##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended September 30, 2007.
 Commission File Number: 000-51239
 ROCKVILLE FINANCIAL, INC.
 (Exact name of registrant as specified in its charter)
 Connecticut
    
    30-0288470(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)25 Park Street, Rockville, Connecticut
    
    06066(Address of principal executive officers)
    
    (Zip Code)
 (860) 291-3600
(Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




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Table of Contents
 PagePart I  FINANCIAL INFORMATIONItem 1. Interim Financial StatementsCondensed Consolidated Statements of Condition as of September 30, 2007
and December 31, 2006 (unaudited)
    
    
    3Condensed Consolidated Statements of Income for the three and nine months ended
September 30, 2007 and 2006 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2007 and 2006 (unaudited)
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    35Item 4. Controls and Procedures
    
    
    36Part II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    37Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    37Item 3. Defaults Upon Senior Securities
    
    
    37Item 4. Submission of Matters to a Vote of Security Holders
    
    
    37Item 5. Other Information
    
    
    37Item 6. Exhibits
    
    
    38SIGNATURES
    
    
    40EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.0: CERTIFICATIONS
  Rockville Financial, Inc.
    
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Part I  FINANCIAL INFORMATION
 
 Item 1. Interim Financial Statements:
 Rockville Financial, Inc.
 
 Condensed Consolidated Statements of Condition
(In Thousands, Except Share Amounts)
(Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    18,150
    
    
    $
    21,000Short-term investments
    
    
    6,187
    
    
    
    1,381Total cash and cash equivalents
    
    
    24,337
    
    
    
    22,381AVAILABLE FOR SALE SECURITIES-At fair value
    
    
    145,865
    
    
    
    132,467LOANS RECEIVABLE (Net of allowance for loan
losses of $10,518 in 2007 and $9,827 in 2006)
    
    
    1,114,803
    
    
    
    1,033,355FEDERAL HOME LOAN BANK STOCK
    
    
    10,914
    
    
    
    9,836ACCRUED INTEREST RECEIVABLE
    
    
    5,082
    
    
    
    4,473DEFERRED TAX ASSET-Net
    
    
    5,296
    
    
    
    5,238BANK PREMISES AND EQUIPMENT-Net
    
    
    14,307
    
    
    
    12,624GOODWILL
    
    
    1,070
    
    
    
    1,070CASH SURRENDER VALUE OF BANK OWNED LIFE INSURANCE
    
    
    9,228
    
    
    
    8,954RECEIVABLE ON MATURED SECURITIES
    
    
    3,000
    
    
    
    OTHER ASSETS
    
    
    1,789
    
    
    
    2,438TOTAL
    
    $
    1,335,691
    
    
    $
    1,232,836LIABILITIES AND CAPITALLIABILITIESDEPOSITSNoninterest bearing
    
    $
    94,610
    
    
    $
    93,068Interest bearing
    
    
    858,365
    
    
    
    791,443Total deposits
    
    
    952,975
    
    
    
    884,511MORTGAGORS AND INVESTORS ESCROW ACCOUNTS
    
    
    2,731
    
    
    
    5,320ADVANCES FROM THE FEDERAL HOME LOAN BANK
    
    
    206,785
    
    
    
    178,110PAYABLE FOR SECURITIES PURCHASED
    
    
    5,505
    
    
    
    ACCRUED EXPENSES AND OTHER LIABILITIES
    
    
    11,122
    
    
    
    9,831Total liabilities
    
    
    1,179,118
    
    
    
    1,077,772COMMITMENTS AND CONTINGENCIES (Note 8)STOCKHOLDERS EQUITYPreferred stock (no par value; 1,000,000 shares authorized;
no shares issued and outstanding)
    
    
    
    
    
    
    Common stock (no par value; 29,000,000 shares authorized;
19,569,840 shares and 19,574,640 shares issued and outstanding (includes 147,960
shares and 163,960 shares of unvested restricted stock) at September 30, 2007 and
December 31, 2006, respectively
    
    
    85,249
    
    
    
    85,249Additional paid-in capital
    
    
    2,791
    
    
    
    1,854Unallocated stock held by ESOP
    
    
    (5,910
    )
    
    
    (6,434
    )Treasury stock, at cost (321,030 shares at September 30, 2007)
    
    
    (4,785
    )
    
    
    Retained earnings
    
    
    80,156
    
    
    
    76,063Accumulated other comprehensive loss, net of tax
    
    
    (928
    )
    
    
    (1,668
    )Total stockholders equity
    
    
    156,573
    
    
    
    155,064TOTAL
    
    $
    1,335,691
    
    
    $
    1,232,836
  Rockville Financial, Inc.
    
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Rockville Financial, Inc.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006INTEREST AND DIVIDEND INCOME:Loans
    
    $
    17,190
    
    
    $
    15,272
    
    
    $
    49,608
    
    
    $
    42,120Securities-interest
    
    
    1,447
    
    
    
    1,172
    
    
    
    4,103
    
    
    
    3,624Interest bearing deposits
    
    
    23
    
    
    
    29
    
    
    
    75
    
    
    
    80Securities-dividends
    
    
    289
    
    
    
    379
    
    
    
    847
    
    
    
    687Total interest and dividend income
    
    
    18,949
    
    
    
    16,852
    
    
    
    54,633
    
    
    
    46,511INTEREST EXPENSEDeposits
    
    
    6,984
    
    
    
    5,553
    
    
    
    19,974
    
    
    
    13,802Borrowed funds
    
    
    2,166
    
    
    
    2,005
    
    
    
    6,159
    
    
    
    5,526Total interest expense
    
    
    9,150
    
    
    
    7,558
    
    
    
    26,133
    
    
    
    19,328Net interest income
    
    
    9,799
    
    
    
    9,294
    
    
    
    28,500
    
    
    
    27,183PROVISION FOR LOAN LOSSES
    
    
    157
    
    
    
    414
    
    
    
    590
    
    
    
    1,421Net interest income after provision
for loan losses
    
    
    9,642
    
    
    
    8,880
    
    
    
    27,910
    
    
    
    25,762NONINTEREST INCOME:Service charges and fees
    
    
    1,258
    
    
    
    1,149
    
    
    
    3,612
    
    
    
    3,063Net gain from sale of securities
    
    
    148
    
    
    
    26
    
    
    
    453
    
    
    
    204Total noninterest income
    
    
    1,406
    
    
    
    1,175
    
    
    
    4,065
    
    
    
    3,267NONINTEREST EXPENSE:Salaries and employee benefits
    
    
    4,193
    
    
    
    3,488
    
    
    
    12,113
    
    
    
    10,261Service bureau fees
    
    
    898
    
    
    
    773
    
    
    
    2,506
    
    
    
    2,202Occupancy and equipment
    
    
    917
    
    
    
    832
    
    
    
    2,591
    
    
    
    2,454Professional fees
    
    
    400
    
    
    
    341
    
    
    
    1,173
    
    
    
    913Marketing and promotions
    
    
    186
    
    
    
    229
    
    
    
    803
    
    
    
    743Insurance and FDIC assessments
    
    
    43
    
    
    
    51
    
    
    
    143
    
    
    
    155Other
    
    
    1,014
    
    
    
    1,097
    
    
    
    3,020
    
    
    
    2,967Total noninterest expense
    
    
    7,651
    
    
    
    6,811
    
    
    
    22,349
    
    
    
    19,695INCOME BEFORE INCOME TAXES
    
    
    3,397
    
    
    
    3,244
    
    
    
    9,626
    
    
    
    9,334PROVISION FOR INCOME TAXES
    
    
    1,136
    
    
    
    1,076
    
    
    
    3,199
    
    
    
    3,095NET INCOME
    
    $
    2,261
    
    
    $
    2,168
    
    
    $
    6,427
    
    
    $
    6,239
  Rockville Financial, Inc.
    
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Rockville Financial, Inc.
 
