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|   | Delaware                                  |                  |   | 04-3445675                                                 |   |
|--------|-------------------------------------------|-----------------------|--------|------------------------------------------------------------|--------|
|   | (State or Other Jurisdiction of           |                  |   | (I.R.S Employer                                            |   |
|   | Incorporation of 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 |
|---------------------------------------------------------------------|-----------------------------|

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TABLE OF CONTENTS

|                                     |                                                                             |
|------------------------------------------|----------------------------------------------------------------------------------|
|                                     |                                                                             |   | Page |
| PART I.  FINANCIAL INFORMATION |                                                                             |
|                                     |                                                                             |   |   |
| Item 1.                                  | Financial Statements (Unaudited)                                                 |   |
|                                     | -                                                                                | Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008 | 3 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Operations for the Three and Six Months Ended |   |
|                                     |                                                                             | June 30, 2009 and 2008 | 4 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Changes in Stockholders' Equity for the |   |
|                                     |                                                                             | Six Months Ended June 30, 2009 and 2008 | 5 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Cash Flows for the Six Months Ended |   |
|                                     |                                                                             | June 30, 2009 and 2008 | 6 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Notes to Consolidated Financial Statements | 8 |
|                                     |                                                                             |   |   |
| Item 2.                                  | Management’s Discussion and Analysis of Financial Condition and Results of |   |
|                                     | Operations                                                                       | 19 |
|                                     |                                                                             |   |   |
| Item 3.                                  | Quantitative and Qualitative Disclosures About Market Risk                       | 34 |
|                                     |                                                                             |   |   |
| Item 4.                                  | Controls and Procedures                                                          | 36 |
|                                     |                                                                             |   |   |
| PART II.  OTHER INFORMATION    |                                                                             |
|                                     |                                                                             |   |   |
| Item 1.                                  | Legal Proceedings                                                                | 37 |
|                                     |                                                                             |   |   |
| Item 1A.                                 | Risk Factors                                                                     | 37 |
|                                     |                                                                             |   |   |
| Item 2.                                  | Unregistered Sales of Equity Securities and Use of Proceeds                      | 38 |
|                                     |                                                                             |   |   |
| Item 3.                                  | Defaults Upon Senior Securities                                                  | 39 |
|                                     |                                                                             |   |   |
| Item 4.                                  | Submission of Matters to a Vote of Security Holders                              | 39 |
|                                     |                                                                             |   |   |
| Item 5.                                  | Other Information                                                                | 39 |
|                                     |                                                                             |   |   |
| Item 6.                                  | Exhibits                                                                         | 40 |

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Table of Contents

PART

Financial 

|                                                                           |   | June 30,       |      |   | December 31, |   |
|--------------------------------------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                                                           |   | 2009           |      |   | 2008         |   |
|                                                                           |   | (In thousands) |      |
| ASSETS                                                                         |   |
| Cash and cash equivalents                                                      |   | $              | 87,612    |   |         | $      | 33,129 |   |
| Certificates of deposit                                                        |   |           | 10,499    |   |         |   | 10,291 |   |
| Securities available for sale, at fair value                                   |   |           | 441,569   |   |         |   | 490,845 |   |
| Loans held for sale                                                            |   |           | 1,428     |   |         |   | - |   |
| Loans                                                                          |   |           | 1,188,419 |   |         |   | 1,118,948 |   |
| Less allowance for loan losses                                                 |   |           | (12,719   | )      |         |   | (12,133 | ) |
| Loans, net                                                                     |   |           | 1,175,700 |   |         |   | 1,106,815 |   |
|                                                                           |   |           |      |   |         |   |   |   |
| Federal Home Loan Bank stock, at cost                                          |   |           | 14,001    |   |         |   | 14,001 |   |
| Premises and equipment, net                                                    |   |           | 26,578    |   |         |   | 22,877 |   |
| Bank-owned life insurance                                                      |   |           | 25,148    |   |         |   | 24,826 |   |
| Other real estate owned                                                        |   |           | 1,674     |   |         |   | 1,158 |   |
| Accrued interest receivable                                                    |   |           | 6,928     |   |         |   | 7,457 |   |
| Deferred tax asset, net                                                        |   |           | 9,308     |   |         |   | 6,955 |   |
| Other assets                                                                   |   |           | 6,892     |   |         |   | 9,455 |   |
|                                                                           |   | $              | 1,807,337 |   |         | $      | 1,727,809 |   |
|                                                                           |   |           |      |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                           |   |
| Deposits:                                                                      |   |           |      |   |         |   |   |   |
| Demand deposits                                                                |   | $              | 144,952   |   |         | $      | 123,414 |   |
| Savings and NOW accounts                                                       |   |           | 206,980   |   |         |   | 176,365 |   |
| Money market accounts                                                          |   |           | 500,145   |   |         |   | 440,931 |   |
| Term certificates over $100,000                                                |   |           | 278,112   |   |         |   | 242,846 |   |
| Other term certificates                                                        |   |           | 170,250   |   |         |   | 134,727 |   |
| Total deposits                                                                 |   |           | 1,300,439 |   |         |   | 1,118,283 |   |
| Short-term borrowings                                                          |   |           | 74,822    |   |         |   | 168,276 |   |
| Long-term debt                                                                 |   |           | 162,254   |   |         |   | 163,022 |   |
| Subordinated debt                                                              |   |           | 29,965    |   |         |   | 29,965 |   |
| Accrued expenses and other liabilities                                         |   |           | 14,594    |   |         |   | 15,255 |   |
| Total liabilities                                                              |   |           | 1,582,074 |   |         |   | 1,494,801 |   |
| Stockholders' equity:                                                          |   |           |      |   |         |   |   |   |
| Preferred stock; $0.01 par value, 10,000,000 shares authorized;                |   |           |      |   |         |   |   |   |
| none issued and outstanding                                                    |   |           | -         |   |         |   | - |   |
| Common stock, $0.01 par value, 60,000,000 shares authorized; 17,842,500 shares |   |           |      |   |         |   |   |   |
| issued and 17,128,800 shares outstanding at June 30, 2009 and 17,842,500       |   |           |      |   |         |   |   |   |
| shares issued and outstanding at December 31, 2008                             |   |           | 178       |   |         |   | 178 |   |
| Additional paid-in capital                                                     |   |           | 173,772   |   |         |   | 174,510 |   |
| Retained earnings                                                              |   |           | 68,722    |   |         |   | 67,854 |   |
| Accumulated other comprehensive income                                         |   |           | 3,418     |   |         |   | 4,026 |   |
| Unearned restricted shares                                                     |   |           | (7,624    | )      |         |   | - |   |
| Unearned compensation - ESOP, 1,320,345 shares and 1,356,030 shares at         |   |           |      |   |         |   |   |   |
| June 30, 2009 and December 31, 2008, respectively                              |   |           | (13,203   | )      |         |   | (13,560 | ) |
| Total stockholders' equity                                                     |   |           | 225,263   |   |         |   | 233,008 |   |
|                                                                           |   | $              | 1,807,337 |   |         | $      | 1,727,809 |   |

