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

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

|                               Massachusetts                              |                       20-4652200                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (State or other jurisdiction of incorporation or                                                                                                                                                                                                                                                                                                                           | (I.R.S. Employer Identification No.)                                                                                                                                                                                                                          |
| organization)                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                          |

----

E

| PART I.    | FINANCIAL INFORMATION                                                                                                        |   |
|------------|------------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                         |   |
| Item 1.    | Financial Statements                                                                                                         | Page   |
|       |                                                                                                                         |   |
|       | Consolidated Balance Sheets at June 30, 2009 and December 31, 2008 (Unaudited)                                               | 1      |
|       |                                                                                                                         |   |
|       | Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008 (Unaudited)                  | 2      |
|       |                                                                                                                         |   |
|       | Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2009 and 2008 (Unaudited) | 3      |
|       |                                                                                                                         |   |
|       | Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008 (Unaudited)                            | 4      |
|       |                                                                                                                         |   |
|       | Notes to Unaudited Consolidated Financial Statements                                                                         | 6      |
|       |                                                                                                                         |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                  | 17     |
|       |                                                                                                                         |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                   | 28     |
|       |                                                                                                                         |   |
| Item 4.    | Controls and Procedures                                                                                                      | 29     |
|       |                                                                                                                         |   |
| PART II.   | OTHER INFORMATION                                                                                                            |   |
|       |                                                                                                                         |   |
| Item 1.    | Legal Proceedings                                                                                                            | 30     |
|       |                                                                                                                         |   |
| Item 1A.   | Risk Factors                                                                                                                 | 30     |
|       |                                                                                                                         |   |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                  | 31     |
|       |                                                                                                                         |   |
| Item 3.    | Defaults Upon Senior Securities                                                                                              | 31     |
|       |                                                                                                                         |   |
| Item 4.    | Submission of Matters to a Vote of Security Holders                                                                          | 31     |
|       |                                                                                                                         |   |
| Item 5.    | Other Information                                                                                                            | 32     |
|       |                                                                                                                         |   |
| Item 6.    | Exhibits                                                                                                                     | 33     |
|       |                                                                                                                         |   |
| Signatures |                                                                                                                         | 34     |

----

Index

P

s

|  MERIDIAN INTERSTATE BANCORP, INC.                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
|  Consolidated Balance Sheets                                                                                                                |
|  (Unaudited)                                                                                                                                |
|                                                                                                                                             |   | June 30, |   |   | December 31, |   |
|  (Dollars in thousands)                                                                                                                     |   | 2009 |   |   | 2008 |   |
|  ASSETS                                                                                                                                     |
|  Cash and due from banks                                                                                                                    |   | $ | 11,090 |   |   | $ | 10,354 |   |
|  Federal funds sold                                                                                                                         |   |   | 24,799 |   |   |   | 9,911 |   |
|            Total cash and cash equivalents                                                |   |   | 35,889 |   |   |   | 20,265 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
|  Certificates of deposit - affiliate bank                                                                                                   |   |   | 2,000 |   |   |   | 7,000 |   |
|  Securities available for sale, at fair value                                                                                               |   |   | 301,675 |   |   |   | 252,529 |   |
|  Federal Home Loan Bank stock, at cost                                                                                                      |   |   | 4,394 |   |   |   | 4,303 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
|  Loans held for sale                                                                                                                        |   |   | 5,911 |   |   |   | - |   |
|  Loans                                                                                                                                      |   |   | 769,445 |   |   |   | 711,016 |   |
|  Less allowance for loan losses                                                                                                             |   |   | (8,120 | ) |   |   | (6,912 | ) |
|             Loans, net                                                               |   |   | 761,325 |   |   |   | 704,104 |   |
|  Bank-owned life insurance                                                                                                                  |   |   | 23,285 |   |   |   | 22,831 |   |
|  Investment in affiliate bank                                                                                                               |   |   | 10,351 |   |   |   | 10,376 |   |
|  Premises and equipment, net                                                                                                                |   |   | 23,512 |   |   |   | 22,710 |   |
|  Accrued interest receivable                                                                                                                |   |   | 6,189 |   |   |   | 6,036 |   |
|  Foreclosed real estate, net                                                                                                                |   |   | 3,050 |   |   |   | 2,604 |   |
|  Deferred tax asset, net                                                                                                                    |   |   | 6,216 |   |   |   | 10,057 |   |
|  Other assets                                                                                                                               |   |   | 1,395 |   |   |   | 2,537 |   |
|                Total assets                                           |   | $ | 1,185,192 |   |   | $ | 1,065,352 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
|  LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                       |
|  Deposits:                                                                                                                                  |   |   |   |   |   |   |   |   |
|  Noninterest-bearing                                                                                                                        |   | $ | 63,241 |   |   | $ | 55,216 |   |
|  Interest-bearing                                                                                                                           |   |   | 850,538 |   |   |   | 741,636 |   |
|  Total deposits                                                                                                                             |   |   | 913,779 |   |   |   | 796,852 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
|  Short-term borrowings - affiliate bank                                                                                                     |   |   | 5,803 |   |   |   | 7,811 |   |
|  Long-term debt                                                                                                                             |   |   | 57,200 |   |   |   | 57,675 |   |
|  Accrued expenses and other liabilities                                                                                                     |   |   | 15,657 |   |   |   | 13,174 |   |
|                Total liabilities                                      |   |   | 992,439 |   |   |   | 875,512 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
|  Stockholders' equity:                                                                                                                      |   |   |   |   |   |   |   |   |
|     Common stock, no par value 50,000,000 shares authorized;                                                                 |   |   |   |   |   |   |   |   |
| 23,000,000 shares issued; 22,357,549 and 22,750,000 shares                                                                                       |   |   |   |   |   |
|         outstanding at June 30, 2009 and December 31, 2008, respectively                                      |   |   | - |   |   |   | - |   |
|     Additional paid-in capital                                                                                               |   |   | 100,842 |   |   |   | 100,684 |   |
|     Retained earnings                                                                                                        |   |   | 105,280 |   |   |   | 105,426 |   |
|     Treasury stock, 228,451 shares at June 30, 2009                                                                          |   |   | (1,971 | ) |   |   | - |   |
|     Accumulated other comprehensive loss                                                                                     |   |   | (255 | ) |   |   | (6,205 | ) |
| Unearned compensation - ESOP - 765,900 and 786,600 shares                                                                                   |   |   |   |   |   |
|        at June 30, 2009 and December 31, 2008, respectively                                                   |   |   | (7,659 | ) |   |   | (7,866 | ) |
|     Unearned compensation - restricted shares - 414,000                                                                      |   |   |   |   |   |   |   |   |
|         and 250,000 shares at June 30, 2009 and                                                          |   |   |   |   |   |   |   |   |
|         December 31, 2008, respectively                                                                  |   |   | (3,484 | ) |   |   | (2,199 | ) |
|               Total stockholders' equity                                   |   |   | 192,753 |   |   |   | 189,840 |   |
|                  Total liabilities and stockholders' equity |   | $ | 1,185,192 |   |   | $ | 1,065,352 |   |