 Condensed Consolidated Statements of Income  Continued
(Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income per share (see Note 2):Basic
    
    $
    0.12
    
    
    $
    0.12
    
    
    $
    0.34
    
    
    $
    0.33Diluted
    
    
    0.12
    
    
    
    0.12
    
    
    
    0.34
    
    
    
    0.33Weighted average shares outstanding:Basic
    
    
    18,702,072
    
    
    
    18,846,247
    
    
    
    18,809,718
    
    
    
    18,832,125Diluted
    
    
    18,702,072
    
    
    
    18,846,247
    
    
    
    18,809,718
    
    
    
    18,832,125
  Rockville Financial, Inc.
    
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Rockville Financial, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 (In Thousands)
 For the Nine MonthsEnded September 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    6,427
    
    
    $
    6,239Adjustments to reconcile net income to net cash
provided by operating activities:Amortization and accretion of premiums and discounts
on investments, net
    
    
    40
    
    
    
    136Stock compensation expense
    
    
    1,461
    
    
    
    751Provision for loan losses
    
    
    590
    
    
    
    1,421Net gain from sale of securities
    
    
    (453
    )
    
    
    (204
    )Depreciation and amortization
    
    
    1,031
    
    
    
    968Loss on disposal of equipment
    
    
    
    
    
    
    13Deferred income taxes
    
    
    (439
    )
    
    
    (99
    )Increase in cash surrender value of bank owned life insurance
    
    
    (274
    )
    
    
    (248
    )Change in assets and liabilities:Deferred loan fees and premiums
    
    
    178
    
    
    
    (139
    )Accrued interest receivable
    
    
    (609
    )
    
    
    (498
    )Other assets
    
    
    1,327
    
    
    
    323Accrued expenses and other liabilities
    
    
    1,299
    
    
    
    447Net cash provided by operating activities
    
    
    10,578
    
    
    
    9,110CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of available for sale securities
    
    
    4,886
    
    
    
    3,030Proceeds from calls and maturities of available for sale securities
    
    
    12,600
    
    
    
    13,115Principal payments on available for sale mortgage-backed securities
    
    
    9,148
    
    
    
    11,237Purchase of available for sale securities
    
    
    (37,090
    )
    
    
    (15,088
    )Purchase of Federal Home Loan Bank stock
    
    
    (1,078
    )
    
    
    (1,338
    )Proceeds from sales of loans
    
    
    
    
    
    
    948Net increase in loans
    
    
    (82,216
    )
    
    
    (161,891
    )Purchases of bank premises and equipment
    
    
    (2,714
    )
    
    
    (2,312
    )Net cash used in investing activities
    
    
    (96,464
    )
    
    
    (152,299
    )CASH FLOWS FROM FINANCING ACTIVITIES:Common stock purchased for ESOP
    
    
    
    
    
    
    (817
    )Common stock repurchased
    
    
    (4,374
    )
    
    
    Net increase in noninterest bearing deposits
    
    
    1,542
    
    
    
    2,668Net increase in interest bearing deposits
    
    
    66,922
    
    
    
    96,272Decrease in mortgagors and investors escrow accounts
    
    
    (2,589
    )
    
    
    (2,273
    )Proceeds from Federal Home Loan Bank advances
    
    
    34,800
    
    
    
    54,900Repayments of Federal Home Loan Bank advances
    
    
    (6,125
    )
    
    
    (10,117
    )Cash dividends paid on common stock
    
    
    (2,334
    )
    
    
    (777
    )Net cash provided by financing activities
    
    
    87,842
    
    
    
    139,856NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,956
    
    
    
    (3,333
    )CASH AND CASH EQUIVALENTS  Beginning of year
    
    
    22,381
    
    
    
    23,611CASH AND CASH EQUIVALENTS  End of period
    
    $
    24,337
    
    
    $
    20,278SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the period for:Interest
    
    $
    25,957
    
    
    $
    19,267Income taxes
    
    
    3,001
    
    
    
    3,636
  Rockville Financial, Inc.
    
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Rockville Financial, Inc. and Subsidiaries
 
 Notes to Unaudited Condensed Consolidated Financial Statements
 1.
    
    Basis of Presentation and Principles of ConsolidationThe condensed consolidated interim financial statements and the accompanying notes
presented in this report include the accounts of Rockville Financial, Inc., its
wholly-owned subsidiary Rockville Bank, and the Banks wholly-owned subsidiaries, The SBR
Mortgage Company, The SBR Investment Corp. and Rockville Financial Services, Inc.The condensed consolidated interim financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP) for
interim financial information and with the instructions to SEC Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all the information and footnotes required
by GAAP for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included in the condensed financial
statements. The results of operations for the three and nine months ended September 30,
2007 are not necessarily indicative of the results that may be expected for the year ending
December 31, 2007. These condensed consolidated financial statements should be read in
conjunction with the Companys 2006 consolidated financial statements and notes thereto
included in the Companys Annual Report on Form 10-K for the year ended December 31, 2006.The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the dates of the condensed financial
statements and the reported amounts of income and expenses during the reporting periods.
Operating results in the future could vary from the amounts derived from managements
estimates and assumptions. Material estimates that are particularly susceptible to
significant change in the near term relate to the determination of the allowance for loan
losses, pension assumptions, stock compensation expense, uncertain tax positions, deferred
tax assets and the evaluation of available for sale securities for other than temporary
impairment.2.
    
    Earnings Per ShareThe following table set forth the calculation of basic and diluted earnings per share for
the three and nine months ended September 30, 2007 and 2006 (In thousands except share and
per share information):
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    2,261
    
    
    $
    2,168
    
    
    $
    6,427
    
    
    $
    6,239Weighted-average
basic shares
outstanding
    
    
    18,702,072
    
    
    
    18,846,247
    
    
    
    18,809,718
    
    
    
    18,832,125Diluted effect of
stock options and
unvested restricted
stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average
diluted shares
    
    
    18,702,072
    
    
    
    18,846,247
    
    
    
    18,809,718
    
    
    
    18,832,125Earnings per share:Basic
    
    $
    0.12
    
    
    $
    0.12
    
    
    $
    0.34
    
    
    $
    0.33Diluted
    
    $
    0.12
    
    
    $
    0.12
    
    
    $
    0.34
    
    
    $
    0.33
 Treasury shares and unallocated common shares held by the ESOP are not included in the
weighted-average number of common shares outstanding for either basic or diluted earnings
per share calculations. The Company had no dilutive options and dilutive unvested
restricted stock outstanding as of September 30, 2007. Options to purchase 256,600 shares
of common stock had no dilutive effect at September 30, 2007 and were not included in the
computation of diluted earnings per share at
 Rockville Financial, Inc.
    
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September 30, 2007 because the options exercise price was greater than the average market
price of the common shares during the three and nine months ended September 30, 2007.3.
    
    Recent Accounting PronouncementsIn September 2006, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 157 (SFAS 157), Fair Value Measurements,
which provides enhanced guidance for using fair value to measure assets and liabilities.
The standard applies whenever other standards require or permit assets or liabilities to be
measured at fair value. The standard does not expand the use of fair value in any new
circumstances and is effective for financial statements for the Company beginning on
January 1, 2008. Early adoption is permitted. The Company does not expect the adoption of
SFAS 157 to have a material impact on the consolidated financial statements or results of
operations of the Company.In September 2006, the FASB issued SFAS No. 158 (SFAS 158), Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No.
87, 88, 106, and 132(R). The Company adopted the provisions of SFAS 158 requiring the
recognition of the funded status of defined benefit plans as of December 31, 2006. The
statement requires the Company to measure plan assets and benefit obligations as of the
date of the Companys fiscal year-end statement of financial position and is effective for
the Company on January 1, 2008. During the prior year, the Company had adopted the
provisions of SFAS 158 and recorded $4.4 million in accumulated other comprehensive loss
related to the unfunded defined benefit plans as of December 31, 2006. The Company recorded
the amortized benefit plan expense related to the adoption of $226,000 and $678,000, net of
taxes of $77,000 and $231,000, respectively, for the three and nine months ended September
30, 2007. The Company offers a defined benefit pension plan whose measurement date of the
pension plan assets and benefit obligations is presently October 1 and will be changed in
accordance with the provisions of SFAS 158 to the Companys year-end of December 31,
effective December 31, 2008. Refer to Note 4 for additional disclosures.In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for
Financial Assets and Financial Liabilities, effective for the Company beginning on January
1, 2008. This statement provides entities with an option to report selected financial
assets and liabilities at fair value, with the objective to reduce the complexity in
accounting for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. The Company is currently assessing the impact
of this guidance on its consolidated financial statements.4.
    
