----

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

| Large accelerated filer o | Accelerated filer x |
|---------------------------|---------------------|

| Non-accelerated filer o (Do not check if smaller reporting company) | Smaller reporting company o |
|---------------------------------------------------------------------|-----------------------------|

----

TABLE

|                                     |                                                                             |
|------------------------------------------|----------------------------------------------------------------------------------|
|                                     |                                                                             |   | Page |
| PART I.  FINANCIAL INFORMATION |                                                                             |
|                                     |                                                                             |   |   |
| Item 1.                                  | Financial Statements (Unaudited)                                                 |   |
|                                     | -                                                                                | Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009 | 3 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Income for the Three and Nine Months Ended |   |
|                                     |                                                                             | September 30, 2010 and 2009 | 4 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Changes in Stockholders' Equity for the |   |
|                                     |                                                                             | Nine Months Ended September 30, 2010 and 2009 | 5 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Consolidated Statements of Cash Flows for the Nine Months Ended |   |
|                                     |                                                                             | September 30, 2010 and 2009 | 6 |
|                                     |                                                                             |   |   |
|                                     | -                                                                                | Notes to Unaudited Consolidated Financial Statements | 8 |
|                                     |                                                                             |   |   |
| Item 2.                                  | Management’s Discussion and Analysis of Financial Condition and Results of |   |
|                                     | Operations                                                                       | 25 |
|                                     |                                                                             |   |   |
| Item 3.                                  | Quantitative and Qualitative Disclosures About Market Risk                       | 41 |
|                                     |                                                                             |   |   |
| Item 4.                                  | Controls and Procedures                                                          | 43 |
|                                     |                                                                             |   |   |
| PART II.  OTHER INFORMATION    |                                                                             |
|                                     |                                                                             |   |   |
| Item 1.                                  | Legal Proceedings                                                                | 43 |
|                                     |                                                                             |   |   |
| Item 1A.                                 | Risk Factors                                                                     | 43 |
|                                     |                                                                             |   |   |
| Item 2.                                  | Unregistered Sales of Equity Securities and Use of Proceeds                      | 44 |
|                                     |                                                                             |   |   |
| Item 3.                                  | Defaults Upon Senior Securities                                                  | 44 |
|                                     |                                                                             |   |   |
| Item 4.                                  | [Removed and Reserved]                                                           | 44 |
|                                     |                                                                             |   |   |
| Item 5.                                  | Other Information                                                                | 44 |
|                                     |                                                                             |   |   |
| Item 6.                                  | Exhibits                                                                         | 45 |

----

Table of Contents

PART I

|                                                                            |   | September 30,  |      |   | December 31, |   |
|---------------------------------------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                                                            |   | 2010           |      |   | 2009         |   |
|                                                                            |   | (In thousands) |      |
| ASSETS                                                                          |   |
| Cash and cash equivalents                                                       |   | $              | 66,388    |   |         | $      | 71,757 |   |
| Certificates of deposit                                                         |   |           | -         |   |         |   | 10,679 |   |
| Securities available for sale, at fair value                                    |   |           | 514,942   |   |         |   | 481,100 |   |
| Securities held to maturity, at cost                                            |   |           | 146,974   |   |         |   | 110,932 |   |
| Loans held for sale                                                             |   |           | 3,750     |   |         |   | 1,948 |   |
| Loans                                                                           |   |           | 1,741,116 |   |         |   | 1,666,164 |   |
| Less allowance for loan losses                                                  |   |           | (16,510   | )      |         |   | (14,699 | ) |
| Loans, net                                                                      |   |           | 1,724,606 |   |         |   | 1,651,465 |   |
|                                                                            |   |           |      |   |         |   |   |   |
| Restricted stock, at cost                                                       |   |           | 18,172    |   |         |   | 18,726 |   |
| Premises and equipment, net                                                     |   |           | 39,476    |   |         |   | 36,764 |   |
| Bank-owned life insurance                                                       |   |           | 33,904    |   |         |   | 32,900 |   |
| Other real estate owned                                                         |   |           | 832       |   |         |   | 1,427 |   |
| Accrued interest receivable                                                     |   |           | 8,982     |   |         |   | 9,998 |   |
| Deferred tax asset, net                                                         |   |           | 8,445     |   |         |   | 9,619 |   |
| Goodwill and intangible assets                                                  |   |           | 33,428    |   |         |   | 35,094 |   |
| Prepaid FDIC assessment                                                         |   |           | 6,723     |   |         |   | 8,515 |   |
| Prepaid taxes                                                                   |   |           | 4,850     |   |         |   | 6,348 |   |
| Other assets                                                                    |   |           | 19,496    |   |         |   | 12,477 |   |
|                                                                            |   | $              | 2,630,968 |   |         | $      | 2,499,749 |   |
|                                                                            |   |           |      |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                            |   |
| Deposits:                                                                       |   |           |      |   |         |   |   |   |
| Demand deposits                                                                 |   | $              | 241,410   |   |         | $      | 224,776 |   |
| Savings and NOW accounts                                                        |   |           | 445,380   |   |         |   | 376,975 |   |
| Money market accounts                                                           |   |           | 802,055   |   |         |   | 621,683 |   |
| Term certificates over $100,000                                                 |   |           | 327,770   |   |         |   | 314,097 |   |
| Other term certificates                                                         |   |           | 222,968   |   |         |   | 228,272 |   |
| Total deposits                                                                  |   |           | 2,039,583 |   |         |   | 1,765,803 |   |
| Short-term borrowings                                                           |   |           | 37,783    |   |         |   | 172,829 |   |
| Long-term debt                                                                  |   |           | 206,155   |   |         |   | 218,475 |   |
| Subordinated debt                                                               |   |           | 29,965    |   |         |   | 29,965 |   |
| Accrued expenses and other liabilities                                          |   |           | 23,992    |   |         |   | 27,011 |   |
| Total liabilities                                                               |   |           | 2,337,478 |   |         |   | 2,214,083 |   |
|                                                                            |   |           |      |   |         |   |   |   |
| Commitments and contingencies                                                   |   |           |      |   |         |   |   |   |
|                                                                            |   |           |      |   |         |   |   |   |
| Stockholders' equity:                                                           |   |           |      |   |         |   |   |   |
| Preferred stock; $0.01 par value, 10,000,000 shares authorized;                 |   |           |      |   |         |   |   |   |
| none issued                                                                     |   |           | -         |   |         |   | - |   |
| Common stock; $0.01 par value, 60,000,000 shares authorized; 22,316,125 shares  |   |           |      |   |         |   |   |   |
| issued                                                                          |   |           | 223       |   |         |   | 223 |   |
| Additional paid-in capital                                                      |   |           | 238,758   |   |         |   | 237,577 |   |
| Retained earnings                                                               |   |           | 83,997    |   |         |   | 71,864 |   |
| Accumulated other comprehensive income                                          |   |           | 7,270     |   |         |   | 3,650 |   |
| Unearned restricted shares - 545,558 and 639,807 shares at September 30, 2010   |   |           |      |   |         |   |   |   |
| and December 31, 2009, respectively                                             |   |           | (5,930    | )      |         |   | (6,793 | ) |
| Unearned compensation - ESOP; 1,231,133 and 1,284,660 shares at                 |   |           |      |   |         |   |   |   |
| September 30, 2010 and December 31, 2009, respectively                          |   |           | (12,311   | )      |         |   | (12,846 | ) |
| Treasury stock, at cost; 1,318,039 and 610,593 shares at September 30, 2010 and |   |           |      |   |         |   |   |   |
| December 31, 2009, respectively                                                 |   |           | (18,517   | )      |         |   | (8,009 | ) |
| Total stockholders' equity                                                      |   |           | 293,490   |   |         |   | 285,666 |   |
|                                                                            |   | $              | 2,630,968 |   |         | $      | 2,499,749 |   |

----

Table of Contents

CONSOLIDATED

|                                                          |   | Three Months Ended                               |       |   | Nine Months Ended |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|--------|-------------------|--------|
|                                                          |   | September 30,                                    |       |   | September 30,     |   |
|                                                          |   | 2010                                             |       |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                          |   | (Dollars in thousands, except per share amounts) |       |
| Interest and dividend income:                                 |   |                                             |       |   |              |   |   |   |   |   |   |   |
| Interest and fees on loans                                    |   | $                                                | 23,563     |   |              | $      | 17,448 |   |   | $ | 71,158 |   |   | $ | 49,767 |   |
| Interest on debt securities:                                  |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                       |   |                                             | 5,441      |   |              |   | 5,262 |   |   |   | 15,797 |   |   |   | 15,780 |   |
| Non-taxable                                                   |   |                                             | 310        |   |              |   | 235 |   |   |   | 757 |   |   |   | 658 |   |
| Dividends on equity securities                                |   |                                             | 8          |   |              |   | - |   |   |   | 12 |   |   |   | 1 |   |
| Interest on cash equivalents and certificates of deposit      |   |                                             | 30         |   |              |   | 97 |   |   |   | 105 |   |   |   | 292 |   |
| Total interest and dividend income                            |   |                                             | 29,352     |   |              |   | 23,042 |   |   |   | 87,829 |   |   |   | 66,498 |   |
|                                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                             |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits:                                         |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                      |   |                                             | 1,403      |   |              |   | 647 |   |   |   | 3,671 |   |   |   | 1,842 |   |
| Money market accounts                                         |   |                                             | 2,563      |   |              |   | 2,828 |   |   |   | 7,195 |   |   |   | 8,711 |   |
| Term certificates                                             |   |                                             | 2,206      |   |              |   | 3,069 |   |   |   | 7,251 |   |   |   | 9,100 |   |
| Interest on short-term borrowings                             |   |                                             | 41         |   |              |   | 62 |   |   |   | 180 |   |   |   | 269 |   |
| Interest on long-term debt and subordinated debt              |   |                                             | 2,377      |   |              |   | 2,291 |   |   |   | 6,851 |   |   |   | 6,916 |   |
| Total interest expense                                        |   |                                             | 8,590      |   |              |   | 8,897 |   |   |   | 25,148 |   |   |   | 26,838 |   |
| Net interest income                                           |   |                                             | 20,762     |   |              |   | 14,145 |   |   |   | 62,681 |   |   |   | 39,660 |   |
| Provision for loan losses                                     |   |                                             | 900        |   |              |   | 1,400 |   |   |   | 3,400 |   |   |   | 3,360 |   |
| Net interest income, after provision for loan losses          |   |                                             | 19,862     |   |              |   | 12,745 |   |   |   | 59,281 |   |   |   | 36,300 |   |
|                                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income:                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposits                                   |   |                                             | 1,129      |   |              |   | 869 |   |   |   | 3,436 |   |   |   | 2,503 |   |
| Loan servicing fees                                           |   |                                             | 34         |   |              |   | 34 |   |   |   | 160 |   |   |   | 63 |   |
| Net gain on sales of loans                                    |   |                                             | 466        |   |              |   | 87 |   |   |   | 709 |   |   |   | 772 |   |
| Net gain on sales of securities                               |   |                                             | 846        |   |              |   | 4 |   |   |   | 2,109 |   |   |   | 4 |   |
| Loss on impairment of securities                              |   |                                             | (779       | )      |              |   | - |   |   |   | (779 | ) |   |   | - |   |
| Increase in cash surrender value of bank-owned life insurance |   |                                             | 346        |   |              |   | 231 |   |   |   | 1,004 |   |   |   | 553 |   |
| Trust services                                                |   |                                             | 362        |   |              |   | - |   |   |   | 1,198 |   |   |   | - |   |
| Other operating income                                        |   |                                             | 392        |   |              |   | 442 |   |   |   | 1,695 |   |   |   | 1,284 |   |
| Total non-interest income                                     |   |                                             | 2,796      |   |              |   | 1,667 |   |   |   | 9,532 |   |   |   | 5,179 |   |
|                                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expenses:                                        |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                |   |                                             | 9,787      |   |              |   | 7,397 |   |   |   | 28,992 |   |   |   | 21,618 |   |
| Occupancy                                                     |   |                                             | 1,936      |   |              |   | 1,372 |   |   |   | 6,004 |   |   |   | 4,254 |   |
| Equipment                                                     |   |                                             | 1,055      |   |              |   | 877 |   |   |   | 3,109 |   |   |   | 2,464 |   |
| Outside services                                              |   |                                             | 474        |   |              |   | 328 |   |   |   | 1,546 |   |   |   | 1,140 |   |
| Other real estate owned expense                               |   |                                             | 276        |   |              |   | 159 |   |   |   | 651 |   |   |   | 426 |   |
| Deposit insurance expense                                     |   |                                             | 683        |   |              |   | 415 |   |   |   | 1,964 |   |   |   | 2,115 |   |
| Advertising expense                                           |   |                                             | 214        |   |              |   | 277 |   |   |   | 856 |   |   |   | 597 |   |
| Other operating expense                                       |   |                                             | 3,118      |   |              |   | 2,219 |   |   |   | 9,188 |   |   |   | 5,801 |   |
| Total non-interest expenses                                   |   |                                             | 17,543     |   |              |   | 13,044 |   |   |   | 52,310 |   |   |   | 38,415 |   |
| Income before income taxes                                    |   |                                             | 5,115      |   |              |   | 1,368 |   |   |   | 16,503 |   |   |   | 3,064 |   |
| Provision for income taxes                                    |   |                                             | 963        |   |              |   | 205 |   |   |   | 3,157 |   |   |   | 383 |   |
| Net income                                                    |   | $                                                | 4,152      |   |              | $      | 1,163 |   |   | $ | 13,346 |   |   | $ | 2,681 |   |
|                                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average shares outstanding:                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                         |   |                                             | 19,871,405 |   |              |   | 16,302,603 |   |   |   | 20,194,817 |   |   |   | 16,256,081 |   |
| Diluted                                                       |   |                                             | 19,902,305 |   |              |   | 16,302,603 |   |   |   | 20,210,095 |   |   |   | 16,256,081 |   |
|                                                          |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                           |   |                                             |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                         |   | $                                                | 0.21       |   |              | $      | 0.07 |   |   | $ | 0.66 |   |   | $ | 0.17 |   |
| Diluted                                                       |   | $                                                | 0.21       |   |              | $      | 0.07 |   |   | $ | 0.66 |   |   | $ | 0.17 |   |

