----

|   | Delaware                                       |   |                                                                        |   |   | 04-3445675                  |   |
|--------|------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|--------|-----------------------------|--------|
|   | (State      or Other Jurisdiction of           |   |                                                                        |   |   | (I.R.S      Employer        |   |
|   | Incorporation      or Organization)            |   |                                                                        |   |   | Identification      No.)    |   |
|   |                                           |   |                                                                        |   |   |                        |   |
|   | One Conant Street, Danvers,      Massachusetts |   |                                                                        |   |   | 01923                       |   |
|   | (Address      of Principal Executive Officers) |   |                                                                        |   |   |   (Zip      Code) |   |
|   |                                           |   |                                                                        |   |   |                        |   |
|   |                                           |   |        (978) 777-2200                                                  |   |   |                        |   |
|   |                                           |   |        (Registrant’s      telephone number, including area code) |   |   |                        |   |
|   |                                           |   |                                                                        |   |   |                        |   |

|   |  Large      accelerated filer o                                               |  Accelerated      filer x         |
|--------|------------------------------------------------------------------------------------|----------------------------------------|
|   |                                                                               |                                   |
|   |  Non-accelerated      filer o (Do      not check if smaller reporting company |  Smaller      reporting company o |

----

|                                          |                                                                                     |
|-----------------------------------------------|------------------------------------------------------------------------------------------|
|                                          |                                                                                     |   | Page |
| PART      I.  FINANCIAL INFORMATION |                                                                                     |
|                                          |                                                                                     |   |   |
| Item      1.                                  | Financial      Statements (Unaudited)                                                    |   |
|                                          | -                                                                                        | Consolidated      Balance Sheets as of March 31, 2010 and December 31, 2009 | 3 |
|                                          |                                                                                     |   |   |
|                                          | -                                                                                        | Consolidated      Statements of Income for the Three Months Ended |   |
|                                          |                                                                                     | March      31, 2010 and 2009 | 4 |
|                                          |                                                                                     |   |   |
|                                          | -                                                                                        | Consolidated      Statements of Changes in Stockholders' Equity for the |   |
|                                          |                                                                                     | Three      Months Ended March 31, 2010 and 2009 | 5 |
|                                          |                                                                                     |   |   |
|                                          | -                                                                                        | Consolidated      Statements of Cash Flows for the Three Months Ended |   |
|                                          |                                                                                     | March      31, 2010 and 2009 | 6 |
|                                          |                                                                                     |   |   |
|                                          | -                                                                                        | Notes      to Consolidated Financial Statements | 8 |
|                                          |                                                                                     |   |   |
| Item      2.                                  | Management’s      Discussion and Analysis of Financial Condition and Results    of |   |
|                                          | Operations                                                                               | 25 |
|                                          |                                                                                     |   |   |
| Item      3.                                  | Quantitative      and Qualitative Disclosures About Market Risk                          | 37 |
|                                          |                                                                                     |   |   |
| Item      4.                                  | Controls      and Procedures                                                             | 39 |
|                                          |                                                                                     |   |   |
| PART      II.  OTHER INFORMATION    |                                                                                     |
|                                          |                                                                                     |   |   |
| Item      1.                                  | Legal      Proceedings                                                                   | 40 |
|                                          |                                                                                     |   |   |
| Item      1A.                                 | Risk      Factors                                                                        | 40 |
|                                          |                                                                                     |   |   |
| Item      2.                                  | Unregistered      Sales of Equity Securities and Use of Proceeds                         | 40 |
|                                          |                                                                                     |   |   |
| Item      3.                                  | Defaults      Upon Senior Securities                                                     | 41 |
|                                          |                                                                                     |   |   |
| Item      4.                                  | (Removed      and Reserved)                                                              | 41 |
|                                          |                                                                                     |   |   |
| Item      5.                                  | Other      Information                                                                   | 41 |
|                                          |                                                                                     |   |   |
| Item      6.                                  | Exhibits                                                                                 | 42 |

----

|                                                                                     |   | March      31,      |      |   | December      31, |   |
|------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|
|                                                                                     |   | 2010                |      |   | 2009              |   |
|                                                                                     |   | (In      thousands) |      |
| ASSETS                                                                                   |   |
| Cash      and cash equivalents                                                           |   | $                   | 64,257    |   |              | $      | 71,757 |   |
| Certificates      of deposit                                                             |   |                | -         |   |              |   | 10,679 |   |
| Securities      available for sale, at fair value                                        |   |                | 466,018   |   |              |   | 481,100 |   |
| Securities      held to maturity, at cost                                                |   |                | 108,879   |   |              |   | 110,932 |   |
| Loans      held for sale                                                                 |   |                | 215       |   |              |   | 1,948 |   |
| Loans                                                                                    |   |                | 1,659,677 |   |              |   | 1,666,164 |   |
| Less      allowance for loan losses                                                      |   |                | (15,509   | )      |              |   | (14,699 | ) |
| Loans,      net                                                                          |   |                | 1,644,168 |   |              |   | 1,651,465 |   |
|                                                                                     |   |                |      |   |              |   |   |   |
| Restricted      stock, at cost                                                           |   |                | 18,726    |   |              |   | 18,726 |   |
| Premises      and equipment, net                                                         |   |                | 37,433    |   |              |   | 36,764 |   |
| Bank-owned      life insurance                                                           |   |                | 33,216    |   |              |   | 32,900 |   |
| Other      real estate owned                                                             |   |                | 1,271     |   |              |   | 1,427 |   |
| Accrued      interest receivable                                                         |   |                | 9,442     |   |              |   | 9,998 |   |
| Deferred      tax asset, net                                                             |   |                | 5,160     |   |              |   | 9,619 |   |
| Goodwill      and intangibles assets                                                     |   |                | 34,539    |   |              |   | 35,094 |   |
| Prepaid      FDIC assessment                                                             |   |                | 8,007     |   |              |   | 8,515 |   |
| Prepaid      taxes                                                                       |   |                | 9,257     |   |              |   | 6,348 |   |
| Other      assets                                                                        |   |                | 14,240    |   |              |   | 12,477 |   |
|                                                                                     |   | $                   | 2,454,828 |   |              | $      | 2,499,749 |   |
|                                                                                     |   |                |      |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                |   |
| Deposits:                                                                                |   |                |      |   |              |   |   |   |
| Demand      deposits                                                                     |   | $                   | 222,189   |   |              | $      | 224,776 |   |
| Savings      and NOW accounts                                                            |   |                | 405,768   |   |              |   | 376,975 |   |
| Money      market accounts                                                               |   |                | 667,640   |   |              |   | 621,683 |   |
| Term      certificates over $100,000                                                     |   |                | 334,227   |   |              |   | 314,097 |   |
| Other      term certificates                                                             |   |                | 233,539   |   |              |   | 228,272 |   |
| Total      deposits                                                                      |   |                | 1,863,363 |   |              |   | 1,765,803 |   |
| Short-term      borrowings                                                               |   |                | 39,730    |   |              |   | 172,829 |   |
| Long-term      debt                                                                      |   |                | 210,436   |   |              |   | 218,475 |   |
| Subordinated      debt                                                                   |   |                | 29,965    |   |              |   | 29,965 |   |
| Accrued      expenses and other liabilities                                              |   |                | 21,120    |   |              |   | 27,011 |   |
| Total      liabilities                                                                   |   |                | 2,164,614 |   |              |   | 2,214,083 |   |
|                                                                                     |   |                |      |   |              |   |   |   |
| Commitments      and contingencies                                                       |   |                |      |   |              |   |   |   |
|                                                                                     |   |                |      |   |              |   |   |   |
| Stockholders'      equity:                                                               |   |                |      |   |              |   |   |   |
| Preferred      stock; $0.01 par value, 10,000,000 shares authorized;                     |   |                |      |   |              |   |   |   |
| none      issued                                                                         |   |                | -         |   |              |   | - |   |
| Common      stock; $0.01 par value, 60,000,000 shares authorized; 22,316,125      shares |   |                |      |   |              |   |   |   |
| issued                                                                                   |   |                | 223       |   |              |   | 223 |   |
| Additional      paid-in capital                                                          |   |                | 237,942   |   |              |   | 237,577 |   |
| Retained      earnings                                                                   |   |                | 75,704    |   |              |   | 71,864 |   |
| Accumulated      other comprehensive income                                              |   |                | 4,323     |   |              |   | 3,650 |   |
| Unearned      restricted shares - 545,558 and 639,807 shares at March 31, 2010      and  |   |                |      |   |              |   |   |   |
| December      31, 2009, respectively                                                     |   |                | (6,806    | )      |              |   | (6,793 | ) |
| Unearned      compensation - ESOP; 1,266,818 and 1,284,660 shares at                     |   |                |      |   |              |   |   |   |
| March      31, 2010 and December 31, 2009, respectively                                  |   |                | (12,668   | )      |              |   | (12,846 | ) |
| Treasury      stock, at cost; 644,218 and 610,593 shares at March 31, 2010      and      |   |                |      |   |              |   |   |   |
| December      31, 2009, respectively                                                     |   |                | (8,504    | )      |              |   | (8,009 | ) |
| Total      stockholders' equity                                                          |   |                | 290,214   |   |              |   | 285,666 |   |
|                                                                                     |   | $                   | 2,454,828 |   |              | $      | 2,499,749 |   |

----

|                                                               |   | Three      Months Ended                               |       |
|--------------------------------------------------------------------|--------|-------------------------------------------------------|------------|
|                                                               |   | March      31,                                        |       |
|                                                               |   | 2010                                                  |       |   | 2009 |   |
|                                                               |   | (Dollars      in thousands, except per share amounts) |       |
| Interest      and dividend income:                                 |   |                                                  |       |   |   |   |
| Interest      and fees on loans                                    |   | $                                                     | 23,389     |   |   | $ | 15,707 |   |
| Interest      on debt securities:                                  |   |                                                  |       |   |   |   |   |   |
| Taxable                                                            |   |                                                  | 5,381      |   |   |   | 5,422 |   |
| Non-taxable                                                        |   |                                                  | 242        |   |   |   | 203 |   |
| Interest      on cash equivalents and certificates of deposit      |   |                                                  | 47         |   |   |   | 97 |   |
| Total      interest and dividend income                            |   |                                                  | 29,059     |   |   |   | 21,429 |   |
|                                                               |   |                                                  |       |   |   |   |   |   |
| Interest      expense:                                             |   |                                                  |       |   |   |   |   |   |
| Interest      on deposits:                                         |   |                                                  |       |   |   |   |   |   |
| Savings      and NOW accounts                                      |   |                                                  | 1,053      |   |   |   | 548 |   |
| Money      market accounts                                         |   |                                                  | 2,255      |   |   |   | 2,923 |   |
| Term      certificates                                             |   |                                                  | 2,597      |   |   |   | 3,027 |   |
| Interest      on short-term borrowings                             |   |                                                  | 96         |   |   |   | 128 |   |
| Interest      on long-term debt and subordinated debt              |   |                                                  | 2,277      |   |   |   | 2,322 |   |
| Total      interest expense                                        |   |                                                  | 8,278      |   |   |   | 8,948 |   |
| Net      interest income                                           |   |                                                  | 20,781     |   |   |   | 12,481 |   |
| Provision      for loan losses                                     |   |                                                  | 1,200      |   |   |   | 760 |   |
| Net      interest income, after provision for loan losses          |   |                                                  | 19,581     |   |   |   | 11,721 |   |
|                                                               |   |                                                  |       |   |   |   |   |   |
| Non-interest      income:                                          |   |                                                  |       |   |   |   |   |   |
| Service      charges on deposits                                   |   |                                                  | 1,084      |   |   |   | 788 |   |
| Loan      servicing fees                                           |   |                                                  | 58         |   |   |   | 10 |   |
| Net      gain on sales of loans                                    |   |                                                  | 99         |   |   |   | 341 |   |
| Net      gain on sales of securities                               |   |                                                  | 71         |   |   |   | - |   |
| Increase      in cash surrender value of bank-owned life insurance |   |                                                  | 316        |   |   |   | 137 |   |
| Trust      services                                                |   |                                                  | 393        |   |   |   | - |   |
| Other      operating income                                        |   |                                                  | 641        |   |   |   | 433 |   |
| Total      non-interest income                                     |   |                                                  | 2,662      |   |   |   | 1,709 |   |
|                                                               |   |                                                  |       |   |   |   |   |   |
| Non-interest      expenses:                                        |   |                                                  |       |   |   |   |   |   |
| Salaries      and employee benefits                                |   |                                                  | 9,856      |   |   |   | 6,973 |   |
| Occupancy                                                          |   |                                                  | 2,089      |   |   |   | 1,504 |   |
| Equipment                                                          |   |                                                  | 1,020      |   |   |   | 768 |   |
| Outside      services                                              |   |                                                  | 546        |   |   |   | 243 |   |
| Other      real estate owned expense                               |   |                                                  | 186        |   |   |   | 96 |   |
| Deposit      insurance expense                                     |   |                                                  | 582        |   |   |   | 436 |   |
| Advertising      expense                                           |   |                                                  | 209        |   |   |   | 176 |   |
| Other      operating expense                                       |   |                                                  | 2,998      |   |   |   | 1,576 |   |
| Total      non-interest expenses                                   |   |                                                  | 17,486     |   |   |   | 11,772 |   |
| Income      before income taxes                                    |   |                                                  | 4,757      |   |   |   | 1,658 |   |
| Provision      for income taxes                                    |   |                                                  | 506        |   |   |   | 275 |   |
| Net      income                                                    |   | $                                                     | 4,251      |   |   | $ | 1,383 |   |
|                                                               |   |                                                  |       |   |   |   |   |   |
| Weighted-average      shares outstanding:                          |   |                                                  |       |   |   |   |   |   |
| Basic                                                              |   |                                                  | 20,423,418 |   |   |   | 16,376,388 |   |
| Diluted                                                            |   |                                                  | 20,423,418 |   |   |   | 16,376,388 |   |
|                                                               |   |                                                  |       |   |   |   |   |   |
| Earnings      per share:                                           |   |                                                  |       |   |   |   |   |   |
| Basic                                                              |   | $                                                     | 0.21       |   |   | $ | 0.08 |   |
| Diluted                                                            |   | $                                                     | 0.21       |   |   | $ | 0.08 |   |