    Benefit PlansThe Company sponsors a noncontributory defined benefit pension plan (the Pension Plan)
covering all full-time employees hired before January 1, 2005. Participants who have
completed one hour of eligible service prior to February 1, 1998 earn 3% of their average
annual earnings times credited service up to a maximum of twenty years. All other
participants earn 2% of their average annual earnings times credited service up to a
maximum of thirty years. Participants earn one year of credited service each plan year that
they have completed at least 1,000 hours of service. Participants become fully vested after
five years of credited service. The Companys funding policy is to contribute annually in
order to meet at least the minimum funding standards established by the Employee Retirement
Security Act of 1974 (ERISA).The measurement date of the pension plan assets and benefit obligations is presently
October 1 and will be changed in accordance with the provisions of SFAS 158 to the
Companys year-end of December 31 effective December 31, 2008. The Company uses January 1
as the measurement date for its postretirement benefit plan.The Company entered into a supplemental retirement agreement with two executive officers of
the Bank. Additionally, effective December 1, 2004, the Bank adopted the Supplemental
Executive Retirement Plan (the SERP) covering two designated executive officers of the
Company. The SERP provides the two designated officers with a retirement benefit equal to
70% of their respective average annual earnings, as defined.The Company also has supplemental retirement plans (the Supplemental Plans) that provide
benefits for certain key executive officers. The Supplemental Plans provide restorative
payments to certain
 Rockville Financial, Inc.
    
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executives who are prevented from receiving the full benefits contemplated by the
tax-qualified Retirement Plan, 401(k) Plan and Employee Stock Ownership Plan. Benefits
under the Supplemental Plans are based on a predetermined formula. The benefits under the
Supplemental Plans are reduced by other employee benefits. The liability arising from the
Supplemental Plans is being accrued over the participants remaining periods of service so
that at the expected retirement dates, the present value of the annual payments will have
been expensed.The Company also provides an unfunded postretirement medical, health and life insurance
benefit plan for retirees and employees hired prior to March 1, 1993.The amounts related to the Pension Plan, Supplemental Plans and the SERPs are reflected in
the tables that follow as Pension Plans:
 Components of Net Periodic Benefit Cost
 Pension Plans
    
    
    Postretirement BenefitsThree Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    238
    
    
    $
    204
    
    
    $
    5
    
    
    $
    6Interest cost
    
    
    248
    
    
    
    222
    
    
    
    30
    
    
    
    33Expected return on
plan assets
    
    
    (263
    )
    
    
    (244
    )
    
    
    
    
    
    
    Amortization of net
actuarial losses
    
    
    121
    
    
    
    124
    
    
    
    22
    
    
    
    30Amortization of prior
service cost
    
    
    78
    
    
    
    155
    
    
    
    5
    
    
    
    5Net periodic benefit cost
    
    $
    422
    
    
    $
    461
    
    
    $
    62
    
    
    $
    74
 Pension Plans
    
    
    Postretirement BenefitsNine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    714
    
    
    $
    603
    
    
    $
    14
    
    
    $
    12Interest cost
    
    
    744
    
    
    
    666
    
    
    
    91
    
    
    
    80Expected return on
plan assets
    
    
    (789
    )
    
    
    (731
    )
    
    
    
    
    
    
    Amortization of net
actuarial losses
    
    
    364
    
    
    
    372
    
    
    
    66
    
    
    
    61Amortization of prior
service cost
    
    
    234
    
    
    
    465
    
    
    
    14
    
    
    
    15Net periodic benefit cost
    
    $
    1,267
    
    
    $
    1,375
    
    
    $
    185
    
    
    $
    168
 No contributions have been made to the pension plan for the nine months ended September 30,
2007. During the nine months ended September 30, 2007 the Company contributed $58,000 to
the postretirement benefit plan. The Company anticipates contributing an additional $59,000
during the year ended December 31, 2007 to the postretirement benefit plan. The Company
plans to contribute $675,000 to the pension plan for the 2007 plan year.The Company has a tax-qualified 401(k) plan for the benefit of its eligible employees.
Beginning January 1, 2005, the 401(k) Plan was amended to pay all employees, even those who
do not contribute to the 401(k) Plan, an automatic 3% of pay safe harbor contribution
that is fully vested instead of the matching contribution previously provided to
participants of the 401(k) Plan. The 401(k) expense for the nine months ended September 30,
2007 and 2006 was $205,000 and $283,000, respectively.On December 31, 2006, the Company adopted the recognition and disclosure provisions of
SFAS 158. SFAS 158 required the Company to recognize the underfunded status of its defined
benefit postretirement benefit plans as a liability in its December 31, 2006 consolidated
balance sheet, with a corresponding adjustment to accumulated other comprehensive income,
net of tax. The funded status is measured as the difference between plan assets at fair
value and the benefit obligation (the projected
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benefit obligation for pension plans or the accumulated benefit obligation for other
postretirement benefit plans). The amount recorded as accumulated other comprehensive
income represents the net unrecognized actuarial loss and prior service cost remaining from
the initial adoption of SFAS No. 87, Employers Accounting for Pensions. The net
unrecognized actuarial loss and prior service cost is being amortized and recognized as net
periodic pension cost and postretirement benefits. Further, actuarial gains and losses that
arise in subsequent periods and are not recognized as net periodic pension cost in the same
period will be recognized as a component of other comprehensive income. Those amounts will
be subsequently recognized as a component of net periodic pension cost on the same basis as
the amounts recognized in accumulated other comprehensive income at adoption of SFAS 158.
SFAS 158 also requires an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position. The measurement date of the pension plan
assets and benefit obligations is presently October 1. The Company uses January 1 as the
measurement date for its postretirement benefit plan. The plan will be changed in
accordance with the provisions of SFAS 158 to the Companys year-end of December 31
effective December 31, 2008.5.
    