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Table of Contents

CONSOLIDATED 

|                                                              |   | Three Months Ended                               |       |   | Six Months Ended |   |
|-------------------------------------------------------------------|--------|--------------------------------------------------|------------|--------|------------------|--------|
|                                                              |   | June 30,                                         |       |   | June 30,         |   |
|                                                              |   | 2009                                             |       |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                              |   | (Dollars in thousands, except per share amounts) |       |
| Interest and dividend income:                                     |   |                                             |       |   |             |   |   |   |   |   |   |   |
| Interest and fees on loans                                        |   | $                                                | 16,612     |   |             | $      | 15,798 |   |   | $ | 32,319 |   |   | $ | 31,418 |   |
| Interest on debt securities:                                      |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                           |   |                                             | 5,096      |   |             |   | 4,888 |   |   |   | 10,518 |   |   |   | 9,680 |   |
| Non-taxable                                                       |   |                                             | 220        |   |             |   | 194 |   |   |   | 423 |   |   |   | 383 |   |
| Dividends on equity securities                                    |   |                                             | 1          |   |             |   | 102 |   |   |   | 1 |   |   |   | 210 |   |
| Interest on cash equivalents and certificates of deposit          |   |                                             | 98         |   |             |   | 155 |   |   |   | 195 |   |   |   | 683 |   |
| Total interest and dividend income                                |   |                                             | 22,027     |   |             |   | 21,137 |   |   |   | 43,456 |   |   |   | 42,374 |   |
|                                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                 |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits:                                             |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                          |   |                                             | 647        |   |             |   | 551 |   |   |   | 1,195 |   |   |   | 1,211 |   |
| Money market accounts                                             |   |                                             | 2,960      |   |             |   | 2,695 |   |   |   | 5,883 |   |   |   | 6,024 |   |
| Term certificates                                                 |   |                                             | 3,004      |   |             |   | 3,321 |   |   |   | 6,031 |   |   |   | 7,594 |   |
| Interest on short-term borrowings                                 |   |                                             | 79         |   |             |   | 198 |   |   |   | 207 |   |   |   | 319 |   |
| Interest on long-term debt and subordinated debt                  |   |                                             | 2,303      |   |             |   | 2,283 |   |   |   | 4,625 |   |   |   | 4,612 |   |
| Total interest expense                                            |   |                                             | 8,993      |   |             |   | 9,048 |   |   |   | 17,941 |   |   |   | 19,760 |   |
| Net interest income                                               |   |                                             | 13,034     |   |             |   | 12,089 |   |   |   | 25,515 |   |   |   | 22,614 |   |
| Provision for loan losses                                         |   |                                             | 1,200      |   |             |   | 1,075 |   |   |   | 1,960 |   |   |   | 1,675 |   |
| Net interest income, after provision for loan losses              |   |                                             | 11,834     |   |             |   | 11,014 |   |   |   | 23,555 |   |   |   | 20,939 |   |
|                                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income:                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposits                                       |   |                                             | 846        |   |             |   | 656 |   |   |   | 1,634 |   |   |   | 1,286 |   |
| Loan servicing fees                                               |   |                                             | 19         |   |             |   | 52 |   |   |   | 29 |   |   |   | 111 |   |
| Gain on sales of loans                                            |   |                                             | 344        |   |             |   | 35 |   |   |   | 685 |   |   |   | 96 |   |
| Gain on sales of other real estate owned                          |   |                                             | -          |   |             |   | - |   |   |   | 29 |   |   |   | - |   |
| Net gain on sales of securities                                   |   |                                             | -          |   |             |   | 141 |   |   |   | - |   |   |   | 913 |   |
| Net increase in cash surrender value of bank-owned life insurance |   |                                             | 185        |   |             |   | 241 |   |   |   | 322 |   |   |   | 600 |   |
| Other operating income                                            |   |                                             | 409        |   |             |   | 510 |   |   |   | 842 |   |   |   | 914 |   |
| Total non-interest income                                         |   |                                             | 1,803      |   |             |   | 1,635 |   |   |   | 3,541 |   |   |   | 3,920 |   |
|                                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expenses:                                            |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                    |   |                                             | 7,248      |   |             |   | 5,604 |   |   |   | 14,221 |   |   |   | 15,640 |   |
| Occupancy                                                         |   |                                             | 1,378      |   |             |   | 1,185 |   |   |   | 2,882 |   |   |   | 2,495 |   |
| Equipment                                                         |   |                                             | 819        |   |             |   | 794 |   |   |   | 1,587 |   |   |   | 1,547 |   |
| Outside services                                                  |   |                                             | 569        |   |             |   | 269 |   |   |   | 812 |   |   |   | 551 |   |
| Contribution to the Danversbank Charitable Foundation             |   |                                             | -          |   |             |   | - |   |   |   | - |   |   |   | 6,850 |   |
| Other real estate owned expense                                   |   |                                             | 171        |   |             |   | 892 |   |   |   | 296 |   |   |   | 1,686 |   |
| Deposit insurance expense                                         |   |                                             | 1,254      |   |             |   | 191 |   |   |   | 1,700 |   |   |   | 342 |   |
| Other operating expense                                           |   |                                             | 2,160      |   |             |   | 1,801 |   |   |   | 3,902 |   |   |   | 3,282 |   |
| Total non-interest expenses                                       |   |                                             | 13,599     |   |             |   | 10,736 |   |   |   | 25,400 |   |   |   | 32,393 |   |
| Income (loss) before income taxes                                 |   |                                             | 38         |   |             |   | 1,913 |   |   |   | 1,696 |   |   |   | (7,534 | ) |
| Provision (benefit) for income taxes                              |   |                                             | (97        | )      |             |   | 1,371 |   |   |   | 178 |   |   |   | (4,820 | ) |
| Net income (loss)                                                 |   | $                                                | 135        |   |             | $      | 542 |   |   | $ | 1,518 |   |   | $ | (2,714 | ) |
|                                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average shares outstanding:                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                             |   |                                             | 15,949,439 |   |             |   | 16,433,139 |   |   |   | 16,161,734 |   |   |   | N/A |   |
| Diluted                                                           |   |                                             | 16,011,626 |   |             |   | 16,433,139 |   |   |   | 16,193,583 |   |   |   | N/A |   |
|                                                              |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                               |   |                                             |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                             |   | $                                                | 0.01       |   |             | $      | 0.03 |   |   | $ | 0.09 |   |   |   | N/A |   |
| Diluted                                                           |   | $                                                | 0.01       |   |             | $      | 0.03 |   |   | $ | 0.09 |   |   |   | N/A |   |

----

Table of Contents

CONSOLIDATED

|                              |   |                   |       |   |    |   |   |       |   |   |          |   |   | Accumulated |   |   |           |   |   |          |   |   |   |   |
|-----------------------------------|--------|------------------------|------------|--------|---------|--------|--------|------------|--------|--------|---------------|--------|--------|-------------|--------|--------|----------------|--------|--------|---------------|--------|--------|--------|--------|
|                              |   |                   |       |   |    |   |   | Additional |   |   |          |   |   | Other       |   |   | Unearned       |   |   | Unearned      |   |   | Total  |   |
|                              |   | Common Stock           |       |   | Paid-In |   |   | Retained   |   |   | Comprehensive |   |   | Restricted  |   |   | Compensation - |   |   | Stockholders' |   |
|                              |   | Shares                 |       |   | Amount  |   |   | Capital    |   |   | Earnings      |   |   | Income      |   |   | Shares         |   |   | ESOP          |   |   | Equity |   |
|                              |   | (Dollars in thousands) |       |
|                              |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |
| Balance at December 31, 2007      |   |                   | -          |   |    | $      | -      |       |   | $      | -             |   |   | $           | 71,213 |   |           | $      | 2,283  |          |   | $      | -      |   |   | $ | - |   |   | $ | 73,496 |   |
| Comprehensive loss:               |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                          |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | (2,714 | )      |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (2,714 | ) |
| Net unrealized loss on securities |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| available for sale, net of        |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| reclassification adjustment       |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| and tax effect                    |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | -      |   |           |   | (2,172 | )             |   |   | -      |   |   |   | - |   |   |   | (2,172 | ) |
| Change in fair value and          |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization of derivative used   |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| for cash flow hedge, net of       |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| tax effect                        |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | -      |   |           |   | (1     | )             |   |   | -      |   |   |   | - |   |   |   | (1 | ) |
| Total comprehensive loss          |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   | (4,887 | ) |
| Issuance of common stock for      |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| initial public offering, net of   |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| expenses of $3,850                |   |                   | 17,192,500 |   |    |   | 172    |       |   |   | 167,902       |   |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | 168,074 |   |
| Issuance of common stock to       |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| the Danversbank Charitable        |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Foundation                        |   |                   | 650,000    |   |    |   | 6      |       |   |   | 6,494         |   |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | 6,500 |   |
| Stock purchased by ESOP           |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | (14,274 | ) |   |   | (14,274 | ) |
| Common stock held by ESOP         |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| committed to be released          |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (29,737 shares)                   |   |                   | -          |   |    |   | -      |       |   |   | 24            |   |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | 297 |   |   |   | 321 |   |
| Balance at June 30, 2008          |   |                   | 17,842,500 |   |    | $      | 178    |       |   | $      | 174,420       |   |   | $           | 68,499 |   |           | $      | 110    |          |   | $      | -      |   |   | $ | (13,977 | ) |   | $ | 229,230 |   |
|                              |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008      |   |                   | 17,842,500 |   |    | $      | 178    |       |   | $      | 174,510       |   |   | $           | 67,854 |   |           | $      | 4,026  |          |   | $      | -      |   |   | $ | (13,560 | ) |   | $ | 233,008 |   |
| Comprehensive income:             |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                        |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | 1,518  |   |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | 1,518 |   |
| Net unrealized loss on securities |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| available for sale, net of        |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| reclassification adjustment       |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| and tax effect                    |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | -      |   |           |   | (606   | )             |   |   | -      |   |   |   | - |   |   |   | (606 | ) |
| Change in fair value and          |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization of derivative used   |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| for cash flow hedge, net of       |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| tax effect                        |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | -      |   |           |   | (2     | )             |   |   | -      |   |   |   | - |   |   |   | (2 | ) |
| Total comprehensive income        |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   | 910 |   |
| Purchase of shares for incentive  |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| plans (713,700 shares)            |   |                   | -          |   |    |   | -      |       |   |   | (9,668        | )      |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (9,668 | ) |
| Resticted stock awards            |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (639,807 shares)                  |   |                   | -          |   |    |   | -      |       |   |   | 8,317         |   |   |        | -      |   |           |   | -      |          |   |   | (8,317 | )      |   |   | - |   |   |   | - |   |
| Equity incentive shares earned    |   |                   | -          |   |    |   | -      |       |   |   | 490           |   |   |        | -      |   |           |   | -      |          |   |   | 693    |   |   |   | - |   |   |   | 1,183 |   |
| Common stock held by ESOP         |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| committed to be released          |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (35,685 shares)                   |   |                   | -          |   |    |   | -      |       |   |   | 123           |   |   |        | -      |   |           |   | -      |          |   |   | -      |   |   |   | 357 |   |   |   | 480 |   |
| Dividends paid                    |   |                   |       |   |    |   |   |       |   |   |          |   |   |        |   |   |           |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| ($.04 per share)                  |   |                   | -          |   |    |   | -      |       |   |   | -             |   |   |        | (650   | )      |           |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (650 | ) |
| Balance at June 30, 2009          |   |                   | 17,842,500 |   |    | $      | 178    |       |   | $      | 173,772       |   |   | $           | 68,722 |   |           | $      | 3,418  |          |   | $      | (7,624 | )      |   | $ | (13,203 | ) |   | $ | 225,263 |   |