----

|                                   |   |                        |       |    |   |       |     |   |     |          |   | Accumulated |       |   |     |                |   |     |     |   |   |          |   |   |    |
|----------------------------------------|--------|-----------------------------|------------|---------|--------|------------|----------|--------|----------|---------------|--------|-------------|------------|--------|----------|---------------------|--------|----------|----------|--------|--------|---------------|--------|--------|---------|
|                                   |   |                        |       |    |   | Additional |     |   |     |          |   | Other       |       |   | Unearned |                |   | Unearned |     |   |   |          |   | Total  |    |
|                                   |   | Common      Stock           |       | Paid-In |   |       | Retained |   |     | Comprehensive |   |        | Restricted |   |     | Compensation      - |   |     | Treasury |   |   | Stockholders' |   |
|                                   |   | Shares                      |       | Amount  |   | Capital    |     |   | Earnings |          |   | Income      |       |   | Shares   |                |   | ESOP     |     |   | Stock  |          |   | Equity |    |
|                                   |   | (Dollars      in thousands) |       |
|                                   |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |
| Balance      at December 31, 2008      |   |                        | 17,842,500 |    | $      | 178        |     | $      | 174,510  |          |   | $           | 67,854     |   |     | $                   | 4,026  |     |     | $      | -      |          |   | $      | (13,560 | ) |   | $ | - |   |   | $ | 233,008 |   |
| Comprehensive      income:             |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| Net      income                        |   |                        | -          |    |   | -          |     |   | -        |          |   |        | 1,383      |   |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | 1,383 |   |
| Net      unrealized gain on securities |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| available      for sale, net of        |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| reclassification      adjustment       |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| and      tax effect                    |   |                        | -          |    |   | -          |     |   | -        |          |   |        | -          |   |     |                | 134    |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | 134 |   |
| Change      in fair value and          |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| amortization      of derivative used   |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |
| for      cash flow hedge, net of       |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| tax      effect                        |   |                        | -          |    |   | -          |     |   | -        |          |   |        | -          |   |     |                | (1     | )        |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | (1 | ) |
| Total      comprehensive income        |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   | 1,516 |   |
| Purchase      of shares for incentive  |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| plans      (339,900 shares)            |   |                        | -          |    |   | -          |     |   | (4,256   | )             |   |        | -          |   |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | (4,256 | ) |
| Restricted      stock awards           |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| (639,807      shares)                  |   |                        | -          |    |   | -          |     |   | 8,317    |          |   |        | -          |   |     |                | -      |     |     |   | (8,317 | )             |   |   | -       |   |   |   | - |   |   |   | - |   |
| Equity      incentive shares earned    |   |                        | -          |    |   | -          |     |   | 196      |          |   |        | -          |   |     |                | -      |     |     |   | 277    |          |   |   | -       |   |   |   | - |   |   |   | 473 |   |
| Common      stock held by ESOP         |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| committed      to be released          |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| (17,843      shares)                   |   |                        | -          |    |   | -          |     |   | 51       |          |   |        | -          |   |     |                | -      |     |     |   | -      |          |   |   | 178     |   |   |   | - |   |   |   | 229 |   |
| Dividends      paid                    |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| ($.02      per share)                  |   |                        | -          |    |   | -          |     |   | -        |          |   |        | (329       | )      |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | (329 | ) |
| Balance      at March 31, 2009         |   |                        | 17,842,500 |    | $      | 178        |     | $      | 178,818  |          |   | $           | 68,908     |   |     | $                   | 4,159  |     |     | $      | (8,040 | )             |   | $      | (13,382 | ) |   | $ | - |   |   | $ | 230,641 |   |
|                                   |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance      at December 31, 2009      |   |                        | 22,316,125 |    | $      | 223        |     | $      | 237,577  |          |   | $           | 71,864     |   |     | $                   | 3,650  |     |     | $      | (6,793 | )             |   | $      | (12,846 | ) |   | $ | (8,009 | ) |   | $ | 285,666 |   |
| Comprehensive      income:             |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| Net      income                        |   |                        | -          |    |   | -          |     |   | -        |          |   |        | 4,251      |   |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | 4,251 |   |
| Net      unrealized gain on securities |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| available      for sale, net of        |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| reclassification      adjustment       |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| and      tax effect                    |   |                        | -          |    |   | -          |     |   | -        |          |   |        | -          |   |     |                | 674    |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | 674 |   |
| Change      in fair value and          |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| amortization      of derivative used   |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |
| for      cash flow hedge, net of       |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| tax      effect                        |   |                        | -          |    |   | -          |     |   | -        |          |   |        | -          |   |     |                | (1     | )        |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | (1 | ) |
| Total      comprehensive income        |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   | 4,924 |   |
| Restricted      stock awards           |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| (33,715      shares)                   |   |                        | -          |    |   | -          |     |   | (12      | )             |   |        | -          |   |     |                | -      |     |     |   | (444   | )             |   |   | -       |   |   |   | 456 |   |   |   | - |   |
| Purchase      of shares for Stock      |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| Repurchase      plan (67,340 shares)   |   |                        | -          |    |   | -          |     |   | -        |          |   |        | -          |   |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | (951 | ) |   |   | (951 | ) |
| Equity      incentive shares earned    |   |                        | -          |    |   | -          |     |   | 307      |          |   |        | -          |   |     |                | -      |     |     |   | 431    |          |   |   | -       |   |   |   | - |   |   |   | 738 |   |
| Common      stock held by ESOP         |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| committed      to be released          |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| (17,843      shares)                   |   |                        | -          |    |   | -          |     |   | 70       |          |   |        | -          |   |     |                | -      |     |     |   | -      |          |   |   | 178     |   |   |   | - |   |   |   | 248 |   |
| Dividends      paid                    |   |                        |       |    |   |       |     |   |     |          |   |        |       |   |     |                |   |     |     |   |   |          |   |   |    |   |   |   |   |   |   |   |   |   |
| ($.02      per share)                  |   |                        | -          |    |   | -          |     |   | -        |          |   |        | (411       | )      |     |                | -      |     |     |   | -      |          |   |   | -       |   |   |   | - |   |   |   | (411 | ) |
| Balance      at March 31, 2010         |   |                        | 22,316,125 |    | $      | 223        |     | $      | 237,942  |          |   | $           | 75,704     |   |     | $                   | 4,323  |     |     | $      | (6,806 | )             |   | $      | (12,668 | ) |   | $ | (8,504 | ) |   | $ | 290,214 |   |

----

|                                                                    |   | Three      Months Ended |    |
|-------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                    |   | March      31,          |    |
|                                                                    |   | 2010                    |    |   | 2009 |   |
|                                                                    |   | (In      thousands)     |    |
| Cash      flows from operating activities:                              |   |                    |    |   |   |   |
| Net      income                                                         |   | $                       | 4,251   |   |   | $ | 1,383 |   |
| Adjustments      to reconcile net income to net cash provided (used) by |   |                    |    |   |   |   |   |   |
| operating      activities:                                              |   |                    |    |   |   |   |   |   |
| Provision      for loan losses                                          |   |                    | 1,200   |   |   |   | 760 |   |
| Depreciation      and amortization                                      |   |                    | 543     |   |   |   | 841 |   |
| Accretion      of net deferred loan fees and costs                      |   |                    | (291    | ) |   |   | (126 | ) |
| Deferred      tax provision (benefit)                                   |   |                    | 3,973   |   |   |   | (959 | ) |
| Amortization      of core deposit intangible and servicing rights       |   |                    | 596     |   |   |   | 113 |   |
| Amortization      of stock-based compensation and ESOP expense          |   |                    | 986     |   |   |   | 702 |   |
| Amortization      of securities, net                                    |   |                    | 227     |   |   |   | 60 |   |
| Net      gain on sales of securities                                    |   |                    | (71     | ) |   |   | - |   |
| Change      in fair value of derivative financial instruments           |   |                    | 3       |   |   |   | (3 | ) |
| Net      (gain) loss on sales of other real estate owned           |   |                    | 72      |   |   |   | (29 | ) |
| Loans      originated for sale                                          |   |                    | (5,103  | ) |   |   | (27,404 | ) |
| Proceeds      from sales of loans originated for sale                   |   |                    | 6,836   |   |   |   | 24,137 |   |
| Changes      in other assets and liabilities:                           |   |                    |    |   |   |   |   |   |
| Accrued      interest receivable                                        |   |                    | 556     |   |   |   | (266 | ) |
| Other      assets and bank-owned life insurance                         |   |                    | (4,585  | ) |   |   | 1,380 |   |
| Accrued      expenses and other liabilities                             |   |                    | (5,832  | ) |   |   | (2,485 | ) |
| Net      cash provided (used) by operating activities                   |   |                    | 3,361   |   |   |   | (1,896 | ) |
|                                                                    |   |                    |    |   |   |   |   |   |
| Cash      flows from investing activities:                              |   |                    |    |   |   |   |   |   |
| Purchases      of certificates of deposit                               |   |                    | (119    | ) |   |   | (115 | ) |
| Maturities      of certificates of deposit                              |   |                    | 10,798  |   |   |   | - |   |
| Activity      in available-for-sale securities:                         |   |                    |    |   |   |   |   |   |
| Sales                                                                   |   |                    | 5,769   |   |   |   | - |   |
| Maturities,      prepayments and calls                                  |   |                    | 57,919  |   |   |   | 65,670 |   |
| Purchases                                                               |   |                    | (47,688 | ) |   |   | (33,251 | ) |
| Activity      in held-to-maturity securities:                           |   |                    |    |   |   |   |   |   |
| Maturities,      prepayments and calls                                  |   |                    | 7,883   |   |   |   | - |   |
| Purchases                                                               |   |                    | (5,743  | ) |   |   | - |   |
| Funds      advanced on other real estate owned                          |   |                    | -       |   |   |   | (384 | ) |
| Proceeds      from sales of other real estate owned                     |   |                    | 647     |   |   |   | 1,209 |   |
| Net      loan payments (originations)                                   |   |                    | 5,817   |   |   |   | (29,570 | ) |
| Purchase      of premises and equipment                                 |   |                    | (1,746  | ) |   |   | (3,799 | ) |
| Net      cash provided (used) by investing activities                   |   |                    | 33,537  |   |   |   | (240 | ) |