----

Index

|  MERIDIAN INTERSTATE BANCORP, INC.                                                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
|  Consolidated Statements of Operations                                                                                                   |
|  (Unaudited)                                                                                                                             |   |
|                                                                                                                                          |   |
|                                                                                                                                          |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|  (Dollars in thousands, except per share amounts)                                                                                        |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|  Interest and dividend income:                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|      Interest and fees on loans                                                                                      |   | $ | 11,046 |   |   | $ | 9,334 |   |   | $ | 21,691 |   |   | $ | 18,517 |   |
|      Interest on debt securities                                                                                     |   |   | 2,554 |   |   |   | 2,633 |   |   |   | 5,009 |   |   |   | 5,245 |   |
|      Dividends on equity securities                                                                                  |   |   | 299 |   |   |   | 434 |   |   |   | 592 |   |   |   | 691 |   |
|      Interest on certificates of deposit                                                                             |   |   | 14 |   |   |   | 30 |   |   |   | 56 |   |   |   | 38 |   |
|      Interest on federal funds sold                                                                                  |   |   | 6 |   |   |   | 478 |   |   |   | 18 |   |   |   | 1,541 |   |
|                 Total interest and dividend income            |   |   | 13,919 |   |   |   | 12,909 |   |   |   | 27,366 |   |   |   | 26,032 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest expense:                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Interest on deposits                                                                                            |   |   | 4,938 |   |   |   | 6,426 |   |   |   | 10,201 |   |   |   | 13,337 |   |
|      Interest on short-term borrowings                                                                               |   |   | 7 |   |   |   | 53 |   |   |   | 42 |   |   |   | 115 |   |
|      Interest on long-term debt                                                                                      |   |   | 502 |   |   |   | 517 |   |   |   | 999 |   |   |   | 829 |   |
|                 Total interest expense                        |   |   | 5,447 |   |   |   | 6,996 |   |   |   | 11,242 |   |   |   | 14,281 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net interest income                                                                                                                     |   |   | 8,472 |   |   |   | 5,913 |   |   |   | 16,124 |   |   |   | 11,751 |   |
|  Provision for loan losses                                                                                                               |   |   | 568 |   |   |   | 2,197 |   |   |   | 1,114 |   |   |   | 2,328 |   |
|                 Net interest income, after provision          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      for loan losses |   |   | 7,904 |   |   |   | 3,716 |   |   |   | 15,010 |   |   |   | 9,423 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Non-interest income:                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Customer service fees                                                                                           |   |   | 799 |   |   |   | 697 |   |   |   | 1,496 |   |   |   | 1,355 |   |
|      Loan fees                                                                                                       |   |   | 127 |   |   |   | 154 |   |   |   | 277 |   |   |   | 370 |   |
|      Gain on sales of loans, net                                                                                     |   |   | 116 |   |   |   | 8 |   |   |   | 299 |   |   |   | 27 |   |
|      Other-than-temporary impairment losses                                                                          |   |   | (249 | ) |   |   | - |   |   |   | (373 | ) |   |   | - |   |
|      Gain on sales of securities, net                                                                                |   |   | - |   |   |   | 47 |   |   |   | - |   |   |   | 2,313 |   |
|      Income from bank-owned life insurance                                                                           |   |   | 240 |   |   |   | 230 |   |   |   | 454 |   |   |   | 415 |   |
|      Equity income (loss) on investment in affiliate bank                                                            |   |   | 2 |   |   |   | (86 | ) |   |   | (25 | ) |   |   | (254 | ) |
|                 Total non-interest income                     |   |   | 1,035 |   |   |   | 1,050 |   |   |   | 2,128 |   |   |   | 4,226 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Non-interest expenses:                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Salaries and employee benefits                                                                                  |   |   | 4,101 |   |   |   | 5,762 |   |   |   | 10,415 |   |   |   | 9,784 |   |
|      Occupancy and equipment                                                                                         |   |   | 697 |   |   |   | 699 |   |   |   | 1,561 |   |   |   | 1,479 |   |
|      Data processing                                                                                                 |   |   | 474 |   |   |   | 406 |   |   |   | 912 |   |   |   | 793 |   |
|      Marketing and advertising                                                                                       |   |   | 313 |   |   |   | 293 |   |   |   | 547 |   |   |   | 539 |   |
|      Professional services                                                                                           |   |   | 416 |   |   |   | 623 |   |   |   | 1,068 |   |   |   | 967 |   |
|      Contribution to the Meridian                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Charitable Foundation                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,000 |   |
|      Deposit insurance                                                                                               |   |   | 830 |   |   |   | 188 |   |   |   | 1,140 |   |   |   | 210 |   |
|      Foreclosed real estate expense                                                                                  |   |   | 223 |   |   |   | 14 |   |   |   | 478 |   |   |   | 38 |   |
|      Other general and administrative                                                                                |   |   | 630 |   |   |   | 491 |   |   |   | 1,240 |   |   |   | 978 |   |
|                 Total non-interest expenses                   |   |   | 7,684 |   |   |   | 8,476 |   |   |   | 17,361 |   |   |   | 17,788 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Income (loss) before income taxes                                                                               |   |   | 1,255 |   |   |   | (3,710 | ) |   |   | (223 | ) |   |   | (4,139 | ) |
|      Provision (benefit) for income taxes                                                                            |   |   | 293 |   |   |   | (1,494 | ) |   |   | (77 | ) |   |   | (1,602 | ) |
|                 Net income (loss)                             |   | $ | 962 |   |   | $ | (2,216 | ) |   | $ | (146 | ) |   | $ | (2,537 | ) |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net income (loss) per share:                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  Basic                                   |   | $ | 0.04 |   |   | $ | (0.10 | ) |   | $ | (0.01 | ) |   |   | N/A |   |
|                  Diluted                                 |   | $ | 0.04 |   |   | $ | (0.10 | ) |   | $ | (0.01 | ) |   |   | N/A |   |
|  Weighted average shares:                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  Basic                                   |   |   | 21,834,988 |   |   |   | 22,185,914 |   |   |   | 21,801,781 |   |   |   | N/A |   |
|                  Diluted                                 |   |   | 22,024,179 |   |   |   | 22,185,914 |   |   |   | 21,991,924 |   |   |   | N/A |   |

----

Index

|  MERIDIAN INTERSTATE BANCORP, INC.                                                            |   |
|----------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTSOF CHANGES IN STOCKHOLDERS' EQUITY                                          |   |
| Six Months Ended June 30, 2009 and 2008                                                            |   |
|  (Dollars in thousands)                                                                       |   | Shares ofNo ParCommonStockOutstanding |   |   | AdditionalPaid-inCapital |   |   | RetainedEarnings |   |   | TreasuryStock |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   | UnearnedCompensationESOP |   |   | UnearnedCompensationRestrictedShares |   |   | Total |   |
|  Six Months Ended June 30, 2008                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Balance at December 31, 2007                                                                 |   |   | - |   |   | $ | - |   |   | $ | 109,177 |   |   | $ | - |   |   | $ | 6,507 |   |   | $ | - |   |   | $ | - |   |   | $ | 115,684 |   |
|      Adjustment to initially apply EITF 06-4                              |   |   | - |   |   |   | - |   |   |   | (1,643 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,643 | ) |
|  Comprehensive loss:                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net loss                                                                   |   |   | - |   |   |   | - |   |   |   | (2,537 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,537 | ) |
|     Change in net unrealized gain on securities available for                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        sale, net of reclassification adjustment and tax effects |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,909 | ) |   |   | - |   |   |   | - |   |   |   | (4,909 | ) |
|      Change in prior service costs and                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        actuarial losses, net of tax effects                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9 |   |   |   | - |   |   |   | - |   |   |   | 9 |   |
|            Total comprehensive loss         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (7,437 | ) |
|      Adjustment to initially apply FAS 158 for                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         long-term health care plan                         |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (353 | ) |   |   | - |   |   |   | - |   |   |   | (353 | ) |
|      Issuance of 12,650,000 shares to the mutual                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|         holding company                                    |   |   | 12,650,000 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Issuance of 10,050,000 shares in the initial                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        public offering, net of expenses of $2,867               |   |   | 10,050,000 |   |   |   | 97,633 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 97,633 |   |
|      Issuance and contribution of 300,000 shares                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        to the Meridian Charitable Foundation                    |   |   | 300,000 |   |   |   | 3,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,000 |   |
|     Purchase of common stock by the ESOP                                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (8,280 | ) |   |   | - |   |   |   | (8,280 | ) |
|     ESOP shares earned (20,700 shares)                                         |   |   | - |   |   |   | (3 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 207 |   |   |   | - |   |   |   | 204 |   |
|  Balance at June 30, 2008                                                                     |   |   | 23,000,000 |   |   | $ | 100,630 |   |   | $ | 104,997 |   |   | $ | - |   |   | $ | 1,254 |   |   | $ | (8,073 | ) |   | $ | - |   |   | $ | 198,808 |   |
|  Six Months Ended June 30, 2009                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Balance at December 31, 2008                                                                 |   |   | 22,750,000 |   |   | $ | 100,684 |   |   | $ | 105,426 |   |   | $ | - |   |   | $ | (6,205 | ) |   | $ | (7,866 | ) |   | $ | (2,199 | ) |   | $ | 189,840 |   |
|  Comprehensive income :                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net loss                                                                   |   |   | - |   |   |   | - |   |   |   | (146 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (146 | ) |
|     Change in net unrealized loss on securities available for                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        sale, net of reclassification adjustment and tax effects |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,968 |   |   |   | - |   |   |   | - |   |   |   | 5,968 |   |
|      Change in prior service costs and                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        actuarial losses, net of tax effects                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (18 | ) |   |   | - |   |   |   | - |   |   |   | (18 | ) |
|            Total comprehensive income       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,804 |   |
|     Repurchase of 228,451 shares                                               |   |   | (228,451 | ) |   |   |   |   |   |   |   |   |   |   | (1,971 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,971 | ) |
|     ESOP shares earned (20,700 shares)                                         |   |   | - |   |   |   | (36 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 207 |   |   |   | - |   |   |   | 171 |   |
|     Purchase of 164,000 shares for restricted share plan                       |   |   | (164,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,468 | ) |   |   | (1,468 | ) |
|     Share-based compensation expense                                           |   |   |   |   |   |   | 194 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 183 |   |   |   | 377 |   |
|  Balance at June 30, 2009                                                                     |   |   | 22,357,549 |   |   | $ | 100,842 |   |   | $ | 105,280 |   |   | $ | (1,971 | ) |   | $ | (255 | ) |   | $ | (7,659 | ) |   | $ | (3,484 | ) |   | $ | 192,753 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Index