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CONSOLIDATED

|                                                                         |   | Six Months Ended |    |
|------------------------------------------------------------------------------|--------|------------------|---------|
|                                                                         |   | June 30,         |    |
|                                                                         |   | 2009             |    |   | 2008 |   |
|                                                                         |   | (In thousands)   |    |
| Cash flows from operating activities:                                        |   |             |    |   |   |   |
| Net income (loss)                                                            |   | $                | 1,518   |   |   | $ | (2,714 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) |   |             |    |   |   |   |   |   |
| operating activities:                                                        |   |             |    |   |   |   |   |   |
| Provision for loan losses                                                    |   |             | 1,960   |   |   |   | 1,675 |   |
| Write-down of other real estate owned                                        |   |             | 82      |   |   |   | 1,387 |   |
| Depreciation and amortization                                                |   |             | 1,718   |   |   |   | 1,809 |   |
| Accretion of net deferred loan fees and costs                                |   |             | (292    | ) |   |   | (271 | ) |
| Deferred tax (benefit) provision                                             |   |             | (1,934  | ) |   |   | 911 |   |
| Amortization of core deposit intangible and servicing rights                 |   |             | 222     |   |   |   | 107 |   |
| Amortization of stock-based compensation and ESOP expense                    |   |             | 1,663   |   |   |   | 321 |   |
| Amortization of securities, net                                              |   |             | 157     |   |   |   | 102 |   |
| Net gain on sales of securities                                              |   |             | -       |   |   |   | (913 | ) |
| Gain on sales of other real estate owned                                     |   |             | (29     | ) |   |   | - |   |
| Loans originated for sale                                                    |   |             | (56,138 | ) |   |   | (5,835 | ) |
| Proceeds from sales of loans originated for sale                             |   |             | 54,710  |   |   |   | 5,611 |   |
| Issuance of common stock to Danversbank Charitable Foundation                |   |             | -       |   |   |   | 6,500 |   |
| Changes in other assets and liabilities:                                     |   |             |    |   |   |   |   |   |
| Accrued interest receivable                                                  |   |             | 529     |   |   |   | 197 |   |
| Other assets and bank-owned life insurance                                   |   |             | 2,016   |   |   |   | (7,992 | ) |
| Accrued expenses and other liabilities                                       |   |             | (661    | ) |   |   | (4,668 | ) |
| Net cash provided by (used in) operating activities                          |   |             | 5,521   |   |   |   | (3,773 | ) |
| Cash flows from investing activities:                                        |   |             |    |   |   |   |   |   |
| Activity in available-for-sale securities:                                   |   |             |    |   |   |   |   |   |
| Sales                                                                        |   |             | 5,019   |   |   |   | 102,157 |   |
| Maturities, prepayments and calls                                            |   |             | 104,316 |   |   |   | 112,382 |   |
| Purchases                                                                    |   |             | (61,240 | ) |   |   | (174,623 | ) |
| Purchases of certificates of deposit                                         |   |             | (208    | ) |   |   | (849 | ) |
| Funds advanced on other real estate owned                                    |   |             | (384    | ) |   |   | (602 | ) |
| Proceeds from sales of other real estate owned                               |   |             | 1,365   |   |   |   | - |   |
| Net loan originations                                                        |   |             | (72,103 | ) |   |   | (91,839 | ) |
| Purchase of premises and equipment                                           |   |             | (5,419  | ) |   |   | (4,469 | ) |
| Net cash used in investing activities                                        |   |             | (28,654 | ) |   |   | (57,843 | ) |

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|                                               |   | Six Months Ended |    |
|----------------------------------------------------|--------|------------------|---------|
|                                               |   | June 30,         |    |
|                                               |   | 2009             |    |   | 2008 |   |
|                                               |   | (In thousands)   |    |
| Cash flows from financing activities:              |   |             |    |   |   |   |
| Net increase (decrease) in:                        |   |             |    |   |   |   |
| Term certificates                                  |   | $                | 70,789  |   |   | $ | (38,631 | ) |
| Other deposits                                     |   |             | 111,367 |   |   |   | 83,756 |   |
| Short-term borrowings                              |   |             | (93,454 | ) |   |   | 6,253 |   |
| Stock subscriptions                                |   |             | -       |   |   |   | (162,859 | ) |
| Activity in long-term debt:                        |   |             |    |   |   |   |   |   |
| Proceeds from advances                             |   |             | -       |   |   |   | 25,000 |   |
| Payment of advances                                |   |             | (768    | ) |   |   | (5,537 | ) |
| Net proceeds from issuance of common stock         |   |             | -       |   |   |   | 168,074 |   |
| Acquisition of common stock by ESOP                |   |             | -       |   |   |   | (14,274 | ) |
| Purchase of shares for incentive plans             |   |             | (9,668  | ) |   |   | - |   |
| Dividends paid                                     |   |             | (650    | ) |   |   | - |   |
| Net cash provided by financing activities          |   |             | 77,616  |   |   |   | 61,782 |   |
| Change in cash and cash equivalents                |   |             | 54,483  |   |   |   | 166 |   |
| Cash and cash equivalents at beginning of period   |   |             | 33,129  |   |   |   | 65,862 |   |
| Cash and cash equivalents at end of period         |   | $                | 87,612  |   |   | $ | 66,028 |   |
|                                               |   |             |    |   |   |   |   |   |
| Supplementary disclosure of cash flow information: |   |             |    |   |   |   |   |   |
| Cash paid during the period for:                   |   |             |    |   |   |   |   |   |
| Interest                                           |   | $                | 18,111  |   |   | $ | 20,084 |   |
| Income taxes                                       |   |             | 923     |   |   |   | 1,151 |   |
| Non-cash financing and investing activities:       |   |             |    |   |   |   |   |   |
| Transfers from loans to other real estate owned    |   |             | 1,550   |   |   |   | - |   |

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NOTES 

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

| 2. | Derivative Financial Instruments and Hedging Activities |
|----|---------------------------------------------------------|

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Table of Contents

|                                  | June 30, 2009     |   | December 31, 2008 |   |
|---------------------------------------|-------------------|--------|-------------------|--------|
|                                  | Balance Sheet     |   | Fair              |   | Balance Sheet |   | Fair |   |
|                                  | Location          |   | Value             |   | Location |   | Value |   |
|                                  | (In thousands)    |   |
| Derivatives not designated as hedging |              |   |              |   |   |   |   |   |
| instruments under Statement 133:      |              |   |              |   |   |   |   |   |
|                                  |              |   |              |   |   |   |   |   |
| Interest rate swap agreements         | Other assets      |   | $                 | 1,291  |   | Other assets |   | $ | 1,761 |   |
| Interest rate cap agreements          | Other assets      |   |              | 174    |   | Other assets |   |   | - |   |
| Total interest rate products          |              |   | $                 | 1,465  |   |   |   | $ | 1,761 |   |
|                                  |              |   |              |   |   |   |   |   |   |   |
| Interest rate swap agreements         | Other Liabilities |   | $                 | 1,309  |   | Other Liabilities |   | $ | 1,796 |   |
| Interest rate cap agreements          | Other Liabilities |   |              | 169    |   | Other Liabilities |   |   | - |   |
| Total interest rate products          |              |   | $                 | 1,478  |   |   |   | $ | 1,796 |   |

|                                   |   |                               |   | Amount Recognized   |   |   | Amount Recognized   |   |
|----------------------------------------|--------|------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
|                                   |   |                               |   | in Income on        |   |   | in Income on        |   |
|                                   |   |                               |   | Derivatives for the |   |   | Derivatives for the |   |
| Derivatives Not Designated as Hedging  |   | Location of Gain (Loss) Recognized |   | Three Months        |   |   | Six Months          |   |
| Instruments Under Statement No. 133    |   | in Income on Derivative            |   | Ended June 30, 2009 |   |   | Ended June 30, 2009 |   |
|                                   |   |                               |   | (In thousands)      |   |
| Interest rate swap agreements          |   | Other income                       |   | $                   | 14     |   |                | $      | 17 |   |
| Interest rate cap agreements           |   | Other income                       |   |                | 5      |   |                |   | 5 |   |
| Total income on interest rate products |   |                               |   | $                   | 19     |   |                | $      | 22 |   |

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| 3. | Securities Available for Sale |
|----|-------------------------------|

|                                   |   | Amortized Cost |    |   | Gross UnrealizedGains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|----------------------------------------|--------|----------------|---------|--------|-----------------------|--------|--------|------------------------------|--------|--------|------------|--------|
|                                   |   | (In thousands) |    |
| June 30, 2009:                         |   |           |    |   |                  |   |   |                         |   |   |       |   |
| Other government-sponsored enterprises |   | $              | 180,351 |   |                  | $      | 2,203  |                         |   | $      | (1,885     | )      |   | $ | 180,669 |   |
| Mortgage-backed                        |   |           | 232,483 |   |                  |   | 6,185  |                         |   |   | (261       | )      |   |   | 238,407 |   |
| Municipal bonds                        |   |           | 22,706  |   |                  |   | 120    |                         |   |   | (583       | )      |   |   | 22,243 |   |
| Other bonds                            |   |           | 250     |   |                  |   | -      |                         |   |   | -          |   |   |   | 250 |   |
|                                   |   | $              | 435,790 |   |                  | $      | 8,508  |                         |   | $      | (2,729     | )      |   | $ | 441,569 |   |
|                                   |   |           |    |   |                  |   |   |                         |   |   |       |   |   |   |   |   |
| December 31, 2008:                     |   |           |    |   |                  |   |   |                         |   |   |       |   |   |   |   |   |
| U.S. Government                        |   | $              | 2,007   |   |                  | $      | 11     |                         |   | $      | -          |   |   | $ | 2,018 |   |
| Federal Home Loan Mortgage Corporation |   |           | 1,147   |   |                  |   | 1      |                         |   |   | -          |   |   |   | 1,148 |   |
| Other government-sponsored enterprises |   |           | 216,369 |   |                  |   | 4,383  |                         |   |   | (129       | )      |   |   | 220,623 |   |
| Mortgage-backed                        |   |           | 245,089 |   |                  |   | 3,549  |                         |   |   | (648       | )      |   |   | 247,990 |   |
| Municipal bonds                        |   |           | 19,179  |   |                  |   | 107    |                         |   |   | (470       | )      |   |   | 18,816 |   |
| Other bonds                            |   |           | 250     |   |                  |   | -      |                         |   |   | -          |   |   |   | 250 |   |
|                                   |   | $              | 484,041 |   |                  | $      | 8,051  |                         |   | $      | (1,247     | )      |   | $ | 490,845 |   |

|                                   |   | Less Than Twelve Months |   |   | Over Twelve Months |   |
|----------------------------------------|--------|------------------------------|--------|--------|--------------------|--------|
|                                   |   | Gross Unrealized Losses      |   |   | Fair Value    |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|                                   |   | (In thousands)               |   |
| June 30, 2009:                         |   |                         |   |   |               |   |   |   |   |   |   |   |
| Debt securities:                       |   |                         |   |   |               |   |   |   |   |   |   |   |
| Other government-sponsored enterprises |   | $                            | 1,885  |   |               | $      | 83,917 |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed                        |   |                         | 239    |   |               |   | 19,405 |   |   |   | 22 |   |   |   | 4,896 |   |
| Municipal bonds                        |   |                         | 16     |   |               |   | 1,398 |   |   |   | 567 |   |   |   | 11,289 |   |
|                                   |   | $                            | 2,140  |   |               | $      | 104,720 |   |   | $ | 589 |   |   | $ | 16,185 |   |
|                                   |   |                         |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                     |   |                         |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                       |   |                         |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Other government-sponsored enterprises |   | $                            | 129    |   |               | $      | 21,371 |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed                        |   |                         | 642    |   |               |   | 57,114 |   |   |   | 6 |   |   |   | 942 |   |
| Municipal bonds                        |   |                         | 25     |   |               |   | 1,135 |   |   |   | 445 |   |   |   | 11,349 |   |
|                                   |   | $                            | 796    |   |               | $      | 79,620 |   |   | $ | 451 |   |   | $ | 12,291 |   |