----

|                                                    |   | Three      Months Ended |     |
|---------------------------------------------------------|--------|-------------------------|----------|
|                                                    |   | March      31,          |     |
|                                                    |   | 2010                    |     |   | 2009 |   |
|                                                    |   | (In      thousands)     |     |
| Cash      flows from financing activities:              |   |                    |     |   |   |   |
| Net      increase (decrease) in:                        |   |                    |     |   |   |   |
| Term      certificates                                  |   | $                       | 25,704   |   |   | $ | 16,162 |   |
| Other      deposits                                     |   |                    | 72,163   |   |   |   | 72,759 |   |
| Short-term      borrowings                              |   |                    | (133,099 | ) |   |   | (73,483 | ) |
| Activity      in long-term debt:                        |   |                    |     |   |   |   |   |   |
| Proceeds      from advances                             |   |                    | 1,080    |   |   |   | - |   |
| Payment      of advances                                |   |                    | (8,884   | ) |   |   | (383 | ) |
| Purchase      of shares for incentive plans             |   |                    | (951     | ) |   |   | (4,256 | ) |
| Dividends      paid                                     |   |                    | (411     | ) |   |   | (329 | ) |
| Net      cash provided (used) by financing activities   |   |                    | (44,398  | ) |   |   | 10,470 |   |
| Change      in cash and cash equivalents                |   |                    | (7,500   | ) |   |   | 8,334 |   |
| Cash      and cash equivalents at beginning of period   |   |                    | 71,757   |   |   |   | 33,129 |   |
| Cash      and cash equivalents at end of period         |   | $                       | 64,257   |   |   | $ | 41,463 |   |
|                                                    |   |                    |     |   |   |   |   |   |
| Supplementary      disclosure of cash flow information: |   |                    |     |   |   |   |   |   |
| Cash      paid during the period for:                   |   |                    |     |   |   |   |   |   |
| Interest                                                |   | $                       | 7,923    |   |   | $ | 8,721 |   |
| Income      taxes                                       |   |                    | 1,000    |   |   |   | 46 |   |
| Non-cash      financing and investing activities:       |   |                    |     |   |   |   |   |   |
| Transfers      from loans to other real estate owned    |   |                    | 563      |   |   |   | 800 |   |

----

| 1. | Basis      of Presentation |
|----|----------------------------|

| 2. | Derivative      Financial Instruments and HedgingActivities |
|----|-------------------------------------------------------------|

----

|                                       | Balance      Sheet  |   | Fair   |   | Balance      Sheet |                   | Fair   |   |
|--------------------------------------------|---------------------|--------|--------|--------|--------------------|------------------------|--------|--------|
|                                       | Location            |   | Value  |   | Location           |                   | Value  |   |
|                                       | (In      thousands) |   |
| Derivatives      not designated as hedging |                |   |   |   |               |                   |   |   |
| instruments:                               |                |   |   |   |               |                   |   |   |
|                                       |                |   |   |   |               |                   |   |   |
| March      31, 2010:                       |                |   |   |   |               |                   |   |   |
| Interest      rate swap agreements         | Other      assets   |   | $      | 1,183  |               | Other      liabilities |   | $      | 1,194 |   |
| Interest      rate cap agreements          | Other      assets   |   |   | 40     |               | Other      liabilities |   |   | 38 |   |
| Total      interest rate products          |                |   | $      | 1,223  |               |                   |   | $      | 1,232 |   |
|                                       |                |   |   |   |               |                   |   |   |   |   |
| December      31, 2009:                    |                |   |   |   |               |                   |   |   |   |   |
| Interest      rate swap agreements         | Other      assets   |   | $      | 1,176  |               | Other      liabilities |   | $      | 1,185 |   |
| Interest      rate cap agreements          | Other      assets   |   |   | 109    |               | Other      liabilities |   |   | 106 |   |
| Total      interest rate products          |                |   | $      | 1,285  |               |                   |   | $      | 1,291 |   |

|                                                         |   |                          |   |  Gain (Loss)         |   |
|--------------------------------------------------------------|--------|-------------------------------|--------|---------------------------|--------|
|                                                         |   |                          |   |  Recognized          |   |
|                                                         |   |                          |   |  in Income on        |   |
|                                                         |   |                          |   |  Derivatives for the |   |
|                                                         |   |  Location of Gain (Loss) |   |  Three Months Ended  |   |
|                                                         |   |  Recognized in           |   |  March      31,      |   |
|  Derivatives Not Designated as Hedging      Instruments |   |  Income on Derivative    |   | 2010                      |   |   | 2009 |   |
|                                                         |   |                          |   | (In      thousands)       |   |
|   Interest rate      swap agreements               |   |  Other      income       |   | $                         | (1     | ) |   | $ | 3 |   |
|   Interest rate      cap agreements                |   |  Other      income       |   |                      | (2     | ) |   |   | - |   |
|  Total income      (loss) on interest rate products     |   |                          |   | $                         | (3     | ) |   | $ | 3 |   |
|                                                         |   |                          |   |                      |   |   |   |   |   |   |

----

| 3. | Securities |
|----|------------|

|                                          |   |                |    |   | Gross      |   |   | Gross      |   |   |            |   |
|-----------------------------------------------|--------|---------------------|---------|--------|------------|--------|--------|------------|--------|--------|-----------------|--------|
|                                          |   | Amortized           |    |   | Unrealized |   |   | Unrealized |   |   |            |   |
|                                          |   | Cost                |    |   | Gains      |   |   | Losses     |   |   | Fair      Value |   |
|                                          |   | (In      thousands) |    |
| March      31, 2010:                          |   |                |    |   |       |   |   |       |   |   |            |   |
| Securities Available for    Sale              |   |                |    |   |       |   |   |       |   |   |            |   |
| Debt      securities:                         |   |                |    |   |       |   |   |       |   |   |            |   |
| U.S.      Government                          |   | $                   | 15,499  |   |       | $      | -      |       |   | $      | -               |   |   | $ | 15,499 |   |
| Other      government-sponsored enterprises:  |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | 6,008   |   |       |   | 2      |       |   |   | (1              | )      |   |   | 6,009 |   |
| Federal      National Mortgage Association    |   |                | 5,751   |   |       |   | 8      |       |   |   | (4              | )      |   |   | 5,755 |   |
| Federal      Home Loan Bank                   |   |                | 95,500  |   |       |   | 1,220  |       |   |   | (338            | )      |   |   | 96,382 |   |
| Federal      Farm Credit Bank                 |   |                | 68,153  |   |       |   | 568    |       |   |   | (304            | )      |   |   | 68,417 |   |
| Residential      mortgage-backed:             |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | 79,395  |   |       |   | 2,145  |       |   |   | (118            | )      |   |   | 81,422 |   |
| Federal      National Mortgage Association    |   |                | 106,948 |   |       |   | 2,882  |       |   |   | (173            | )      |   |   | 109,657 |   |
| Government      National Mortgage Association |   |                | 53,735  |   |       |   | 1,789  |       |   |   | (46             | )      |   |   | 55,478 |   |
| Municipal      bonds                          |   |                | 25,769  |   |       |   | 336    |       |   |   | (150            | )      |   |   | 25,955 |   |
| Other      bonds and notes                    |   |                | 250     |   |       |   | -      |       |   |   | -               |   |   |   | 250 |   |
| Total      debt securities                    |   |                | 457,008 |   |       |   | 8,950  |       |   |   | (1,134          | )      |   |   | 464,824 |   |
| Marketable      equity securities:            |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Warrants                                      |   |                | 779     |   |       |   | -      |       |   |   | (195            | )      |   |   | 584 |   |
| Mutual      funds                             |   |                | 607     |   |       |   | 3      |       |   |   | -               |   |   |   | 610 |   |
| Total      equity securities                  |   |                | 1,386   |   |       |   | 3      |       |   |   | (195            | )      |   |   | 1,194 |   |
|                                          |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Total      securities available for sale      |   | $                   | 458,394 |   |       | $      | 8,953  |       |   | $      | (1,329          | )      |   | $ | 466,018 |   |

| Securities Held to Maturity                   |   |   |    |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Debt      securities:                         |   |   |    |   |   |   |   |   |   |   |   |   |
| Other      government-sponsored enterprises:  |   |   |    |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Bank                   |   | $      | 45,261  |   |   | $      | 62     |   |   | $      | (237   | )      |   | $ | 45,086 |   |
| Federal      Farm Credit Bank                 |   |   | 3,540   |   |   |   | 5      |   |   |   | (14    | )      |   |   | 3,531 |   |
| Residential      mortgage-backed:             |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |   | 21,441  |   |   |   | 11     |   |   |   | (325   | )      |   |   | 21,127 |   |
| Federal      National Mortgage Association    |   |   | 13,158  |   |   |   | -      |   |   |   | (109   | )      |   |   | 13,049 |   |
| Government      National Mortgage Association |   |   | 16,008  |   |   |   | -      |   |   |   | (115   | )      |   |   | 15,893 |   |
| Subordinated      note                        |   |   | 9,271   |   |   |   | -      |   |   |   | (1,771 | )      |   |   | 7,500 |   |
| Other      bonds                              |   |   | 200     |   |   |   | -      |   |   |   | -      |   |   |   | 200 |   |
| Total      securities held to maturity        |   | $      | 108,879 |   |   | $      | 78     |   |   | $      | (2,571 | )      |   | $ | 106,386 |   |

----

|                                          |   |                |    |   | Gross      |   |   | Gross      |   |   |            |   |
|-----------------------------------------------|--------|---------------------|---------|--------|------------|--------|--------|------------|--------|--------|-----------------|--------|
|                                          |   | Amortized           |    |   | Unrealized |   |   | Unrealized |   |   |            |   |
|                                          |   | Cost                |    |   | Gains      |   |   | Losses     |   |   | Fair      Value |   |
|                                          |   | (In      thousands) |    |
| December      31, 2009:                       |   |                |    |   |       |   |   |       |   |   |            |   |
| Securities Available for    Sale              |   |                |    |   |       |   |   |       |   |   |            |   |
| Debt      securities:                         |   |                |    |   |       |   |   |       |   |   |            |   |
| U.S.      Government                          |   | $                   | 15,488  |   |       | $      | -      |       |   | $      | (8              | )      |   | $ | 15,480 |   |
| Other      government-sponsored enterprises:  |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | 6,038   |   |       |   | -      |       |   |   | (26             | )      |   |   | 6,012 |   |
| Federal      National Mortgage Association    |   |                | 7,803   |   |       |   | 2      |       |   |   | (76             | )      |   |   | 7,729 |   |
| Federal      Home Loan Bank                   |   |                | 107,048 |   |       |   | 1,048  |       |   |   | (542            | )      |   |   | 107,554 |   |
| Federal      Farm Credit Bank                 |   |                | 57,855  |   |       |   | 165    |       |   |   | (1,182          | )      |   |   | 56,838 |   |
| Residential      mortgage-backed:             |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | 84,306  |   |       |   | 2,203  |       |   |   | (88             | )      |   |   | 86,421 |   |
| Federal      National Mortgage Association    |   |                | 110,941 |   |       |   | 3,202  |       |   |   | (202            | )      |   |   | 113,941 |   |
| Government      National Mortgage Association |   |                | 59,397  |   |       |   | 1,857  |       |   |   | (39             | )      |   |   | 61,215 |   |
| Municipal      bonds                          |   |                | 24,125  |   |       |   | 363    |       |   |   | (124            | )      |   |   | 24,364 |   |
| Other      bonds and notes                    |   |                | 250     |   |       |   | -      |       |   |   | -               |   |   |   | 250 |   |
| Total      debt securities                    |   |                | 473,251 |   |       |   | 8,840  |       |   |   | (2,287          | )      |   |   | 479,804 |   |
| Marketable      equity securities:            |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Warrants                                      |   |                | 779     |   |       |   | -      |       |   |   | (87             | )      |   |   | 692 |   |
| Mutual      funds                             |   |                | 602     |   |       |   | -      |       |   |   | (3              | )      |   |   | 599 |   |
| Other      equities                           |   |                | 5       |   |       |   | -      |       |   |   | -               |   |   |   | 5 |   |
| Total      equity securities                  |   |                | 1,386   |   |       |   | -      |       |   |   | (90             | )      |   |   | 1,296 |   |
|                                          |   |                |    |   |       |   |   |       |   |   |            |   |   |   |   |   |
| Total      securities available for sale      |   | $                   | 474,637 |   |       | $      | 8,840  |       |   | $      | (2,377          | )      |   | $ | 481,100 |   |