t

|                                                                                                                                                                          |   |                      |    |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|--------|--------|
|                                                                                                                                                                          |   | Six Months Ended June 30, |    |
|  (In thousands)                                                                                                                                                          |   | 2009                      |    | 2008   |   |
|  Cash flows from operating activities:                                                                                                                                   |   |                      |    |   |   |   |
|      Net loss                                                                                                                                        |   | $                         | (146    | )      |   | $      | (2,537 | ) |
|      Adjustments to reconcile net loss to net cash                                                                                                   |   |                      |    |   |   |   |   |   |
|          provided by operating activities:                                                                                       |   |                      |    |   |   |   |   |   |
|              Contribution to the Meridian Charitable Foundation                                              |   |                      | -       |   |   |   | 3,000 |   |
|              Earned ESOP shares                                                                              |   |                      | 171     |   |   |   | 204 |   |
|              Provision for loan losses                                                                       |   |                      | 1,114   |   |   |   | 2,328 |   |
|              Amortization of net deferred loan origination fees                                              |   |                      | (53     | )      |   |   | (146 | ) |
|              Net amortization of securities available for sale                                               |   |                      | 616     |   |   |   | 544 |   |
|              Depreciation and amortization expense                                                           |   |                      | 661     |   |   |   | 642 |   |
|              Loss (gain) on securities, net                                                                  |   |                      | 373     |   |   |   | (2,313 | ) |
|              Loss and provision for foreclosed real estate                                                   |   |                      | 322     |   |   |   | 5 |   |
|              Deferred income tax benefit                                                                     |   |                      | (40     | )      |   |   | (1,338 | ) |
|              Loans originated for sale                                                                       |   |                      | (24,596 | )      |   |   | (7,514 | ) |
|              Principal balance of mortgage loans sold                                                        |   |                      | 18,685  |   |   |   | 7,506 |   |
|              Income from bank-owned life insurance                                                           |   |                      | (454    | )      |   |   | (415 | ) |
|              Equity loss on investment in affiliate bank                                                     |   |                      | 25      |   |   |   | 254 |   |
|              Share-based compensation expense                                                                |   |                      | 377     |   |   |   | - |   |
|              Net changes in:                                                                                 |   |                      |    |   |   |   |   |   |
|                   Accrued interest receivable                                       |   |                      | (153    | )      |   |   | (410 | ) |
|                   Other assets                                                      |   |                      | 1,142   |   |   |   | 3,087 |   |
|                   Accrued expenses and other liabilities                            |   |                      | 2,465   |   |   |   | (1,227 | ) |
|                       Net cash provided by operating activities |   |                      | 509     |   |   |   | 1,670 |   |
|                                                                                                                                                                          |   |                      |    |   |   |   |   |   |
|  Cash flows from investing activities:                                                                                                                                   |   |                      |    |   |   |   |   |   |
|      Maturities (purchases) of certificates of deposit                                                                                               |   |                      | 5,000   |   |   |   | (7,000 | ) |
|      Activity in securities available for sale:                                                                                                      |   |                      |    |   |   |   |   |   |
|           Proceeds from maturities, calls and principal payments                                                            |   |                      | 29,878  |   |   |   | 61,207 |   |
|           Proceeds from redemption of mutual funds                                                                          |   |                      | 5,257   |   |   |   | - |   |
|           Proceeds from sales                                                                                               |   |                      | -       |   |   |   | 9,804 |   |
|           Purchases                                                                                                         |   |                      | (75,421 | )      |   |   | (151,701 | ) |
|      Purchase of Federal Home Loan Bank stock                                                                                                        |   |                      | (91     | )      |   |   | (1,138 | ) |
|      Loans originated, net of principal payments received                                                                                            |   |                      | (58,917 | )      |   |   | (51,096 | ) |
|      Purchase of bank-owned life insurance                                                                                                           |   |                      | -       |   |   |   | (4,000 | ) |
|      Purchases of premises and equipment                                                                                                             |   |                      | (1,463  | )      |   |   | (258 | ) |
|      Capitalized cost on foreclosed real estate                                                                                                      |   |                      | (776    | )      |   |   | - |   |
|      Proceeds from sales of foreclosed real estate                                                                                                   |   |                      | 643     |   |   |   | 1,463 |   |
|                       Net cash used in investing activities     |   |                      | (95,890 | )      |   |   | (142,719 | ) |

----

Index

|                                                                                                                                                                    |   | Six Months Ended June 30, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|
|  (In thousands)                                                                                                                                                    |   | 2009                      |    | 2008 |   |
|  Cash flows from financing activities:                                                                                                                             |   |                      |    |   |   |   |
|      Net increase in deposits                                                                                                                  |   |                      | 116,927 |   |   |   | 28,375 |   |
|      Proceeds from sale of common stock                                                                                                        |   |                      | -       |   |   |   | 97,633 |   |
|      Common stock purchased by ESOP                                                                                                            |   |                      | -       |   |   |   | (8,280 | ) |
|      Decrease in stock subscriptions                                                                                                           |   |                      | -       |   |   |   | (62,518 | ) |
|      Purchase of stock for equity incentive plan                                                                                               |   |                      | (1,468  | ) |   |   | - |   |
|      Purchase of treasury stock                                                                                                                |   |                      | (1,971  | ) |   |   | - |   |
|      Net change in borrowings with maturities                                                                                                  |   |                      |    |   |   |   |   |   |
|           less than three months                                                                                      |   |                      | (2,008  | ) |   |   | (9,154 | ) |
|      Proceeds from Federal Home Loan Bank advances                                                                                             |   |                      |    |   |   |   |   |   |
|           with maturities of three months or more                                                                     |   |                      | -       |   |   |   | 45,000 |   |
|      Repayment of Federal Home Loan Bank advances                                                                                              |   |                      |    |   |   |   |   |   |
|           with maturities of three months or more                                                                     |   |                      | (475    | ) |   |   | (9,550 | ) |
|                      Net cash provided by financing activities |   |                      | 111,005 |   |   |   | 81,506 |   |
|                                                                                                                                                                    |   |                      |    |   |   |   |   |   |
|  Net change in cash and cash equivalents                                                                                                                           |   |                      | 15,624  |   |   |   | (59,543 | ) |
|                                                                                                                                                                    |   |                      |    |   |   |   |   |   |
|  Cash and cash equivalents at beginning of period                                                                                                                  |   |                      | 20,265  |   |   |   | 103,093 |   |
|                                                                                                                                                                    |   |                      |    |   |   |   |   |   |
|  Cash and cash equivalents at end of period                                                                                                                        |   | $                         | 35,889  |   |   | $ | 43,550 |   |
|                                                                                                                                                                    |   |                      |    |   |   |   |   |   |
|  Supplemental cash flow information:                                                                                                                               |   |                      |    |   |   |   |   |   |
|      Interest paid on deposits                                                                                                                 |   | $                         | 10,398  |   |   | $ | 13,472 |   |
|      Interest paid on borrowings                                                                                                               |   |                      | 1,048   |   |   |   | 843 |   |
|      Income taxes paid                                                                                                                         |   |                      | 190     |   |   |   | 60 |   |
|  Non-cash investing and financing activities:                                                                                                                      |   |                      |    |   |   |   |   |   |
|      Transfers from loans to foreclosed real estate                                                                                            |   |                      | 635     |   |   |   | 908 |   |