----

Table of Contents

CONSO

|                              |   |                   |       |    |   |       |   |          |    | Accumulated |   |           |   |     |   |          |   |   |   |
|-----------------------------------|--------|------------------------|------------|---------|--------|------------|--------|---------------|---------|-------------|--------|----------------|--------|----------|--------|---------------|--------|--------|--------|
|                              |   |                   |       |    |   | Additional |   |          |    | Other       |   | Unearned       |   | Unearned |   |          |   | Total  |   |
|                              |   | Common Stock           |       | Paid-In |   | Retained   |   | Comprehensive |    | Restricted  |   | Compensation - |   | Treasury |   | Stockholders' |   |
|                              |   | Shares                 |       | Amount  |   | Capital    |   | Earnings      |    | Income      |   | Shares         |   | ESOP     |   | Stock         |   | Equity |   |
|                              |   | (Dollars in thousands) |       |
|                              |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |
| Balance at December 31, 2008      |   |                   | 17,842,500 |    | $      | 178        |   | $             | 174,510 |        | $      | 67,854         |   | $        | 4,026  |          | $      | -      |   | $ | (13,560 | ) | $ | - |   | $ | 233,008 |   |
| Comprehensive income:             |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                        |   |                   | -          |    |   | -          |   |          | -       |        |   | 2,681          |   |     | -      |          |   | -      |   |   | - |   |   | - |   |   | 2,681 |   |
| Net unrealized gain on securities |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| available for sale, net of        |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| reclassification adjustment       |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| and tax effect                    |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | 2,171  |          |   | -      |   |   | - |   |   | - |   |   | 2,171 |   |
| Change in fair value and          |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization of derivative used   |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| for cash flow hedge, net of       |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| tax effect                        |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | (3     | )             |   | -      |   |   | - |   |   | - |   |   | (3 | ) |
| Total comprehensive income        |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   | 4,849 |   |
| Purchase of shares for incentive  |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| plans (713,700 shares)            |   |                   | -          |    |   | -          |   |          | (8,667  | )           |   | -              |   |     | -      |          |   | -      |   |   | - |   |   | (1,001 | ) |   | (9,668 | ) |
| Restricted stock awards           |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (639,807 shares)                  |   |                   | -          |    |   | -          |   |          | 8,317   |        |   | -              |   |     | -      |          |   | (8,317 | )      |   | - |   |   | - |   |   | - |   |
| Purchase of shares for Stock      |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Repurchase plan (288,900 shares)  |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | -      |          |   | -      |   |   | - |   |   | (3,675 | ) |   | (3,675 | ) |
| Equity incentive shares earned    |   |                   | -          |    |   | -          |   |          | 786     |        |   | -              |   |     | -      |          |   | 1,108  |   |   | - |   |   | - |   |   | 1,894 |   |
| Common stock held by ESOP         |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| committed to be released          |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (53,527 shares)                   |   |                   | -          |    |   | -          |   |          | 178     |        |   | -              |   |     | -      |          |   | -      |   |   | 535 |   |   | - |   |   | 713 |   |
| Dividends paid                    |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| ($.06 per share)                  |   |                   | -          |    |   | -          |   |          | -       |        |   | (977           | )      |     | -      |          |   | -      |   |   | - |   |   | - |   |   | (977 | ) |
| Balance at September 30, 2009     |   |                   | 17,842,500 |    | $      | 178        |   | $             | 175,124 |        | $      | 69,558         |   | $        | 6,194  |          | $      | (7,209 | )      | $ | (13,025 | ) | $ | (4,676 | ) | $ | 226,144 |   |
|                              |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009      |   |                   | 22,316,125 |    | $      | 223        |   | $             | 237,577 |        | $      | 71,864         |   | $        | 3,650  |          | $      | (6,793 | )      | $ | (12,846 | ) | $ | (8,009 | ) | $ | 285,666 |   |
| Comprehensive income:             |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                        |   |                   | -          |    |   | -          |   |          | -       |        |   | 13,346         |   |     | -      |          |   | -      |   |   | - |   |   | - |   |   | 13,346 |   |
| Net unrealized gain on securities |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| available for sale, net of        |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| reclassification adjustments      |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| and tax effect                    |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | 3,623  |          |   | -      |   |   | - |   |   | - |   |   | 3,623 |   |
| Change in fair value and          |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization of derivative used   |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |
| for cash flow hedge, net of       |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| tax effect                        |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | (3     | )             |   | -      |   |   | - |   |   | - |   |   | (3 | ) |
| Total comprehensive income        |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   | 16,966 |   |
| Restricted stock awards           |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| (33,715 shares)                   |   |                   | -          |    |   | -          |   |          | (12     | )           |   | -              |   |     | -      |          |   | (444   | )      |   | - |   |   | 456 |   |   | - |   |
| Purchase of shares for Stock      |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Repurchase plan (741,161 shares)  |   |                   | -          |    |   | -          |   |          | -       |        |   | -              |   |     | -      |          |   | -      |   |   | - |   |   | (10,964 | ) |   | (10,964 | ) |
| Equity incentive shares earned    |   |                   | -          |    |   | -          |   |          | 932     |        |   | -              |   |     | -      |          |   | 1,307  |   |   | - |   |   | - |   |   | 2,239 |   |
| Common stock held by ESOP         |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| committed to be released          |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| ( 53,527 shares)                  |   |                   | -          |    |   | -          |   |          | 261     |        |   | -              |   |     | -      |          |   | -      |   |   | 535 |   |   | - |   |   | 796 |   |
| Dividends paid                    |   |                   |       |    |   |       |   |          |    |        |   |           |   |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| ($.06 per share)                  |   |                   | -          |    |   | -          |   |          | -       |        |   | (1,213         | )      |     | -      |          |   | -      |   |   | - |   |   | - |   |   | (1,213 | ) |
| Balance at September 30, 2010     |   |                   | 22,316,125 |    | $      | 223        |   | $             | 238,758 |        | $      | 83,997         |   | $        | 7,270  |          | $      | (5,930 | )      | $ | (12,311 | ) | $ | (18,517 | ) | $ | 293,490 |   |

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Table of Contents

CONSO

|                                                                                    |   | Nine Months Ended |     |
|-----------------------------------------------------------------------------------------|--------|-------------------|----------|
|                                                                                    |   | September 30,     |     |
|                                                                                    |   | 2010              |     |   | 2009 |   |
|                                                                                    |   | (In thousands)    |     |
| Cash flows from operating activities:                                                   |   |              |     |   |   |   |
| Net income                                                                              |   | $                 | 13,346   |   |   | $ | 2,681 |   |
| Adjustments to reconcile net income to net cash provided by                             |   |              |     |   |   |   |   |   |
| operating activities:                                                                   |   |              |     |   |   |   |   |   |
| Provision for loan losses                                                               |   |              | 3,400    |   |   |   | 3,360 |   |
| Depreciation and amortization of premises and equipment and acquisition accounting, net |   |              | 1,393    |   |   |   | 2,629 |   |
| Accretion of net deferred loan fees and costs                                           |   |              | (828     | ) |   |   | (465 | ) |
| Deferred tax benefit                                                                    |   |              | (1,375   | ) |   |   | (1,867 | ) |
| Amortization of core deposit intangible and servicing rights                            |   |              | 1,796    |   |   |   | 311 |   |
| Amortization of stock-based compensation and ESOP expense                               |   |              | 3,035    |   |   |   | 2,607 |   |
| Amortization of securities, net                                                         |   |              | 1,005    |   |   |   | 282 |   |
| Net gain on sales of securities                                                         |   |              | (2,109   | ) |   |   | (4 | ) |
| Loss on impairment of securities                                                        |   |              | 779      |   |   |   | - |   |
| Change in fair value of derivative financial instruments                                |   |              | 7        |   |   |   | (22 | ) |
| Net loss on sales of other real estate owned                                            |   |              | 93       |   |   |   | 74 |   |
| Loans originated for sale                                                               |   |              | (36,272  | ) |   |   | (62,556 | ) |
| Proceeds from sales of loans originated for sale                                        |   |              | 34,470   |   |   |   | 60,931 |   |
| Changes in other assets and liabilities:                                                |   |              |     |   |   |   |   |   |
| Accrued interest receivable                                                             |   |              | 1,016    |   |   |   | (793 | ) |
| Other assets and bank-owned life insurance                                              |   |              | (4,952   | ) |   |   | (2,412 | ) |
| Accrued expenses and other liabilities                                                  |   |              | (2,942   | ) |   |   | (1,502 | ) |
| Net cash provided by operating activities                                               |   |              | 11,862   |   |   |   | 3,254 |   |
|                                                                                    |   |              |     |   |   |   |   |   |
| Cash flows from investing activities:                                                   |   |              |     |   |   |   |   |   |
| Purchases of certificates of deposit                                                    |   |              | (119     | ) |   |   | (297 | ) |
| Maturities of certificates of deposit                                                   |   |              | 10,798   |   |   |   | - |   |
| Activity in available-for-sale securities:                                              |   |              |     |   |   |   |   |   |
| Sales                                                                                   |   |              | 38,298   |   |   |   | 6,803 |   |
| Maturities, prepayments and calls                                                       |   |              | 263,954  |   |   |   | 139,852 |   |
| Purchases                                                                               |   |              | (330,327 | ) |   |   | (161,495 | ) |
| Activity in held-to-maturity securities:                                                |   |              |     |   |   |   |   |   |
| Sales                                                                                   |   |              | 10,150   |   |   |   | - |   |
| Maturities, prepayments and calls                                                       |   |              | 46,204   |   |   |   | - |   |
| Purchases                                                                               |   |              | (91,664  | ) |   |   | (10,000 | ) |
| Redemptions of restricted stock                                                         |   |              | 554      |   |   |   | - |   |
| Funds advanced on other real estate owned                                               |   |              | -        |   |   |   | (384 | ) |
| Proceeds from sales of other real estate owned                                          |   |              | 1,065    |   |   |   | 1,766 |   |
| Net loan originations                                                                   |   |              | (76,301  | ) |   |   | (127,776 | ) |
| Purchase of premises and equipment                                                      |   |              | (6,049   | ) |   |   | (6,368 | ) |
| Net cash used by investing activities                                                   |   |              | (133,437 | ) |   |   | (157,899 | ) |