| Securities Held to Maturity                   |   |   |    |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Debt      securities:                         |   |   |    |   |   |   |   |   |   |   |   |   |
| Other      government-sponsored enterprises:  |   |   |    |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   | $      | 1,698   |   |   | $      | 6      |   |   | $      | (17    | )      |   | $ | 1,687 |   |
| Federal      Home Loan Bank                   |   |   | 49,773  |   |   |   | -      |   |   |   | (776   | )      |   |   | 48,997 |   |
| Federal      Farm Credit Bank                 |   |   | 2,042   |   |   |   | -      |   |   |   | (89    | )      |   |   | 1,953 |   |
| Residential      mortgage-backed:             |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |   | 21,927  |   |   |   | 98     |   |   |   | (440   | )      |   |   | 21,585 |   |
| Federal      National Mortgage Association    |   |   | 11,079  |   |   |   | -      |   |   |   | (132   | )      |   |   | 10,947 |   |
| Government      National Mortgage Association |   |   | 14,962  |   |   |   | -      |   |   |   | (134   | )      |   |   | 14,828 |   |
| Subordinated      note                        |   |   | 9,251   |   |   |   | -      |   |   |   | (751   | )      |   |   | 8,500 |   |
| Other      bonds                              |   |   | 200     |   |   |   | -      |   |   |   | -      |   |   |   | 200 |   |
| Total      securities held to maturity        |   | $      | 110,932 |   |   | $      | 104    |   |   | $      | (2,339 | )      |   | $ | 108,697 |   |

----

|                                          |   | Less      Than Twelve Months |   |   | Over      Twelve Months |   |
|-----------------------------------------------|--------|------------------------------|--------|--------|-------------------------|--------|
|                                          |   | Gross                        |   |   |                    |   |   | Gross |   |   |   |   |
|                                          |   | Unrealized                   |   |   | Fair                    |   |   | Unrealized |   |   | Fair |   |
|                                          |   | Losses                       |   |   | Value                   |   |   | Losses |   |   | Value |   |
|                                          |   | (In      thousands)          |   |
| March      31, 2010:                          |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Securities Available for    Sale              |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Other      government-sponsored enterprises:  |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   | $                            | 1      |   |                    | $      | 2,001 |   |   | $ | - |   |   | $ | - |   |
| Federal      National Mortgage Association    |   |                         | 4      |   |                    |   | 996 |   |   |   | - |   |   |   | - |   |
| Federal      Home Loan Bank                   |   |                         | 338    |   |                    |   | 28,218 |   |   |   | - |   |   |   | - |   |
| Federal      Farm Credit Bank                 |   |                         | 300    |   |                    |   | 21,168 |   |   |   | 4 |   |   |   | 972 |   |
| Residential      mortgage-backed:             |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                         | 118    |   |                    |   | 20,506 |   |   |   | - |   |   |   | - |   |
| Federal      National Mortgage Association    |   |                         | 173    |   |                    |   | 19,391 |   |   |   | - |   |   |   | - |   |
| Government      National Mortgage Association |   |                         | 46     |   |                    |   | 10,734 |   |   |   | - |   |   |   | - |   |
| Municipal      bonds                          |   |                         | 58     |   |                    |   | 6,643 |   |   |   | 92 |   |   |   | 3,085 |   |
| Total      debt securities                    |   |                         | 1,038  |   |                    |   | 109,657 |   |   |   | 96 |   |   |   | 4,057 |   |
| Marketable      equity securities:            |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                      |   |                         | 195    |   |                    |   | 584 |   |   |   | - |   |   |   | - |   |
| Total      marketable equity securities       |   |                         | 195    |   |                    |   | 584 |   |   |   | - |   |   |   | - |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | $                            | 1,233  |   |                    | $      | 110,241 |   |   | $ | 96 |   |   | $ | 4,057 |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held to Maturity                   |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Other      government-sponsored enterprises:  |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Bank                   |   | $                            | 237    |   |                    | $      | 22,763 |   |   | $ | - |   |   | $ | - |   |
| Federal      Farm Credit Bank                 |   |                         | 14     |   |                    |   | 1,027 |   |   |   | - |   |   |   | - |   |
| Residential      mortgage-backed:             |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                         | 325    |   |                    |   | 18,468 |   |   |   | - |   |   |   | - |   |
| Federal      National Mortgage Association    |   |                         | 109    |   |                    |   | 13,049 |   |   |   | - |   |   |   | - |   |
| Government      National Mortgage Association |   |                         | 115    |   |                    |   | 15,894 |   |   |   | - |   |   |   | - |   |
| Subordinated      note                        |   |                         | 1,771  |   |                    |   | 7,500 |   |   |   | - |   |   |   | - |   |
|                                          |   | $                            | 2,571  |   |                    | $      | 78,701 |   |   | $ | - |   |   | $ | - |   |

----

|                                          |   | Less      Than Twelve Months |   |   | Over      Twelve Months |   |
|-----------------------------------------------|--------|------------------------------|--------|--------|-------------------------|--------|
|                                          |   | Gross                        |   |   |                    |   |   | Gross |   |   |   |   |
|                                          |   | Unrealized                   |   |   | Fair                    |   |   | Unrealized |   |   | Fair |   |
|                                          |   | Losses                       |   |   | Value                   |   |   | Losses |   |   | Value |   |
|                                          |   | (In      thousands)          |   |
| December      31, 2009:                       |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Securities Available for    Sale              |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                         |   |   |                    |   |   |   |   |   |   |   |
| U.S.      Government                          |   | $                            | 8      |   |                    | $      | 15,480 |   |   | $ | - |   |   | $ | - |   |
| Other      government-sponsored enterprises:  |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                         | 26     |   |                    |   | 6,012 |   |   |   | - |   |   |   | - |   |
| Federal      National Mortgage Association    |   |                         | 76     |   |                    |   | 5,727 |   |   |   | - |   |   |   | - |   |
| Federal      Home Loan Bank                   |   |                         | 542    |   |                    |   | 37,681 |   |   |   | - |   |   |   | - |   |
| Federal      Farm Credit Bank                 |   |                         | 1,046  |   |                    |   | 38,698 |   |   |   | 136 |   |   |   | 3,364 |   |
| Residential      mortgage-backed:             |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                         | 88     |   |                    |   | 20,481 |   |   |   | - |   |   |   | - |   |
| Federal      National Mortgage Association    |   |                         | 202    |   |                    |   | 24,193 |   |   |   | - |   |   |   | - |   |
| Government      National Mortgage Association |   |                         | 39     |   |                    |   | 9,369 |   |   |   | - |   |   |   | - |   |
| Municipal      bonds                          |   |                         | 15     |   |                    |   | 968 |   |   |   | 109 |   |   |   | 7,132 |   |
| Total      debt securities                    |   |                         | 2,042  |   |                    |   | 158,609 |   |   |   | 245 |   |   |   | 10,496 |   |
| Marketable      equity securities:            |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                      |   |                         | 87     |   |                    |   | 692 |   |   |   | - |   |   |   | - |   |
| Mutual      funds                             |   |                         | 3      |   |                    |   | 599 |   |   |   | - |   |   |   | - |   |
| Total      marketable equity securities       |   |                         | 90     |   |                    |   | 1,291 |   |   |   | - |   |   |   | - |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | $                            | 2,132  |   |                    | $      | 159,900 |   |   | $ | 245 |   |   | $ | 10,496 |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held to Maturity                   |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Other      government-sponsored enterprises:  |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   | $                            | 17     |   |                    | $      | 983 |   |   | $ | - |   |   | $ | - |   |
| Federal      Home Loan Bank                   |   |                         | 776    |   |                    |   | 48,997 |   |   |   | - |   |   |   | - |   |
| Federal      Farm Credit Bank                 |   |                         | 89     |   |                    |   | 1,953 |   |   |   | - |   |   |   | - |   |
| Residential      mortgage-backed:             |   |                         |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                         | 440    |   |                    |   | 18,801 |   |   |   | - |   |   |   | - |   |
| Federal      National Mortgage Association    |   |                         | 132    |   |                    |   | 10,947 |   |   |   | - |   |   |   | - |   |
| Government      National Mortgage Association |   |                         | 134    |   |                    |   | 14,828 |   |   |   | - |   |   |   | - |   |
| Subordinated      note                        |   |                         | 751    |   |                    |   | 8,500 |   |   |   | - |   |   |   | - |   |
|                                          |   | $                            | 2,339  |   |                    | $      | 105,009 |   |   | $ | - |   |   | $ | - |   |

----

| 4. | Fair      Value of Assets and Liabilities |
|----|-------------------------------------------|

----

----

----

|                                          |   | March      31, 2010 |   |
|-----------------------------------------------|--------|---------------------|--------|
|                                          |   | Level      1        |   |   | Level      2 |   |   | Level      3 |   |   | Fair      Value |   |
|                                          |   | (In      thousands) |   |
| Assets                                        |   |                |   |   |   |   |   |   |   |   |   |   |
| Securities Available for    Sale:             |   |                |   |   |   |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government                          |   | $                   | -      |   |   | $ | 15,499 |   |   | $ | - |   |   | $ | 15,499 |   |
| Other      government-sponsored enterprises:  |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | -      |   |   |   | 6,009 |   |   |   | - |   |   |   | 6,009 |   |
| Federal      National Mortgage Association    |   |                | -      |   |   |   | 5,755 |   |   |   | - |   |   |   | 5,755 |   |
| Federal      Home Loan Bank                   |   |                | -      |   |   |   | 96,382 |   |   |   | - |   |   |   | 96,382 |   |
| Federal      Farm Credit Bank                 |   |                | -      |   |   |   | 68,417 |   |   |   | - |   |   |   | 68,417 |   |
| Residential      mortgage-backed:             |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                | -      |   |   |   | 81,422 |   |   |   | - |   |   |   | 81,422 |   |
| Federal      National Mortgage Association    |   |                | -      |   |   |   | 109,657 |   |   |   | - |   |   |   | 109,657 |   |
| Government      National Mortgage Association |   |                | -      |   |   |   | 55,478 |   |   |   | - |   |   |   | 55,478 |   |
| Municipal      bonds                          |   |                | -      |   |   |   | 25,955 |   |   |   | - |   |   |   | 25,955 |   |
| Other      bonds and notes                    |   |                | -      |   |   |   | 250 |   |   |   | - |   |   |   | 250 |   |
| Marketable      equity securities:            |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                      |   |                | -      |   |   |   | - |   |   |   | 584 |   |   |   | 584 |   |
| Mutual      funds                             |   |                | -      |   |   |   | 610 |   |   |   | - |   |   |   | 610 |   |
| Other:                                        |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate products                   |   |                | -      |   |   |   | 1,223 |   |   |   | - |   |   |   | 1,223 |   |
| Total      assets                             |   | $                   | -      |   |   | $ | 466,657 |   |   | $ | 584 |   |   | $ | 467,241 |   |
|                                          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate products                   |   | $                   | -      |   |   | $ | 1,232 |   |   | $ | - |   |   | $ | 1,232 |   |