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Table of Contents

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

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Table of Contents

|                                   |   |           |   |   |    |   |    |    |   |   | Total      |   |
|----------------------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|------------|--------|
|                                   |   | Level 1        |   |   | Level 2 |   |    | Level 3 |   |   | Fair Value |   |
|                                   |   | (In thousands) |   |
| June 30, 2009:                         |   |           |   |   |    |   |    |    |   |   |       |   |
| Assets                                 |   |           |   |   |    |   |    |    |   |   |       |   |
| Other government-sponsored enterprises |   | $              | -      |   |    | $      | 180,669 |    |   | $      | -          |   |   | $ | 180,669 |   |
| Mortgage-backed                        |   |           | -      |   |    |   | 238,407 |    |   |   | -          |   |   |   | 238,407 |   |
| Municipal bonds                        |   |           | -      |   |    |   | 22,243  |    |   |   | -          |   |   |   | 22,243 |   |
| Other bonds                            |   |           | -      |   |    |   | 250     |    |   |   | -          |   |   |   | 250 |   |
| Interest rate products                 |   |           | -      |   |    |   | 1,465   |    |   |   | -          |   |   |   | 1,465 |   |
|                                   |   | $              | -      |   |    | $      | 443,034 |    |   | $      | -          |   |   | $ | 443,034 |   |
|                                   |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
|                                   |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
| Liabilities                            |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
| Interest rate products                 |   | $              | -      |   |    | $      | 1,478   |    |   | $      | -          |   |   | $ | 1,478 |   |

|                                   |   |           |   |   |    |   |    |    |   |   | Total      |   |
|----------------------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|------------|--------|
|                                   |   | Level 1        |   |   | Level 2 |   |    | Level 3 |   |   | Fair Value |   |
|                                   |   | (In thousands) |   |
| December 31, 2008:                     |   |           |   |   |    |   |    |    |   |   |       |   |
| Assets                                 |   |           |   |   |    |   |    |    |   |   |       |   |
| U.S. Government                        |   | $              | -      |   |    | $      | 2,018   |    |   | $      | -          |   |   | $ | 2,018 |   |
| Federal Home Loan Mortgage Corporation |   |           | -      |   |    |   | 1,148   |    |   |   | -          |   |   |   | 1,148 |   |
| Other government-sponsored enterprises |   |           | -      |   |    |   | 220,623 |    |   |   | -          |   |   |   | 220,623 |   |
| Mortgage-backed                        |   |           | -      |   |    |   | 247,990 |    |   |   | -          |   |   |   | 247,990 |   |
| Municipal bonds                        |   |           | -      |   |    |   | 18,816  |    |   |   | -          |   |   |   | 18,816 |   |
| Other bonds                            |   |           | -      |   |    |   | 250     |    |   |   | -          |   |   |   | 250 |   |
| Interest rate products                 |   |           | -      |   |    |   | 1,761   |    |   |   | -          |   |   |   | 1,761 |   |
|                                   |   | $              | -      |   |    | $      | 492,606 |    |   | $      | -          |   |   | $ | 492,606 |   |
|                                   |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
|                                   |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
| Liabilities                            |   |           |   |   |    |   |    |    |   |   |       |   |   |   |   |   |
| Interest rate products                 |   | $              | -      |   |    | $      | 1,796   |    |   | $      | -          |   |   | $ | 1,796 |   |

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Table of Contents

|                    |   |           |   |   |    |   |   |    |   |   | Quarter Ended |   |
|-------------------------|--------|----------------|--------|--------|---------|--------|--------|---------|--------|--------|---------------|--------|
|                    |   |           |   |   |    |   |   |    |   |   | June 30,      |   |
|                    |   | June 30, 2009  |   |   | 2009    |   |
|                    |   |           |   |   |    |   |   |    |   |   | Total         |   |
|                    |   | Level 1        |   |   | Level 2 |   |   | Level 3 |   |   | Losses        |   |
|                    |   | (In thousands) |   |
| Assets                  |   |           |   |   |    |   |   |    |   |   |          |   |
| Other real estate owned |   | $              | -      |   |    | $      | -      |    |   | $      | 1,674         |   |   | $ | 82 |   |
| Impaired loans          |   |           | -      |   |    |   | -      |    |   |   | 598           |   |   |   | 726 |   |
|                    |   | $              | -      |   |    | $      | -      |    |   | $      | 2,272         |   |   | $ | 808 |   |

|                    |   |              |   |   |    |   |   |    |   |   | Quarter Ended |   |
|-------------------------|--------|-------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------------|--------|
|                    |   |              |   |   |    |   |   |    |   |   | June 30,      |   |
|                    |   | December 31, 2008 |   |   | 2008    |   |
|                    |   |              |   |   |    |   |   |    |   |   | Total         |   |
|                    |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Losses        |   |
|                    |   | (In thousands)    |   |
| Assets                  |   |              |   |   |    |   |   |    |   |   |          |   |
| Other real estate owned |   | $                 | -      |   |    | $      | 1,158  |    |   | $      | -             |   |   | $ | 579 |   |
| Impaired loans          |   |              | -      |   |    |   | 1,481  |    |   |   | -             |   |   |   | 75 |   |
|                    |   | $                 | -      |   |    | $      | 2,639  |    |   | $      | -             |   |   | $ | 654 |   |

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Table of Contents

|                               |   | June 30, 2009   |      |   | December 31, 2008 |   |
|------------------------------------|--------|-----------------|-----------|--------|-------------------|--------|
|                               |   | Carrying Amount |      |   | Fair Value        |   |   | Carrying Amount |   |   | Fair Value |   |
|                               |   | (In thousands)  |      |
| Financial assets:                  |   |            |      |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents          |   | $               | 87,612    |   |              | $      | 87,612 |   |   | $ | 33,129 |   |   | $ | 33,129 |   |
| Certificates of deposit            |   |            | 10,499    |   |              |   | 10,499 |   |   |   | 10,291 |   |   |   | 10,291 |   |
| Securities available for sale      |   |            | 441,569   |   |              |   | 441,569 |   |   |   | 490,845 |   |   |   | 490,845 |   |
| Federal Home Loan Bank stock       |   |            | 14,001    |   |              |   | 14,001 |   |   |   | 14,001 |   |   |   | 14,001 |   |
| Loans held for sale and loans, net |   |            | 1,177,128 |   |              |   | 1,183,489 |   |   |   | 1,106,815 |   |   |   | 1,118,521 |   |
| Accrued interest receivable        |   |            | 6,928     |   |              |   | 6,928 |   |   |   | 7,457 |   |   |   | 7,457 |   |
| Servicing rights                   |   |            | 485       |   |              |   | 485 |   |   |   | 473 |   |   |   | 473 |   |
|                               |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:             |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                          |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                    |   |            | 144,952   |   |              |   | 144,952 |   |   |   | 123,414 |   |   |   | 123,414 |   |
| Savings and NOW accounts           |   |            | 206,980   |   |              |   | 206,980 |   |   |   | 176,365 |   |   |   | 176,365 |   |
| Money market accounts              |   |            | 500,145   |   |              |   | 500,145 |   |   |   | 440,931 |   |   |   | 440,931 |   |
| Term certificates                  |   |            | 448,362   |   |              |   | 451,801 |   |   |   | 377,573 |   |   |   | 379,840 |   |
| Short-term borrowings              |   |            | 74,822    |   |              |   | 74,822 |   |   |   | 168,276 |   |   |   | 168,276 |   |
| Long-term debt                     |   |            | 162,254   |   |              |   | 162,982 |   |   |   | 163,022 |   |   |   | 165,822 |   |
| Subordinated debt                  |   |            | 29,965    |   |              |   | 12,242 |   |   |   | 29,965 |   |   |   | 9,608 |   |
| Accrued interest payable           |   |            | 1,139     |   |              |   | 1,139 |   |   |   | 1,309 |   |   |   | 1,309 |   |
|                               |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| On-balance sheet derivative        |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| financial instruments:             |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate products:            |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Assets                             |   |            | 1,465     |   |              |   | 1,465 |   |   |   | 1,761 |   |   |   | 1,761 |   |
| Liabilities                        |   |            | 1,478     |   |              |   | 1,478 |   |   |   | 1,796 |   |   |   | 1,796 |   |

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| 5. | Earnings Per Share |
|----|--------------------|

|                                               |   | Three Months Ended June 30, |       |   | Six Months Ended June 30, |   |
|----------------------------------------------------|--------|-----------------------------|------------|--------|---------------------------|--------|
|                                               |   | 2009                        |       |   | 2008                      |   |   | 2009 |   |   | 2008 |   |
|                                               |   |                        |       |   |                      |   |   |   |   |   |   |   |
| Basic weighted average common shares outstanding   |   |                        | 15,949,439 |   |                      |   | 16,433,139 |   |   |   | 16,161,734 |   |   |   | N/A |   |
| Dilutive shares                                    |   |                        | 62,187     |   |                      |   | - |   |   |   | 31,849 |   |   |   | N/A |   |
| Diluted weighted average common shares outstanding |   |                        | 16,011,626 |   |                      |   | 16,433,139 |   |   |   | 16,193,583 |   |   |   | N/A |   |
|                                               |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                           |   | $                           | 0.01       |   |                      | $      | 0.03 |   |   | $ | 0.09 |   |   |   | N/A |   |
| Effect of dilutive shares                          |   |                        | -          |   |                      |   | - |   |   |   | - |   |   |   |   |   |
| Diluted earnings per share                         |   | $                           | 0.01       |   |                      | $      | 0.03 |   |   | $ | 0.09 |   |   |   | N/A |   |

| 6. | Dividend Declared |
|----|-------------------|

| 7. | Recent Accounting Pronouncements |
|----|----------------------------------|