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Table of Contents

|                                               |   | Nine Months Ended |     |
|----------------------------------------------------|--------|-------------------|----------|
|                                               |   | September 30,     |     |
|                                               |   | 2010              |     |   | 2009 |   |
|                                               |   | (In thousands)    |     |
| Cash flows from financing activities:              |   |              |     |   |   |   |
| Net increase (decrease) in:                        |   |              |     |   |   |   |
| Term certificates                                  |   |              | 9,279    |   |   |   | 88,191 |   |
| Other deposits                                     |   |              | 265,411  |   |   |   | 167,575 |   |
| Short-term borrowings                              |   |              | (135,046 | ) |   |   | (81,172 | ) |
| Activity in long-term debt:                        |   |              |     |   |   |   |   |   |
| Proceeds from advances                             |   |              | 1,561    |   |   |   | - |   |
| Payment of advances                                |   |              | (12,822  | ) |   |   | (1,155 | ) |
| Purchase of shares for incentive plans             |   |              | (10,964  | ) |   |   | (13,343 | ) |
| Dividends paid                                     |   |              | (1,213   | ) |   |   | (977 | ) |
| Net cash provided by financing activities          |   |              | 116,206  |   |   |   | 159,119 |   |
| Change in cash and cash equivalents                |   |              | (5,369   | ) |   |   | 4,474 |   |
| Cash and cash equivalents at beginning of period   |   |              | 71,757   |   |   |   | 33,129 |   |
| Cash and cash equivalents at end of period         |   | $                 | 66,388   |   |   | $ | 37,603 |   |
|                                               |   |              |     |   |   |   |   |   |
| Supplementary disclosure of cash flow information: |   |              |     |   |   |   |   |   |
| Cash paid during the period for:                   |   |              |     |   |   |   |   |   |
| Interest                                           |   | $                 | 24,946   |   |   | $ | 26,768 |   |
| Income taxes                                       |   |              | 4,137    |   |   |   | 1,068 |   |
| Non-cash financing and investing activities:       |   |              |     |   |   |   |   |   |
| Transfers from loans to other real estate owned    |   |              | 563      |   |   |   | 2,165 |   |

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Table of Contents

NOTES

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

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

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Table of Contents

|                                  | Balance Sheet  |   | Fair   |   | Balance Sheet |              | Fair   |   |
|---------------------------------------|----------------|--------|--------|--------|---------------|-------------------|--------|--------|
|                                  | Location       |   | Value  |   | Location      |              | Value  |   |
|                                  | (In thousands) |   |
| Derivatives not designated as hedging |           |   |   |   |          |              |   |   |
| instruments:                          |           |   |   |   |          |              |   |   |
|                                  |           |   |   |   |          |              |   |   |
| September 30, 2010:                   |           |   |   |   |          |              |   |   |
| Interest rate swap agreements         | Other assets   |   | $      | 1,199  |          | Other liabilities |   | $      | 1,212 |   |
| Interest rate cap agreements          | Other assets   |   |   | 2      |          | Other liabilities |   |   | 2 |   |
| Total interest rate products          |           |   | $      | 1,201  |          |              |   | $      | 1,214 |   |
|                                  |           |   |   |   |          |              |   |   |   |   |
| December 31, 2009:                    |           |   |   |   |          |              |   |   |   |   |
| Interest rate swap agreements         | Other assets   |   | $      | 1,176  |          | Other liabilities |   | $      | 1,185 |   |
| Interest rate cap agreements          | Other assets   |   |   | 109    |          | Other liabilities |   |   | 106 |   |
| Total interest rate products          |           |   | $      | 1,285  |          |              |   | $      | 1,291 |   |

|                                                |   |                    |   | Gain (Loss)         |   |   | Gain (Loss)         |   |
|-----------------------------------------------------|--------|-------------------------|--------|---------------------|--------|--------|---------------------|--------|
|                                                |   |                    |   | Recognized          |   |   | Recognized          |   |
|                                                |   |                    |   | in Income on        |   |   | in Income on        |   |
|                                                |   |                    |   | Derivatives for the |   |   | Derivatives for the |   |
|                                                |   | Location of Gain (Loss) |   | Quarter Ended       |   |   | Nine Months Ended   |   |
| Derivatives Not Designated                          |   | Recognized in           |   | September 30,       |   |   | September 30,       |   |
| as Hedging Instruments                              |   | Income on Derivatives   |   | 2010                |   |   | 2009                |   |   | 2010 |   |   | 2009 |   |
|                                                |   |                    |   | (In thousands)      |   |
|  Interest rate swap agreements                 |   |  Other income      |   | $                   | 1      |   |                | $      | 1 |   |   | $ | (3 | ) |   | $ | 18 |   |
|  Interest rate cap agreements                  |   |  Other income      |   |                | (1     | )      |                |   | (1 | ) |   |   | (4 | ) |   |   | 4 |   |
|  Total income (loss) on interest rate products |   | $                       | -      |                |   | $      | -                   |   |   | $ | (7 | ) |   | $ | 22 |   |

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Table of Contents

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

|                                     |   |           |    |   | Gross      |   |   | Gross      |   |   |       |   |
|------------------------------------------|--------|----------------|---------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
|                                     |   | Amortized      |    |   | Unrealized |   |   | Unrealized |   |   |       |   |
|                                     |   | Cost           |    |   | Gains      |   |   | Losses     |   |   | Fair Value |   |
|                                     |   | (In thousands) |    |
| September 30, 2010:                      |   |           |    |   |       |   |   |       |   |   |       |   |
| Securities Available for Sale            |   |           |    |   |       |   |   |       |   |   |       |   |
| Debt securities:                         |   |           |    |   |       |   |   |       |   |   |       |   |
| Other government-sponsored enterprises:  |   |           |    |   |       |   |   |       |   |   |       |   |
| Federal Home Loan Bank                   |   | $              | 177,866 |   |       | $      | 2,460  |       |   | $      | -          |   |   | $ | 180,326 |   |
| Federal Farm Credit Bank                 |   |           | 72,551  |   |       |   | 1,085  |       |   |   | -          |   |   |   | 73,636 |   |
| Residential mortgage-backed:             |   |           |    |   |       |   |   |       |   |   |       |   |   |   |   |   |
| Federal Home Loan Mortgage Corporation   |   |           | 66,842  |   |       |   | 2,499  |       |   |   | (2         | )      |   |   | 69,339 |   |
| Federal National Mortgage Association    |   |           | 88,261  |   |       |   | 3,669  |       |   |   | (18        | )      |   |   | 91,912 |   |
| Government National Mortgage Association |   |           | 55,335  |   |       |   | 1,877  |       |   |   | (49        | )      |   |   | 57,163 |   |
| Municipal bonds                          |   |           | 40,588  |   |       |   | 1,171  |       |   |   | (79        | )      |   |   | 41,680 |   |
| Other bonds and notes                    |   |           | 250     |   |       |   | -      |       |   |   | -          |   |   |   | 250 |   |
| Total debt securities                    |   |           | 501,693 |   |       |   | 12,761 |       |   |   | (148       | )      |   |   | 514,306 |   |
| Marketable equity securities:            |   |           |    |   |       |   |   |       |   |   |       |   |   |   |   |   |
| Mutual funds                             |   |           | 612     |   |       |   | 24     |       |   |   | -          |   |   |   | 636 |   |
| Total securities available for sale      |   | $              | 502,305 |   |       | $      | 12,785 |       |   | $      | (148       | )      |   | $ | 514,942 |   |

| Securities Held to Maturity              |   |   |    |   |   |   |   |   |   |   |   |   |
|------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Debt securities:                         |   |   |    |   |   |   |   |   |   |   |   |   |
| Other government-sponsored enterprises:  |   |   |    |   |   |   |   |   |   |   |   |   |
| Federal Home Loan Bank                   |   | $      | 59,938  |   |   | $      | 556    |   |   | $      | -      |   |   | $ | 60,494 |   |
| Federal Farm Credit Bank                 |   |   | 18,039  |   |   |   | 275    |   |   |   | (20    | )      |   |   | 18,294 |   |
| Residential mortgage-backed:             |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Home Loan Mortgage Corporation   |   |   | 21,536  |   |   |   | 384    |   |   |   | -      |   |   |   | 21,920 |   |
| Federal National Mortgage Association    |   |   | 28,734  |   |   |   | 548    |   |   |   | (29    | )      |   |   | 29,253 |   |
| Government National Mortgage Association |   |   | 18,527  |   |   |   | 290    |   |   |   | (2     | )      |   |   | 18,815 |   |
| Other bonds                              |   |   | 200     |   |   |   | -      |   |   |   | -      |   |   |   | 200 |   |
| Total securities held to maturity        |   | $      | 146,974 |   |   | $      | 2,053  |   |   | $      | (51    | )      |   | $ | 148,976 |   |

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Table of Contents

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

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

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Table of Contents

|                                     |   | Less Than Twelve Months |   |   | Over Twelve Months |   |
|------------------------------------------|--------|-------------------------|--------|--------|--------------------|--------|
|                                     |   | Gross                   |   |   |               |   |   | Gross |   |   |   |   |
|                                     |   | Unrealized              |   |   | Fair               |   |   | Unrealized |   |   | Fair |   |
|                                     |   | Losses                  |   |   | Value              |   |   | Losses |   |   | Value |   |
|                                     |   | (In thousands)          |   |
| September 30, 2010:                      |   |                    |   |   |               |   |   |   |   |   |   |   |
| Securities Available for Sale            |   |                    |   |   |               |   |   |   |   |   |   |   |
| Debt securities:                         |   |                    |   |   |               |   |   |   |   |   |   |   |
| Residential mortgage-backed:             |   |                    |   |   |               |   |   |   |   |   |   |   |
| Federal Home Loan Mortgage Corporation   |   | $                       | 2      |   |               | $      | 1,278 |   |   | $ | - |   |   | $ | - |   |
| Federal National Mortgage Association    |   |                    | 18     |   |               |   | 3,351 |   |   |   | - |   |   |   | - |   |
| Government National Mortgage Association |   |                    | 49     |   |               |   | 10,212 |   |   |   | - |   |   |   | - |   |
| Municipal bonds                          |   |                    | 79     |   |               |   | 8,749 |   |   |   | - |   |   |   | - |   |
|                                     |   | $                       | 148    |   |               | $      | 23,590 |   |   | $ | - |   |   | $ | - |   |
|                                     |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held to Maturity              |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                         |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage-backed:             |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Federal Farm Credit Bank                 |   | $                       | 20     |   |               | $      | 2,980 |   |   | $ | - |   |   | $ | - |   |
| Federal National Mortgage Association    |   |                    | 29     |   |               |   | 3,427 |   |   |   |   |   |   |   |   |   |
| Government National Mortgage Association |   |                    | 2      |   |               |   | 1,547 |   |   |   | - |   |   |   | - |   |
|                                     |   | $                       | 51     |   |               | $      | 7,954 |   |   | $ | - |   |   | $ | - |   |