----

|                                          |   | December      31, 2009 |   |
|-----------------------------------------------|--------|------------------------|--------|
|                                          |   | Level      1           |   |   | Level      2 |   |   | Level      3 |   |   | Fair      Value |   |
|                                          |   | (In      thousands)    |   |
| Assets                                        |   |                   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for    Sale:             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Debt      securities:                         |   |                   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government                          |   | $                      | -      |   |   | $ | 15,480 |   |   | $ | - |   |   | $ | 15,480 |   |
| Other      government-sponsored enterprises:  |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                   | -      |   |   |   | 6,012 |   |   |   | - |   |   |   | 6,012 |   |
| Federal      National Mortgage Association    |   |                   | -      |   |   |   | 7,729 |   |   |   | - |   |   |   | 7,729 |   |
| Federal      Home Loan Bank                   |   |                   | -      |   |   |   | 107,554 |   |   |   | - |   |   |   | 107,554 |   |
| Federal      Farm Credit Bank                 |   |                   | -      |   |   |   | 56,838 |   |   |   | - |   |   |   | 56,838 |   |
| Residential      mortgage-backed:             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Home Loan Mortgage Corporation   |   |                   | -      |   |   |   | 86,421 |   |   |   | - |   |   |   | 86,421 |   |
| Federal      National Mortgage Association    |   |                   | -      |   |   |   | 113,941 |   |   |   | - |   |   |   | 113,941 |   |
| Government      National Mortgage Association |   |                   | -      |   |   |   | 61,215 |   |   |   | - |   |   |   | 61,215 |   |
| Municipal      bonds                          |   |                   | -      |   |   |   | 24,364 |   |   |   | - |   |   |   | 24,364 |   |
| Other      bonds and notes                    |   |                   | -      |   |   |   | 250 |   |   |   | - |   |   |   | 250 |   |
| Marketable      equity securities:            |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                      |   |                   | -      |   |   |   | - |   |   |   | 692 |   |   |   | 692 |   |
| Mutual      funds                             |   |                   | -      |   |   |   | 599 |   |   |   | - |   |   |   | 599 |   |
| Other      equities                           |   |                   | 5      |   |   |   | - |   |   |   | - |   |   |   | 5 |   |
| Other:                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate products                   |   |                   | -      |   |   |   | 1,285 |   |   |   | - |   |   |   | 1,285 |   |
| Total      assets                             |   | $                      | 5      |   |   | $ | 481,688 |   |   | $ | 692 |   |   | $ | 482,385 |   |
|                                          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate products                   |   | $                      | -      |   |   | $ | 1,291 |   |   | $ | - |   |   | $ | 1,291 |   |

----

|                                                                   |   | Assets                             |   |
|------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                   |   | Securities      Available for Sale |   |
|                                                                   |   | (In      thousands)                |   |
| Balance      as of December 31, 2008                                   |   | $                                  | -      |   |
|                                                                   |   |                               |   |   |
| Total      unrealized losses included in other comprehensive income    |   |                               | -      |   |
| Purchases                                                              |   |                               | -      |   |
| Balance      as of March 31, 2009                                      |   | $                                  | -      |   |
|                                                                   |   |                               |   |   |
| Change      in unrealized losses relating to instruments still held at |   |                               |   |   |
| March      31, 2009                                                    |   | $                                  | -      |   |
|                                                                   |   |                               |   |   |
|                                                                   |   |                               |   |   |
| Balance      as of December 31, 2009                                   |   | $                                  | 692    |   |
|                                                                   |   |                               |   |   |
| Total      unrealized losses included in other comprehensive income    |   |                               | (108   | ) |
| Purchases                                                              |   |                               | -      |   |
| Balance      as of March 31, 2010                                      |   | $                                  | 584    |   |
|                                                                   |   |                               |   |   |
| Change      in unrealized losses relating to instruments still held at |   |                               |   |   |
| March      31, 2010                                                    |   | $                                  | (108   | ) |

|                         |   |                |   |   |         |   |   |         |   |   | Quarter        |   |
|------------------------------|--------|---------------------|--------|--------|--------------|--------|--------|--------------|--------|--------|----------------|--------|
|                         |   |                |   |   |         |   |   |         |   |   | Ended          |   |
|                         |   |                |   |   |         |   |   |         |   |   | March      31, |   |
|                         |   | March      31, 2010 |   |   | 2010         |   |
|                         |   |                |   |   |         |   |   |         |   |   | Total          |   |
|                         |   | Level      1        |   |   | Level      2 |   |   | Level      3 |   |   | Losses         |   |
|                         |   | (In      thousands) |   |
| Assets                       |   |                |   |   |         |   |   |         |   |   |           |   |
| Other      real estate owned |   | $                   | -      |   |         | $      | -      |         |   | $      | 1,271          |   |   | $ | - |   |
| Impaired      loans          |   |                | -      |   |         |   | -      |         |   |   | 677            |   |   |   | 677 |   |
|                         |   | $                   | -      |   |         | $      | -      |         |   | $      | 1,948          |   |   | $ | 677 |   |

----

|                         |   |                   |   |   |         |   |   |         |   |   | Quarter        |   |
|------------------------------|--------|------------------------|--------|--------|--------------|--------|--------|--------------|--------|--------|----------------|--------|
|                         |   |                   |   |   |         |   |   |         |   |   | Ended          |   |
|                         |   |                   |   |   |         |   |   |         |   |   | March      31, |   |
|                         |   | December      31, 2009 |   |   | 2009         |   |
|                         |   |                   |   |   |         |   |   |         |   |   | Total          |   |
|                         |   | Level      1           |   |   | Level      2 |   |   | Level      3 |   |   | Losses         |   |
|                         |   | (In      thousands)    |   |
| Assets                       |   |                   |   |   |         |   |   |         |   |   |           |   |
| Other      real estate owned |   | $                      | -      |   |         | $      | -      |         |   | $      | 1,427          |   |   | $ | - |   |
| Impaired      loans          |   |                   | -      |   |         |   | -      |         |   |   | 653            |   |   |   | 135 |   |
|                         |   | $                      | -      |   |         | $      | -      |         |   | $      | 2,080          |   |   | $ | 135 |   |

----

|                                    |   | March      31, 2010 |      |   | December      31, 2009 |   |
|-----------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|
|                                    |   | Carrying            |      |   | Fair                   |   |   | Carrying |   |   | Fair |   |
|                                    |   | Amount              |      |   | Value                  |   |   | Amount |   |   | Value |   |
|                                    |   | (In      thousands) |      |
| Financial      assets:                  |   |                |      |   |                   |   |   |   |   |   |   |   |
| Cash      and cash equivalents          |   | $                   | 64,257    |   |                   | $      | 64,257 |   |   | $ | 71,757 |   |   | $ | 71,757 |   |
| Certificates      of deposit            |   |                | -         |   |                   |   | - |   |   |   | 10,679 |   |   |   | 10,679 |   |
| Securities      available for sale      |   |                | 466,018   |   |                   |   | 466,018 |   |   |   | 481,100 |   |   |   | 481,100 |   |
| Securities      held to maturity        |   |                | 108,879   |   |                   |   | 106,386 |   |   |   | 110,932 |   |   |   | 108,697 |   |
| Loans      and loans held for sale, net |   |                | 1,644,383 |   |                   |   | 1,650,424 |   |   |   | 1,653,413 |   |   |   | 1,660,176 |   |
| Restricted      stock                   |   |                | 18,726    |   |                   |   | 18,726 |   |   |   | 18,726 |   |   |   | 18,726 |   |
| Accrued      interest receivable        |   |                | 9,442     |   |                   |   | 9,442 |   |   |   | 9,998 |   |   |   | 9,998 |   |
|                                    |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:             |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                               |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                    |   |                | 222,189   |   |                   |   | 222,189 |   |   |   | 224,776 |   |   |   | 224,776 |   |
| Savings      and NOW accounts           |   |                | 405,768   |   |                   |   | 405,768 |   |   |   | 376,975 |   |   |   | 376,975 |   |
| Money      market accounts              |   |                | 667,640   |   |                   |   | 667,640 |   |   |   | 621,683 |   |   |   | 621,683 |   |
| Term      certificates                  |   |                | 567,766   |   |                   |   | 571,684 |   |   |   | 542,369 |   |   |   | 545,740 |   |
| Short-term      borrowings              |   |                | 39,730    |   |                   |   | 39,730 |   |   |   | 172,829 |   |   |   | 172,829 |   |
| Long-term      debt                     |   |                | 210,436   |   |                   |   | 209,521 |   |   |   | 218,475 |   |   |   | 222,122 |   |
| Subordinated      debt                  |   |                | 29,965    |   |                   |   | 20,882 |   |   |   | 29,965 |   |   |   | 12,402 |   |
| Accrued      interest payable           |   |                | 1,801     |   |                   |   | 1,801 |   |   |   | 1,838 |   |   |   | 1,838 |   |
|                                    |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| On-balance      sheet derivative        |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| financial      instruments:             |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate products:            |   |                |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                  |   |                | 1,223     |   |                   |   | 1,223 |   |   |   | 1,285 |   |   |   | 1,285 |   |
| Liabilities                             |   |                | 1,232     |   |                   |   | 1,232 |   |   |   | 1,291 |   |   |   | 1,291 |   |

| 5. | Goodwill      and Intangible Assets |
|----|-------------------------------------|

----

|                                        |   |                |   |   |         |   |   |     |   | Weighted     |
|---------------------------------------------|--------|---------------------|--------|--------|--------------|--------|--------|----------|--------|--------------|
|                                        |   |                |   |   |         |   |   | Net      |   | Average      |
|                                        |   | Gross      Carrying |   |   | Accumulated  |   |   | Carrying |   | Amortization |
|                                        |   | Amount              |   |   | Amortization |   |   | Amount   |   | Period       |
|                                        |   | (In      thousands) |   |   |
| March 31, 2010:                             |   |                |   |   |         |   |   |     |   |         |
| Revere      acquisition, September 26, 2001 |   | $                   | 1,603  |   |         | $      | (1,395 | )        |   | $            | 208 |   | 10      years |
| Beverly      acquisition, October 30, 2009  |   |                | 11,561 |   |         |   | (876   | )        |   |         | 10,685 |   | 10      years |
|                                        |   | $                   | 13,164 |   |         | $      | (2,271 | )        |   | $            | 10,893 |   |   |
|                                        |   |                |   |   |         |   |   |     |   |         |   |   |   |
| December 31, 2009:                          |   |                |   |   |         |   |   |     |   |         |   |   |   |
| Revere      acquisition, September 26, 2001 |   | $                   | 1,603  |   |         | $      | (1,366 | )        |   | $            | 237 |   | 10      years |
| Beverly      acquisition, October 30, 2009  |   |                | 11,561 |   |         |   | (350   | )        |   |         | 11,211 |   | 10      years |
|                                        |   | $                   | 13,164 |   |         | $      | (1,716 | )        |   | $            | 11,448 |   |   |

| Aggregate      Amortization Expense:                                  |   |   | Amount              |   |
|-----------------------------------------------------------------------|--------|--------|---------------------|--------|
|                                                                  |   |   | (In      thousands) |   |
|                                                                  |   |   |                |   |
| For      the three months ended March 31, 2010                        |   |   | $                   | 555    |   |
|                                                                  |   |   |                |   |   |
| Estimated      Amortization Expense for the Years Ending December 31, |   |   | Amount              |   |
|                                                                  |   |   | (In      thousands) |   |
|                                                                  |   |   |                |   |   |
| 2010                                                                  |   |   | $                   | 2,186  |   |
| 2011                                                                  |   |   |                | 1,976  |   |
| 2012                                                                  |   |   |                | 1,647  |   |
| 2013                                                                  |   |   |                | 1,436  |   |
| 2014                                                                  |   |   |                | 1,226  |   |
| Thereafter                                                            |   |   |                | 2,977  |   |
|                                                                  |   |   | $                   | 11,448 |   |

----

| 6. | Securities      Sold Under Agreements to Repurchase |
|----|-----------------------------------------------------|

| 7. | Post      Retirement Benefits |
|----|-------------------------------|

|                                |   | Three      Months    |   |
|-------------------------------------|--------|----------------------|--------|
|                                |   | Ended      March 31, |   |
|                                |   | 2010                 |   |   | 2009 |   |
|                                |   | (In      thousands)  |   |
| Interest      cost                  |   | $                    | 124    |   |   | $ | - |   |
| Expected      return on plan assets |   |                 | (128   | ) |   |   | - |   |
| Unrecognized      actuarial loss    |   |                 | -      |   |   |   | - |   |
| Net      pension benefit            |   | $                    | (4     | ) |   | $ | - |   |

|                             |   | Three      Months    |   |
|----------------------------------|--------|----------------------|--------|
|                             |   | Ended      March 31, |   |
|                             |   | 2010                 |   |   | 2009 |   |
|                             |   | (In      thousands)  |   |
| Interest      cost               |   | $                    | 15     |   |   | $ | - |   |
| Unrecognized      actuarial loss |   |                 | -      |   |   |   | - |   |
| Net      pension expense         |   | $                    | 15     |   |   | $ | - |   |