    Stock Based CompensationOn January 1, 2006, the Company adopted SFAS 123R (revised 2004), Share-Based Payment. The
adoption of this standard did not have an impact the Companys consolidated financial
statements since the Company had not issued any stock options or restricted stock before
the adoption date. Under SFAS 123R, the fair value of stock option and restricted stock
awards, measured at grant date, is amortized to compensation expense on a straight-line
basis over the vesting period. The Company accelerates the recognition of compensation
costs for stock-based awards granted to retirement-eligible employees and employees who
become retirement-eligible prior to full vesting of the award because the Companys
incentive compensation plans allow for vesting at the time an employee retires. Stock-based
compensation granted to non-retirement-eligible individuals is expensed over the normal
vesting period.The Board of Directors and stockholders of the Company approved the Rockville Financial,
Inc. 2006 Stock Incentive Award Plan (the Plan) in 2006. The Plan allows the Company to
use stock options, stock awards, stock appreciation rights and performance awards to
attract, retain and reward performance of qualified employees and others who contribute to
the success of the Company.During the fourth quarter of 2006, the Board of Directors awarded 197,440 shares of
restricted stock (net of 7,508 shares which were used by the executives for income tax
withholding as described below) with a fair value of $3.5 million, as measured on the grant
date, and options to purchase 179,200 shares of the Companys stock with cliff vesting on
December 13, 2008 and an exercise price of $17.77 per share. The restricted stock and
options were issued to directors and officers of the Company. The fair value of the options
awarded on grant date, net of estimated forfeitures, was $739,000 using the Black-Scholes
pricing model. The right to exercise the stock options expires on December 13, 2016 with
the exception of 7,000 shares that expire on an accelerated basis on April 30, 2012 due to
a retirement of a director. There was no restricted stock awarded in the first nine months
of 2007 and 85,500 options awarded in August of 2007 at an exercise price of $14.35 per
share. The fair value of the options awarded in August, net of estimated forfeitures, was
$349,000 using the Black-Scholes pricing model that uses assumptions noted in the following
table. The August 2007 grant vested 20% immediately with an additional 20% vesting annually
for each of the next four years. The right to exercise the stock options expires in August
of 2017. Option and share awards provide for accelerated vesting if there is a change in
control, as defined in the Plan. During the first nine months of 2007 there were
forfeitures of 4,800 restricted stock shares and 8,100 stock options. As of September 30,
2007, there were 149,682 restricted stock shares and 617,975 stock options available for
future grants under the Plan.The Company made a tender offer to purchase 45,500
outstanding eligible options to purchase shares of common stock of the Company with an exercise price of $17.77 per share, granted
on December 13, 2006. The tender offer was made to non-executive officer employees for a
price of $2.61 per share for a total aggregate purchase price of $119,000. The Offer to
Purchase has expired and the Company has accepted for purchase all properly tendered and
not validly withdrawn options eligible, which represented the right to purchase an
aggregate of 43,100 shares of the Companys common stock. The
tender offer expired on October 26, 2007 and was subsequently
settled. Upon the terms and subject to the
conditions of the Offer to Purchase, the Company paid an aggregate purchase price of
$112,000 for the tendered options. This tender offer resulted in the immediate recognition
of $110,000 of unrecognized stock compensation. In addition, an
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additional stock compensation expense of $13,000 was recorded to reflect
the excess of the price paid over the fair value of the options purchased at the date of
settlement.Total employee and director share-based compensation expense recognized for stock options
and restricted stock for the three and nine months ended September 30, 2007 was $378,000
and $677,000, respectively, of which director share-based compensation expense recognized
(in the consolidated statement of income as other noninterest expense) was $65,000 and
$238,000, respectively, and officer share-based compensation expense recognized (in the
consolidated statement of income as salaries and benefit noninterest expense) was $313,000
and $439,000, respectively.In November of 2006, the Board of Directors approved a stock repurchase program to purchase
up to 349,830 shares. During the year ended December 31, 2006, the Company purchased 57,800
shares on the open market at a cost of $962,000 and re-issued them along with 139,640
shares of previously unissued shares to settle the restricted stock awards granted under
the Plan during 2006. In September of 2007, the Board of Directors approved a stock
repurchase program to purchase up to an additional 212,100 shares. During the first nine
months of 2007 the Company purchased 321,030 shares on the open market at a cost of $4.8
million and holds these shares as treasury stock at September 30, 2007. As of September 30,
2007, the Company may repurchase up to 183,100 additional shares under the approved stock
repurchase program. The Plan allows the Company to use either acquired or unissued shares
to award future restricted stock grants or execute option exercises.Stock Options:For share-based compensation recognized for the three and nine months ended September 30,
2007, the Company used the Black-Scholes option pricing model for estimating the fair value
of stock options granted at the date of grant. Additional options were granted during
August 2007. The weighted average estimated fair values of stock options granted in 2007
and the assumptions that were used in calculating such fair values were based on estimates
at the date of grants as follows:
 Weighted per share average fair value of options granted
    
    $
    4.08Assumptions:Risk free interest rate
    
    
    4.60
    %Expected volatility
    
    
    19.06
    %Expected dividend yield
    
    
    .84
    %Expected life of options granted
    
    6.5 years
 The expected volatility was determined by using a weighted average of both the Companys
historical trading volatility experienced since the Companys stock began publicly trading
and the historical volatility of an index published by SNL Financial for mutual holding
companys common stock for the period before the Companys stock began trading. It is
managements intent to use the Banks own experience once it approximates the expected life
of the option plan. The grant was made to executive officers and the Company estimates
there will be no forfeitures as they are top executives and are expected to remain employed
during the next four years.The expected life of stock options granted is derived using the simplified method and
represents the period of time that stock options granted are expected to be outstanding.The risk-free interest rate for periods within the contractual life of the stock option is
based on the average seven years U.S. Treasury Note yield curve in effect at the date of
grant.The expected dividend yield reflects an estimate of the dividends the Company expects to
declare over the expected life of the options granted.Stock options provide grantees the option to purchase shares of common stock at a specified
exercise price and, expire ten years from the date of grant. Stock options issued on August
14, 2007 and December 13, 2006 had exercise prices of $14.35 and $17.77, respectively, and
were equal to the fair value of the shares on the date the options were granted. The
Company recognizes compensation expense, measured as the fair value of the stock option on
the date of grant, on a straight-line basis over the vesting period with accelerated
recognition of compensation costs for stock options granted to retirement-eligible
employees and employees who become retirement-eligible prior to full vesting of the award
because the Companys incentive compensation plans allow for vesting at the time an
employee retires. Stock options granted to non-retirement-eligible individuals are expensed
over the normal vesting period.
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The following table presents the activity related to stock options under the Plan for the
three months ended September 30, 2007:
 Weighted Average
    
    
    AggregateWeighted
    
    
    Remaining
    
    
    IntrinsicStock
    
    
    Average
    
    
    Contractual Term
    
    
    ValueOptions
    
    
    Exercise Price
    
    
    (in years)
    
    
    (in thousands)Stock options outstanding at July 1, 2007
    
    
    172,100
    
    
    $
    17.77Granted
    
    
    85,500
    
    
    
    14.35Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (1,000
    )
    
    
    17.77Stock options outstanding at
September 30, 2007
    
    
    256,600
    
    
    
    16.63
    
    
    
    9.3
    
    
    $
    0Options exercisable at September 30, 2007
    
    
    107,900
    
    
    
    16.16
    
    
    
    9.2
    
    
    
    0
  Weighted Average
    
    
    AggregateWeighted
    
    
    Remaining
    
    
    IntrinsicStock
    
    
    Average
    
    
    Contractual Term
    
    
    ValueOptions
    
    
    Exercise Price
    
    
    (in years)
    
    
    (in thousands)Stock options outstanding at January 1, 2007
    
    
    179,200
    
    
    $
    17.77Granted
    
    
    85,500
    
    
    
    14.35Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (8,100
    )
    
    
    17.77Stock options outstanding at September 30,
2007
    
    
    256,600
    
    
    
    16.63
    
    
    
    9.3
    
    
    $
    0
 As of September 30, 2007, the unrecognized cost related to the stock options awarded of
$410,000 will be recognized over a weighted-average period of 1.5 years.Restricted Stock:Restricted stock provides grantees with rights to shares of common stock upon completion of
a service period. During the restriction period, all shares are considered outstanding and
dividends are paid on the restricted stock. The Company recognizes compensation expense,
measured as the closing market price of the Companys common stock on the date of grant, on
a straight-line basis over the vesting period with accelerated recognition of compensation
costs for restricted stock granted to retirement-eligible employees and employees who
become retirement-eligible prior to full vesting of the award because the Companys
incentive compensation plans allow for vesting at the time an employee retires. Restricted
stock granted to non-retirement-eligible individuals is expensed over the normal vesting
period. Restricted stock is forfeited if an employee terminates prior to vesting.As of September 30, 2007, the unrecognized cost relating to non-vested restricted stock
awards to non-retirement age executives and directors granted under the Plan was $1.1
million which will be recognized over a weighted average period of 3.0 years.The following table presents the activity for Restricted Stock for the three months ended
September 30, 2007:
 Weighted AverageNumber
    
    
    Grant-of Shares
    
    
    Date Fair ValueUnvested as of July 1, 2007
    
    
    79,960
    
    
    $
    17.63Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Unvested as of September 30, 2007
    
    
    79,960
    
    
    $
    17.63
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The following table presents the activity for Restricted Stock for the nine months ended
September 30, 2007:
 Weighted AverageNumber
    
    
    Grant-of Shares


    Date Fair ValueUnvested as of January 1, 2007 (1)
    
    
    84,760
    
    
    $
    17.61Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    (4,800
    )
    
    
    17.22Unvested as of September 30, 2007
    
    
    79,960
    
    
    $
    17.63
 (1)
    