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| 8. | Subsequent Events |
|----|-------------------|

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Item 2.

|   | · | statements of our goals, intentions and expectations; |
|--------|--------|-------------------------------------------------------|

|   | · | 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 and benefits. |
|--------|--------|-------------------------------------------------------|

|   | · | 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 financial instruments; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 own directly; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 secondarymarket 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; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

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

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|                      |   | June 30, 2009          |      |   | December 31, 2008 |   |
|---------------------------|--------|------------------------|-----------|--------|-------------------|--------|
|                      |   | Amount                 |      |   | Percent           |   |   | Amount |   |   | Percent |   |
|                      |   | (Dollars in thousands) |      |
| Real estate mortgages:    |   |                   |      |   |              |   |   |   |   |   |   |   |
| Construction              |   | $                      | 111,386   |   |              |   | 9.4 | % |   | $ | 122,974 |   |   |   | 11.0 | % |
| Residential               |   |                   | 194,706   |   |              |   | 16.3 |   |   |   | 189,242 |   |   |   | 16.9 |   |
| Commercial                |   |                   | 302,850   |   |              |   | 25.4 |   |   |   | 247,483 |   |   |   | 22.1 |   |
| Home equity               |   |                   | 47,071    |   |              |   | 4.0 |   |   |   | 41,660 |   |   |   | 3.7 |   |
| C&I                   |   |                   | 527,101   |   |              |   | 44.3 |   |   |   | 510,359 |   |   |   | 45.5 |   |
| Consumer                  |   |                   | 7,133     |   |              |   | 0.6 |   |   |   | 8,725 |   |   |   | 0.8 |   |
| Total loans               |   |                   | 1,190,247 |   |              |   | 100.0 | % |   |   | 1,120,443 |   |   |   | 100.0 | % |
| Allowance for loan losses |   |                   | (12,719   | )      |              |   |   |   |   |   | (12,133 | ) |   |   |   |   |
| Net deferred loan fees    |   |                   | (1,828    | )      |              |   |   |   |   |   | (1,495 | ) |   |   |   |   |
| Loans, net                |   | $                      | 1,175,700 |   |              |   |   |   |   | $ | 1,106,815 |   |   |   |   |   |

|                                                                                                |   |   | June 30,               |   |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------|--------|--------|------------------------|--------|--------|--------------|--------|
|                                                                                                |   |   | 2009                   |   |   | 2008         |   |
|                                                                                                |   |   | (Dollars in thousands) |   |
| Non-accrual loans:                                                                                  |   |   |                   |   |   |         |   |
| Real estate mortgages:                                                                              |   |   |                   |   |   |         |   |
| Construction                                                                                        |   |   | $                      | 1,045  |   |         | $      | 1,925 |   |
| Residential                                                                                         |   |   |                   | 4,383  |   |         |   | 2,184 |   |
| Commercial                                                                                          |   |   |                   | 1,266  |   |         |   | 263 |   |
| Home equity                                                                                         |   |   |                   | 950    |   |         |   | 227 |   |
| Total real estate mortgages                                                                         |   |   |                   | 7,644  |   |         |   | 4,599 |   |
| C&I                                                                                             |   |   |                   | 1,318  |   |         |   | 1,295 |   |
| Consumer                                                                                            |   |   |                   | 9      |   |         |   | 38 |   |
|             Total non-accrual loans (1) |   |   | $                      | 8,971  |   |         | $      | 5,932 |   |
| Restructured loans (1)                                                                              |   |   | $                      | 3,572  |   |         | $      | - |   |
| Total non-performing loans                                                                          |   |   | $                      | 12,543 |   |         | $      | 5,932 |   |
| Other real estate owned                                                                             |   |   |                   | 1,674  |   |         |   | 1,158 |   |
| Total non-performing assets                                                                         |   |   | $                      | 14,217 |   |         | $      | 7,090 |   |
| Total non-performing loans to total loans                                                           |   |   |                   | 1.05   | %      |         |   | 0.53 | % |
| Total non-performing loans to total assets                                                          |   |   |                   | 0.69   | %      |         |   | 0.34 | % |
| Total non-performing assets to total assets                                                         |   |   |                   | 0.79   | %      |         |   | 0.41 | % |

|   | (1) | All loans on non-accrual status and restructured loans that have been performing in accordance with their modified terms for a period of less than 12 months are considered non-performing. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                      |   | At or For the Three    |      |   | At or For the Six     |   |
|-------------------------------------------|--------|------------------------|-----------|--------|-----------------------|--------|
|                                      |   | Months Ended June 30,  |      |   | Months Ended June 30, |   |
|                                      |   | 2009                   |      |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
|                                      |   | (Dollars in thousands) |      |
|                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |
| Allowance balance at beginning of period  |   | $                      | 12,545    |   |                  | $      | 9,443 |   |   | $ | 12,133 |   |   | $ | 9,096 |   |
| Provision for loan losses                 |   |                   | 1,200     |   |                  |   | 1,075 |   |   |   | 1,960 |   |   |   | 1,675 |   |
| Charge-offs:                              |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Real estate mortgages:                    |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Construction                              |   |                   | 234       |   |                  |   | - |   |   |   | 475 |   |   |   | - |   |
| Residential                               |   |                   | 49        |   |                  |   | - |   |   |   | 49 |   |   |   | 85 |   |
| Commercial                                |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | - |   |
| Home equity                               |   |                   | -         |   |                  |   | 11 |   |   |   | - |   |   |   | 14 |   |
| Total real estate mortgages               |   |                   | 283       |   |                  |   | 11 |   |   |   | 524 |   |   |   | 99 |   |
| C&I                                   |   |                   | 725       |   |                  |   | 115 |   |   |   | 831 |   |   |   | 271 |   |
| Consumer                                  |   |                   | 33        |   |                  |   | 74 |   |   |   | 68 |   |   |   | 98 |   |
| Total charge-offs                         |   |                   | 1,041     |   |                  |   | 200 |   |   |   | 1,423 |   |   |   | 468 |   |
| Recoveries:                               |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Real estate mortgages:                    |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Construction                              |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | - |   |
| Residential                               |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | 8 |   |
| Commercial                                |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | - |   |
| Home equity                               |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | - |   |
| Total real estate mortgages               |   |                   | -         |   |                  |   | - |   |   |   | - |   |   |   | 8 |   |
| C&I                                   |   |                   | 5         |   |                  |   | - |   |   |   | 25 |   |   |   | - |   |
| Consumer                                  |   |                   | 10        |   |                  |   | 2 |   |   |   | 24 |   |   |   | 9 |   |
| Total recoveries                          |   |                   | 15        |   |                  |   | 2 |   |   |   | 49 |   |   |   | 17 |   |
| Net charge-offs                           |   |                   | 1,026     |   |                  |   | 198 |   |   |   | 1,374 |   |   |   | 451 |   |
| Allowance balance at end of period        |   | $                      | 12,719    |   |                  | $      | 10,320 |   |   | $ | 12,719 |   |   | $ | 10,320 |   |
|                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Total loans outstanding                   |   | $                      | 1,191,675 |   |                  | $      | 1,001,406 |   |   | $ | 1,191,675 |   |   | $ | 1,001,406 |   |
| Average loans outstanding                 |   | $                      | 1,166,114 |   |                  | $      | 983,556 |   |   | $ | 1,146,218 |   |   | $ | 955,683 |   |
|                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses as a percent of |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| total loans outstanding                   |   |                   | 1.07      | %      |                  |   | 1.03 | % |   |   | 1.07 | % |   |   | 1.03 | % |
| Net loans charged off as a percent of     |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| average loans outstanding (annualized)    |   |                   | 0.35      | %      |                  |   | 0.08 | % |   |   | 0.24 | % |   |   | 0.09 | % |
| Allowance for loan losses to non-         |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| performing loans                          |   |                   | 101.40    | %      |                  |   | 128.68 | % |   |   | 101.40 | % |   |   | 128.68 | % |

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|                            |   | June 30, 2009          |      |   | December 31, 2008 |   |
|---------------------------------|--------|------------------------|-----------|--------|-------------------|--------|
|                            |   | Amount                 |      |   | Percent           |   |   | Amount |   |   | Percent |   |
|                            |   | (Dollars in thousands) |      |
|                            |   |                   |      |   |              |   |   |   |   |   |   |   |
| Demand deposits                 |   | $                      | 144,952   |   |              |   | 11.1 | % |   | $ | 123,414 |   |   |   | 11.0 | % |
| Savings and NOW accounts        |   |                   | 206,980   |   |              |   | 15.9 |   |   |   | 176,365 |   |   |   | 15.8 |   |
| Money market accounts           |   |                   | 500,145   |   |              |   | 38.5 |   |   |   | 440,931 |   |   |   | 39.4 |   |
| Total non-certificate accounts  |   |                   | 852,077   |   |              |   | 65.5 |   |   |   | 740,710 |   |   |   | 66.2 |   |
| Term certificates over $100,000 |   |                   | 278,112   |   |              |   | 21.4 |   |   |   | 242,846 |   |   |   | 21.7 |   |
| Other term certificates         |   |                   | 170,250   |   |              |   | 13.1 |   |   |   | 134,727 |   |   |   | 12.1 |   |
| Total certificate accounts      |   |                   | 448,362   |   |              |   | 34.5 |   |   |   | 377,573 |   |   |   | 33.8 |   |
| Total deposits                  |   | $                      | 1,300,439 |   |              |   | 100.0 | % |   | $ | 1,118,283 |   |   |   | 100.0 | % |