----

Index

O

----

Index

----

Index

----

Index

----

Index

|                          |   |  June 30, 2009     |   |
|-------------------------------|--------|-------------------------|--------|
| (In thousands)                |   | Level 1                 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale |   | $                       | 72,842 |   |   | $ | 228,833 |   |   |   | - |   |   | $ | 301,675 |   |
|                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |  December 31, 2008 |   |
| (In thousands)                |   | Level 1                 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale |   | $                       | 47,799 |   |   | $ | 204,730 |   |   |   | - |   |   | $ | 252,529 |   |

|                        |   | June 30, 2009     |   |   | Six MonthsEnded June 30,2009             |   |
|-----------------------------|--------|-------------------|--------|--------|------------------------------------------|--------|
| (In thousands)              |   | Level 1           |   |   | Level 2                                  |   |   | Level 3 |   |   | Total Losses |   |
|  Impaired loans        |   | $                 | -      |   |                                     | $      | - |   |   | $ | 2,505 |   |   | $ | 304 |   |
|  Foreclosed real esate |   |              | -      |   |                                     |   | - |   |   |   | 3,050 |   |   |   | 286 |   |
|                        |   | $                 | -      |   |                                     | $      | - |   |   | $ | 5,555 |   |   | $ | 590 |   |
|                        |   |              |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | December 31, 2008 |   |   | Six MonthsEnded June 30,2008 TotalLosses |   |
| (In thousands)              |   | Level 1           |   |   | Level 2                                  |   |   | Level 3 |   |   | Total Losses |   |
|  Impaired loans        |   | $                 | -      |   |                                     | $      | - |   |   | $ | 1,511 |   |   | $ | 2,079 |   |
|  Foreclosed real esate |   |              | -      |   |                                     |   | - |   |   |   | 2,604 |   |   |   | - |   |
|                        |   | $                 | -      |   |                                     | $      | - |   |   | $ | 4,115 |   |   | $ | 2,079 |   |

----

Index

|                                                  |   | June 30, 2009 |    |   | December 31, 2008 |   |
|-------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                  |   | Carrying      |    |   | Fair              |   |   | Carrying |   |   | Fair |   |
| (In thousands)                                        |   | Amount        |    |   | Value             |   |   | Amount |   |   | Value |   |
|                                                  |   |          |    |   |              |   |   |   |   |   |   |   |
| Financial assets:                                     |   |          |    |   |              |   |   |   |   |   |   |   |
|     Cash and cash equivalents     |   | $             | 35,889  |   |              | $      | 35,889 |   |   | $ | 20,265 |   |   | $ | 20,265 |   |
|     Certificates of deposit       |   |          | 2,000   |   |              |   | 2,000 |   |   |   | 7,000 |   |   |   | 7,010 |   |
|     Securities available for sale |   |          | 301,675 |   |              |   | 301,675 |   |   |   | 252,529 |   |   |   | 252,529 |   |
|     Federal Home Loan Bank stock  |   |          | 4,394   |   |              |   | 4,394 |   |   |   | 4,303 |   |   |   | 4,303 |   |
|     Loans held for sale           |   |          | 5,911   |   |              |   | 5,911 |   |   |   | - |   |   |   | - |   |
|     Loans                         |   |          | 761,325 |   |              |   | 767,330 |   |   |   | 704,104 |   |   |   | 705,956 |   |
|     Accrued interest receivable   |   |          | 6,189   |   |              |   | 6,189 |   |   |   | 6,036 |   |   |   | 6,036 |   |
|                                                  |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                                |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     Deposits                      |   |          | 913,779 |   |              |   | 918,402 |   |   |   | 796,852 |   |   |   | 799,378 |   |
|     Borrowings                    |   |          | 63,003  |   |              |   | 64,271 |   |   |   | 65,486 |   |   |   | 66,509 |   |
|     Accrued interest payable      |   |          | 877     |   |              |   | 877 |   |   |   | 1,081 |   |   |   | 1,081 |   |

----

Index

|                                                     |   | Three Months Ended |       |   | Six Months Ended |   |
|----------------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                     |   | June 30,           |       |   | June 30,         |   |
|  (Dollars in thousands, except per share amounts)   |   | 2009               |       |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                     |   |               |       |   |             |   |   |   |   |   |   |   |
|  Net income (loss) available to common stockholders |   | $                  | 962        |   |             | $      | (2,216 | ) |   | $ | (146 | ) |   | $ | (2,537 | ) |
|                                                     |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  Basic weighted average shares outstanding          |   |               | 21,834,988 |   |             |   | 22,185,914 |   |   |   | 21,801,781 |   |   |   | N/A |   |
|  Effect of dilutive securities                      |   |               | 189,191    |   |             |   | - |   |   |   | 190,143 |   |   |   | N/A |   |
|   Diluted weighted average shares outstanding  |   | $                  | 22,024,179 |   |             | $      | 22,185,914 |   |   | $ | 21,991,924 |   |   | $ | N/A |   |
|                                                     |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  Net income (loss) per share:                       |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  Basic                                              |   | $                  | 0.04       |   |             | $      | (0.10 | ) |   | $ | (0.01 | ) |   | $ | N/A |   |
|  Diluted                                            |   | $                  | 0.04       |   |             | $      | (0.10 | ) |   | $ | (0.01 | ) |   | $ | N/A |   |