----

| 8. | Earnings      Per Share |
|----|-------------------------|

|                                                       |   | Three      Months Ended March 31, |       |
|------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                       |   | 2010                              |       |   | 2009 |   |
|                                                       |   |                              |       |
| Average      number of common shares issued                |   |                              | 22,316,125 |   |   |   | 17,842,500 |   |
| Less:  Average      treasury shares              |   |                              | (614,193   | ) |   |   | (116,228 | ) |
| Less:  Average      unallocated ESOP shares      |   |                              | (1,278,514 | ) |   |   | (1,349,884 | ) |
| Average      number of common shares outstanding used to   |   |                              |       |   |   |   |   |   |
| calculate      basic earnings per common share             |   |                              | 20,423,418 |   |   |   | 16,376,388 |   |
| Effect      of dilutive unvested stock awards              |   |                              | -          |   |   |   | - |   |
| Average      number of common shares outstanding used to   |   |                              |       |   |   |   |   |   |
| calculate      basic and diluted earnings per common share |   |                              | 20,423,418 |   |   |   | 16,376,388 |   |

| 9. | Dividend      Declared |
|----|------------------------|

| 10. | Recent      Accounting Pronouncements |
|-----|---------------------------------------|

----

|   | · | statements      of our goals, intentions andexpectations; |
|--------|--------|-----------------------------------------------------------|

|   | · | statements      regarding our business plans and prospects and growth and operating      strategies; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | statements      regarding the asset quality of our loan and investment portfolios;      and |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | estimates      of our risks and future costs andbenefits. |
|--------|--------|-----------------------------------------------------------|

|   | · | significantly      increased competition among depository and other financial      institutions; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | inflation      and changes in the interest rate environment that reduce our margins or      reduce the fair value of financialinstruments; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | general      economic conditions, whether national or regional, and conditions in the      real estate markets that could affect the demand for our loans and other      products and ability of borrowers to repay loans, lead to further declines      in credit quality and increased loan losses, and continue to negatively      affect the value and salability of the real estate that is the collateral      for many of our loans or that we owndirectly; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changing      business, banking, or regulatory conditions or policies, or new      legislation affecting the financial services industry that could lead to      changes in the competitive balance among financial institutions,      restrictions on bank activities, changes in costs (including deposit      insurance premiums), increased regulatory scrutiny, declines in consumer      confidence in depository institutions, or changes in the secondary market      for bank loan and other products; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | our      ability to enter new markets successfully and take advantage of growth      opportunities; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | changes      in consumer spending, borrowing and savings  habits; |
|--------|--------|-------------------------------------------------------------------|

|   | · | changes      in accounting policies and practices, as may be adopted by the bank      regulatory agencies and the Financial Accounting Standards Board (“FASB”);      and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in our organization, compensation and benefits  plans. |
|--------|--------|---------------------------------------------------------------------|

----

----

|                           |   | March      31, 2010         |      |   | December      31, 2009 |   |
|--------------------------------|--------|-----------------------------|-----------|--------|------------------------|--------|
|                           |   | Amount                      |      |   | Percent                |   |   | Amount |   |   | Percent |   |
|                           |   | (Dollars      in thousands) |      |
| Real      estate mortgages:    |   |                        |      |   |                   |   |   |   |   |   |   |   |
| Construction                   |   | $                           | 120,564   |   |                   |   | 7.3 | % |   | $ | 125,952 |   |   |   | 7.5 | % |
| Residential                    |   |                        | 302,255   |   |                   |   | 18.2 |   |   |   | 290,894 |   |   |   | 17.4 |   |
| Commercial                     |   |                        | 420,336   |   |                   |   | 25.3 |   |   |   | 473,075 |   |   |   | 28.4 |   |
| Home      equity               |   |                        | 86,287    |   |                   |   | 5.1 |   |   |   | 86,269 |   |   |   | 5.2 |   |
| C&I                        |   |                        | 729,046   |   |                   |   | 43.9 |   |   |   | 687,808 |   |   |   | 41.2 |   |
| Consumer                       |   |                        | 3,499     |   |                   |   | 0.2 |   |   |   | 4,523 |   |   |   | 0.3 |   |
| Total      loans               |   |                        | 1,661,987 |   |                   |   | 100.0 | % |   |   | 1,668,521 |   |   |   | 100.0 | % |
| Allowance      for loan losses |   |                        | (15,509   | )      |                   |   |   |   |   |   | (14,699 | ) |   |   |   |   |
| Net      deferred loan fees    |   |                        | (2,310    | )      |                   |   |   |   |   |   | (2,357 | ) |   |   |   |   |
| Loans,      net                |   | $                           | 1,644,168 |   |                   |   |   |   |   | $ | 1,651,465 |   |   |   |   |   |

|                                               |   |   | March      31,              |   |   | December      31, |   |
|----------------------------------------------------|--------|--------|-----------------------------|--------|--------|-------------------|--------|
|                                               |   |   | 2010                        |   |   | 2009              |   |
|                                               |   |   | (Dollars      in thousands) |   |
| Non-accrual      loans:                            |   |   |                        |   |   |              |   |
| Real      estate mortgages:                        |   |   |                        |   |   |              |   |
| Construction                                       |   |   | $                           | 230    |   |              | $      | 935 |   |
| Residential      (1)                               |   |   |                        | 4,591  |   |              |   | 3,332 |   |
| Commercial                                         |   |   |                        | 888    |   |              |   | 926 |   |
| Home      equity                                   |   |   |                        | 1,302  |   |              |   | 1,139 |   |
| Total      real estate mortgages                   |   |   |                        | 7,011  |   |              |   | 6,332 |   |
| C&I                                            |   |   |                        | 2,896  |   |              |   | 2,286 |   |
| Consumer                                           |   |   |                        | 9      |   |              |   | 6 |   |
| Total      non-accrual loans (2)                   |   |   | $                           | 9,916  |   |              | $      | 8,624 |   |
| Non-performing      accrual loans (3)              |   |   | $                           | -      |   |              | $      | 1,495 |   |
| Restructured      loans (4)                        |   |   | $                           | 5,624  |   |              | $      | 7,700 |   |
| Total      non-performing loans                    |   |   |                        | 15,540 |   |              | $      | 17,819 |   |
| Other      real estate owned                       |   |   |                        | 1,271  |   |              |   | 1,427 |   |
| Total      non-performing assets                   |   |   | $                           | 16,811 |   |              | $      | 19,246 |   |
| Total      non-performing loans to total loans (5) |   |   |                        | 0.93   | %      |              |   | 1.01 | % |
| Total      non-performing loans to total assets    |   |   |                        | 0.63   | %      |              |   | 0.71 | % |
| Total      non-performing assets to total assets   |   |   |                        | 0.68   | %      |              |   | 0.77 | % |

|   | (1) | Included      in non-accrual residential loans is one troubled debt restructure in the      amount of $424,000. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | (2) | All      loans on non-accrual status are considered  non-performing. |
|--------|-----|----------------------------------------------------------------------|

|   | (3) | At      December 31, 2009, non-performing accrual loans consist of six loans      adequately secured and in the process of  collection. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Restructured      loans that have been performing in accordance with their modified terms      for a period of less than 12 months are considered      non-performing. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Total      loans includes loans held forsale. |
|--------|-----|-----------------------------------------------|

----

----

|                                           |   |   | At      or For the Three    |      |
|------------------------------------------------|--------|--------|-----------------------------|-----------|
|                                           |   |   | Months      Ended March 31, |      |
|                                           |   |   | 2010                        |      |   | 2009 |   |
|                                           |   |   | (Dollars      in thousands) |      |
|                                           |   |   |                        |      |   |   |   |
| Allowance      balance at beginning of period  |   |   | $                           | 14,699    |   |   | $ | 12,133 |   |
| Provision      for loan losses                 |   |   |                        | 1,200     |   |   |   | 760 |   |
| Charge-offs:                                   |   |   |                        |      |   |   |   |   |   |
| Real      estate mortgages:                    |   |   |                        |      |   |   |   |   |   |
| Construction                                   |   |   |                        | 331       |   |   |   | 241 |   |
| Residential                                    |   |   |                        | -         |   |   |   | - |   |
| Commercial                                     |   |   |                        | -         |   |   |   | - |   |
| Home      equity                               |   |   |                        | -         |   |   |   | - |   |
| Total      real estate mortgages               |   |   |                        | 331       |   |   |   | 241 |   |
| C&I                                        |   |   |                        | 35        |   |   |   | 106 |   |
| Consumer                                       |   |   |                        | 29        |   |   |   | 35 |   |
| Total      charge-offs                         |   |   |                        | 395       |   |   |   | 382 |   |
| Recoveries:                                    |   |   |                        |      |   |   |   |   |   |
| Real      estate mortgages:                    |   |   |                        |      |   |   |   |   |   |
| Construction                                   |   |   |                        | -         |   |   |   | - |   |
| Residential                                    |   |   |                        | -         |   |   |   | - |   |
| Commercial                                     |   |   |                        | -         |   |   |   | - |   |
| Home      equity                               |   |   |                        | -         |   |   |   | - |   |
| Total      real estate mortgages               |   |   |                        | -         |   |   |   | - |   |
| C&I                                        |   |   |                        | 5         |   |   |   | 20 |   |
| Consumer                                       |   |   |                        | -         |   |   |   | 14 |   |
| Total      recoveries                          |   |   |                        | 5         |   |   |   | 34 |   |
| Net      charge-offs                           |   |   |                        | 390       |   |   |   | 348 |   |
| Allowance      balance at end of period        |   |   | $                           | 15,509    |   |   | $ | 12,545 |   |
|                                           |   |   |                        |      |   |   |   |   |   |
| Total      loans outstanding (1)               |   |   | $                           | 1,662,202 |   |   | $ | 1,149,249 |   |
| Average      loans outstanding                 |   |   | $                           | 1,662,729 |   |   | $ | 1,126,097 |   |
|                                           |   |   |                        |      |   |   |   |   |   |
| Allowance      for loan losses as a percent of |   |   |                        |      |   |   |   |   |   |
| total      loans outstanding                   |   |   |                        | 0.93      | % |   |   | 1.09 | % |
| Net      loans charged off as a percent of     |   |   |                        |      |   |   |   |   |   |
| average      loans outstanding (annualized)    |   |   |                        | 0.09      | % |   |   | 0.12 | % |
| Allowance      for loan losses to non-         |   |   |                        |      |   |   |   |   |   |
| performing      loans                          |   |   |                        | 99.80     | % |   |   | 149.54 | % |

|   | (1)  Includes      loans held for sale. |
|--------|---------------------------------------------------|

----

|                                 |   | March      31, 2010         |      |   | December      31, 2009 |   |
|--------------------------------------|--------|-----------------------------|-----------|--------|------------------------|--------|
|                                 |   | Amount                      |      |   | Percent                |   |   | Amount |   |   | Percent |   |
|                                 |   | (Dollars      in thousands) |      |
|                                 |   |                        |      |   |                   |   |   |   |   |   |   |   |
| Demand      deposits                 |   | $                           | 222,189   |   |                   |   | 11.9 | % |   | $ | 224,776 |   |   |   | 12.7 | % |
| Savings      and NOW accounts        |   |                        | 405,768   |   |                   |   | 21.8 |   |   |   | 376,975 |   |   |   | 21.4 |   |
| Money      market accounts           |   |                        | 667,640   |   |                   |   | 35.8 |   |   |   | 621,683 |   |   |   | 35.2 |   |
| Total      non-certificate accounts  |   |                        | 1,295,597 |   |                   |   | 69.5 |   |   |   | 1,223,434 |   |   |   | 69.3 |   |
| Term      certificates over $100,000 |   |                        | 334,227   |   |                   |   | 18.0 |   |   |   | 314,097 |   |   |   | 17.8 |   |
| Other      term certificates         |   |                        | 233,539   |   |                   |   | 12.5 |   |   |   | 228,272 |   |   |   | 12.9 |   |
| Total      certificate accounts      |   |                        | 567,766   |   |                   |   | 30.5 |   |   |   | 542,369 |   |   |   | 30.7 |   |
| Total      deposits                  |   | $                           | 1,863,363 |   |                   |   | 100.0 | % |   | $ | 1,765,803 |   |   |   | 100.0 | % |