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|                                                                                                                                      |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|-----------|---------|----------|--------|--------|----------|--------|--------|-------------|--------|--------|----------|-----------|---------|----------|--------|
|                                                                                                                                      |   |   | Three Months Ended June 30, |      |
|                                                                                                                                      |   |   | 2009                        |      |    | 2008     |   |
|                                                                                                                                      |   |   | 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                                                                             |   |   | $                           | 42,563    |    |     | $      | 98     |     |   |   | 0.92        | %      |   | $        | 19,933    |    |     | $      | 155 |   |   |   | 3.11 | % |
|  Debt securities: (2)                                                                                                                |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  U.S. Government                                                                                                                     |   |   |                        | 520       |    |     |   | 3      |     |   |   | 2.31        |   |   |     | 2,083     |    |     |   | 22 |   |   |   | 4.22 |   |
|  Gov't-sponsored enterprises and                                                                                                     |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  FHLMC                                                                                                                               |   |   |                        | 188,332   |    |     |   | 2,311  |     |   |   | 4.91        |   |   |     | 174,698   |    |     |   | 2,112 |   |   |   | 4.84 |   |
|  Mortgage-backed                                                                                                                     |   |   |                        | 234,042   |    |     |   | 2,780  |     |   |   | 4.75        |   |   |     | 221,759   |    |     |   | 2,750 |   |   |   | 4.96 |   |
|  Municipal bonds                                                                                                                     |   |   |                        | 21,692    |    |     |   | 220    |     |   |   | 4.06        |   |   |     | 19,068    |    |     |   | 194 |   |   |   | 4.07 |   |
|  Other                                                                                                                               |   |   |                        | 250       |    |     |   | 2      |     |   |   | 3.20        |   |   |     | 307       |    |     |   | 4 |   |   |   | 5.21 |   |
|  Equity securities                                                                                                                   |   |   |                        | 14,626    |    |     |   | 1      |     |   |   | 0.30        |   |   |     | 11,366    |    |     |   | 102 |   |   |   | 3.59 |   |
|  Real estate mortgages (3)                                                                                                           |   |   |                        | 636,246   |    |     |   | 8,905  |     |   |   | 5.60        |   |   |     | 571,348   |    |     |   | 9,035 |   |   |   | 6.33 |   |
|  C&I loans (3)                                                                                                                   |   |   |                        | 441,482   |    |     |   | 6,599  |     |   |   | 5.98        |   |   |     | 351,522   |    |     |   | 5,952 |   |   |   | 6.77 |   |
|  IRBs (3)                                                                                                                            |   |   |                        | 81,037    |    |     |   | 966    |     |   |   | 4.77        |   |   |     | 51,247    |    |     |   | 622 |   |   |   | 4.85 |   |
|  Consumer loans  (3)                                                                                                       |   |   |                        | 7,349     |    |     |   | 142    |     |   |   | 7.73        |   |   |     | 9,439     |    |     |   | 189 |   |   |   | 8.01 |   |
|  Total interest-earning assets                                                                                                       |   |   |                        | 1,668,139 |    |     |   | 22,027 |     |   |   | 5.28        |   |   |     | 1,432,770 |    |     |   | 21,137 |   |   |   | 5.90 |   |
|  Allowance for loan losses                                                                                                           |   |   |                        | (12,583   | )       |     |   |   |     |   |   |        |   |   |     | (9,720    | )       |     |   |   |   |   |   |   |   |
|  Total earning assets less allowance                                                                                                 |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|   for loan losses                                                                                                               |   |   |                        | 1,655,556 |    |     |   |   |     |   |   |        |   |   |     | 1,423,050 |    |     |   |   |   |   |   |   |   |
|  Non-interest-earning assets                                                                                                         |   |   |                        | 104,369   |    |     |   |   |     |   |   |        |   |   |     | 101,510   |    |     |   |   |   |   |   |   |   |
|  Total assets                                                                                                                        |   |   | $                           | 1,759,925 |    |     |   |   |     |   |   |        |   |   | $        | 1,524,560 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                       |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Deposits:                                                                                                                           |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Savings and NOW accounts                                                                                                            |   |   | $                           | 208,005   |    |     |   | 647    |     |   |   | 1.24        |   |   | $        | 182,872   |    |     |   | 551 |   |   |   | 1.21 |   |
|  Money market accounts                                                                                                               |   |   |                        | 492,968   |    |     |   | 2,960  |     |   |   | 2.40        |   |   |     | 418,972   |    |     |   | 2,695 |   |   |   | 2.57 |   |
|  Term certificates (4)                                                                                                               |   |   |                        | 418,722   |    |     |   | 3,004  |     |   |   | 2.87        |   |   |     | 330,434   |    |     |   | 3,321 |   |   |   | 4.02 |   |
|  Total deposits                                                                                                                      |   |   |                        | 1,119,695 |    |     |   | 6,611  |     |   |   | 2.36        |   |   |     | 932,278   |    |     |   | 6,567 |   |   |   | 2.82 |   |
|  Borrowed funds:                                                                                                                     |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Short-term borrowings                                                                                                               |   |   |                        | 80,205    |    |     |   | 79     |     |   |   | 0.39        |   |   |     | 45,449    |    |     |   | 198 |   |   |   | 1.74 |   |
|  Long-term debt                                                                                                                      |   |   |                        | 162,391   |    |     |   | 1,805  |     |   |   | 4.45        |   |   |     | 159,628   |    |     |   | 1,745 |   |   |   | 4.37 |   |
|  Subordinated debt                                                                                                                   |   |   |                        | 29,965    |    |     |   | 498    |     |   |   | 6.65        |   |   |     | 29,965    |    |     |   | 538 |   |   |   | 7.18 |   |
|  Total interest-bearing liabilities                                                                                                  |   |   |                        | 1,392,256 |    |     |   | 8,993  |     |   |   | 2.58        |   |   |     | 1,167,320 |    |     |   | 9,048 |   |   |   | 3.10 |   |
|  Non-interest-bearing deposits                                                                                                       |   |   |                        | 128,361   |    |     |   |   |     |   |   |        |   |   |     | 125,416   |    |     |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                    |   |   |                        | 13,565    |    |     |   |   |     |   |   |        |   |   |     | 393       |    |     |   |   |   |   |   |   |   |
| Total non-interest-bearing liabilities                                                                                                    |   |   |                        | 141,926   |    |     |   |   |     |   |   |        |   |   |     | 125,809   |    |     |   |   |   |   |   |   |   |
|  Total liabilities                                                                                                                   |   |   |                        | 1,534,182 |    |     |   |   |     |   |   |        |   |   |     | 1,293,129 |    |     |   |   |   |   |   |   |   |
|  Stockholders' equity                                                                                                                |   |   |                        | 225,743   |    |     |   |   |     |   |   |        |   |   |     | 231,431   |    |     |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                |   |   | $                           | 1,759,925 |    |     |   |   |     |   |   |        |   |   | $        | 1,524,560 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Net interest income                                                                                                                 |   |   |                        |      |    |     | $      | 13,034 |     |   |   |        |   |   |     |      |    |     | $      | 12,089 |   |   |   |   |   |
|  Net interest rate spread (5)                                                                                                        |   |   |                        |      |    |     |   |   |     |   |   | 2.70        | %      |   |     |      |    |     |   |   |   |   |   | 2.80 | % |
|  Net interest-earning assets (6)                                                                                                     |   |   | $                           | 275,883   |    |     |   |   |     |   |   |        |   |   | $        | 265,450   |    |     |   |   |   |   |   |   |   |
|  Net interest margin (7)                                                                                                             |   |   |                        |      |    |     |   |   |     |   |   | 3.13        | %      |   |     |      |    |     |   |   |   |   |   | 3.38 | % |
|  Ratio of interest-earning assets                                                                                                    |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| to total interest-bearing liabilities                                                                                                     |   |   |                        | 1.20      |  x |     |   |   |     |   |   |        |   |   |     | 1.23      |  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) Term certificates include brokered and non-brokered CDs.                                                                         |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |
| (5) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing |   |
| liabilities at the period indicated.                                                                                                      |   |   |                        |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| (6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                     |   |   |                        |      |    |
| (7) Net interest margin represents net interest income divided by average total interest-earning assets.                             |   |   |                        |      |    |     |   |   |