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

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

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|                                     |   | September 30, 2010 |   |
|------------------------------------------|--------|--------------------|--------|
|                                     |   | Level 1            |   |   | Level 2 |   |   | Level 3 |   |   | Fair Value |   |
|                                     |   | (In thousands)     |   |
| Assets                                   |   |               |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:           |   |               |   |   |   |   |   |   |   |   |   |   |
| Debt securities:                         |   |               |   |   |   |   |   |   |   |   |   |   |
| Other government-sponsored enterprises:  |   |               |   |   |   |   |   |   |   |   |   |   |
| Federal Home Loan Bank                   |   | $                  | -      |   |   | $ | 180,326 |   |   | $ | - |   |   | $ | 180,326 |   |
| Federal Farm Credit Bank                 |   |               | -      |   |   |   | 73,636 |   |   |   | - |   |   |   | 73,636 |   |
| Residential mortgage-backed:             |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Home Loan Mortgage Corporation   |   |               | -      |   |   |   | 69,339 |   |   |   | - |   |   |   | 69,339 |   |
| Federal National Mortgage Association    |   |               | -      |   |   |   | 91,912 |   |   |   | - |   |   |   | 91,912 |   |
| Government National Mortgage Association |   |               | -      |   |   |   | 57,163 |   |   |   | - |   |   |   | 57,163 |   |
| Municipal bonds                          |   |               | -      |   |   |   | 41,680 |   |   |   | - |   |   |   | 41,680 |   |
| Other bonds and notes                    |   |               | -      |   |   |   | 250 |   |   |   | - |   |   |   | 250 |   |
| Marketable equity securities:            |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mutual funds                             |   |               | -      |   |   |   | 636 |   |   |   | - |   |   |   | 636 |   |
| Other:                                   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate products                   |   |               | -      |   |   |   | 1,201 |   |   |   | - |   |   |   | 1,201 |   |
| Total assets                             |   | $                  | -      |   |   | $ | 516,143 |   |   | $ | - |   |   | $ | 516,143 |   |
|                                     |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                              |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate products                   |   | $                  | -      |   |   | $ | 1,214 |   |   | $ | - |   |   | $ | 1,214 |   |

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

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|                                                               |   | Assets                        |   |
|--------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                               |   | Securities Available for Sale |   |
|                                                               |   | (In thousands)                |   |
| Balance as of December 31, 2008                                    |   | $                             | -      |   |
|                                                               |   |                          |   |   |
| Total unrealized losses included in other comprehensive income     |   |                          | -      |   |
| Purchases                                                          |   |                          | 779    |   |
| Balance as of September 30, 2009                                   |   | $                             | 779    |   |
|                                                               |   |                          |   |   |
| Change in unrealized losses relating to instruments still held at  |   |                          |   |   |
| September 30, 2009                                                 |   | $                             | -      |   |
|                                                               |   |                          |   |   |
|                                                               |   |                          |   |   |
| Balance as of December 31, 2009                                    |   | $                             | 692    |   |
|                                                               |   |                          |   |   |
| Loss on impairment of securities                                   |   |                          | (779   | ) |
| Change in unrealized losses included in other comprehensive income |   |                          | 87     |   |
| Total unrealized losses included in other comprehensive income     |   |                          | -      |   |
| Purchases                                                          |   |                          | -      |   |
| Balance as of September 30, 2010                                   |   | $                             | -      |   |
|                                                               |   |                          |   |   |
| Change in unrealized losses relating to instruments still held at  |   |                          |   |   |
| September 30, 2010                                                 |   | $                             | 779    |   |

|                    |   |               |   |   |    |   |   |    |   |   | Quarter       |   |   | Nine Months   |   |
|-------------------------|--------|--------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------------|--------|--------|---------------|--------|
|                    |   |               |   |   |    |   |   |    |   |   | Ended         |   |   | Ended         |   |
|                    |   |               |   |   |    |   |   |    |   |   | September 30, |   |   | September 30, |   |
|                    |   | September 30, 2010 |   |   | 2010    |   |   | 2010    |   |
|                    |   |               |   |   |    |   |   |    |   |   | Total         |   |   | Total         |   |
|                    |   | Level 1            |   |   | Level 2 |   |   | Level 3 |   |   | Losses        |   |   | Losses        |   |
|                    |   | (In thousands)     |   |
| Assets                  |   |               |   |   |    |   |   |    |   |   |          |   |   |          |   |
| Other real estate owned |   | $                  | -      |   |    | $      | -      |    |   | $      | 832           |   |   | $             | -      |   |   | $ | - |   |
| Impaired loans          |   |               | -      |   |    |   | -      |    |   |   | 1,129         |   |   |          | 265    |   |   |   | 1,102 |   |
|                    |   | $                  | -      |   |    | $      | -      |    |   | $      | 1,961         |   |   | $             | 265    |   |   | $ | 1,102 |   |

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|                    |   |              |   |   |    |   |   |    |   |   | Quarter       |   |   | Nine Months   |   |
|-------------------------|--------|-------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------------|--------|--------|---------------|--------|
|                    |   |              |   |   |    |   |   |    |   |   | Ended         |   |   | Ended         |   |
|                    |   |              |   |   |    |   |   |    |   |   | September 30, |   |   | September 30, |   |
|                    |   | December 31, 2009 |   |   | 2009    |   |   | 2009    |   |
|                    |   |              |   |   |    |   |   |    |   |   | Total         |   |   | Total         |   |
|                    |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Losses        |   |   | Losses        |   |
|                    |   | (In thousands)    |   |
| Assets                  |   |              |   |   |    |   |   |    |   |   |          |   |   |          |   |
| Other real estate owned |   | $                 | -      |   |    | $      | -      |    |   | $      | 1,427         |   |   | $             | -      |   |   | $ | 82 |   |
| Impaired loans          |   |              | -      |   |    |   | -      |    |   |   | 653           |   |   |          | 327    |   |   |   | 1,188 |   |
|                    |   | $                 | -      |   |    | $      | -      |    |   | $      | 2,080         |   |   | $             | 327    |   |   | $ | 1,270 |   |

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|                               |   | September 30, 2010 |      |   | December 31, 2009 |   |
|------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                               |   | Carrying           |      |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                               |   | Amount             |      |   | Value             |   |   | Amount |   |   | Value |   |
|                               |   | (In thousands)     |      |
| Financial assets:                  |   |               |      |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents          |   | $                  | 66,388    |   |              | $      | 66,388 |   |   | $ | 71,757 |   |   | $ | 71,757 |   |
| Certificates of deposit            |   |               | -         |   |              |   | - |   |   |   | 10,679 |   |   |   | 10,679 |   |
| Securities available for sale      |   |               | 514,492   |   |              |   | 514,492 |   |   |   | 481,100 |   |   |   | 481,100 |   |
| Securities held to maturity        |   |               | 146,974   |   |              |   | 148,976 |   |   |   | 110,932 |   |   |   | 108,697 |   |
| Loans and loans held for sale, net |   |               | 1,728,356 |   |              |   | 1,733,697 |   |   |   | 1,653,413 |   |   |   | 1,660,176 |   |
| Restricted stock                   |   |               | 18,172    |   |              |   | 18,172 |   |   |   | 18,726 |   |   |   | 18,726 |   |
| Accrued interest receivable        |   |               | 8,982     |   |              |   | 8,982 |   |   |   | 9,998 |   |   |   | 9,998 |   |
|                               |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:             |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                    |   |               | 241,410   |   |              |   | 241,410 |   |   |   | 224,776 |   |   |   | 224,776 |   |
| Savings and NOW accounts           |   |               | 445,380   |   |              |   | 445,380 |   |   |   | 376,975 |   |   |   | 376,975 |   |
| Money market accounts              |   |               | 802,055   |   |              |   | 802,055 |   |   |   | 621,683 |   |   |   | 621,683 |   |
| Term certificates                  |   |               | 550,738   |   |              |   | 555,468 |   |   |   | 542,369 |   |   |   | 545,740 |   |
| Short-term borrowings              |   |               | 37,783    |   |              |   | 37,783 |   |   |   | 172,829 |   |   |   | 172,829 |   |
| Long-term debt                     |   |               | 206,155   |   |              |   | 212,628 |   |   |   | 218,475 |   |   |   | 222,122 |   |
| Subordinated debt                  |   |               | 29,965    |   |              |   | 26,401 |   |   |   | 29,965 |   |   |   | 12,402 |   |
| Accrued interest payable           |   |               | 1,648     |   |              |   | 1,648 |   |   |   | 1,838 |   |   |   | 1,838 |   |
|                               |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| On-balance sheet derivative        |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| financial instruments:             |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate products:            |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Assets                             |   |               | 1,201     |   |              |   | 1,201 |   |   |   | 1,285 |   |   |   | 1,285 |   |
| Liabilities                        |   |               | 1,214     |   |              |   | 1,214 |   |   |   | 1,291 |   |   |   | 1,291 |   |

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

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|                                           |   |           |   |   |         |   |   |     |   | Weighted     |
|------------------------------------------------|--------|----------------|--------|--------|--------------|--------|--------|----------|--------|--------------|
|                                           |   |           |   |   |         |   |   | Net      |   | Average      |
|                                           |   | Gross Carrying |   |   | Accumulated  |   |   | Carrying |   | Amortization |
|                                           |   | Amount         |   |   | Amortization |   |   | Amount   |   | Period       |
|                                           |   | (In thousands) |   |   |
| September 30, 2010:                            |   |           |   |   |         |   |   |     |   |         |
| Revere acquisition, September 26, 2001         |   | $              | 1,603  |   |         | $      | (1,455 | )        |   | $            | 148 |   | 10 years |
| Beverly National acquisition, October 30, 2009 |   |           | 11,561 |   |         |   | (1,927 | )        |   |         | 9,634 |   | 10 years |
|                                           |   | $              | 13,164 |   |         | $      | (3,382 | )        |   | $            | 9,782 |   |   |
|                                           |   |           |   |   |         |   |   |     |   |         |   |   |   |
| December 31, 2009:                             |   |           |   |   |         |   |   |     |   |         |   |   |   |
| Revere acquisition, September 26, 2001         |   | $              | 1,603  |   |         | $      | (1,366 | )        |   | $            | 237 |   | 10 years |
| Beverly National acquisition, October 30, 2009 |   |           | 11,561 |   |         |   | (350   | )        |   |         | 11,211 |   | 10 years |
|                                           |   | $              | 13,164 |   |         | $      | (1,716 | )        |   | $            | 11,448 |   |   |

|   |                                                             |   |               |   |   | Nine Months        |           |
|--------|------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|----------------|
|   |                                                             |   | Quarter Ended      |   |   | Ended              |           |
|   | Aggregate Amortization Expense:                                  |   | September 30, 2010 |   |   | September 30, 2010 |           |
|   |                                                             |   | (In thousands)     |   |
|   | Amortization expense                                             |   | $                  | 556    |   |               | $              | 1,666 |   |
|   |                                                             |   |               |   |   |               |           |   |   |
|   | Estimated Amortization Expense for the Years Ending December 31, |   |               |   |   |               | Amount         |   |
|   |                                                             |   |               |   |   |               | (In thousands) |   |
|   | 2010                                                             |   |               |   |   |               | $              | 2,186 |   |
|   | 2011                                                             |   |               |   |   |               |           | 1,976 |   |
|   | 2012                                                             |   |               |   |   |               |           | 1,647 |   |
|   | 2013                                                             |   |               |   |   |               |           | 1,436 |   |
|   | 2014                                                             |   |               |   |   |               |           | 1,226 |   |
|   | Thereafter                                                       |   |               |   |   |               |           | 2,977 |   |
|   |                                                             |   |               |   |   |               | $              | 11,448 |   |