| 5. | Securities |
|----|------------|

----

Index

|                                                                                                                                     |   |      |    |   | Gross      |   |   | Gross      |   |   |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|--------|------------|--------|--------|------------|--------|--------|---------|--------|
|                                                                                                                                     |   | Amortized |    |   | Unrealized |   |   | Unrealized |   |   | Fair    |   |
|  (In thousands)                                                                                                                     |   | Cost      |    |   | Gains      |   |   | Losses     |   |   | Value   |   |
| June 30, 2009                                                                                                                            |   |      |    |   |       |   |   |       |   |   |    |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |
|  Debt securities:                                                                                                                   |   |      |    |   |       |   |   |       |   |   |    |   |
|      Government-sponsored enterprises                                                                           |   | $         | 18      |   |       | $      | -      |       |   | $      | (3      | )      |   | $ | 15 |   |
|      Corporate bonds                                                                                            |   |      | 223,425 |   |       |   | 5,959  |       |   |   | (3,554  | )      |   |   | 225,830 |   |
|      Mortgage-backed securities                                                                                 |   |      | 3,022   |   |       |   | 2      |       |   |   | (36     | )      |   |   | 2,988 |   |
|                  Total debt securities              |   |      | 226,465 |   |       |   | 5,961  |       |   |   | (3,593  | )      |   |   | 228,833 |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|  Marketable equity securities:                                                                                                      |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|      Common stocks                                                                                              |   |      | 28,166  |   |       |   | 1,310  |       |   |   | (3,507  | )      |   |   | 25,969 |   |
|      Money market mutual funds                                                                                  |   |      | 46,873  |   |       |   | -      |       |   |   | -       |   |   |   | 46,873 |   |
|                  Total marketable equity securities |   |      | 75,039  |   |       |   | 1,310  |       |   |   | (3,507  | )      |   |   | 72,842 |   |
|                  Total securities available         |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|                      for sale   |   | $         | 301,504 |   |       | $      | 7,271  |       |   | $      | (7,100  | )      |   | $ | 301,675 |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|                                                                                                                                     |   |      |    |   |       | Gross  |   |       | Gross  |   |    |   |   |   |
|                                                                                                                                     |   | Amortized |    |   | Unrealized |   |   | Unrealized |   |   | Fair    |   |
|  (In thousands)                                                                                                                     |   | Cost      |    |   | Gains      |   |   | Losses     |   |   | Value   |   |
| December 31, 2008                                                                                                                        |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|  Debt securities:                                                                                                                   |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|      Government-sponsored enterprises                                                                           |   | $         | 1,000   |   |       | $      | 3      |       |   | $      | -       |   |   | $ | 1,003 |   |
|      Corporate bonds                                                                                            |   |      | 210,079 |   |       |   | 1,404  |       |   |   | (7,796  | )      |   |   | 203,687 |   |
|      Mortgage-backed securities                                                                                 |   |      | 40      |   |       |   | 3      |       |   |   | (3      | )      |   |   | 40 |   |
|                  Total debt securities              |   |      | 211,119 |   |       |   | 1,410  |       |   |   | (7,799  | )      |   |   | 204,730 |   |
|                                                                                                                                     |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|  Marketable equity securities:                                                                                                      |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|      Common stocks                                                                                              |   |      | 26,142  |   |       |   | 1,185  |       |   |   | (4,473  | )      |   |   | 22,854 |   |
|      Money market mutual funds                                                                                  |   |      | 24,945  |   |       |   | -      |       |   |   | -       |   |   |   | 24,945 |   |
|                  Total marketable equity securities |   |      | 51,087  |   |       |   | 1,185  |       |   |   | (4,473  | )      |   |   | 47,799 |   |
|                  Total securities available         |   |      |    |   |       |   |   |       |   |   |    |   |   |   |   |   |
|                      for sale   |   | $         | 262,206 |   |       | $      | 2,595  |       |   | $      | (12,272 | )      |   | $ | 252,529 |   |

----

Index

|                             |   | June 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                             |   | Amortized     |    |   | Fair              |   |   | Amortized |   |   | Fair |   |
|  (In thousands)             |   | Cost          |    |   | Value             |   |   | Cost |   |   | Value |   |
|                             |   |          |    |   |              |   |   |   |   |   |   |   |
|  Within 1 year              |   | $             | 31,299  |   |              | $      | 31,085 |   |   | $ | 48,533 |   |   | $ | 48,430 |   |
|  Over 1 year to 5 years     |   |          | 192,144 |   |              |   | 194,760 |   |   |   | 162,546 |   |   |   | 156,260 |   |
|  Mortgage-backed securities |   |          | 3,022   |   |              |   | 2,988 |   |   |   | 40 |   |   |   | 40 |   |
|                             |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                             |   | $             | 226,465 |   |              | $      | 228,833 |   |   | $ | 211,119 |   |   | $ | 204,730 |   |

|                                                                                                                               |   | Less Than Twelve Months |   |   | Twelve Months or More |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                                                                                                               |   | Gross                   |   |   |                  |   |   | Gross |   |   |   |   |
|                                                                                                                               |   | Unrealized              |   |   | Fair                  |   |   | Unrealized |   |   | Fair |   |
|  (In thousands)                                                                                                               |   | Losses                  |   |   | Value                 |   |   | Losses |   |   | Value |   |
|                                                                                                                               |   |                    |   |   |                  |   |   |   |   |   |   |   |
| June 30, 2009                                                                                                                      |   |                    |   |   |                  |   |   |   |   |   |   |   |
|  Debt securities:                                                                                                             |   |                    |   |   |                  |   |   |   |   |   |   |   |
|      Government-sponsored enterprises                                                                     |   | $                       | 3      |   |                  | $      | 15 |   |   | $ | - |   |   | $ | - |   |
|      Corporate bonds                                                                                      |   |                    | 701    |   |                  |   | 14,414 |   |   |   | 2,853 |   |   |   | 16,704 |   |
|      Mortgage-backed securities                                                                           |   |                    | 36     |   |                  |   | 2,988 |   |   |   | - |   |   |   | - |   |
|                Total debt securities                    |   |                    | 740    |   |                  |   | 17,417 |   |   |   | 2,853 |   |   |   | 16,704 |   |
|                                                                                                                               |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|  Common stock                                                                                                                 |   |                    | 1,453  |   |                  |   | 9,248 |   |   |   | 2,054 |   |   |   | 7,202 |   |
|                Total temporarily impaired               |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                     securities |   | $                       | 2,193  |   |                  | $      | 26,665 |   |   | $ | 4,907 |   |   | $ | 23,906 |   |

----

Index

|                                                                                                                               |   | Less Than Twelve Months |   |   | Twelve Months or More |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                                                                                                               |   | Gross                   |   |   |                  |   |   | Gross |   |   |   |   |
|                                                                                                                               |   | Unrealized              |   |   | Fair                  |   |   | Unrealized |   |   | Fair |   |
|  (In thousands)                                                                                                               |   | Losses                  |   |   | Value                 |   |   | Losses |   |   | Value |   |
|                                                                                                                               |   |                    |   |   |                  |   |   |   |   |   |   |   |
| December 31, 2008                                                                                                                  |   |                    |   |   |                  |   |   |   |   |   |   |   |
|  Debt securities:                                                                                                             |   |                    |   |   |                  |   |   |   |   |   |   |   |
|      Corporate bonds                                                                                      |   | $                       | 4,431  |   |                  | $      | 77,145 |   |   | $ | 3,365 |   |   | $ | 36,102 |   |
|      Mortgage-backed securities                                                                           |   |                    | -      |   |                  |   | - |   |   |   | 3 |   |   |   | 11 |   |
|                Total debt securities                    |   |                    | 4,431  |   |                  |   | 77,145 |   |   |   | 3,368 |   |   |   | 36,113 |   |
|                                                                                                                               |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|  Common stock                                                                                                                 |   |                    | 3,728  |   |                  |   | 14,979 |   |   |   | 745 |   |   |   | 2,281 |   |
|                Total temporarily impaired               |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                     securities |   | $                       | 8,159  |   |                  | $      | 92,124 |   |   | $ | 4,113 |   |   | $ | 38,394 |   |

----

Index

----

Index

n

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

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

|   | · | general economic conditions, either nationally or in our market areas, that are worse than expected; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | adverse changes in the securities markets; |
|--------|--------|--------------------------------------------|

|   | · | legislative or regulatory changes that adversely affect our business; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | our ability to enter new markets successfully and take advantage of growth opportunities, and the possible dilutive effect of potential acquisitions or de novo branches, if any; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | changes in accounting policies and practices, as may be adopted by bank regulatory agencies, the Financial Accounting Standards Board, the Public Company Accounting Oversight Board and other promulgating authorities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | inability of third-party providers to perform their obligations to us; |
|--------|--------|------------------------------------------------------------------------|

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

|   | · | changes in real estate values in our market areas; |
|--------|--------|----------------------------------------------------|

|   | · | the effect of the current governmental effort to restructure the U.S. financial and regulatory system; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | the effect of developments in the secondary market affecting our loan pricing; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | the level of future deposit premiums; and |
|--------|--------|-------------------------------------------|

|   | · | the effect of the current financial crisis on our loan portfolio and our investment portfolio, and our deposit and other customers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