----

Table of Contents

|                                                                                                                                      |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------|-----------|---------|----------|--------|--------|----------|--------|--------|-------------|--------|--------|----------|-----------|---------|----------|--------|
|                                                                                                                                      |   |   | Six Months Ended June 30, |      |
|                                                                                                                                      |   |   | 2009                      |      |    | 2008     |   |
|                                                                                                                                      |   |   | 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                                                                             |   |   | $                         | 35,043    |    |     | $      | 195    |     |   |   | 1.11        | %      |   | $        | 44,142    |    |     | $      | 683 |   |   |   | 3.09 | % |
|  Debt securities: (2)                                                                                                                |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  U.S. Government                                                                                                                     |   |   |                      | 1,027     |    |     |   | 14     |     |   |   | 2.73        |   |   |     | 2,042     |    |     |   | 45 |   |   |   | 4.41 |   |
|  Gov't-sponsored enterprises and                                                                                                     |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  FHLMC                                                                                                                               |   |   |                      | 193,378   |    |     |   | 4,749  |     |   |   | 4.91        |   |   |     | 178,128   |    |     |   | 4,307 |   |   |   | 4.84 |   |
|  Mortgage-backed                                                                                                                     |   |   |                      | 238,959   |    |     |   | 5,751  |     |   |   | 4.81        |   |   |     | 209,039   |    |     |   | 5,319 |   |   |   | 5.09 |   |
|  Municipal bonds                                                                                                                     |   |   |                      | 20,830    |    |     |   | 423    |     |   |   | 4.06        |   |   |     | 18,831    |    |     |   | 383 |   |   |   | 4.07 |   |
|  Other                                                                                                                               |   |   |                      | 250       |    |     |   | 4      |     |   |   | 3.20        |   |   |     | 317       |    |     |   | 9 |   |   |   | 5.68 |   |
|  Equity securities                                                                                                                   |   |   |                      | 14,626    |    |     |   | 1      |     |   |   | 0.01        |   |   |     | 11,029    |    |     |   | 210 |   |   |   | 3.81 |   |
|  Real estate mortgages (3)                                                                                                           |   |   |                      | 621,137   |    |     |   | 17,330 |     |   |   | 5.58        |   |   |     | 565,553   |    |     |   | 18,098 |   |   |   | 6.40 |   |
|  C&I loans (3)                                                                                                                   |   |   |                      | 439,138   |    |     |   | 12,823 |     |   |   | 5.84        |   |   |     | 331,587   |    |     |   | 11,734 |   |   |   | 7.08 |   |
|  IRBs (3)                                                                                                                            |   |   |                      | 77,952    |    |     |   | 1,857  |     |   |   | 4.76        |   |   |     | 49,145    |    |     |   | 1,205 |   |   |   | 4.90 |   |
|  Consumer loans  (3)                                                                                                       |   |   |                      | 7,991     |    |     |   | 309    |     |   |   | 7.73        |   |   |     | 9,398     |    |     |   | 381 |   |   |   | 8.11 |   |
|  Total interest-earning assets                                                                                                       |   |   |                      | 1,650,331 |    |     |   | 43,456 |     |   |   | 5.27        |   |   |     | 1,419,211 |    |     |   | 42,374 |   |   |   | 5.97 |   |
|  Allowance for loan losses                                                                                                           |   |   |                      | (12,464   | )       |     |   |   |     |   |   |        |   |   |     | (9,478    | )       |     |   |   |   |   |   |   |   |
|  Total earning assets less allowance                                                                                                 |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|   for loan losses                                                                                                               |   |   |                      | 1,637,867 |    |     |   |   |     |   |   |        |   |   |     | 1,409,733 |    |     |   |   |   |   |   |   |   |
|  Non-interest-earning assets                                                                                                         |   |   |                      | 102,310   |    |     |   |   |     |   |   |        |   |   |     | 97,477    |    |     |   |   |   |   |   |   |   |
|  Total assets                                                                                                                        |   |   | $                         | 1,740,177 |    |     |   |   |     |   |   |        |   |   | $        | 1,507,210 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                       |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Deposits:                                                                                                                           |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Savings and NOW accounts                                                                                                            |   |   | $                         | 196,923   |    |     |   | 1,195  |     |   |   | 1.21        |   |   | $        | 179,542   |    |     |   | 1,211 |   |   |   | 1.35 |   |
|  Money market accounts                                                                                                               |   |   |                      | 479,715   |    |     |   | 5,883  |     |   |   | 2.45        |   |   |     | 402,571   |    |     |   | 6,024 |   |   |   | 2.99 |   |
|  Term certificates (4)                                                                                                               |   |   |                      | 399,410   |    |     |   | 6,031  |     |   |   | 3.02        |   |   |     | 350,738   |    |     |   | 7,594 |   |   |   | 4.33 |   |
|  Total deposits                                                                                                                      |   |   |                      | 1,076,048 |    |     |   | 13,109 |     |   |   | 2.44        |   |   |     | 932,851   |    |     |   | 14,829 |   |   |   | 3.18 |   |
|  Borrowed funds:                                                                                                                     |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Short-term borrowings                                                                                                               |   |   |                      | 104,246   |    |     |   | 207    |     |   |   | 0.39        |   |   |     | 36,163    |    |     |   | 319 |   |   |   | 1.76 |   |
|  Long-term debt                                                                                                                      |   |   |                      | 162,585   |    |     |   | 3,594  |     |   |   | 4.42        |   |   |     | 152,534   |    |     |   | 3,434 |   |   |   | 4.50 |   |
|  Subordinated debt                                                                                                                   |   |   |                      | 29,965    |    |     |   | 1,031  |     |   |   | 6.88        |   |   |     | 29,965    |    |     |   | 1,178 |   |   |   | 7.86 |   |
|  Total interest-bearing liabilities                                                                                                  |   |   |                      | 1,372,844 |    |     |   | 17,941 |     |   |   | 2.61        |   |   |     | 1,151,513 |    |     |   | 19,760 |   |   |   | 3.43 |   |
|  Non-interest-bearing deposits                                                                                                       |   |   |                      | 126,514   |    |     |   |   |     |   |   |        |   |   |     | 145,999   |    |     |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                    |   |   |                      | 13,508    |    |     |   |   |     |   |   |        |   |   |     | 3,260     |    |     |   |   |   |   |   |   |   |
| Total non-interest-bearing liabilities                                                                                                    |   |   |                      | 140,022   |    |     |   |   |     |   |   |        |   |   |     | 149,259   |    |     |   |   |   |   |   |   |   |
|  Total liabilities                                                                                                                   |   |   |                      | 1,512,866 |    |     |   |   |     |   |   |        |   |   |     | 1,300,772 |    |     |   |   |   |   |   |   |   |
|  Stockholders' equity                                                                                                                |   |   |                      | 227,311   |    |     |   |   |     |   |   |        |   |   |     | 206,438   |    |     |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                |   |   | $                         | 1,740,177 |    |     |   |   |     |   |   |        |   |   | $        | 1,507,210 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Net interest income                                                                                                                 |   |   |                      |      |    |     | $      | 25,515 |     |   |   |        |   |   |     |      |    |     | $      | 22,614 |   |   |   |   |   |
|  Net interest rate spread (5)                                                                                                        |   |   |                      |      |    |     |   |   |     |   |   | 2.66        | %      |   |     |      |    |     |   |   |   |   |   | 2.54 | % |
|  Net interest-earning assets (6)                                                                                                     |   |   | $                         | 277,487   |    |     |   |   |     |   |   |        |   |   | $        | 267,698   |    |     |   |   |   |   |   |   |   |
|  Net interest margin (7)                                                                                                             |   |   |                      |      |    |     |   |   |     |   |   | 3.09        | %      |   |     |      |    |     |   |   |   |   |   | 3.19 | % |
|  Ratio of interest-earning assets                                                                                                    |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| to total interest-bearing liabilities                                                                                                     |   |   |                      | 1.20      |  x |     |   |   |     |   |   |        |   |   |     | 1.23      |  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) Term certificates include brokered and non-brokered CDs.                                                                         |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |
| (5) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing |   |
| liabilities at the period indicated.                                                                                                      |   |   |                      |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |
| (6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                     |   |   |                      |      |    |
| (7) Net interest margin represents net interest income divided by average total interest-earning assets.                             |   |   |                      |      |    |     |   |   |

----

Table of Contents

|                                                          |   | Three Months Ended June 30, |   |
|---------------------------------------------------------------|--------|-----------------------------|--------|
|                                                          |   | 2009 vs. 2008               |   |
|                                                          |   | Increase (Decrease)         |   |   | Total |   |
|                                                          |   | Due to                      |   |   | Increase |   |
|                                                          |   | Volume                      |   |   | Rate |   |   | (Decrease) |   |
|                                                          |   | (In thousands)              |   |
| Interest-earning assets:                                      |   |                        |   |   |   |   |   |   |   |
| Interest-earning cash equivalents and certificates of deposit |   | $                           | 176    |   |   | $ | (233 | ) |   | $ | (57 | ) |
| Debt securities (1):                                          |   |                        |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                                               |   |                        | (17    | ) |   |   | (2 | ) |   |   | (19 | ) |
| Gov't-sponsored enterprises and FHLMC                         |   |                        | 165    |   |   |   | 34 |   |   |   | 199 |   |
| Mortgage-backed                                               |   |                        | 152    |   |   |   | (122 | ) |   |   | 30 |   |
| Municipal bonds                                               |   |                        | 27     |   |   |   | (1 | ) |   |   | 26 |   |
| Other                                                         |   |                        | (1     | ) |   |   | (1 | ) |   |   | (2 | ) |
| Equity securities                                             |   |                        | 29     |   |   |   | (130 | ) |   |   | (101 | ) |
| Real estate mortgages (2)                                     |   |                        | 1,026  |   |   |   | (1,156 | ) |   |   | (130 | ) |
| C&I loans (2)                                             |   |                        | 1,523  |   |   |   | (876 | ) |   |   | 647 |   |
| IRBs (2)                                                      |   |                        | 362    |   |   |   | (18 | ) |   |   | 344 |   |
| Consumer loans (2)                                            |   |                        | (42    | ) |   |   | (5 | ) |   |   | (47 | ) |
| Total interest-earning assets                                 |   |                        | 3,400  |   |   |   | (2,510 | ) |   |   | 890 |   |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                 |   |                        |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                      |   |                        | 76     |   |   |   | 20 |   |   |   | 96 |   |
| Money market accounts                                         |   |                        | 476    |   |   |   | (211 | ) |   |   | 265 |   |
| Term certificates (3)                                         |   |                        | 887    |   |   |   | (1,204 | ) |   |   | (317 | ) |
| Total deposits                                                |   |                        | 1,439  |   |   |   | (1,395 | ) |   |   | 44 |   |
| Borrowed funds:                                               |   |                        |   |   |   |   |   |   |   |   |   |   |
| Short-term borrowings                                         |   |                        | 151    |   |   |   | (270 | ) |   |   | (119 | ) |
| Long-term debt                                                |   |                        | 30     |   |   |   | 30 |   |   |   | 60 |   |
| Subordinated debt                                             |   |                        | -      |   |   |   | (40 | ) |   |   | (40 | ) |
| Total interest-bearing liabilities                            |   |                        | 1,620  |   |   |   | (1,675 | ) |   |   | (55 | ) |
|                                                          |   |                        |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in net interest income                    |   | $                           | 1,780  |   |   | $ | (835 | ) |   | $ | 945 |   |

|   | (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. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (3) | Term certificates include brokered and non-brokered certificates of deposit. |
|--------|-----|------------------------------------------------------------------------------|