    The unvested balance was revised to exclude shares that were
constructively vested by employees and directors who are retirement-eligible as of
the reporting date and prior to full vesting of the award because the Companys
incentive compensation plans allow for vesting at the time an employee or director
retires. Twenty-five percent, or 19,988, of the remaining unvested restricted stock shares will vest
in 2007, 21,188 shares in 2008, 21,886 shares in 2009, and 16,898 shares will vest in 2010.
All unvested restricted stock shares are expected to vest.Employee Stock Ownership Plan:As part of the reorganization and stock offering completed
in May 2005, the Company established an Employee Stock Ownership Plan (ESOP) for eligible
employees of the Bank, and authorized the Company to lend the funds to the ESOP to purchase
699,659 or 3.6% of the shares issued in the initial public offering. Upon completion of the
reorganization, the ESOP borrowed $4.4 million from the Company to purchase 437,287 shares
of common stock. Additional shares of 59,300 and 203,072 were subsequently purchased by the
ESOP in the open market at a total cost of $817,000 and $2.7 million in 2006 and 2005,
respectively, with additional funds borrowed from the Company. The Bank intends to make
annual contributions to the ESOP that will be adequate to fund the payment of regular debt
service requirements attributable to the indebtedness of the ESOP.The interest rate for the ESOP loan is the prime rate plus one percent, or 8.75% at
September 30, 2007. As the loan is repaid to the Company, shares will be released from
collateral and will be allocated to the accounts of the participants. As of September 30,
2007, the outstanding principal and interest due was $6.9 million, and principal payments
of $1.4 million have been made on the loan since inception.ESOP expense for the nine months ended September 30, 2007 and 2006 was $785,000 and
$751,000, respectively. At September 30, 2007, there were 139,931 allocated, 0 unallocated
and 559,728 unreleased ESOP shares; and the unreleased shares had an aggregate fair value
of $8.0 million.6.
    
    Income TaxesIn July 2006, the FASB issued Interpretation No. 48 (FIN 48), Accounting for Uncertainty
in Income Taxes  An Interpretation of FASB Statement No. 109.FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprises financial
statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48
also prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. The interpretation of FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure, and
transition. FIN 48 includes a recognition threshold of more-likely-than-not, and a
measurement attribute for all tax positions taken or expected to be taken on a tax return,
in order for those tax positions to be recognized in the financial statements.Effective January 1, 2007, the Company has adopted the provisions of FIN 48 and there was
no material effect on the consolidated condensed financial statements. As a result, there
was no cumulative effect related to adopting FIN 48. As of January 1, 2007 and September
30, 2007, there were no unrecognized tax benefits related to federal and state income tax
matters. The Company is currently open to audit under the statute of limitations by the
Internal Revenue Service and state taxing authorities for the years ended December 31, 2003
through 2006.
 As of January 1, 2007 and September 30, 2007, the Company has not accrued any interest
related to uncertain tax positions.
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7.
    
    Accumulated Other Comprehensive (Loss) IncomeComponents of accumulated other comprehensive (loss) income, net of taxes, consist of the
following:
 UnrealizedIncome (Loss)
    
    
    Accumulatedon Available-
    
    
    OtherUnamortized
    
    
    For-Sale
    
    
    ComprehensiveBenefit Plans
    
    
    Securities
    
    
    (Loss) Income(In Thousands)January 1, 2007
    
    $
    (4,406
    )
    
    $
    2,738
    
    
    $
    (1,668
    )Change
    
    
    149
    
    
    
    285
    
    
    
    434March 31, 2007
    
    
    (4,257
    )
    
    
    3,023
    
    
    
    (1,234
    )Change
    
    
    149
    
    
    
    (351
    )
    
    
    (202
    )June 30, 2007
    
    
    (4,108
    )
    
    
    2,672
    
    
    
    (1,436
    )Change
    
    
    149
    
    
    
    359
    
    
    
    508September 30, 2007
    
    $
    (3,959
    )
    
    $
    3,031
    
    
    $
    (928
    )
 The following table summarizes other comprehensive income and the related tax effects for
the three and nine months ended September 30, 2007 and 2006:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Net income as reported
    
    $
    2,261
    
    
    $
    2,168
    
    
    $
    6,427
    
    
    $
    6,239Unrealized gain on securities available
for sale
    
    
    544
    
    
    
    1,437
    
    
    
    444
    
    
    
    1,053Tax benefit
    
    
    (185
    )
    
    
    (489
    )
    
    
    (151
    )
    
    
    (358
    )Net unrealized loss on securities
available for sale
    
    
    359
    
    
    
    948
    
    
    
    293
    
    
    
    695Amortization of unamortized benefit plans
    
    
    226
    
    
    
    
    
    
    
    678
    
    
    
    Tax provision
    
    
    (77
    )
    
    
    
    
    
    
    (231
    )
    
    
    Net amortization of unamortized benefit
plans
    
    
    149
    
    
    
    
    
    
    
    447
    
    
    
    Other comprehensive income, net of tax
    
    
    508
    
    
    
    948
    
    
    
    740
    
    
    
    695Total comprehensive income
    
    $
    2,769
    
    
    $
    3,116
    
    
    $
    7,167
    
    
    $
    6,934
 8.
    
    Commitments and ContingenciesFinancial Instruments With Off-Balance Sheet RiskIn the normal course of business, the Company is a party to financial instruments with
off-balance sheet risk to meet the financing needs of its customers. These financial
instruments include commitments to extend credit, undisbursed portions of construction
loans, unused commercial and consumer lines of credit and standby letters of credit.
Commitments generally have fixed expiration dates or other termination clauses and may
require payment of a fee by the customer. Standby letters of credit are conditional
commitments issued by the Company to guarantee the performance of a customer to a third
party. Since these commitments could expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements. These commitments involve,
to varying degrees, elements of credit and interest rate risk in excess of the amounts
recognized in the statements of financial condition. The contractual amounts of commitments
to extend credit represent the amounts of potential accounting loss should the contract be
fully drawn upon, the customer default, and the value of any existing collateral
obligations become worthless as it may for
on-balance sheet instruments. The Company evaluates each customers creditworthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company
upon extension of credit, is based on managements credit evaluation.
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Financial instruments whose contract amounts represent credit risk are as follows at
September 30, 2007 and December 31, 2006:
 September 30,
    
    
    December 31,2007
    
    
    2006(In thousands)Commitments to extend credit:Future loan commitments
    
    $
    43,028
    
    
    $
    23,740Undisbursed construction loans
    
    
    98,628
    
    
    
    93,563Undisbursed home equity lines of credit
    
    
    104,771
    
    
    
    101,675Undisbursed commercial lines of credit
    
    
    52,411
    
    
    
    57,368Standby letters of credit
    
    
    12,086
    
    
    
    17,614Unused checking overdraft lines of credit
    
    
    102
    
    
    
    98$
    311,026
    
    
    $
    294,058
 9.
    
    Legal MattersThe Company is involved in various legal proceedings which have arisen in the normal course
of business. Management believes that resolution of these matters will not have a material
effect on the Companys financial condition or results of operations.10.
    
    Regulatory MattersThe Company and the Bank are subject to various regulatory capital requirements
administered by Federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory, and possibly additional discretionary, actions by regulators
that, if undertaken, could have a direct material effect on the Companys financial
statements. The regulations require the Company and the Bank meet specific capital
guidelines that involve quantitative measures of the Companys and the Banks assets,
liabilities, and certain off-balance sheet items, as calculated under regulatory accounting
practices. The Companys and the Banks capital amounts and classification are also subject
to qualitative judgments by the regulators about components, risk weightings, and other
factors. The Bank was classified at its most recent notification as well capitalized. At
September 30, 2007, the Company and the Bank exceeded all regulatory capital requirements
and are considered well capitalized under regulatory guidelines.
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To Be WellFor Capital
    
    Capitalized UnderAdequacy
    
    Prompt CorrectiveActual
    
    Purposes
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in Thousands)Rockville Bank:September 30, 2007Total capital to risk weighted assets
    
    $
    135,150
    
    
    
    13.5
    %
    
    $
    80,089
    
    
    
    8.0
    %
    
    $
    100,111
    
    
    
    10.0
    %Tier I capital to risk weighted assets
    
    
    124,142
    
    
    
    12.4
    
    
    
    40,046
    
    
    
    4.0
    
    
    
    60,069
    
    
    