----

Index

----

Index

|                                                                          |   | At June 30, 2009 |    |   | At December 31, 2008 |   |
|-------------------------------------------------------------------------------|--------|------------------|---------|--------|----------------------|--------|
|  (Dollars in thousands)                                                  |   | Amount           |    |   | %                    |   |   | Amount |   |   | % |   |
|  Real estate loans:                                                      |   |             |    |   |                 |   |   |   |   |   |   |   |
|     One- to four-family                                   |   | $                | 281,595 |   |                 |   | 36.6 | % |   | $ | 274,716 |   |   |   | 38.6 | % |
|     Multi-family                                          |   |             | 48,376  |   |                 |   | 6.3 |   |   |   | 31,212 |   |   |   | 4.4 |   |
|     Commercial real estate                                |   |             | 289,521 |   |                 |   | 37.6 |   |   |   | 269,454 |   |   |   | 37.7 |   |
|     Construction                                          |   |             | 102,640 |   |                 |   | 13.3 |   |   |   | 91,652 |   |   |   | 12.9 |   |
|     Home equity lines                                     |   |             |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|       of credit                                 |   |             | 30,414  |   |                 |   | 4.0 |   |   |   | 28,253 |   |   |   | 4.0 |   |
|          Total real estate loans |   |             | 752,546 |   |                 |   | 97.7 |   |   |   | 695,287 |   |   |   | 97.6 |   |
|                                                                          |   |             |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|  Commercial business loans                                               |   |             | 16,544  |   |                 |   | 2.1 |   |   |   | 15,355 |   |   |   | 2.2 |   |
|  Consumer loans                                                          |   |             | 1,339   |   |                 |   | 0.2 |   |   |   | 1,379 |   |   |   | 0.2 |   |
|           Total loans       |   |             | 770,429 |   |                 |   | 100.0 | % |   |   | 712,021 |   |   |   | 100.0 | % |
|  Net deferred loan origination fees                                      |   |             | (984    | )      |                 |   |   |   |   |   | (1,005 | ) |   |   |   |   |
|  Allowance for loan losses                                               |   |             | (8,120  | )      |                 |   |   |   |   |   | (6,912 | ) |   |   |   |   |
|           Loans, net        |   | $                | 761,325 |   |                 |   |   |   |   | $ | 704,104 |   |   |   |   |   |

----

Index

|                                                                    |     | Three Months Ended |   |     | Six Months Ended |   |
|-------------------------------------------------------------------------|----------|--------------------|--------|----------|------------------|--------|
|                                                                    | June 30, |               |   | June 30, |             |
|  (Dollars in thousands)                                            | 2009     |               |   | 2008     |             |   | 2009 |   |   | 2008 |   |
|  Beginning balance                                                 |     | $                  | 7,456  |     |             | $      | 3,768 |   |   | $ | 6,912 |   |   | $ | 3,637 |   |
|                                                                    |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|  Provision for loan losses                                         |     |               | 568    |     |             |   | 2,197 |   |   |   | 1,114 |   |   |   | 2,328 |   |
|  Charge offs:                                                      |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|  Real estate loans                                                 |     |               | 164    |     |             |   | 5 |   |   |   | 166 |   |   |   | 5 |   |
|  Commercial business loans                                         |     |               | -      |     |             |   | - |   |   |   | - |   |   |   | - |   |
|  Consumer loans                                                    |     |               | -      |     |             |   | - |   |   |   | - |   |   |   | - |   |
|          Total charge-offs |     |               | 164    |     |             |   | 5 |   |   |   | 166 |   |   |   | 5 |   |
|                                                                    |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|  Recoveries:                                                       |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|  Real estate loans                                                 |     |               | 260    |     |             |   | 1 |   |   |   | 260 |   |   |   | 1 |   |
|  Commercial business                                               |     |               | -      |     |             |   | - |   |   |   | - |   |   |   | - |   |
|  Consumer loans                                                    |     |               | -      |     |             |   | - |   |   |   | - |   |   |   | - |   |
|  Total recoveries                                                  |     |               | 260    |     |             |   | 1 |   |   |   | 260 |   |   |   | 1 |   |
|  Net recoveries (charge-offs)                                      |     |               | 96     |     |             |   | (4 | ) |   |   | 94 |   |   |   | (4 | ) |
|                                                                    |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|          Ending balance    |     | $                  | 8,120  |     |             | $      | 5,961 |   |   | $ | 8,120 |   |   | $ | 5,961 |   |
|                                                                    |     |               |   |     |             |   |   |   |   |   |   |   |   |   |   |   |
|  Allowance to non-accrual loans                                    |     |               | 47.61  | %        |             |   | 78.64 | % |   |   | 47.61 | % |   |   | 78.64 | % |
|  Allowance to total loans outstanding                              |     |               | 1.05   | %        |             |   | 0.96 | % |   |   | 1.05 | % |   |   | 0.96 | % |
|  Net recovery (charge-offs) to average loans outstanding           |     |               | 0.01   | %        |             |   | (0.00 | )% |   |   | 0.01 | % |   |   | (0.00 | )% |

----

Index

|                                                                                          | At June 30, |   |   | At December 31, |   |
|-----------------------------------------------------------------------------------------------|-------------|--------|--------|-----------------|--------|
|  (In thousands)                                                                          | 2009        |   |   | 2008            |   |
| Loans accounted for on a non-accrual basis:                                                   |        |   |   |            |
|  Real estate loans:                                                                      |        |   |   |            |   |   |
|      One- to four-family                                                  |        | $      | 4,224  |            |   | $ | 3,962 |   |
|      Multi-family                                                         |        |   | 820    |            |   |   | - |   |
|      Commercial real estate                                               |        |   | 300    |            |   |   | 883 |   |
|    Home equity lines of credit                                                 |        |   | -      |            |   |   | - |   |
|    Construction                                                                |        |   | 11,663 |            |   |   | 9,387 |   |
|          Total real estate loans                 |        |   | 17,007 |            |   |   | 14,232 |   |
|  Commercial business loans                                                               |        |   | 47     |            |   |   | - |   |
|  Consumer loans                                                                          |        |   | 2      |            |   |   | - |   |
|      Total non-accrual loans                                         |        |   | 17,056 |            |   |   | 14,232 |   |
|                                                                                          |        |   |   |            |   |   |   |   |
|  Foreclosed assets                                                                       |        |   | 3,050  |            |   |   | 2,604 |   |
|            Total non-performing assets |        | $      | 20,106 |            |   | $ | 16,836 |   |
|                                                                                          |        |   |   |            |   |   |   |   |
|  Non-accrual loans to total loans                                                        |        |   | 2.21   | %               |   |   | 2.00 | % |
|  Non-accrual loans to total assets                                                       |        |   | 1.44   | %               |   |   | 1.34 | % |
|  Non-performing assets to total assets                                                   |        |   | 1.70   | %               |   |   | 1.58 | % |

----

Index

|                                                              |   | At June 30, 2009 |    |   | At December 31, 2008 |   |
|-------------------------------------------------------------------|--------|------------------|---------|--------|----------------------|--------|
|  (Dollars in thousands)                                      |   | Amount           |    |   | Percent              |   |   | Amount |   |   | Percent |   |
|  NOW and demand deposits                                     |   | $                | 101,545 |   |                 |   | 11.11 | % |   | $ | 92,051 |   |   |   | 11.55 | % |
|  Money market deposits                                       |   |             | 253,647 |   |                 |   | 27.76 |   |   |   | 172,876 |   |   |   | 21.69 |   |
|  Regular and other deposits                                  |   |             | 124,473 |   |                 |   | 13.62 |   |   |   | 117,913 |   |   |   | 14.80 |   |
|  Certificates of deposit                                     |   |             | 434,114 |   |                 | 47.51  |   |   |   | 414,012 |   |   | 51.96 |   |
|           Total |   | $                | 913,779 |   |                 |   | 100.00 | % |   | $ | 796,852 |   |   |   | 100.00 | % |

