITS



|       |  |                                                                                 
|------ |  | --------------------------------------------------------------------------------
|2.1    |  | Amended and Restated Plan of Conversion                                         
|       | 
|3.1    |  | Certificate of Incorporation of Legacy Bancorp, Inc.                            
|       | 
|3.2    |  | Bylaws of Legacy Bancorp, Inc. (as amended)                                     
|       | 
|10.1   |  | Legacy Banks ESOP Trust Agreement*                                              
|       | 
|10.2   |  | ESOP Plan Document*                                                             
|       | 
|10.3   |  | ESOP Loan Documents*                                                            
|       | 
|10.4.1 |  | Employment Agreement between Legacy Banks and J. Williar Dunlaevy*              
|       | 
|10.4.2 |  | Employment Agreement between Legacy Banks and Michael A. Christopher*           
|       | 
|10.4.3 |  | Employment Agreement between Legacy Banks and Steven F. Pierce*                 
|       | 
|10.4.4 |  | Employment Agreement between Legacy Banks and Stephen M. Conley*                
|       | 
|10.4.5 |  | Employment Agreement between Legacy Banks and Richard M. Sullivan*              
|       | 
|10.5.1 |  | Employment Agreement between Legacy Bancorp, Inc. and J. Williar Dunlaevy*      
|       | 
|10.5.2 |  | Employment Agreement between Legacy Bancorp, Inc. and Michael A. Christopher*   
|       | 
|10.5.3 |  | Employment Agreement between Legacy Bancorp, Inc. and Steven F. Pierce*         
|       | 
|10.5.4 |  | Employment Agreement between Legacy Bancorp, Inc. and Stephen M. Conley*        
|       | 
|10.5.5 |  | Employment Agreement between Legacy Bancorp, Inc. and Richard M. Sullivan*      
|       | 
|10.8   |  | Legacy Banks Employee Severance Compensation Plan*                              
|       | 
|10.9.1 |  | Legacy Banks Supplemental Executive Retirement Plan with J. Williar Dunlaevy*   
|       | 
|10.9.2 |  | Legacy Banks Supplemental Executive Retirement Plan with Michael A. Christopher*
|       | 
|10.10  |  | Director Fee Continuation Plan*                                                 
|       | 
|31.1   |  | Certification pursuant to Rule 13a-14(a)/15d-14(a) of J. Williar Dunlaevy       
|       | 
|31.2   |  | Certification pursuant to Rule 13a-14(a)/15d-14(a) of Stephen M. Conley         
|       | 
|32     |  | Certification pursuant to 18 U.S.C. Section 1350                                



|* | Incorporated by reference from the Registration Statement on Form S-1 (No. 333-126481) filed July 8, 2005, as amended
|- | ---------------------------------------------------------------------------------------------------------------------



27