    6.0Tier I capital to total average assets
    
    
    124,142
    
    
    
    9.6
    
    
    
    51,726
    
    
    
    4.0
    
    
    
    64,657
    
    
    
    5.0Rockville Bank:December 31, 2006Total capital to risk weighted assets
    
    $
    127,949
    
    
    
    13.9
    %
    
    $
    73,640
    
    
    
    8.0
    %
    
    $
    92,050
    
    
    
    10.0
    %Tier I capital to risk weighted assets
    
    
    117,606
    
    
    
    12.8
    
    
    
    36,752
    
    
    
    4.0
    
    
    
    55,128
    
    
    
    6.0Tier I capital to total average assets
    
    
    117,606
    
    
    
    9.6
    
    
    
    49,003
    
    
    
    4.0
    
    
    
    61,253
    
    
    
    5.0Rockville Financial, Inc.:September 30, 2007Total capital to risk weighted assets
    
    $
    167,431
    
    
    
    16.7
    %
    
    $
    80,206
    
    
    
    8.0
    %
    
    $
    100,258
    
    
    
    10.0
    %Tier I capital to risk weighted assets
    
    
    156,423
    
    
    
    15.6
    
    
    
    40,108
    
    
    
    4.0
    
    
    
    60,163
    
    
    
    6.0Tier I capital to total average assets
    
    
    156,423
    
    
    
    12.1
    
    
    
    51,710
    
    
    
    4.0
    
    
    
    64,638
    
    
    
    5.0Rockville Financial, Inc.:December 31, 2006Total capital to risk weighted assets
    
    $
    165,992
    
    
    
    18.0
    %
    
    $
    73,774
    
    
    
    8.0
    %
    
    $
    92,218
    
    
    
    10.0
    %Tier I capital to risk weighted assets
    
    
    155,649
    
    
    
    16.9
    
    
    
    36,840
    
    
    
    4.0
    
    
    
    55,260
    
    
    
    6.0Tier I capital to total average assets
    
    
    155,649
    
    
    
    12.8
    
    
    
    48,640
    
    
    
    4.0
    
    
    
    60,800
    
    
    
    5.0
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements
     
    
    Local, regional and national business or economic conditions may differ from
those expected.
    
    The effects of and changes in trade, monetary and fiscal policies and laws,
including the U.S. Federal Reserve Boards interest rate policies, may adversely
affect our business.
    
    The ability to increase market share and control expenses may be more difficult
than anticipated.
    
    Changes in laws and regulatory requirements (including those concerning taxes,
banking, securities and insurance) may adversely affect us or our businesses.
    
    Changes in accounting policies and practices, as may be adopted by regulatory
agencies, the Public Company Accounting Oversight Board or the Financial
Accounting Standards Board, may affect expected financial reporting.
    
    Future changes in interest rates may reduce our profits which could have a
negative impact on the value of our stock.
    
    We are subject to lending risk and could incur losses in our loan portfolio
despite our underwriting practices. Changes in real estate values could also
increase our lending risk.
    
    Changes in demand for loan products, financial products and deposit flow could
impact our financial performance.
    
    Strong competition within our market area may limit our growth and
profitability.
    
    We may not manage the risks involved in the foregoing as well as anticipated.
    
    We recently opened new branches which may not become profitable as soon as
anticipated, if at all.
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Overview
   Critical Accounting Policies
   Allowance for Loan Losses:
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Other than Temporary Impairment of Securities:
  Income Taxes:
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Pension and Other Postretirement Benefits:
   Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No.
87, 88, 106, and 132(R)
 Stock Compensation: Share-Based Payments (revised 2004)
 Rockville Financial, Inc.
    
    20




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##### Table of Contents



Comparison of Operating Results for the Three and Nine Months Ended September 30, 2007 and
2006
  Income Statement Summary
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)Net interest income
    
    $
    9,799
    
    
    $
    9,294
    
    
    $
    505
    
    
    $
    28,500
    
    
    $
    27,183
    
    
    $
    1,317Provision for loan losses
    
    
    157
    
    
    
    414
    
    
    
    (257
    )
    
    
    590
    
    
    
    1,421
    
    
    
    (831
    )Noninterest income
    
    
    1,406
    
    
    
    1,175
    
    
    
    231
    
    
    
    4,065
    
    
    
    3,267
    
    
    
    798Noninterest expense
    
    
    7,651
    
    
    
    6,811
    
    
    
    840
    
    
    
    22,349
    
    
    
    19,695
    
    
    
    2,654Income before income taxes
    
    
    3,397
    
    
    
    3,244
    
    
    
    153
    
    
    
    9,626
    
    
    
    9,334
    
    
    
    292Provision for income taxes
    
    
    (1,136
    )
    
    
    (1,076
    )
    
    
    (60
    )
    
    
    (3,199
    )
    
    
    (3,095
    )
    
    
    (104
    )Net income
    
    $
    2,261
    
    
    $
    2,168
    
    
    $
    93
    
    
    $
    6,427
    
    
    $
    6,239
    
    
    $
    188
      Rockville Financial, Inc.
    
    21




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##### Table of Contents



Rockville Financial, Inc.
    
    22




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##### Table of Contents



Net Interest Income Analysis
 Average Balance Sheets, Interest and Yields/Costs:
 Rockville Financial, Inc.
    
    23




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##### Table of Contents



Three Months Ended September 30,2007
    
    
    2006InterestAverage
    
    
    Interest and
    
    
    Yield/
    
    
    Average
    
    
    andBalance
    
    
    Dividends
    
    
    Cost
    
    
    Balance
    
    
    Dividends
    
    
    Yield/ Cost(Dollars in thousands)Interest-earning assets:Loans receivable, net
    
    $
    1,092,391
    
    
    $
    17,190
    
    
    
    6.29
    %
    
    $
    993,703
    
    
    $
    15,272
    
    
    
    6.15
    %Available for sale securities
    
    
    137,825
    
    
    
    1,577
    
    
    
    4.58
    
    
    
    120,991
    
    
    
    1,284
    
    
    
    4.25Federal Home Loan Bank stock
    
    
    10,206
    
    
    
    159
    
    
    
    6.23
    
    
    
    9,836
    
    
    
    268
    
    
    
    10.90Other earning assets
    
    
    2,911
    
    
    
    23
    
    
    
    3.16
    
    
    
    2,511
    
    
    
    28
    
    
    
    4.46Total interest-earning assets
    
    
    1,243,333
    
    
    
    18,949
    
    
    
    6.10
    
    
    
    1,127,041
    
    
    
    16,852
    
    
    
    5.98Noninterest-earning assets
    
    
    52,873
    
    
    
    
    
    
    
    
    
    
    
    53,327Total assets
    
    $
    1,296,206
    
    
    
    
    
    
    
    
    
    
    $
    1,180,368Interest-bearing liabilities:NOW and money market accounts
    
    $
    197,310
    
    
    
    784
    
    
    
    1.59
    
    
    $
    183,666
    
    
    
    727
    
    
    
    1.58Savings accounts
    
    
    126,924
    
    
    
    196
    
    
    
    0.62
    
    
    
    134,952
    
    
    
    207
    
    
    
    0.61Time deposits
    
    
    519,293
    
    
    
    5,995
    
    
    
    4.62
    
    
    
    435,962
    
    
    
    4,612
    
    
    
    4.23Total interest-bearing deposits
    
    
    843,527
    
    
    
    6,975
    
    
    
    3.31
    
    
    
    754,580
    
    
    
    5,546
    
    
    
    2.94Mortgagors and investors escrow accounts
    
    
    2,359
    
    
    
    9
    
    
    
    1.53
    
    
    
    1,704
    
    
    
    7
    
    
    
    1.64Advances from the Federal Home Loan Bank
    
    
    185,329
    
    
    
    2,166
    
    
    
    4.67
    
    
    
    171,559
    
    
    
    2,005
    
    
    
    4.67Total interest-bearing liabilities
    
    
    1,031,215
    
    
    
    9,150
    
    
    
    3.55
    %
    
    
    927,843
    
    
    
    7,558
    
    
    
    3.26
    %Noninterest-bearing liabilities
    
    
    108,499
    
    
    