----

Index

|                                                                                                                                          |   | For The Three Months Ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                                                                                          |   | 2009                                |      |   | 2008 |   |
|  (Dollars in thousands)                                                                                                                  |   | AverageBalance                      |      |   | InterestEarned/Paid |   |   | Yield/Cost (4) |   |   | AverageBalance |   |   | InterestEarned/Paid |   |   | Yield/Cost (4) |   |
|  Assets:                                                                                                                                 |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-earning assets:                                                                                                                |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Loans (1)                                                                                                             |   | $                                   | 757,131   |   |   | $ | 11,046 |   |   |   | 5.85 | % |   | $ | 604,227 |   |   | $ | 9,334 |   |   |   | 6.21 | % |
|     Securities and certificates of deposit                                                                                |   |                                | 290,433   |   |   |   | 2,867 |   |   |   | 3.96 |   |   |   | 310,094 |   |   |   | 3,097 |   |   |   | 4.02 |   |
|     Federal funds sold                                                                                                    |   |                                | 22,125    |   |   |   | 6 |   |   |   | 0.11 |   |   |   | 96,801 |   |   |   | 478 |   |   |   | 1.99 |   |
|           Total interest-earning assets                                                     |   |                                | 1,069,689 |   |   |   | 13,919 |   |   |   | 5.22 |   |   |   | 1,011,122 |   |   |   | 12,909 |   |   |   | 5.13 |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Noninterest-earning assets                                                                                                              |   |                                | 82,769    |   |   |   |   |   |   |   |   |   |   |   | 76,288 |   |   |   |   |   |   |   |   |   |
|           Total assets                                                                      |   | $                                   | 1,152,458 |   |   |   |   |   |   |   |   |   |   | $ | 1,087,410 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Liabilities and stockholders' equity:                                                                                                   |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                           |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     NOW  deposits                                                                                               |   | $                                   | 37,913    |   |   |   | 37 |   |   |   | 0.39 |   |   | $ | 39,530 |   |   |   | 79 |   |   |   | 0.80 |   |
|     Money market deposits                                                                                                 |   |                                | 226,777   |   |   |   | 1,074 |   |   |   | 1.90 |   |   |   | 143,566 |   |   |   | 885 |   |   |   | 2.48 |   |
|     Savings and other deposits                                                                                            |   |                                | 128,148   |   |   |   | 293 |   |   |   | 0.92 |   |   |   | 123,801 |   |   |   | 351 |   |   |   | 1.14 |   |
|     Certificates of deposit                                                                                               |   |                                | 432,899   |   |   |   | 3,534 |   |   |   | 3.27 |   |   |   | 448,618 |   |   |   | 5,111 |   |   |   | 4.58 |   |
|        Total interest-bearing deposits                                                                     |   |                                | 825,737   |   |   |   | 4,938 |   |   |   | 2.40 |   |   |   | 755,515 |   |   |   | 6,426 |   |   |   | 3.42 |   |
|     FHLB advances  and other borrowings                                                                         |   |                                | 64,212    |   |   |   | 509 |   |   |   | 3.18 |   |   |   | 64,070 |   |   |   | 570 |   |   |   | 3.58 |   |
|        Total interest-bearing liabilities                                                                  |   |                                | 889,949   |   |   |   | 5,447 |   |   |   | 2.45 |   |   |   | 819,585 |   |   |   | 6,996 |   |   |   | 3.43 |   |
|     Noninterest-bearing demand deposits                                                                                   |   |                                | 61,772    |   |   |   |   |   |   |   |   |   |   |   | 55,299 |   |   |   |   |   |   |   |   |   |
|     Other noninterest-bearing liabilities                                                                                 |   |                                | 10,853    |   |   |   |   |   |   |   |   |   |   |   | 9,647 |   |   |   |   |   |   |   |   |   |
|           Total liabilities                                                                 |   |                                | 962,574   |   |   |   |   |   |   |   |   |   |   |   | 884,531 |   |   |   |   |   |   |   |   |   |
|        Total stockholders' equity                                                                          |   |                                | 189,884   |   |   |   |   |   |   |   |   |   |   |   | 202,879 |   |   |   |   |   |   |   |   |   |
|        Total liabilities and stockholders' equity                                                          |   | $                                   | 1,152,458 |   |   |   |   |   |   |   |   |   |   | $ | 1,087,410 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net interest income                                                                                                   |   |                                |      |   |   | $ | 8,472 |   |   |   |   |   |   |   |   |   |   | $ | 5,913 |   |   |   |   |   |
|     Interest rate spread  (2)                                                                                   |   |                                |      |   |   |   |   |   |   |   | 2.77 | % |   |   |   |   |   |   |   |   |   |   | 1.70 | % |
|     Net interest margin  (3)                                                                                    |   |                                |      |   |   |   |   |   |   |   | 3.18 | % |   |   |   |   |   |   |   |   |   |   | 2.35 | % |
|     Average interest-earning assets to average interest-bearing liabilities                                          |   |                                |      |   |   |   | 120.20 | % |   |   |   |   |   |   |   |   |   |   | 123.37 | % |   |   |   |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Loans on non-accrual status are included in average balances.                                                                             |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (2) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |   |
|                                                                                                                                          |   |
| (3) Net interest margin represents net interest income divided by average interest-earning assets.                                            |   |                                |      |   |   |   |   |   |   |
|                                                                                                                                          |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  (4) Annualized.                                                                                                                         |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Index

|                                                                                                                                          |   | For The Six Months Ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                                                                                          |   | 2009                              |      |   | 2008 |   |
|  (Dollars in thousands)                                                                                                                  |   | AverageBalance                    |      |   | InterestEarned/Paid |   |   | Yield/Cost (4) |   |   | AverageBalance |   |   | InterestEarned/Paid |   |   | Yield/Cost (4) |   |
|  Assets:                                                                                                                                 |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-earning assets:                                                                                                                |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Loans (1)                                                                                                             |   | $                                 | 742,085   |   |   | $ | 21,691 |   |   |   | 5.89 | % |   | $ | 585,481 |   |   | $ | 18,517 |   |   |   | 6.36 | % |
|     Securities and certificates of deposit                                                                                |   |                              | 272,016   |   |   |   | 5,657 |   |   |   | 4.19 |   |   |   | 285,088 |   |   |   | 5,974 |   |   |   | 4.21 |   |
|     Federal funds sold                                                                                                    |   |                              | 26,220    |   |   |   | 18 |   |   |   | 0.14 |   |   |   | 117,636 |   |   |   | 1,541 |   |   |   | 2.63 |   |
|           Total interest-earning assets                                                     |   |                              | 1,040,321 |   |   |   | 27,366 |   |   |   | 5.30 |   |   |   | 988,205 |   |   |   | 26,032 |   |   |   | 5.30 |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Noninterest-earning assets                                                                                                              |   |                              | 83,764    |   |   |   |   |   |   |   |   |   |   |   | 75,438 |   |   |   |   |   |   |   |   |   |
|           Total assets                                                                      |   | $                                 | 1,124,085 |   |   |   |   |   |   |   |   |   |   | $ | 1,063,643 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Liabilities and stockholders' equity:                                                                                                   |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                                                                                                           |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     NOW  deposits                                                                                               |   | $                                 | 37,265    |   |   |   | 83 |   |   |   | 0.45 |   |   | $ | 37,225 |   |   |   | 147 |   |   |   | 0.79 |   |
|     Money market deposits                                                                                                 |   |                              | 205,108   |   |   |   | 2,101 |   |   |   | 2.07 |   |   |   | 141,844 |   |   |   | 2,038 |   |   |   | 2.89 |   |
|     Savings and other deposits                                                                                            |   |                              | 125,584   |   |   |   | 595 |   |   |   | 0.96 |   |   |   | 132,122 |   |   |   | 746 |   |   |   | 1.14 |   |
|     Certificates of deposit                                                                                               |   |                              | 430,232   |   |   |   | 7,422 |   |   |   | 3.48 |   |   |   | 447,243 |   |   |   | 10,406 |   |   |   | 4.68 |   |
|        Total interest-bearing deposits                                                                     |   |                              | 798,189   |   |   |   | 10,201 |   |   |   | 2.58 |   |   |   | 758,434 |   |   |   | 13,337 |   |   |   | 3.54 |   |
|     FHLB advances  and other borrowings                                                                         |   |                              | 65,973    |   |   |   | 1,041 |   |   |   | 3.18 |   |   |   | 49,992 |   |   |   | 944 |   |   |   | 3.80 |   |
|        Total interest-bearing liabilities                                                                  |   |                              | 864,162   |   |   |   | 11,242 |   |   |   | 2.62 |   |   |   | 808,426 |   |   |   | 14,281 |   |   |   | 3.55 |   |
|     Noninterest-bearing demand deposits                                                                                   |   |                              | 60,247    |   |   |   |   |   |   |   |   |   |   |   | 53,550 |   |   |   |   |   |   |   |   |   |
|     Other noninterest-bearing liabilities                                                                                 |   |                              | 9,979     |   |   |   |   |   |   |   |   |   |   |   | 9,215 |   |   |   |   |   |   |   |   |   |
|           Total liabilities                                                                 |   |                              | 934,388   |   |   |   |   |   |   |   |   |   |   |   | 871,191 |   |   |   |   |   |   |   |   |   |
|        Total stockholders' equity                                                                          |   |                              | 189,697   |   |   |   |   |   |   |   |   |   |   |   | 192,452 |   |   |   |   |   |   |   |   |   |
|        Total liabilities and stockholders' equity                                                          |   | $                                 | 1,124,085 |   |   |   |   |   |   |   |   |   |   | $ | 1,063,643 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net interest income                                                                                                   |   |                              |      |   |   | $ | 16,124 |   |   |   |   |   |   |   |   |   |   | $ | 11,751 |   |   |   |   |   |
|     Interest rate spread  (2)                                                                                   |   |                              |      |   |   |   |   |   |   |   | 2.68 | % |   |   |   |   |   |   |   |   |   |   | 1.75 | % |
|     Net interest margin  (3)                                                                                    |   |                              |      |   |   |   |   |   |   |   | 3.13 | % |   |   |   |   |   |   |   |   |   |   | 2.39 | % |
|     Average interest-earning assets to average interest-bearing liabilities                                               |   |                              |      |   |   |   | 120.38 | % |   |   |   |   |   |   |   |   |   |   | 122.24 | % |   |   |   |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Loans on non-accrual status are included in average balances.                                                                             |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (2) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (3) Net interest margin represents net interest income divided by average interest-earning assets.                                            |   |                              |      |   |   |   |   |   |   |
|                                                                                                                                          |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (4) Annualized.                                                                                                                               |   |                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| (a.) | – (b.) Not applicable. |
|------|------------------------------|