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

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

|                           |   | Quarter             |   |   | Nine Months         |   |
|--------------------------------|--------|---------------------|--------|--------|---------------------|--------|
|                           |   | Ended September 30, |   |   | Ended September 30, |   |
|                           |   | 2010                |   |   | 2009                |   |   | 2010 |   |   | 2009 |   |
|                           |   | (In thousands)      |   |
| Interest cost                  |   | $                   | 124    |   |                | $      | - |   |   | $ | 371 |   |   | $ | - |   |
| Expected return on plan assets |   |                | (128   | )      |                |   | - |   |   |   | (383 | ) |   |   | - |   |
| Unrecognized actuarial loss    |   |                | -      |   |                |   | - |   |   |   | - |   |   |   | - |   |
| Net pension benefit            |   | $                   | (4     | )      |                | $      | - |   |   | $ | (12 | ) |   | $ | - |   |

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|                           |   | Quarter             |   |   | Nine Months         |   |
|--------------------------------|--------|---------------------|--------|--------|---------------------|--------|
|                           |   | Ended September 30, |   |   | Ended September 30, |   |
|                           |   | 2010                |   |   | 2009                |   |   | 2010 |   |   | 2009 |   |
|                           |   | (In thousands)      |   |
| Interest cost                  |   | $                   | 15     |   |                | $      | - |   |   | $ | 45 |   |   | $ | - |   |
| Expected return on plan assets |   |                | -      |   |                |   | - |   |   |   | - |   |   |   | - |   |
| Unrecognized actuarial loss    |   |                | -      |   |                |   | - |   |   |   | - |   |   |   | - |   |
| Net pension expense            |   | $                   | 15     |   |                | $      | - |   |   | $ | 45 |   |   | $ | - |   |

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

|                                                |   | Quarter Ended |       |   | Nine Months Ended |   |
|-----------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                                |   | September 30, |       |   | September 30,     |   |
|                                                |   | 2010          |       |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                |   |          |       |   |              |   |
| Average number of common shares issued              |   |          | 22,316,125 |   |              |   | 17,842,500 |   |   |   | 22,316,125 |   |   |   | 17,842,500 |   |
| Less:  Average treasury shares            |   |          | (1,201,822 | )      |              |   | (225,629 | ) |   |   | (860,744 | ) |   |   | (254,485 | ) |
| Less:  Average unallocated ESOP shares    |   |          | (1,242,898 | )      |              |   | (1,314,268 | ) |   |   | (1,260,564 | ) |   |   | (1,331,934 | ) |
| Average number of common shares outstanding used to |   |          |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| calculate basic earnings per common share           |   |          | 19,871,405 |   |              |   | 16,302,603 |   |   |   | 20,194,817 |   |   |   | 16,256,081 |   |
| Effect of dilutive unvested stock awards            |   |          | 30,900     |   |              |   | - |   |   |   | 15,278 |   |   |   | - |   |
| Average number of common shares outstanding used to |   |          |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| calculate diluted earnings per common share         |   |          | 19,902,305 |   |              |   | 16,302,603 |   |   |   | 20,210,095 |   |   |   | 16,256,081 |   |

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

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

Item 2.

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|   | · | 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, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, that could lead to changes in the competitive balance among financial institutions, restrictions on bank activities, changes in costs (including deposit insurance premiums), increased regulatory scrutiny, declines in consumer confidence in depository institutions or changes in the secondary market for bank loan and other products; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

|   | · | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies and the FASB; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

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

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|                      |   | September 30, 2010     |      |   | December 31, 2009 |   |
|---------------------------|--------|------------------------|-----------|--------|-------------------|--------|
|                      |   | Amount                 |      |   | Percent           |   |   | Amount |   |   | Percent |   |
|                      |   | (Dollars in thousands) |      |
| Real estate mortgages:    |   |                   |      |   |              |   |   |   |   |   |   |   |
| Construction              |   | $                      | 117,244   |   |              |   | 6.7 | % |   | $ | 125,952 |   |   |   | 7.5 | % |
| Residential               |   |                   | 297,215   |   |              |   | 17.1 |   |   |   | 290,894 |   |   |   | 17.4 |   |
| Commercial                |   |                   | 392,857   |   |              |   | 22.5 |   |   |   | 473,075 |   |   |   | 28.4 |   |
| Home equity               |   |                   | 87,487    |   |              |   | 5.0 |   |   |   | 86,269 |   |   |   | 5.2 |   |
| C&I                   |   |                   | 845,477   |   |              |   | 48.5 |   |   |   | 687,808 |   |   |   | 41.2 |   |
| Consumer                  |   |                   | 3,379     |   |              |   | 0.2 |   |   |   | 4,523 |   |   |   | 0.3 |   |
| Total loans               |   |                   | 1,743,659 |   |              |   | 100.0 | % |   |   | 1,668,521 |   |   |   | 100.0 | % |
| Allowance for loan losses |   |                   | (16,510   | )      |              |   |   |   |   |   | (14,699 | ) |   |   |   |   |
| Net deferred loan fees    |   |                   | (2,543    | )      |              |   |   |   |   |   | (2,357 | ) |   |   |   |   |
| Loans, net                |   | $                      | 1,724,606 |   |              |   |   |   |   | $ | 1,651,465 |   |   |   |   |   |

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|                                            |   |   | September 30,          |   |   | December 31, |   |
|-------------------------------------------------|--------|--------|------------------------|--------|--------|--------------|--------|
|                                            |   |   | 2010                   |   |   | 2009         |   |
|                                            |   |   | (Dollars in thousands) |   |
| Non-accrual loans:                              |   |   |                   |   |   |         |   |
| Real estate mortgages:                          |   |   |                   |   |   |         |   |
| Construction                                    |   |   | $                      | -      |   |         | $      | 935 |   |
| Residential                                     |   |   |                   | 6,430  |   |         |   | 3,332 |   |
| Commercial                                      |   |   |                   | 369    |   |         |   | 926 |   |
| Home equity                                     |   |   |                   | 1,660  |   |         |   | 1,139 |   |
| Total real estate mortgages                     |   |   |                   | 8,459  |   |         |   | 6,332 |   |
| C&I                                         |   |   |                   | 2,462  |   |         |   | 2,286 |   |
| Consumer                                        |   |   |                   | 13     |   |         |   | 6 |   |
| Troubled debt restructured loans - non-accrual  |   |   |                   | 1,370  |   |         |   | - |   |
| Total non-accrual loans (1)                     |   |   | $                      | 12,304 |   |         | $      | 8,624 |   |
| Non-performing accrual loans (2)                |   |   | $                      | -      |   |         | $      | 1,495 |   |
| Troubled debt restructured loans - accruing (3) |   |   | $                      | 6,066  |   |         | $      | 7,700 |   |
| Total non-performing loans                      |   |   | $                      | 18,370 |   |         | $      | 17,819 |   |
| Other real estate owned                         |   |   |                   | 832    |   |         |   | 1,427 |   |
| Total non-performing assets                     |   |   | $                      | 19,202 |   |         | $      | 19,246 |   |
| Total non-performing loans to total loans (4)   |   |   |                   | 1.05   | %      |         |   | 1.01 | % |
| Total non-performing loans to total assets      |   |   |                   | 0.70   | %      |         |   | 0.71 | % |
| Total non-performing assets to total assets     |   |   |                   | 0.73   | %      |         |   | 0.77 | % |

| (1) | All loans on non-accrual status are considered non-performing. |
|-----|----------------------------------------------------------------|

| (2)  | At December 31, 2009, non-performing accrual loans consisted of six loans adequately secured and in the process of collection. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------|

| (3) | Troubled debt restructured loans that have been performing in accordance with their modified terms for a period of less than 12 months are considered non-performing. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Total loans include loans held for sale. |
|-----|------------------------------------------|

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|                                      |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   | At or For the |      |   |
|-------------------------------------------|--------|----------------------------|-----------|--------|----------------------------|--------|--------|--------------|--------|--------|--------|-----------|--------|--------|--------|---------------|-----------|--------|
|                                      |   | At or For the Three        |      |   | At or For the Nine         |   |   | Year Ended   |   |   |
|                                      |   | Months Ended September 30, |      |   | Months Ended September 30, |   |   | December 31, |   |   |
|                                      |   | 2010                       |      |   |                       | 2009   |   |         | 2010   |   |   |      | 2009   |   |   | 2009          |      |   |
|                                      |   | (Dollars in thousands)     |      |   |                       |   |   |
|                                      |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |
| Allowance balance at beginning of period  |   | $                          | 16,244    |   |                       |   | $      | 12,719       |   |   | $      | 14,699    |   |   |   | $             | 12,133    |   |   | $ | 12,133 |   |   |
| Provision for loan losses                 |   |                       | 900       |   |                       |   |   | 1,400        |   |   |   | 3,400     |   |   |   |          | 3,360     |   |   |   | 5,110 |   |   |
| Charge-offs:                              |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Real estate mortgages:                    |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Construction                              |   |                       | 80        |   |                       |   |   | 110          |   |   |   | 560       |   |   |   |          | 585       |   |   |   | 585 |   |   |
| Residential                               |   |                       | -         |   |                       |   |   | 1            |   |   |   | -         |   |   |   |          | 50        |   |   |   | 298 |   |   |
| Commercial                                |   |                       | -         |   |                       |   |   | -            |   |   |   | -         |   |   |   |          | -         |   |   |   | - |   |   |
| Home equity                               |   |                       | -         |   |                       |   |   | -            |   |   |   | -         |   |   |   |          | -         |   |   |   | 207 |   |   |
| Total real estate mortgages               |   |                       | 80        |   |                       |   |   | 111          |   |   |   | 560       |   |   |   |          | 635       |   |   |   | 1,090 |   |   |
| C&I                                   |   |                       | 563       |   |                       |   |   | 135          |   |   |   | 1,072     |   |   |   |          | 966       |   |   |   | 1,411 |   |   |
| Consumer                                  |   |                       | -         |   |                       |   |   | 5            |   |   |   | 43        |   |   |   |          | 73        |   |   |   | 106 |   |   |
| Total charge-offs                         |   |                       | 643       |   |                       |   |   | 251          |   |   |   | 1,675     |   |   |   |          | 1,674     |   |   |   | 2,607 |   |   |
| Recoveries:                               |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Real estate mortgages:                    |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Construction                              |   |                       | -         |   |                       |   |   | 5            |   |   |   | 33        |   |   |   |          | 5         |   |   |   | 6 |   |   |
| Residential                               |   |                       | -         |   |                       |   |   | -            |   |   |   | -         |   |   |   |          | -         |   |   |   | - |   |   |
| Commercial                                |   |                       | -         |   |                       |   |   | -            |   |   |   | -         |   |   |   |          | -         |   |   |   | - |   |   |
| Home equity                               |   |                       | -         |   |                       |   |   | -            |   |   |   | -         |   |   |   |          | -         |   |   |   | - |   |   |
| Total real estate mortgages               |   |                       | -         |   |                       |   |   | 5            |   |   |   | 33        |   |   |   |          | 5         |   |   |   | 6 |   |   |
| C&I                                   |   |                       | 7         |   |                       |   |   | -            |   |   |   | 42        |   |   |   |          | 25        |   |   |   | 26 |   |   |
| Consumer                                  |   |                       | 2         |   |                       |   |   | 5            |   |   |   | 11        |   |   |   |          | 29        |   |   |   | 31 |   |   |
| Total recoveries                          |   |                       | 9         |   |                       |   |   | 10           |   |   |   | 86        |   |   |   |          | 59        |   |   |   | 63 |   |   |
| Net charge-offs                           |   |                       | 634       |   |                       |   |   | 241          |   |   |   | 1,589     |   |   |   |          | 1,615     |   |   |   | 2,544 |   |   |
| Allowance balance at end of period        |   | $                          | 16,510    |   |                       |   | $      | 13,878       |   |   | $      | 16,510    |   |   |   | $             | 13,878    |   |   | $ | 14,699 |   |   |
|                                      |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Total loans outstanding (1)               |   | $                          | 1,747,409 |   |                       |   | $      | 1,246,809    |   |   | $      | 1,747,409 |   |   |   | $             | 1,246,809 |   |   | $ | 1,668,521 |   |   |
| Average loans outstanding                 |   | $                          | 1,666,209 |   |                       |   | $      | 1,213,788    |   |   | $      | 1,661,290 |   |   |   | $             | 1,168,888 |   |   | $ | 1,252,625 |   |   |
|                                      |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| Allowance for loan losses as a percent of |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| total loans outstanding                   |   |                       | 0.94      | %      | (2)                        |   |   | 1.11         | %      |   |   | 0.94      | %      | (2)    |   |          | 1.11      | %      |   |   | 0.88 | % | (2) |
| Net loans charged off as a percent of     |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| average loans outstanding (3)             |   |                       | 0.15      | %      |                       |   |   | 0.08         | %      |   |   | 0.13      | %      |   |   |          | 0.18      | %      |   |   | 0.20 | % |   |
| Allowance for loan losses to non-         |   |                       |      |   |                       |   |   |         |   |   |   |      |   |   |   |          |      |   |   |   |   |   |   |
| performing loans                          |   |                       | 89.87     | %      |                       |   |   | 115.72       | %      |   |   | 89.87     | %      |   |   |          | 115.72    | %      |   |   | 82.49 | % |   |