----

Table of Contents

|                                                                |   | Six Months Ended June 30, |   |
|---------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                |   | 2009 vs. 2008             |   |
|                                                                |   | Increase (Decrease)       |   |   | Total |   |
|                                                                |   | Due to                    |   |   | Increase |   |
|                                                                |   | Volume                    |   |   | Rate |   |   | (Decrease) |   |
|                                                                |   | (In thousands)            |   |
| Interest-earning assets:                                            |   |                      |   |   |   |   |   |   |   |
|  Interest-earning cash equivalents and certificates of deposit |   | $                         | (141   | ) |   | $ | (347  | ) |   | $ | (488  | ) |
| Debt securities (1):                                                |   |                      |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                                                     |   |                      | (22    | ) |   |   | (9 | ) |   |   | (31 | ) |
| Gov't-sponsored enterprises and FHLMC                               |   |                      | 369    |   |   |   | 73 |   |   |   | 442 |   |
| Mortgage-backed                                                     |   |                      | 761    |   |   |   | (329 | ) |   |   | 432 |   |
| Municipal bonds                                                     |   |                      | 41     |   |   |   | (1 | ) |   |   | 40 |   |
| Other                                                               |   |                      | (2     | ) |   |   | (3 | ) |   |   | (5 | ) |
| Equity securities                                                   |   |                      | 68     |   |   |   | (277 | ) |   |   | (209 | ) |
| Real estate mortgages (2)                                           |   |                      | 1,779  |   |   |   | (2,547 | ) |   |   | (768 | ) |
| C&I loans (2)                                                   |   |                      | 3,806  |   |   |   | (2,717 | ) |   |   | 1,089 |   |
| IRBs (2)                                                            |   |                      | 706    |   |   |   | (54 | ) |   |   | 652 |   |
| Consumer loans (2)                                                  |   |                      | (57    | ) |   |   | (15 | ) |   |   | (72 | ) |
| Total interest-earning assets                                       |   |                      | 7,308  |   |   |   | (6,226 | ) |   |   | 1,082 |   |
|                                                                |   |                      |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                       |   |                      |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                           |   |                      |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                            |   |                      | 117    |   |   |   | (133 | ) |   |   | (16 | ) |
| Money market accounts                                               |   |                      | 1,154  |   |   |   | (1,295 | ) |   |   | (141 | ) |
| Term certificates (3)                                               |   |                      | 1,054  |   |   |   | (2,617 | ) |   |   | (1,563 | ) |
| Total deposits                                                      |   |                      | 2,325  |   |   |   | (4,045 | ) |   |   | (1,720 | ) |
| Borrowed funds:                                                     |   |                      |   |   |   |   |   |   |   |   |   |   |
| Short-term borrowings                                               |   |                      | 609    |   |   |   | (721 | ) |   |   | (112 | ) |
| Long-term debt                                                      |   |                      | 226    |   |   |   | (66 | ) |   |   | 160 |   |
| Subordinated debt                                                   |   |                      | -      |   |   |   | (147 | ) |   |   | (147 | ) |
| Total interest-bearing liabilities                                  |   |                      | 3,160  |   |   |   | (4,979 | ) |   |   | (1,819 | ) |
|                                                                |   |                      |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in net interest income                          |   | $                         | 4,148  |   |   | $ | (1,247 | ) |   | $ | 2,901 |   |

|   | (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. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (3) | Term certificates include brokered and non-brokered certificates of deposit. |
|--------|-----|------------------------------------------------------------------------------|

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|                            |   | June 30, 2009  |   |
|---------------------------------|--------|----------------|--------|
|                            |   |           |   |   | 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 |   | $              | 6,469  |   |   | $ | 45,000 |   |   | $ | 10,000 |   |   | $ | 100,785 |   |   | $ | 162,254 |   |
| Federal Reserve Bank borrowings |   |           | 45,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 45,000 |   |
| Repurchase agreements (1)       |   |           | 29,822 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,822 |   |
| Subordinated debt               |   |           | -      |   |   |   | - |   |   |   | - |   |   |   | 29,965 |   |   |   | 29,965 |   |
| Operating leases                |   |           | 2,249  |   |   |   | 4,193 |   |   |   | 3,149 |   |   |   | 7,117 |   |   |   | 16,708 |   |
| Total contractual obligations   |   | $              | 83,540 |   |   | $ | 49,193 |   |   | $ | 13,149 |   |   | $ | 137,867 |   |   | $ | 283,749 |   |

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

|                                       |   | June 30, 2009  |    |
|--------------------------------------------|--------|----------------|---------|
|                                       |   |           |    |   | 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                 |   | $              | 14,377  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 14,377 |   |
| Unfunded commitments under lines of credit |   |           | 307,966 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 307,966 |   |
| Unadvanced funds on construction loans     |   |           | 13,292  |   |   |   | 11,439 |   |   |   | 4,295 |   |   |   | - |   |   |   | 29,026 |   |
| Commercial and standby letters of credit   |   |           | 7,296   |   |   |   | 15 |   |   |   | - |   |   |   | 4 |   |   |   | 7,315 |   |
| Total contractual obligations              |   | $              | 342,931 |   |   | $ | 11,454 |   |   | $ | 4,295 |   |   | $ | 4 |   |   | $ | 358,684 |   |

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Table of Contents

Item 3.  

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Table of Contents

|              |   |   | 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     |                   | $      | 180,489 |                          |   | $ | (52,388 | ) |   |   | -22.5 | % |   | $ | 54,553 |   |   | $ | 87 |   |   |   | 0.2 | % |
|              | +200   | bp     |                   |   | 201,247 |                          |   |   | (31,630 | ) |   |   | -13.6 | % |   |   | 55,187 |   |   |   | 721 |   |   |   | 1.3 | % |
|              | +100   | bp     |                   |   | 222,909 |                          |   |   | (9,968 | ) |   |   | -4.3 | % |   |   | 55,748 |   |   |   | 1,282 |   |   |   | 2.4 | % |
|              | 0      | bp     |                   |   | 232,877 |                          |   |   | - |   |   |   | 0.0 | % |   |   | 54,466 |   |   |   | - |   |   |   | 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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

Item 4.

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Table of Contents

PART II.  

Item 1. 

Item 1A. 

|   | · | integrating personnel with diverse business backgrounds; |
|--------|--------|----------------------------------------------------------|

|   | · | integrating departments, systems, operating procedures and information technologies; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | combining different corporate cultures; |
|--------|--------|-----------------------------------------|

|   | · | retaining existing customers and attracting new customers; and |
|--------|--------|----------------------------------------------------------------|

|   | · | retaining key employees. |
|--------|--------|--------------------------|

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Table of Contents

Item 2.

|       |   |      |    |   |       |   |   | 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       |   |
|       |   |      |    |   |       |   |   |                |   |   |              |   |
| April 1-30 |   |      | 49,900  |   |       | $      | 14.33  |                |   |   | 49,900            |   |   |   | 323,900 |   |
|       |   |      |    |   |       |   |   |                |   |   |              |   |   |   |   |   |
| May 1-31   |   |      | 323,900 |   |       | $      | 14.50  |                |   |   | 323,900           |   |   |   | - |   |
|       |   |      |    |   |       |   |   |                |   |   |              |   |   |   |   |   |
| June 1-30  |   |      | -       |   |       | $      | -      |                |   |   | -                 |   |   |   | - |   |
| Total      |   |      | 373,800 |   |       | $      | 14.48  |                |   |   | 373,800           |   |   |   |   |   |

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Item 3. 

Item 4

|                   |   | FOR    |       |   | WITHHELD |   |
|------------------------|--------|--------|------------|--------|----------|--------|
|                   |   |   |       |   |     |   |
| Kevin T. Bottomley     |   |   | 15,819,159 |   |     |   | 256,474 |   |
| Diane C. Brinkley      |   |   | 15,616,200 |   |     |   | 459,433 |   |
| Robert J. Broudo       |   |   | 15,635,821 |   |     |   | 439,812 |   |
| Craig S. Cerretani     |   |   | 15,816,188 |   |     |   | 259,445 |   |
| Eleanor M. Hersey      |   |   | 15,642,406 |   |     |   | 433,227 |   |
| Mary Coffey Moran, CPA |   |   | 15,813,697 |   |     |   | 261,936 |   |

| FOR    |       |   | AGAINST |   |    | ABSTAIN |   |
|--------|------------|--------|---------|--------|---------|---------|--------|
|   |       |   |    |   |    |    |   |
|   | 15,807,398 |   |    |   | 182,593 |    |   |   | 85,642 |   |

Item 5

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Table of Contents

Item 6.

| Exhibit No.                                                                                               |   | Description |
|-----------------------------------------------------------------------------------------------------------|--------|-------------|
|                                                                                                      |   |        |
|                                                                                                      | 2.1    |        | Agreement and Plan of Merger (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 June 17, 2009. |

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|   |           |   |   |   |   |   |                                  |   |
|--------|----------------|--------|--------|--------|--------|--------|---------------------------------------|--------|
| Date:  | August 7, 2009 |   |   |   | By:    | /s/    | Kevin T. Bottomley                    |   |
|   |           |   |   |   |   |   | Kevin T. Bottomley                    |   |
|   |           |   |   |   |   |   | President and Chied Executive Officer |   |
|   |           |   |   |   |   |   |                                  |   |
|   |           |   |   |   |   |   |                                  |   |
| Date:  | August 7, 2009 |   |   |   | By:    | /s/    | James J. McCarthy                     |   |
|   |           |   |   |   |   |   | James J. McCarthy                     |   |
|   |           |   |   |   |   |   | Executive Vice President and Chief    |   |
|   |           |   |   |   |   |   | Operating Officer                     |   |
|   |           |   |   |   |   |   |                                  |   |
|   |           |   |   |   |   |   |                                  |   |
| Date:  | August 7, 2009 |   |   |   | By:    | /s/    | L. Mark Panella                       |   |
|   |           |   |   |   |   |   | L. Mark Panella                       |   |
|   |           |   |   |   |   |   | Executive Vice President and Chief    |   |
|   |           |   |   |   |   |   | Financial Officer                     |   |

----