| (c.) | The following table sets forth information with respect to any purchase made by or on behalf of the Company during the indicated periods: |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  Period                       |  (a)                                                                                                                                                                       |  (b)                                                                                                                                                                       |  (c)                                                                                                                                                                       |  (d)                                                                                                                       |
|------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                               |  Total Number ofShares (or Units)Purchased                                                                                                                                 |  Average Price PaidPer Share (orUnit)                                                                                                                                      |  Total Number ofShares (or Units)Purchased as Partof PubliclyAnnounced Plansor Programs (1)                                                                                |  Maximum Number(or ApproximateDollar Value) ofShares (or Units)that May Yet BePurchased Underthe Plans orPrograms          |
|  April 1 – 30, 2009 (1) |                              - |                              - |                              - |                     517,500 |
|                               |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                                            |
|  May 1 – 31, 2009       |                   216,701                                                             |  $                     8.63                                       |                   216,701                                                             |                     300,799 |
|                               |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                                                                                            |                                                                                                                            |
|  June 1 – 30, 2009      |                     11,750                                                  |  $                     8.52                                       |                     11,750                                                  |                     289,049 |
|  Total                        |                   228,451                                                             |  $                     8.63                                       |                   228,451                                                             |                     289,049 |

D

u

|   | (a) | The annual meeting of shareholders was held on May 20, 2009. |
|--------|-----|--------------------------------------------------------------|

|   | (b) | The following individuals were re-elected as directors for a three-year term at the annual meeting: Marilyn A. Censullo, Richard J. Gavegnano, Edward L. Lynch and Gregory F. Natalucci. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The following matters were voted upon and approved by the Company’s shareholders at the 2009 Annual Meeting of Shareholders held on May 20, 2009: (i) election of four directors to serve for three-year terms (Proposal 1) and (ii) ratification of the appointment of Wolf & Company, P.C. as the independent registered public accounting firm for the Company for the fiscal year ending December 31,2009. (Proposal 2). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 3.1   | Amended and Restated Articles of Organization of Meridian Interstate Bancorp, Inc.*                                                                 |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2   | Amended and Restated Bylaws of Meridian Interstate Bancorp, Inc.*                                                                                   |
| 4     | Form of Common Stock Certificate of Meridian Interstate Bancorp, Inc.*                                                                              |
| 10.1  | Form of East Boston Savings Bank Employee Stock Ownership Plan*                                                                                     |
| 10.2  | Form of East Boston Savings Bank Employee Stock Ownership Plan Trust Agreement*                                                                     |
| 10.3  | East Boston Savings Bank Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and Promissory Note*                                        |
| 10.4  | Form of Amended and Restated Employment Agreement*                                                                                                  |
| 10.5  | Form of East Boston Savings Bank Employee Severance Compensation Plan*                                                                              |
| 10.6  | Form of Supplemental Executive Retirement Agreements with certain directors*                                                                        |
| 10.7  | Form of Separation Agreement with Robert F. Verdonck incorporated by reference to the Form 8-K filed on June 9, 2008                                |
| 10.8  | Form of Separation Agreement with Leonard V. Siuda incorporated by reference to Form 8-K filed on April 7, 2009                                     |
| 10.9  | Form of Separation Agreement with Philip F. Freehan incorporated by reference to Form 8-K filed on April 7, 2009                                    |
| 10.10 | Form of Supplemental Executive Retirement Agreement with Richard J. Gavegnano filed as an exhibit to Form 10-Q filed on May 14, 2008                |
| 10.11 | Form of Employment Agreement with Richard J. Gavegnano incorporated by reference to the Form 8-K filed on January 12, 2009                          |
| 10.12 | Form of Employment Agreement with Deborah J. Jackson incorporated by reference to the Form 8-K filed on January 22, 2009                            |
| 10.13 | Form of Supplemental Executive Retirement Agreement with Deborah J. Jackson incorporated by reference to the Form 8-K filed on January 22, 2009     |
| 10.14 | 2008 Equity Incentive Plan**                                                                                                                        |
| 10.15 | Amendment to Supplemental Executive Retirement Agreements with certain directors incorporated by reference to the Form 10K-A filed on April 8, 2009 |
| 10.16 | Agreement and Plan of Merger incorporated by reference to the Form 8-K filed on July 24, 2009.                                                      |
| 21    | Subsidiaries of Registrant*                                                                                                                         |
| 31.1  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                  |
| 31.2  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                  |
| 32    | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                      |

| *  | Incorporated by reference to the Registration Statement on Form S-1 of Meridian Interstate Bancorp, Inc. (File No. 333-146373), originally filed with the Securities and Exchange Commission on September 28, 2007. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** | Incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement for its 2008 Annual Meeting, as filed with the Securities and Exchange Commission on July 11, 2008.                       |

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|                             | MERIDIAN INTERSTATE BANCORP, INC.            |
|----------------------------------|----------------------------------------------|
|                             | (Registrant)                                 |
|                             |                                         |
|                             |                                         |
| Dated:  August 7, 2009 | /s/ Richard J. Gavegnano                     |
|                             | Richard J. Gavegnano                         |
|                             | Chairman and Chief Executive Officer         |
|                             | (Principal Executive Officer)                |
|                             |                                         |
|                             |                                         |
| Dated:  August 7, 2009 | /s/ Gregory Derderian                        |
|                             | Gregory Derderian                            |
|                             | Treasurer and Chief Financial Officer        |
|                             | (Principal Financial and Accounting Officer) |