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

| (2) | The acquisition of Beverly National into the Company and the attendant acquisition accounting considerations are the reasons that the reserve represents a lower percentage of gross loans. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Ratios for the three and nine months ended September 30, 2010 and 2009 are annualized. |
|-----|----------------------------------------------------------------------------------------|

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|                            |   | September 30, 2010     |      |   | December 31, 2009 |   |
|---------------------------------|--------|------------------------|-----------|--------|-------------------|--------|
|                            |   | Amount                 |      |   | Percent           |   |   | Amount |   |   | Percent |   |
|                            |   | (Dollars in thousands) |      |
|                            |   |                   |      |   |              |   |   |   |   |   |   |   |
| Demand deposits                 |   | $                      | 241,410   |   |              |   | 11.8 | % |   | $ | 224,776 |   |   |   | 12.7 | % |
| Savings and NOW accounts        |   |                   | 445,380   |   |              |   | 21.9 |   |   |   | 376,975 |   |   |   | 21.4 |   |
| Money market accounts           |   |                   | 802,055   |   |              |   | 39.3 |   |   |   | 621,683 |   |   |   | 35.2 |   |
| Total non-certificate accounts  |   |                   | 1,488,845 |   |              |   | 73.0 |   |   |   | 1,223,434 |   |   |   | 69.3 |   |
| Term certificates over $100,000 |   |                   | 327,770   |   |              |   | 16.1 |   |   |   | 314,097 |   |   |   | 17.8 |   |
| Other term certificates         |   |                   | 222,968   |   |              |   | 10.9 |   |   |   | 228,272 |   |   |   | 12.9 |   |
| Total certificate accounts      |   |                   | 550,738   |   |              |   | 27.0 |   |   |   | 542,369 |   |   |   | 30.7 |   |
| Total deposits                  |   | $                      | 2,039,583 |   |              |   | 100.0 | % |   | $ | 1,765,803 |   |   |   | 100.0 | % |

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|                        |   | September 30,  |    |   | December 31, |   |
|-----------------------------|--------|----------------|---------|--------|--------------|--------|
|                        |   | 2010           |    |   | 2009         |   |
|                        |   | (In thousands) |    |
| Short-term borrowings:      |   |           |    |   |         |   |
| Repurchase agreements       |   | $              | 37,783  |   |         | $      | 52,829 |   |
| FHLB advances               |   |           | -       |   |         |   | 120,000 |   |
| Total short-term borrowings |   |           | 37,783  |   |         |   | 172,829 |   |
|                        |   |           |    |   |         |   |   |   |
| Long-term debt:             |   |           |    |   |         |   |   |   |
| FHLB advances               |   |           | 206,155 |   |         |   | 218,475 |   |
| Total borrowed funds        |   | $              | 243,938 |   |         | $      | 391,304 |   |

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|                                                                                                                                      |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|---------|----------|--------|--------|----------|--------|--------|-------------|--------|--------|----------|-----------|---------|----------|--------|
|                                                                                                                                      |   | Three Months Ended September 30, |      |
|                                                                                                                                      |   | 2010                             |      |    | 2009     |   |
|                                                                                                                                      |   | Average                          |      |    | Interest |   |   | Average  |   |   | Average     |   |   | Interest |      |    | Average  |   |
|                                                                                                                                      |   | Outstanding                      |      |    | Earned/  |   |   | Yield/   |   |   | Outstanding |   |   | Earned/  |      |    | Yield/   |   |
|                                                                                                                                      |   | Balance                          |      |    | Paid     |   |   | Rate (1) |   |   | Balance     |   |   | Paid     |      |    | Rate (1) |   |
|                                                                                                                                      |   | (Dollars in thousands)           |      |
|  Interest-earning assets:                                                                                                            |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|  Interest-earning cash equivalents and                                                                                               |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
| certificates of deposit                                                                                                                   |   | $                                | 45,395    |    |     | $      | 30     |     |   |   | 0.26        | %      |   | $        | 60,633    |    |     | $      | 97 |   |   |   | 0.64 | % |
|  Debt securities: (2)                                                                                                                |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Gov't-sponsored enterprises                                                                                                         |   |                             | 325,286   |    |     |   | 2,741  |     |   |   | 3.37        |   |   |     | 187,896   |    |     |   | 2,241 |   |   |   | 4.77 |   |
|  Mortgage-backed                                                                                                                     |   |                             | 276,293   |    |     |   | 2,540  |     |   |   | 3.68        |   |   |     | 246,167   |    |     |   | 2,823 |   |   |   | 4.59 |   |
|  Municipal bonds                                                                                                                     |   |                             | 32,050    |    |     |   | 310    |     |   |   | 3.87        |   |   |     | 23,071    |    |     |   | 235 |   |   |   | 4.07 |   |
|  Other                                                                                                                               |   |                             | 9,326     |    |     |   | 160    |     |   |   | 6.86        |   |   |     | 7,454     |    |     |   | 198 |   |   |   | 10.63 |   |
|  Restricted stock                                                                                                                    |   |                             | 23,067    |    |     |   | 8      |     |   |   | 0.14        |   |   |     | 14,626    |    |     |   | - |   |   |   | - |   |
|  Real estate mortgages (3)                                                                                                           |   |                             | 880,169   |    |     |   | 12,353 |     |   |   | 5.61        |   |   |     | 664,082   |    |     |   | 9,537 |   |   |   | 5.74 |   |
|  C&I loans (3)                                                                                                                   |   |                             | 639,855   |    |     |   | 9,475  |     |   |   | 5.92        |   |   |     | 456,742   |    |     |   | 6,748 |   |   |   | 5.91 |   |
|  IRBs (3)                                                                                                                            |   |                             | 142,668   |    |     |   | 1,686  |     |   |   | 4.73        |   |   |     | 89,087    |    |     |   | 1,073 |   |   |   | 4.82 |   |
|  Consumer loans  (3)                                                                                                       |   |                             | 3,517     |    |     |   | 49     |     |   |   | 5.57        |   |   |     | 3,877     |    |     |   | 90 |   |   |   | 9.29 |   |
|  Total interest-earning assets                                                                                                       |   |                             | 2,377,626 |    |     |   | 29,352 |     |   |   | 4.94        |   |   |     | 1,753,635 |    |     |   | 23,042 |   |   |   | 5.26 |   |
|  Allowance for loan losses                                                                                                           |   |                             | (16,325   | )       |     |   |   |     |   |   |        |   |   |     | (12,939   | )       |     |   |   |   |   |   |   |   |
|  Total earning assets less allowance                                                                                                 |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|   for loan losses                                                                                                               |   |                             | 2,361,301 |    |     |   |   |     |   |   |        |   |   |     | 1,740,696 |    |     |   |   |   |   |   |   |   |
|  Non-interest-earning assets                                                                                                         |   |                             | 222,869   |    |     |   |   |     |   |   |        |   |   |     | 105,848   |    |     |   |   |   |   |   |   |   |
|  Total assets                                                                                                                        |   | $                                | 2,584,170 |    |     |   |   |     |   |   |        |   |   | $        | 1,846,544 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                       |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Deposits:                                                                                                                           |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Savings and NOW accounts                                                                                                            |   | $                                | 435,559   |    |     |   | 1,403  |     |   |   | 1.29        |   |   | $        | 210,558   |    |     |   | 647 |   |   |   | 1.23 |   |
|  Money market accounts                                                                                                               |   |                             | 769,254   |    |     |   | 2,563  |     |   |   | 1.33        |   |   |     | 553,428   |    |     |   | 2,828 |   |   |   | 2.04 |   |
|  Term certificates                                                                                                                   |   |                             | 546,500   |    |     |   | 2,206  |     |   |   | 1.61        |   |   |     | 459,363   |    |     |   | 3,069 |   |   |   | 2.67 |   |
|  Total deposits                                                                                                                      |   |                             | 1,751,313 |    |     |   | 6,172  |     |   |   | 1.41        |   |   |     | 1,223,349 |    |     |   | 6,544 |   |   |   | 2.14 |   |
|  Borrowed funds:                                                                                                                     |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Short-term borrowings                                                                                                               |   |                             | 40,102    |    |     |   | 41     |     |   |   | 0.41        |   |   |     | 63,215    |    |     |   | 62 |   |   |   | 0.39 |   |
|  Long-term debt                                                                                                                      |   |                             | 207,606   |    |     |   | 1,809  |     |   |   | 3.49        |   |   |     | 162,006   |    |     |   | 1,823 |   |   |   | 4.50 |   |
|  Subordinated debt                                                                                                                   |   |                             | 30,481    |    |     |   | 568    |     |   |   | 7.45        |   |   |     | 29,965    |    |     |   | 468 |   |   |   | 6.25 |   |
|  Total interest-bearing liabilities                                                                                                  |   |                             | 2,029,502 |    |     |   | 8,590  |     |   |   | 1.69        |   |   |     | 1,478,535 |    |     |   | 8,897 |   |   |   | 2.41 |   |
|  Non-interest-bearing deposits                                                                                                       |   |                             | 242,240   |    |     |   |   |     |   |   |        |   |   |     | 131,408   |    |     |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                    |   |                             | 20,258    |    |     |   |   |     |   |   |        |   |   |     | 14,677    |    |     |   |   |   |   |   |   |   |
| Total non-interest-bearing liabilities                                                                                                    |   |                             | 262,498   |    |     |   |   |     |   |   |        |   |   |     | 146,085   |    |     |   |   |   |   |   |   |   |
|  Total liabilities                                                                                                                   |   |                             | 2,292,000 |    |     |   |   |     |   |   |        |   |   |     | 1,624,620 |    |     |   |   |   |   |   |   |   |
|  Stockholders' equity                                                                                                                |   |                             | 292,170   |    |     |   |   |     |   |   |        |   |   |     | 221,924   |    |     |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                |   | $                                | 2,584,170 |    |     |   |   |     |   |   |        |   |   | $        | 1,846,544 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Net interest income                                                                                                                 |   |                             |      |    |     | $      | 20,762 |     |   |   |        |   |   |     |      |    |     | $      | 14,145 |   |   |   |   |   |
|  Net interest rate spread (4)                                                                                                        |   |                             |      |    |     |   |   |     |   |   | 3.25        | %      |   |     |      |    |     |   |   |   |   |   | 2.85 | % |
|  Net interest-earning assets (5)                                                                                                     |   | $                                | 348,124   |    |     |   |   |     |   |   |        |   |   | $        | 275,100   |    |     |   |   |   |   |   |   |   |
|  Net interest margin (6)                                                                                                             |   |                             |      |    |     |   |   |     |   |   | 3.49        | %      |   |     |      |    |     |   |   |   |   |   | 3.23 | % |
|  Ratio of interest-earning assets                                                                                                    |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| to total interest-bearing liabilities                                                                                                     |   |                             | 1.17      |  x |     |   |   |     |   |   |        |   |   |     | 1.19      |  x |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                             |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| (1) Yields are annualized.                                                                                                           |   |
| (2) Average balances are presented at average amortized cost.                                                                        |   |
| (3) Average loans include non-accrual loans and are net of average deferred loan fees/costs.                                         |   |
| (4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing |   |
| liabilities.                                                                                                                              |   |
| (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                     |   |
| (6) Net interest margin represents net interest income divided by average total interest-earning assets.                             |   |