    
    
    
    
    
    
    
    
    96,254Total liabilities
    
    
    1,139,714
    
    
    
    
    
    
    
    
    
    
    
    1,024,097Capital
    
    
    156,492
    
    
    
    
    
    
    
    
    
    
    
    156,271Total liabilities and capital
    
    $
    1,296,206
    
    
    
    
    
    
    
    
    
    
    $
    1,180,368Net interest income
    
    
    
    
    
    $
    9,799
    
    
    
    
    
    
    
    
    
    
    $
    9,294Net interest rate spread (1)
    
    
    
    
    
    
    
    
    
    
    2.55
    %
    
    
    
    
    
    
    
    
    
    
    2.72
    %Net interest-earning assets (2)
    
    $
    212,118
    
    
    
    
    
    
    
    
    
    
    $
    199,198Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.15
    %
    
    
    
    
    
    
    
    
    
    
    3.30
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    120.57
    %
    
    
    
    
    
    
    
    
    
    
    121.47
    %
 
 (1)
    
    Net interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing liabilities.(2)
    
    Net interest-earning assets represent total interest-earning assets less
total interest-bearing liabilities.(3)
    
    Net interest margin represents the annualized net interest income divided by
average total interest-earning assets. Rockville Financial, Inc.
    
    24




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##### Table of Contents



Nine Months Ended September 30,2007
    
    
    2006InterestAverage
    
    
    Interest and
    
    
    Yield/
    
    
    Average
    
    
    andBalance
    
    
    Dividends
    
    
    Cost
    
    
    Balance
    
    
    Dividends
    
    
    Yield/ Cost(Dollars in thousands)Interest-earning assets:Loans receivable, net
    
    $
    1,063,495
    
    
    $
    49,608
    
    
    
    6.22
    %
    
    $
    938,159
    
    
    $
    42,120
    
    
    
    5.99
    %Available for sale securities
    
    
    132,840
    
    
    
    4,460
    
    
    
    4.48
    
    
    
    125,370
    
    
    
    3,932
    
    
    
    4.18Federal Home Loan Bank stock
    
    
    9,960
    
    
    
    490
    
    
    
    6.56
    
    
    
    9,349
    
    
    
    379
    
    
    
    5.41Other earning assets
    
    
    2,462
    
    
    
    75
    
    
    
    4.06
    
    
    
    2,864
    
    
    
    80
    
    
    
    3.72Total interest-earning assets
    
    
    1,208,757
    
    
    
    54,633
    
    
    
    6.03
    
    
    
    1,075,742
    
    
    
    46,511
    
    
    
    5.76Noninterest-earning assets
    
    
    51,536
    
    
    
    
    
    
    
    
    
    
    
    51,959Total assets
    
    $
    1,260,293
    
    
    
    
    
    
    
    
    
    
    $
    1,127,701Interest-bearing liabilities:NOW and money market accounts
    
    $
    188,196
    
    
    
    2,221
    
    
    
    1.57
    
    
    $
    188,016
    
    
    
    2,167
    
    
    
    1.54Savings accounts
    
    
    128,834
    
    
    
    590
    
    
    
    0.61
    
    
    
    142,275
    
    
    
    647
    
    
    
    0.61Time deposits
    
    
    503,382
    
    
    
    17,126
    
    
    
    4.54
    
    
    
    383,622
    
    
    
    10,955
    
    
    
    3.81Total interest-bearing deposits
    
    
    820,412
    
    
    
    19,937
    
    
    
    3.24
    
    
    
    713,913
    
    
    
    13,769
    
    
    
    2.57Mortgagors and investors escrow accounts
    
    
    3,001
    
    
    
    37
    
    
    
    1.64
    
    
    
    2,645
    
    
    
    33
    
    
    
    1.67Advances from the Federal Home Loan Bank
    
    
    176,125
    
    
    
    6,159
    
    
    
    4.66
    
    
    
    163,210
    
    
    
    5,526
    
    
    
    4.51Total interest-bearing liabilities
    
    
    999,538
    
    
    
    26,133
    
    
    
    3.49
    %
    
    
    879,768
    
    
    
    19,328
    
    
    
    2.93
    %Noninterest-bearing liabilities
    
    
    104,311
    
    
    
    
    
    
    
    
    
    
    
    93,857Total liabilities
    
    
    1,103,849
    
    
    
    
    
    
    
    
    
    
    
    973,625Capital
    
    
    156,444
    
    
    
    
    
    
    
    
    
    
    
    154,076Total liabilities and capital
    
    $
    1,260,293
    
    
    
    
    
    
    
    
    
    
    $
    1,127,701Net interest income
    
    
    
    
    
    $
    28,500
    
    
    
    
    
    
    
    
    
    
    $
    27,183Net interest rate spread (1)
    
    
    
    
    
    
    
    
    
    
    2.54
    %
    
    
    
    
    
    
    
    
    
    
    2.83
    %Net interest-earning assets (2)
    
    $
    209,219
    
    
    
    
    
    
    
    
    
    
    $
    195,974Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.14
    %
    
    
    
    
    
    
    
    
    
    
    3.37
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    120.93
    %
    
    
    
    
    
    
    
    
    
    
    122.28
    %
 
 (1)
    
    Net interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing liabilities.(2)
    
    Net interest-earning assets represent total interest-earning assets less
total interest-bearing liabilities.(3)
    
    Net interest margin represents the annualized net interest income divided by
average total interest-earning assets. Rockville Financial, Inc.
    
    25




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##### Table of Contents



Rate Volume Analysis
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2007Compared to
    
    
    Compared toSeptember 30, 2006
    
    
    September 30, 2006Increase (Decrease)
    
    
    
    
    
    
    Increase (Decrease)Due To
    
    
    
    
    
    
    Due ToVolume
    
    
    Rate
    
    
    Net
    
    
    Volume
    
    
    Rate
    
    
    Net(In thousands)Interest and dividend income:Loans receivable
    
    $
    1,546
    
    
    $
    372
    
    
    $
    1,918
    
    
    $
    5,797
    
    
    $
    1,691
    
    
    $
    7,488Securities interest, dividends &
income from other assets
    
    
    205
    
    
    
    (26
    )
    
    
    179
    
    
    
    254
    
    
    
    380
    
    
    
    634Total earning assets
    
    
    1,751
    
    
    
    346
    
    
    
    2,097
    
    
    
    6,051
    
    
    
    2,071
    
    
    
    8,122Interest expense:NOW and money market accounts
    
    
    54
    
    
    
    3
    
    
    
    57
    
    
    
    2
    
    
    
    52
    
    
    
    54Savings accounts
    
    
    (12
    )
    
    
    3
    
    
    
    (9
    )
    
    
    (60
    )
    
    
    7
    
    
    
    (53
    )Time deposits
    
    
    936
    
    
    
    447
    
    
    
    1,383
    
    
    
    3,823
    
    
    
    2,348
    
    
    
    6,171Total interest-bearing deposits
    
    
    978
    
    
    
    453
    
    
    
    1,431
    
    
    
    3,765
    
    
    
    2,407
    
    
    
    6,172FHLB Advances
    
    
    161
    
    
    
    
    
    
    
    161
    
    
    
    446
    
    
    
    187
    
    
    
    633Total interest bearing liabilities
    
    
    1,139
    
    
    
    453
    
    
    
    1,592
    
    
    
    4,211
    
    
    
    2,594
    
    
    
    6,805Change in net interest income
    
    $
    612
    
    
    $
    (107
    )
    
    $
    505
    
    
    $
    1,840
    
    
    $
    (523
    )
    
    $
    1,317
 Net Interest Income:
  Rockville Financial, Inc.
    
    26




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##### Table of Contents



Interest and Dividend Income:
  Interest Expense:
  Provision for Loan Losses:
 Rockville Financial, Inc.
    