----

|                             |   | March      31,      |    |   | December      31, |   |
|----------------------------------|--------|---------------------|---------|--------|-------------------|--------|
|                             |   | 2010                |    |   | 2009              |   |
|                             |   | (In      thousands) |    |
| Short-term      borrowings:      |   |                |    |   |              |   |
| Repurchase      agreements       |   | $                   | 39,730  |   |              | $      | 52,829 |   |
| FHLB      advances               |   |                | -       |   |              |   | 120,000 |   |
| Total      short-term borrowings |   |                | 39,730  |   |              |   | 172,829 |   |
|                             |   |                |    |   |              |   |   |   |
| Long-term      debt:             |   |                |    |   |              |   |   |   |
| FHLB      advances               |   |                | 210,436 |   |              |   | 218,475 |   |
| Total      borrowed funds        |   | $                   | 250,166 |   |              | $      | 391,304 |   |

----

----

|                                                                                                                                                |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|---------|----------|--------|--------|---------------|--------|--------|-------------|--------|--------|----------|-----------|---------|---------------|--------|
|                                                                                                                                                |   | Three      Months Ended March 31, |      |
|                                                                                                                                                |   | 2010                              |      |    | 2009     |   |
|                                                                                                                                                |   | Average                           |      |    | Interest |   |   | Average       |   |   | Average     |   |   | Interest |      |    | Average       |   |
|                                                                                                                                                |   | Outstanding                       |      |    | Earned/  |   |   | Yield/        |   |   | Outstanding |   |   | Earned/  |      |    | Yield/        |   |
|                                                                                                                                                |   | Balance                           |      |    | Paid     |   |   | Rate      (1) |   |   | Balance     |   |   | Paid     |      |    | Rate      (1) |   |
|                                                                                                                                                |   | (Dollars      in thousands)       |      |
|  Interest-earning      assets:                                                                                                                 |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |
|  Interest-earning      cash equivalents and                                                                                                    |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |
| certificates      of deposit                                                                                                                        |   | $                                 | 27,052    |    |     | $      | 47     |          |   |   | 0.69        | %      |   | $        | 27,475    |    |          | $      | 97 |   |   |   | 1.41 | % |
|  Debt      securities: (2)                                                                                                                     |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  U.S.      Government                                                                                                                          |   |                              | 15,493    |    |     |   | 6      |          |   |   | 0.15        |   |   |     | 1,538     |    |          |   | 11 |   |   |   | 2.86 |   |
|  Gov't-sponsored      enterprises                                                                                                              |   |                              | 218,927   |    |     |   | 1,943  |          |   |   | 3.55        |   |   |     | 198,460   |    |          |   | 2,439 |   |   |   | 4.92 |   |
|  Mortgage-backed                                                                                                                               |   |                              | 294,141   |    |     |   | 3,129  |          |   |   | 4.26        |   |   |     | 243,959   |    |          |   | 2,970 |   |   |   | 4.87 |   |
|  Municipal      bonds                                                                                                                          |   |                              | 24,417    |    |     |   | 242    |          |   |   | 3.96        |   |   |     | 19,960    |    |          |   | 203 |   |   |   | 4.07 |   |
|  Other                                                                                                                                         |   |                              | 10,310    |    |     |   | 303    |          |   |   | 11.76       |   |   |     | 250       |    |          |   | 2 |   |   |   | 3.20 |   |
|  Restricted      stock                                                                                                                         |   |                              | 18,951    |    |     |   | -      |          |   |   | -           |   |   |     | 14,626    |    |          |   | - |   |   |   | - |   |
|  Real      estate mortgages (3)                                                                                                                |   |                              | 967,439   |    |     |   | 13,650 |          |   |   | 5.64        |   |   |     | 609,640   |    |          |   | 8,485 |   |   |   | 5.57 |   |
|  C&I      loans (3)                                                                                                                        |   |                              | 567,021   |    |     |   | 8,215  |          |   |   | 5.80        |   |   |     | 436,752   |    |          |   | 6,225 |   |   |   | 5.70 |   |
|  IRBs      (3)                                                                                                                                 |   |                              | 124,625   |    |     |   | 1,468  |          |   |   | 4.71        |   |   |     | 74,833    |    |          |   | 890 |   |   |   | 4.76 |   |
|  Consumer      loans  (3)                                                                                                            |   |                              | 3,644     |    |     |   | 56     |          |   |   | 6.15        |   |   |     | 4,872     |    |          |   | 107 |   |   |   | 8.78 |   |
|  Total      interest-earning assets                                                                                                            |   |                              | 2,272,020 |    |     |   | 29,059 |          |   |   | 5.12        |   |   |     | 1,632,365 |    |          |   | 21,429 |   |   |   | 5.25 |   |
|  Allowance      for loan losses                                                                                                                |   |                              | (15,083   | )       |     |   |   |          |   |   |        |   |   |     | (12,341   | )       |          |   |   |   |   |   |   |   |
|  Total      earning assets less allowance                                                                                                      |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|   for      loan losses                                                                                                                    |   |                              | 2,256,937 |    |     |   |   |          |   |   |        |   |   |     | 1,620,024 |    |          |   |   |   |   |   |   |   |
|  Non-interest-earning      assets                                                                                                              |   |                              | 206,360   |    |     |   |   |          |   |   |        |   |   |     | 100,126   |    |          |   |   |   |   |   |   |   |
|  Total      assets                                                                                                                             |   | $                                 | 2,463,297 |    |     |   |   |          |   |   |        |   |   | $        | 1,720,150 |    |          |   |   |   |   |   |   |   |
|                                                                                                                                                |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  Interest-bearing      liabilities:                                                                                                            |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  Deposits:                                                                                                                                     |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  Savings      and NOW accounts                                                                                                                 |   | $                                 | 396,621   |    |     |   | 1,053  |          |   |   | 1.06        |   |   | $        | 185,714   |    |          |   | 548 |   |   |   | 1.18 |   |
|  Money      market accounts                                                                                                                    |   |                              | 653,047   |    |     |   | 2,255  |          |   |   | 1.38        |   |   |     | 466,267   |    |          |   | 2,923 |   |   |   | 2.51 |   |
|  Term      certificates                                                                                                                        |   |                              | 558,538   |    |     |   | 2,597  |          |   |   | 1.86        |   |   |     | 379,904   |    |          |   | 3,027 |   |   |   | 3.19 |   |
|  Total      deposits                                                                                                                           |   |                              | 1,608,206 |    |     |   | 5,905  |          |   |   | 1.47        |   |   |     | 1,031,885 |    |          |   | 6,498 |   |   |   | 2.52 |   |
|  Borrowed      funds:                                                                                                                          |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  Short-term      borrowings                                                                                                                    |   |                              | 86,494    |    |     |   | 96     |          |   |   | 0.44        |   |   |     | 128,388   |    |          |   | 128 |   |   |   | 0.40 |   |
|  Long-term      debt                                                                                                                           |   |                              | 216,992   |    |     |   | 1,835  |          |   |   | 3.38        |   |   |     | 162,781   |    |          |   | 1,789 |   |   |   | 4.40 |   |
|  Subordinated      debt                                                                                                                        |   |                              | 29,965    |    |     |   | 442    |          |   |   | 5.90        |   |   |     | 29,965    |    |          |   | 533 |   |   |   | 7.11 |   |
|  Total      interest-bearing liabilities                                                                                                       |   |                              | 1,941,657 |    |     |   | 8,278  |          |   |   | 1.71        |   |   |     | 1,353,019 |    |          |   | 8,948 |   |   |   | 2.65 |   |
|  Non-interest-bearing      deposits                                                                                                            |   |                              | 213,156   |    |     |   |   |          |   |   |        |   |   |     | 124,656   |    |          |   |   |   |   |   |   |   |
| Other      non-interest-bearing liabilities                                                                                                         |   |                              | 20,612    |    |     |   |   |          |   |   |        |   |   |     | 13,572    |    |          |   |   |   |   |   |   |   |
| Total      non-interest-bearing liabilities                                                                                                         |   |                              | 233,768   |    |     |   |   |          |   |   |        |   |   |     | 138,228   |    |          |   |   |   |   |   |   |   |
|  Total      liabilities                                                                                                                        |   |                              | 2,175,425 |    |     |   |   |          |   |   |        |   |   |     | 1,491,247 |    |          |   |   |   |   |   |   |   |
|  Stockholders'      equity                                                                                                                     |   |                              | 287,872   |    |     |   |   |          |   |   |        |   |   |     | 228,903   |    |          |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                                                                                                     |   | $                                 | 2,463,297 |    |     |   |   |          |   |   |        |   |   | $        | 1,720,150 |    |          |   |   |   |   |   |   |   |
|                                                                                                                                                |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|  Net      interest income                                                                                                                      |   |                              |      |    |     | $      | 20,781 |          |   |   |        |   |   |     |      |    |          | $      | 12,481 |   |   |   |   |   |
|  Net      interest rate spread (4)                                                                                                             |   |                              |      |    |     |   |   |          |   |   | 3.41        | %      |   |     |      |    |          |   |   |   |   |   | 2.60 | % |
|  Net      interest-earning assets (5)                                                                                                          |   | $                                 | 330,363   |    |     |   |   |          |   |   |        |   |   | $        | 279,346   |    |          |   |   |   |   |   |   |   |
|  Net      interest margin (6)                                                                                                                  |   |                              |      |    |     |   |   |          |   |   | 3.66        | %      |   |     |      |    |          |   |   |   |   |   | 3.06 | % |
|  Ratio      of interest-earning assets                                                                                                         |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
| to      total interest-bearing liabilities                                                                                                          |   |                              | 1.17      |  x |     |   |   |          |   |   |        |   |   |     | 1.21      |  x |          |   |   |   |   |   |   |   |
|                                                                                                                                                |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
|                                                                                                                                                |   |                              |      |    |     |   |   |          |   |   |        |   |   |     |      |    |          |   |   |   |   |   |   |   |
| (1)   Yields      are annualized.                                                                                                    |   |                              |      |    |     |   |   |          |
| (2) Average      balances are presented at average amortized cost.                                                                             |   |                              |      |    |     |   |   |          |
| (3) Average      loans include non-accrual loans and are net of average deferred loan      fees/costs.                                         |   |                              |      |    |     |   |   |          |
| (4) Net      interest rate spread represents the difference between the yield on      interest-earning assets and the cost of interest-bearing |   |
| liabilities      for the periods indicated.                                                                                                         |   |                              |      |    |     |   |   |          |
| (5) Net      interest-earning assets represent total interest-earning assets less total      interest-bearing liabilities.                     |   |                              |      |    |     |   |   |          |
| (6) Net      interest margin represents net interest income divided by average total      interest-earning assets.                             |   |                              |      |    |     |   |   |          |