----

Table of Contents

|                                                                                                                                      |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|---------|----------|--------|--------|----------|--------|--------|-------------|--------|--------|----------|-----------|---------|----------|--------|
|                                                                                                                                      |   | Nine Months Ended September 30, |      |
|                                                                                                                                      |   | 2010                            |      |    | 2009     |   |
|                                                                                                                                      |   | Average                         |      |    | Interest |   |   | Average  |   |   | Average     |   |   | Interest |      |    | Average  |   |
|                                                                                                                                      |   | Outstanding                     |      |    | Earned/  |   |   | Yield/   |   |   | Outstanding |   |   | Earned/  |      |    | Yield/   |   |
|                                                                                                                                      |   | Balance                         |      |    | Paid     |   |   | Rate (1) |   |   | Balance     |   |   | Paid     |      |    | Rate (1) |   |
|                                                                                                                                      |   | (Dollars in thousands)          |      |
|  Interest-earning assets:                                                                                                            |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
|  Interest-earning cash equivalents and                                                                                               |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |
| certificates of deposit                                                                                                                   |   | $                               | 62,792    |    |     | $      | 105    |     |   |   | 0.22        | %      |   | $        | 43,678    |    |     | $      | 292 |   |   |   | 0.89 | % |
|  Debt securities: (2)                                                                                                                |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  U.S. Government                                                                                                                     |   |                            | 6,300     |    |     |   | 8      |     |   |   | 0.17        |   |   |     | 681       |    |     |   | 13 |   |   |   | 2.55 |   |
|  Gov't-sponsored enterprises                                                                                                         |   |                            | 265,774   |    |     |   | 6,890  |     |   |   | 3.46        |   |   |     | 191,469   |    |     |   | 6,991 |   |   |   | 4.87 |   |
|  Mortgage-backed                                                                                                                     |   |                            | 285,872   |    |     |   | 8,132  |     |   |   | 3.79        |   |   |     | 241,350   |    |     |   | 8,574 |   |   |   | 4.74 |   |
|  Municipal bonds                                                                                                                     |   |                            | 28,012    |    |     |   | 757    |     |   |   | 3.60        |   |   |     | 21,583    |    |     |   | 658 |   |   |   | 4.06 |   |
|  Other                                                                                                                               |   |                            | 9,995     |    |     |   | 767    |     |   |   | 10.23       |   |   |     | 2,668     |    |     |   | 202 |   |   |   | 10.09 |   |
|  Restricted stock                                                                                                                    |   |                            | 18,948    |    |     |   | 12     |     |   |   | 0.08        |   |   |     | 14,626    |    |     |   | 1 |   |   |   | 0.01 |   |
|  Real estate mortgages (3)                                                                                                           |   |                            | 919,449   |    |     |   | 39,692 |     |   |   | 5.76        |   |   |     | 637,778   |    |     |   | 26,983 |   |   |   | 5.64 |   |
|  C&I loans (3)                                                                                                                   |   |                            | 607,395   |    |     |   | 26,658 |     |   |   | 5.85        |   |   |     | 445,032   |    |     |   | 19,571 |   |   |   | 5.86 |   |
|  IRBs (3)                                                                                                                            |   |                            | 130,969   |    |     |   | 4,660  |     |   |   | 4.74        |   |   |     | 81,684    |    |     |   | 2,930 |   |   |   | 4.78 |   |
|  Consumer loans  (3)                                                                                                       |   |                            | 3,477     |    |     |   | 148    |     |   |   | 5.68        |   |   |     | 4,394     |    |     |   | 283 |   |   |   | 8.59 |   |
|  Total interest-earning assets                                                                                                       |   |                            | 2,338,983 |    |     |   | 87,829 |     |   |   | 5.01        |   |   |     | 1,684,943 |    |     |   | 66,498 |   |   |   | 5.26 |   |
|  Allowance for loan losses                                                                                                           |   |                            | (15,757   | )       |     |   |   |     |   |   |        |   |   |     | (12,623   | )       |     |   |   |   |   |   |   |   |
|  Total earning assets less allowance                                                                                                 |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|   for loan losses                                                                                                               |   |                            | 2,323,226 |    |     |   |   |     |   |   |        |   |   |     | 1,672,320 |    |     |   |   |   |   |   |   |   |
|  Non-interest-earning assets                                                                                                         |   |                            | 189,898   |    |     |   |   |     |   |   |        |   |   |     | 103,532   |    |     |   |   |   |   |   |   |   |
|  Total assets                                                                                                                        |   | $                               | 2,513,124 |    |     |   |   |     |   |   |        |   |   | $        | 1,775,852 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                       |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Deposits:                                                                                                                           |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Savings and NOW accounts                                                                                                            |   | $                               | 417,034   |    |     |   | 3,671  |     |   |   | 1.17        |   |   | $        | 201,511   |    |     |   | 1,842 |   |   |   | 1.22 |   |
|  Money market accounts                                                                                                               |   |                            | 705,443   |    |     |   | 7,195  |     |   |   | 1.36        |   |   |     | 504,418   |    |     |   | 8,711 |   |   |   | 2.30 |   |
|  Term certificates                                                                                                                   |   |                            | 558,508   |    |     |   | 7,251  |     |   |   | 1.73        |   |   |     | 419,597   |    |     |   | 9,100 |   |   |   | 2.89 |   |
|  Total deposits                                                                                                                      |   |                            | 1,680,985 |    |     |   | 18,117 |     |   |   | 1.44        |   |   |     | 1,125,526 |    |     |   | 19,653 |   |   |   | 2.33 |   |
|  Borrowed funds:                                                                                                                     |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Short-term borrowings                                                                                                               |   |                            | 55,804    |    |     |   | 180    |     |   |   | 0.43        |   |   |     | 90,414    |    |     |   | 269 |   |   |   | 0.40 |   |
|  Long-term debt                                                                                                                      |   |                            | 211,452   |    |     |   | 5,457  |     |   |   | 3.44        |   |   |     | 162,391   |    |     |   | 5,417 |   |   |   | 4.45 |   |
|  Subordinated debt                                                                                                                   |   |                            | 29,965    |    |     |   | 1,394  |     |   |   | 6.20        |   |   |     | 29,965    |    |     |   | 1,499 |   |   |   | 6.67 |   |
|  Total interest-bearing liabilities                                                                                                  |   |                            | 1,978,206 |    |     |   | 25,148 |     |   |   | 1.70        |   |   |     | 1,408,296 |    |     |   | 26,838 |   |   |   | 2.54 |   |
|  Non-interest-bearing deposits                                                                                                       |   |                            | 226,488   |    |     |   |   |     |   |   |        |   |   |     | 128,132   |    |     |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                    |   |                            | 18,025    |    |     |   |   |     |   |   |        |   |   |     | 13,923    |    |     |   |   |   |   |   |   |   |
| Total non-interest-bearing liabilities                                                                                                    |   |                            | 244,513   |    |     |   |   |     |   |   |        |   |   |     | 142,055   |    |     |   |   |   |   |   |   |   |
|  Total liabilities                                                                                                                   |   |                            | 2,222,719 |    |     |   |   |     |   |   |        |   |   |     | 1,550,351 |    |     |   |   |   |   |   |   |   |
|  Stockholders' equity                                                                                                                |   |                            | 290,405   |    |     |   |   |     |   |   |        |   |   |     | 225,501   |    |     |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                |   | $                               | 2,513,124 |    |     |   |   |     |   |   |        |   |   | $        | 1,775,852 |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|  Net interest income                                                                                                                 |   |                            |      |    |     | $      | 62,681 |     |   |   |        |   |   |     |      |    |     | $      | 39,660 |   |   |   |   |   |
|  Net interest rate spread (4)                                                                                                        |   |                            |      |    |     |   |   |     |   |   | 3.31        | %      |   |     |      |    |     |   |   |   |   |   | 2.72 | % |
|  Net interest-earning assets (5)                                                                                                     |   | $                               | 360,777   |    |     |   |   |     |   |   |        |   |   | $        | 276,647   |    |     |   |   |   |   |   |   |   |
|  Net interest margin (6)                                                                                                             |   |                            |      |    |     |   |   |     |   |   | 3.57        | %      |   |     |      |    |     |   |   |   |   |   | 3.14 | % |
|  Ratio of interest-earning assets                                                                                                    |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| to total interest-bearing liabilities                                                                                                     |   |                            | 1.18      |  x |     |   |   |     |   |   |        |   |   |     | 1.20      |  x |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
|                                                                                                                                      |   |                            |      |    |     |   |   |     |   |   |        |   |   |     |      |    |     |   |   |   |   |   |   |   |
| (1) Yields are annualized.                                                                                                           |   |
| (2) Average balances are presented at average amortized cost.                                                                        |   |
| (3) Average loans include non-accrual loans and are net of average deferred loan fees/costs.                                         |   |
| (4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing |   |
| liabilities.                                                                                                                              |   |                            |      |    |     |
| (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                     |   |
| (6) Net interest margin represents net interest income divided by average total interest-earning assets.                             |   |