----

|                                                                                                   |   |   | Three      Months Ended March 31, |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------|--------|
|                                                                                                   |   |   | 2010      vs. 2009                |   |
|                                                                                                   |   |   | Increase      (Decrease)          |   |   | Total |   |
|                                                                                                   |   |   | Due      to                       |   |   | Increase |   |
|                                                                                                   |   |   | Volume                            |   |   | Rate |   |   | (Decrease) |   |
|                                                                                                   |   |   | (In      thousands)               |   |
| Interest-earning      assets:                                                                          |   |   |                              |   |   |   |   |   |   |   |
| Interest-earning      cash equivalents and certificates of deposit                                     |   |   | $                                 | (1     | ) |   | $ | (49 | ) |   | $ | (50 | ) |
| Debt      securities (1):                                                                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government                                                                                   |   |   |                              | 100    |   |   |   | (105 | ) |   |   | (5 | ) |
| Gov't-sponsored      enterprises and FHLMC                                                             |   |   |                              | 252    |   |   |   | (748 | ) |   |   | (496 | ) |
| Mortgage-backed                                                                                        |   |   |                              | 611    |   |   |   | (452 | ) |   |   | 159 |   |
| Municipal      bonds                                                                                   |   |   |                              | 45     |   |   |   | (6 | ) |   |   | 39 |   |
| Other                                                                                                  |   |   |                              | 80     |   |   |   | 221 |   |   |   | 301 |   |
| Real      estate mortgages (2)                                                                         |   |   |                              | 4,980  |   |   |   | 185 |   |   |   | 5,165 |   |
| C&I      loans (2)                                                                                 |   |   |                              | 1,857  |   |   |   | 133 |   |   |   | 1,990 |   |
| IRBs      (2)                                                                                          |   |   |                              | 592    |   |   |   | (14 | ) |   |   | 578 |   |
| Consumer      loans (2)                                                                                |   |   |                              | (27    | ) |   |   | (24 | ) |   |   | (51 | ) |
| Total      interest-earning assets                                                                     |   |   |                              | 8,489  |   |   |   | (859 | ) |   |   | 7,630 |   |
|                                                                                                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                     |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Savings      and NOW accounts                                                                          |   |   |                              | 622    |   |   |   | (117 | ) |   |   | 505 |   |
| Money      market accounts                                                                             |   |   |                              | 1,171  |   |   |   | (1,839 | ) |   |   | (668 | ) |
| Term      certificates                                                                                 |   |   |                              | 1,423  |   |   |   | (1,853 | ) |   |   | (430 | ) |
| Total      deposits                                                                                    |   |   |                              | 3,216  |   |   |   | (3,809 | ) |   |   | (593 | ) |
| Borrowed      funds:                                                                                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Short-term      borrowings                                                                             |   |   |                              | (42    | ) |   |   | 10 |   |   |   | (32 | ) |
| Long-term      debt                                                                                    |   |   |                              | 596    |   |   |   | (550 | ) |   |   | 46 |   |
| Subordinated      debt                                                                                 |   |   |                              | -      |   |   |   | (91 | ) |   |   | (91 | ) |
| Total      interest-bearing liabilities                                                                |   |   |                              | 3,770  |   |   |   | (4,440 | ) |   |   | (670 | ) |
|                                                                                                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| Increase      in net interest income                                                                   |   |   | $                                 | 4,719  |   |   | $ | 3,581 |   |   | $ | 8,300 |   |
|                                                                                                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |
| (1) Average balances are      presented at average amortized cost.                                     |   |
|                                                                                                   |   |
| (2)      Average loans include non-accrual loans and are net of average deferred      loan fees/costs. |   |

----

|                                 |   |   | March      31, 2010 |   |
|--------------------------------------|--------|--------|---------------------|--------|
|                                 |   |   |                |   |   | More      than |   |   | More      than |   |   |   |   |   |   |   |
|                                 |   |   |                |   |   | One      Year |   |   | Three      Years |   |   |   |   |   |   |   |
|                                 |   |   | One      Year       |   |   | Through |   |   | Through |   |   | Over |   |   |   |   |
|                                 |   |   | or      Less        |   |   | Three      Years |   |   | Five      Years |   |   | Five      Years |   |   | Total |   |
|                                 |   |   | (In      thousands) |   |
| Federal      Home Loan Bank advances |   |   | $                   | 19,933 |   |   | $ | 48,194 |   |   | $ | 22,714 |   |   | $ | 119,595 |   |   | $ | 210,436 |   |
| Repurchase      agreements (1)       |   |   |                | 39,730 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 39,730 |   |
| Subordinated      debt               |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | 29,965 |   |   |   | 29,965 |   |
| Operating      leases                |   |   |                | 3,249  |   |   |   | 5,825 |   |   |   | 4,714 |   |   |   | 15,286 |   |   |   | 29,074 |   |
| Total      contractual obligations   |   |   | $                   | 62,912 |   |   | $ | 54,019 |   |   | $ | 27,428 |   |   | $ | 164,846 |   |   | $ | 309,205 |   |

|   | (1) | All      repurchase agreements mature on a daily basis and are secured by      obligations of government-sponsoredenterprises. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

|                                            |   |   | March      31, 2010 |    |
|-------------------------------------------------|--------|--------|---------------------|---------|
|                                            |   |   |                |    |   | More      than |   |   | More      than |   |   |   |   |   |   |   |
|                                            |   |   |                |    |   | One      Year |   |   | Three      Years |   |   |   |   |   |   |   |
|                                            |   |   | One      Year       |    |   | Through |   |   | Through |   |   | Over |   |   |   |   |
|                                            |   |   | or      Less        |    |   | Three      Years |   |   | Five      Years |   |   | Five      Years |   |   | Total |   |
|                                            |   |   | (In      thousands) |    |
| Commitments      to grant loans                 |   |   | $                   | 7,383   |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 7,383 |   |
| Unfunded      commitments under lines of credit |   |   |                | 361,240 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 361,240 |   |
| Unadvanced      funds on construction loans     |   |   |                | 13,228  |   |   |   | 12,078 |   |   |   | - |   |   |   | - |   |   |   | 25,306 |   |
| Commercial      and standby letters of credit   |   |   |                | 3,221   |   |   |   | 289 |   |   |   | 44 |   |   |   | - |   |   |   | 3,554 |   |
| Total      contractual obligations              |   |   | $                   | 385,072 |   |   | $ | 12,367 |   |   | $ | 44 |   |   | $ | - |   |   | $ | 397,483 |   |

----

----

|                   |   |   | Net      Portfolio Value(2) |   |    | Net      Interest Income           |   |
|------------------------|--------|--------|-----------------------------|--------|---------|------------------------------------|--------|
|                   |   |   |                        |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                   |   |   |                        |   |    |                               |   |   |   |   |   |   |   |   | Increase      (Decrease) |   |
| Change      in         |   |   | Estimated                   |   |    |                               |   |   |   |   |   | Estimated |   |   | in      Estimated |   |
| Interest      Rates    |   |   | Net      Portfolio          |   |    | Estimated      Increase (Decrease) |   |   | Net      Interest |   |   | Net      Interest Income |   |
| (basis      points)(1) |   |   | Value                       |   |    | Amount                             |   |   | Percent |   |   | Income |   |   | Amount |   |   | Percent |   |
|                   |   |   | (Dollars      in thousands) |   |
|                   |   |   |                        |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                   | +300   | bp     |                        | $      | 187,867 |                               |   | $ | (78,363 | ) |   |   | -29.4 | % |   | $ | 70,511 |   |   | $ | (11,026 | ) |   |   | -13.5 | % |
|                   | +200   | bp     |                        |   | 218,955 |                               |   |   | (47,275 | ) |   |   | -17.8 | % |   |   | 74,737 |   |   |   | (6,800 | ) |   |   | -8.3 | % |
|                   | +100   | bp     |                        |   | 249,879 |                               |   |   | (16,351 | ) |   |   | -6.1 | % |   |   | 78,549 |   |   |   | (2,988 | ) |   |   | -3.7 | % |
|                   | 0      | bp     |                        |   | 266,230 |                               |   |   | - |   |   |   | 0.0 | % |   |   | 81,537 |   |   |   | - |   |   |   | 0.0 | % |

|   | (1) | Assumes      an instantaneous uniform change in interest rates at all      maturities. |
|--------|-----|----------------------------------------------------------------------------------------|

|   | (2) | Net portfolio value is the      discounted present value of expected cash flows from interest-earning      assets, interest-bearing liabilities and off-balance sheet      contracts. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|               |   |   |           |   |   |            |   |   | Total      Number of     |   |   | Maximum      Number of |   |
|--------------------|--------|--------|----------------|--------|--------|-----------------|--------|--------|--------------------------|--------|--------|------------------------|--------|
|               |   |   | Total          |   |   |            |   |   | Shares      Purchased    |   |   | Shares      That May   |   |
|               |   |   | Number         |   |   | Average         |   |   | as      Part of Publicly |   |   | Yet      be Purchased  |   |
|               |   |   | of      Shares |   |   | Price      Paid |   |   | Announced      Plans     |   |   | Under      the Plans   |   |
| Period             |   |   | Purchased      |   |   | per      Share  |   |   | or      Programs         |   |   | or      Programs       |   |
|               |   |   |           |   |   |            |   |   |                     |   |   |                   |   |
| January      1-31  |   |   |           | -      |   |            | $      | -      |                     |   |   | -                      |   |   |   | 355,425 |   |
|               |   |   |           |   |   |            |   |   |                     |   |   |                   |   |   |   |   |   |
| February      1-28 |   |   |           | 32,088 |   |            | $      | 13.55  |                     |   |   | 32,088                 |   |   |   | 323,337 |   |
|               |   |   |           |   |   |            |   |   |                     |   |   |                   |   |   |   |   |   |
| March      1-31    |   |   |           | 35,252 |   |            | $      | 14.65  |                     |   |   | 35,252                 |   |   |   | 288,085 |   |
| Total              |   |   |           | 67,340 |   |            | $      | 14.12  |                     |   |   | 67,340                 |   |   |   |   |   |

----

| Exhibit      No.                                                                                                       |   | Description                                                                                                                                 |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                   |   |                                                                                                                                        |
| 10.1                                                                                                                   |   | Executive      Employment Agreement, dated February 1, 2010, by and among Danvers      Bancorp, Inc., Danversbank and Donat A. Fournier(1)+ |
| 10.2                                                                                                                   |   | Change      in Control Agreement, dated February 1, 2010, by and between Danvers      Bancorp, Inc., Danversbank and Paul E. Flynn(1)+      |
| 31.1                                                                                                                   |   | Section      302 Certification of President and Chief Executive  Officer*                                                                   |
| 31.2                                                                                                                   |   | Section      302 Certification of Executive Vice President and Chief Operating      Officer*                                                |
| 31.3                                                                                                                   |   | Section      302 Certification of Executive Vice President and Chief Financial      Officer*                                                |
| 32.1                                                                                                                   |   | Section      906 Certification of President and Chief Executive    Officer**                                                                |
| 32.2                                                                                                                   |   | Section      906 Certification of Executive Vice President and Chief Operating      Officer**                                               |
| 32.3                                                                                                                   |   | Section      906 Certification of Executive Vice President and Chief Financial      Officer**                                               |
|                                                                                                                   |   |                                                                                                                                        |
|                                                                                                                   |   |                                                                                                                                        |
| +    Represents      management contract or compensatory plan or agreement.                        |
| *    Filed      herewith.                                                                          |
| **      Furnished herewith.                                                                                            |
| (1)      Previously filed as an exhibit to the Registrant's Current Report on Form      8-K filed on February 2, 2010. |

|   |              |   |   |   |   |   |                                       |   |
|--------|-------------------|--------|--------|--------|--------|--------|--------------------------------------------|--------|
| Date:  | May      10, 2010 |   |   |   | By:    | /s/    | Kevin      T. Bottomley                    |   |
|   |              |   |   |   |   |   | Kevin      T. Bottomley                    |   |
|   |              |   |   |   |   |   | President      and Chief Executive Officer |   |
|   |              |   |   |   |   |   |                                       |   |
|   |              |   |   |   |   |   |                                       |   |
| Date:  | May      10, 2010 |   |   |   | By:    | /s/    | James      J. McCarthy                     |   |
|   |              |   |   |   |   |   | James      J. McCarthy                     |   |
|   |              |   |   |   |   |   | Executive      Vice President and Chief    |   |
|   |              |   |   |   |   |   | Operating      Officer                     |   |
|   |              |   |   |   |   |   |                                       |   |
|   |              |   |   |   |   |   |                                       |   |
| Date:  | May      10, 2010 |   |   |   | By:    | /s/    | L.      Mark Panella                       |   |
|   |              |   |   |   |   |   | L.      Mark Panella                       |   |
|   |              |   |   |   |   |   | Executive      Vice President and Chief    |   |
|   |              |   |   |   |   |   | Financial      Officer                     |   |

----