----

Table of Contents

|                                                                                        |   |   | Three Months Ended September 30, |   |
|---------------------------------------------------------------------------------------------|--------|--------|----------------------------------|--------|
|                                                                                        |   |   | 2010 vs. 2009                    |   |
|                                                                                        |   |   | Increase (Decrease)              |   |   | Total |   |
|                                                                                        |   |   | Due to                           |   |   | Increase |   |
|                                                                                        |   |   | Volume                           |   |   | Rate |   |   | (Decrease) |   |
|                                                                                        |   |   | (In thousands)                   |   |
| Interest-earning assets:                                                                    |   |   |                             |   |   |   |   |   |   |   |
| Interest-earning cash equivalents and certificates of deposit                               |   |   | $                                | (24    | ) |   | $ | (43 | ) |   | $ | (67 | ) |
| Debt securities (1):                                                                        |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                                                                             |   |   |                             | -      |   |   |   | - |   |   |   | - |   |
| Gov't-sponsored enterprises and FHLMC                                                       |   |   |                             | 1,639  |   |   |   | (1,139 | ) |   |   | 500 |   |
| Mortgage-backed                                                                             |   |   |                             | 345    |   |   |   | (628 | ) |   |   | (283 | ) |
| Municipal bonds                                                                             |   |   |                             | 91     |   |   |   | (16 | ) |   |   | 75 |   |
| Other                                                                                       |   |   |                             | 50     |   |   |   | (88 | ) |   |   | (38 | ) |
| Equity securities                                                                           |   |   |                             | -      |   |   |   | 8 |   |   |   | 8 |   |
| Real estate mortgages (2)                                                                   |   |   |                             | 3,103  |   |   |   | (287 | ) |   |   | 2,816 |   |
| C&I loans (2)                                                                           |   |   |                             | 2,705  |   |   |   | 22 |   |   |   | 2,727 |   |
| IRBs (2)                                                                                    |   |   |                             | 645    |   |   |   | (32 | ) |   |   | 613 |   |
| Consumer loans (2)                                                                          |   |   |                             | (8     | ) |   |   | (33 | ) |   |   | (41 | ) |
| Total interest-earning assets                                                               |   |   |                             | 8,546  |   |   |   | (2,236 | ) |   |   | 6,310 |   |
|                                                                                        |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                               |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                   |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                                                    |   |   |                             | 691    |   |   |   | 65 |   |   |   | 756 |   |
| Money market accounts                                                                       |   |   |                             | 1,103  |   |   |   | (1,368 | ) |   |   | (265 | ) |
| Term certificates                                                                           |   |   |                             | 582    |   |   |   | (1,445 | ) |   |   | (863 | ) |
| Total deposits                                                                              |   |   |                             | 2,376  |   |   |   | (2,748 | ) |   |   | (372 | ) |
| Borrowed funds:                                                                             |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Short-term borrowings                                                                       |   |   |                             | (23    | ) |   |   | 2 |   |   |   | (21 | ) |
| Long-term debt                                                                              |   |   |                             | 513    |   |   |   | (527 | ) |   |   | (14 | ) |
| Subordinated debt                                                                           |   |   |                             | 8      |   |   |   | 92 |   |   |   | 100 |   |
| Total interest-bearing liabilities                                                          |   |   |                             | 2,874  |   |   |   | (3,181 | ) |   |   | (307 | ) |
|                                                                                        |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Increase in net interest income                                                             |   |   | $                                | 5,672  |   |   | $ | 945 |   |   | $ | 6,617 |   |
|                                                                                        |   |   |                             |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| (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. |   |

----

Table of Contents

|                                                                                        |   |   | Nine Months Ended September 30, |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------|--------|
|                                                                                        |   |   | 2010 vs. 2009                   |   |
|                                                                                        |   |   | Increase (Decrease)             |   |   | Total |   |
|                                                                                        |   |   | Due to                          |   |   | Increase |   |
|                                                                                        |   |   | Volume                          |   |   | Rate |   |   | (Decrease) |   |
|                                                                                        |   |   | (In thousands)                  |   |
| Interest-earning assets:                                                                    |   |   |                            |   |   |   |   |   |   |   |
| Interest-earning cash equivalents and certificates of deposit                               |   |   | $                               | 128    |   |   | $ | (315 | ) |   | $ | (187 | ) |
| Debt securities (1):                                                                        |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                                                                             |   |   |                            | 107    |   |   |   | (112 | ) |   |   | (5 | ) |
| Gov't-sponsored enterprises and FHLMC                                                       |   |   |                            | 2,713  |   |   |   | (2,814 | ) |   |   | (101 | ) |
| Mortgage-backed                                                                             |   |   |                            | 1,582  |   |   |   | (2,024 | ) |   |   | (442 | ) |
| Municipal bonds                                                                             |   |   |                            | 196    |   |   |   | (97 | ) |   |   | 99 |   |
| Other                                                                                       |   |   |                            | 555    |   |   |   | 10 |   |   |   | 565 |   |
| Equity securities                                                                           |   |   |                            | -      |   |   |   | 11 |   |   |   | 11 |   |
| Real estate mortgages (2)                                                                   |   |   |                            | 11,917 |   |   |   | 792 |   |   |   | 12,709 |   |
| C&I loans (2)                                                                           |   |   |                            | 7,140  |   |   |   | (53 | ) |   |   | 7,087 |   |
| IRBs (2)                                                                                    |   |   |                            | 1,768  |   |   |   | (38 | ) |   |   | 1,730 |   |
| Consumer loans (2)                                                                          |   |   |                            | (59    | ) |   |   | (76 | ) |   |   | (135 | ) |
| Total interest-earning assets                                                               |   |   |                            | 26,047 |   |   |   | (4,716 | ) |   |   | 21,331 |   |
|                                                                                        |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                               |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                   |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Savings and NOW accounts                                                                    |   |   |                            | 1,970  |   |   |   | (141 | ) |   |   | 1,829 |   |
| Money market accounts                                                                       |   |   |                            | 3,472  |   |   |   | (4,988 | ) |   |   | (1,516 | ) |
| Term certificates                                                                           |   |   |                            | 3,013  |   |   |   | (4,862 | ) |   |   | (1,849 | ) |
| Total deposits                                                                              |   |   |                            | 8,455  |   |   |   | (9,991 | ) |   |   | (1,536 | ) |
| Borrowed funds:                                                                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Short-term borrowings                                                                       |   |   |                            | (103   | ) |   |   | 14 |   |   |   | (89 | ) |
| Long-term debt                                                                              |   |   |                            | 1,637  |   |   |   | (1,597 | ) |   |   | 40 |   |
| Subordinated debt                                                                           |   |   |                            | -      |   |   |   | (105 | ) |   |   | (105 | ) |
| Total interest-bearing liabilities                                                          |   |   |                            | 9,989  |   |   |   | (11,679 | ) |   |   | (1,690 | ) |
|                                                                                        |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in net interest income                                                  |   |   | $                               | 16,058 |   |   | $ | 6,963 |   |   | $ | 23,021 |   |
|                                                                                        |   |   |                            |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |   |                            |   |   |   |   |   |   |   |   |   |   |
| (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. |   |

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|                            |   |   | September 30, 2010 |   |
|---------------------------------|--------|--------|--------------------|--------|
|                            |   |   |               |   |   | More than |   |   | More than |   |   |   |   |   |   |   |
|                            |   |   |               |   |   | One Year |   |   | Three Years |   |   |   |   |   |   |   |
|                            |   |   | One Year           |   |   | Through |   |   | Through |   |   | Over |   |   |   |   |
|                            |   |   | or Less            |   |   | Three Years |   |   | Five Years |   |   | Five Years |   |   | Total |   |
|                            |   |   | (In thousands)     |   |
| Federal Home Loan Bank advances |   |   | $                  | 37,389 |   |   | $ | 37,032 |   |   | $ | 13,146 |   |   | $ | 118,588 |   |   | $ | 206,155 |   |
| Repurchase agreements (1)       |   |   |               | 37,783 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 37,783 |   |
| Subordinated debt               |   |   |               | -      |   |   |   | - |   |   |   | - |   |   |   | 29,965 |   |   |   | 29,965 |   |
| Operating leases                |   |   |               | 3,457  |   |   |   | 6,343 |   |   |   | 5,795 |   |   |   | 16,582 |   |   |   | 32,177 |   |
| Total contractual obligations   |   |   | $                  | 78,629 |   |   | $ | 43,375 |   |   | $ | 18,941 |   |   | $ | 165,135 |   |   | $ | 306,080 |   |

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

|                                       |   | September 30, 2010 |    |
|--------------------------------------------|--------|--------------------|---------|
|                                       |   |               |    |   | More than |   |   | More than |   |   |   |   |   |   |   |
|                                       |   |               |    |   | One Year |   |   | Three Years |   |   |   |   |   |   |   |
|                                       |   | One Year           |    |   | Through |   |   | Through |   |   | Over |   |   |   |   |
|                                       |   | or Less            |    |   | Three Years |   |   | Five Years |   |   | Five Years |   |   | Total |   |
|                                       |   | (In thousands)     |    |
| Commitments to grant loans                 |   | $                  | 29,637  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 29,637 |   |
| Unfunded commitments under lines of credit |   |               | 321,096 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 321,096 |   |
| Unadvanced funds on construction loans     |   |               | 21,884  |   |   |   | 10,848 |   |   |   | - |   |   |   | - |   |   |   | 32,732 |   |
| Commercial and standby letters of credit   |   |               | 3,319   |   |   |   | 595 |   |   |   | 44 |   |   |   | - |   |   |   | 3,958 |   |
| Total contractual obligations              |   | $                  | 375,936 |   |   | $ | 11,443 |   |   | $ | 44 |   |   | $ | - |   |   | $ | 387,423 |   |

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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            |                   | $      | 181,938                       |                |   | $ | (79,834 | ) |   |   | -30.5 | % |   | $ | 75,896 |   |   | $ | (6,838 | ) |   |   | -8.3 | % |
|              | +200   | bp            |                   |   | 219,675                       |                |   |   | (42,097 | ) |   |   | -16.1 | % |   |   | 78,270 |   |   |   | (4,464 | ) |   |   | -5.4 | % |
|              | +100   | bp            |                   |   | 247,947                       |                |   |   | (13,825 | ) |   |   | -5.3 | % |   |   | 80,027 |   |   |   | (2,707 | ) |   |   | -3.3 | % |
|              | 0      | bp            |                   |   | 261,772                       |                |   |   | - |   |   |   | 0.0 | % |   |   | 82,734 |   |   |   | - |   |   |   | 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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Item 4.

Item 1

Item 1A

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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       |   |
|           |   |      |    |   |       |   |   |                |   |   |              |   |
| July 1-31      |   |      | 238,100 |   |       | $      | 14.90  |                |   |   | 238,100           |   |   |   | 658,594 |   |
|           |   |      |    |   |       |   |   |                |   |   |              |   |   |   |   |   |
| August 1-31    |   |      | 83,100  |   |       | $      | 15.17  |                |   |   | 83,100            |   |   |   | 575,494 |   |
|           |   |      |    |   |       |   |   |                |   |   |              |   |   |   |   |   |
| September 1-30 |   |      | 55,500  |   |       | $      | 15.24  |                |   |   | 55,500            |   |   |   | 519,994 |   |
| Total          |   |      | 376,700 |   |       | $      | 15.01  |                |   |   | 376,700           |   |   |   |   |   |

Item 3

Item 4

Item 5.

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Table of Contents

Item 6.

| Exhibit No.                                                                                                         |   | Description                                                                         |
|---------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|
|                                                                                                                |   |                                                                                |
| 10.1                                                                                                                |   | Amended and Restated Danversbank Supplemental Executive Retirement Plan(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** |
|                                                                                                                |   |                                                                                |
|                                                                                                                |   |                                                                                |
| *    Filed herewith.                                                                            |
| ** Furnished herewith.                                                                                              |
| (1) Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 4, 2010. |

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