    27




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##### Table of Contents



Noninterest Income:
   Noninterest Expense:
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)Salaries and employee benefits
    
    $
    4,193
    
    
    $
    3,488
    
    
    $
    705
    
    
    $
    12,113
    
    
    $
    10,261
    
    
    $
    1,852Service bureau fees
    
    
    898
    
    
    
    773
    
    
    
    125
    
    
    
    2,506
    
    
    
    2,202
    
    
    
    304Occupancy and equipment
    
    
    917
    
    
    
    832
    
    
    
    85
    
    
    
    2,591
    
    
    
    2,454
    
    
    
    137Professional fees
    
    
    400
    
    
    
    341
    
    
    
    59
    
    
    
    1,173
    
    
    
    913
    
    
    
    260Marketing and promotions
    
    
    186
    
    
    
    229
    
    
    
    (43
    )
    
    
    803
    
    
    
    743
    
    
    
    60Insurance and FDIC
Assessments
    
    
    43
    
    
    
    51
    
    
    
    (8
    )
    
    
    143
    
    
    
    155
    
    
    
    (12
    )Other
    
    
    1,014
    
    
    
    1,097
    
    
    
    (83
    )
    
    
    3,020
    
    
    
    2,967
    
    
    
    53Total noninterest expense
    
    $
    7,651
    
    
    $
    6,811
    
    
    $
    840
    
    
    $
    22,349
    
    
    $
    19,695
    
    
    $
    2,654
  Rockville Financial, Inc.
    
    28




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##### Table of Contents



Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)Directors fees
    
    $
    165
    
    
    $
    101
    
    
    $
    64
    
    
    $
    537
    
    
    $
    290
    
    
    $
    247Telephone
    
    
    42
    
    
    
    62
    
    
    
    (20
    )
    
    
    167
    
    
    
    190
    
    
    
    (23
    )Postage
    
    
    85
    
    
    
    103
    
    
    
    (18
    )
    
    
    280
    
    
    
    277
    
    
    
    3Courier
    
    
    79
    
    
    
    65
    
    
    
    14
    
    
    
    224
    
    
    
    223
    
    
    
    1Dues and subscriptions
    
    
    46
    
    
    
    38
    
    
    
    8
    
    
    
    170
    
    
    
    133
    
    
    
    37Service charges
    
    
    34
    
    
    
    35
    
    
    
    (1
    )
    
    
    96
    
    
    
    101
    
    
    
    (5
    )Printing and forms
    
    
    116
    
    
    
    145
    
    
    
    (29
    )
    
    
    237
    
    
    
    285
    
    
    
    (48
    )Other
    
    
    447
    
    
    
    548
    
    
    
    (101
    )
    
    
    1,309
    
    
    
    1,468
    
    
    
    (159
    )Total other noninterest expense
    
    $
    1,014
    
    
    $
    1,097
    
    
    $
    (83
    )
    
    $
    3,020
    
    
    $
    2,967
    
    
    $
    53
   Income Tax Expense:
 Rockville Financial, Inc.
    
    29




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##### Table of Contents



Comparison of Financial Condition at September 30, 2007 and December 31, 2006
 Summary:
   Investment Securities:
 Lending Activities:
 Rockville Financial, Inc.
    
    30




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##### Table of Contents



Non-performing Assets:
 September 30,
    
    
    December 31,2007
    
    
    2006(Dollars in thousands)Nonaccrual loans:Residential(1)
    
    $
    230
    
    
    $
    422Commercial
    
    
    386
    
    
    
    311Commercial business loans
    
    
    35
    
    
    
    114Installment, collateral and other loans
    
    
    10
    
    
    
    8Total nonaccrual loans(2)
    
    
    661
    
    
    
    855Accruing loan past due 90 days or more
    
    
    
    
    
    
    Other accruing loans
    
    
    
    
    
    
    78Troubled debt restructurings
    
    
    509
    
    
    
    560Total non-performing loans
    
    
    1,170
    
    
    
    1,493Real estate owned
    
    
    
    
    
    
    Total non-performing assets
    
    $
    1,170
    
    
    $
    1,493Total non-performing loans to total loans
    
    
    0.10
    %
    
    
    0.14
    %Total non-performing loans to total assets
    
    
    0.09
    %
    
    
    0.12
    %Allowance for loan losses as a percent of total loans
    
    
    0.94
    %
    
    
    0.94
    %Allowance for loan losses as a percent of non-performing loans
    
    
    898.97
    %
    
    
    658.20
    %
 
 (1)
    
    Residential mortgage loans include one-to-four family mortgage loans, home
equity loans, and home equity lines of credit.(2)
    
    The amount of income that was contractually due but not recognized on
nonaccrual loans totaled $36,000 and $52,000 at September 30, 2007 and December 31,
2006, respectively. Allowance for Loan Losses:
    Rockville Financial, Inc.
    
    31




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##### Table of Contents



Accounting by Creditors for Impairment of a Loan Accounting by Creditors for Impairment for
Loan-Income Recognition and Disclosures
     Rockville Financial, Inc.
    
    32




---



##### Table of Contents



Deposits:
 Liquidity and Capital Resources:
       Rockville Financial, Inc.
    
    33




---



##### Table of Contents



Rockville Financial, Inc.
    
    34




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
 General:
  Quantitative Analysis
 Income Simulation:
 PercentageIncrease (Decrease) inEstimated NetInterest IncomeOver 12 Months200 basis point increase in rates
    
    
    0.2200 basis point decrease in rates
    
    
    (6.5
    )
 Rockville Financial, Inc.
    
    35




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures:
 Changes in Internal Controls:
 Rockville Financial, Inc.
    
    36




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##### Table of Contents



Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (c)
    
    The following table provides information about repurchases of common stock by the
Company during the quarter ended September 30, 2007:
 Issuer Purchases of Equity Securities
 MaximumNumber ofTotal Number of
    
    Shares thatShares
    
    May Yet BeTotal
    
    
    
    
    
    Purchased as
    
    PurchasedNumber of
    
    Average
    
    Part of Publicly
    
    Under theShares
    
    Price Paid
    
    Announced Plans
    
    Plans orPeriod
    
    Purchased
    
    per Share
    
    or Programs
    
    Programs (1)(2)7/1/07  7/31/07
    
    
    45,200
    
    
    $
    14.73
    
    
    
    45,200
    
    
    
    31,3748/1/07  8/31/07
    
    
    31,374
    
    
    
    14.68
    
    
    
    31,374
    
    
    
    9/1/07  9/30/07
    
    
    29,000
    
    
    
    14.18
    
    
    
    29,000
    
    
    
    183,100Total
    
    
    105,574
    
    
    $
    14.56
    
    
    
    105,574
    
    
    
    183,100
 
 (1)
    
    Effective November 13, 2006, the Company adopted a plan to repurchase of
up to 349,830 of our outstanding shares of common stock on the open market. At June
30, 2007, 76,574 shares were available to be purchased under this program.(2)
    
    Effective September 20, 2007, the Company adopted a plan to repurchase of
up to 212,100 of our outstanding shares of common stock on the open market. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  Rockville Financial, Inc.
    
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Item 6. Exhibits
 3.1
    
    Certificate of Incorporation of Rockville Financial, Inc.
(incorporated herein by reference to Exhibit 3.1 to the Registration Statement on
the Form S-1 filed for Rockville Financial Inc., as amended, initially filed on
December 17, 2004 (File No. 333-121421))3.2
    
    Bylaws of Rockville Financial, Inc. (incorporated herein by reference
to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed for Rockville Financial,
Inc. on May 13, 2005)3.3
    
    Form of Common Stock Certificate of Rockville Financial, Inc.
(incorporated herein by reference to Exhibit 4 to the Registration Statement on
the Form S-1 filed for Rockville Financial, Inc., as amended, initially filed on
December 17, 2004 (File No. 333-121421))10.1
    
    Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and William J. McGurk, effective May 20, 2005 (incorporated herein
by reference to Exhibit 10.4 to the Post Effective Amendment No. 1 to the
Registration Statement on Form S-1 of Rockville Financial, Inc. filed on April 22,
2005)10.1.1
    
    Amendment dated December 22, 2006 to the Employment Agreement dated as of May
20, 2005 between Rockville Financial, Inc., Rockville Bank and William J. McGurk
(incorporated herein by reference to Exhibit 10.1.1 to the Companys Annual Report
on Form 10-K for the year ended December 31, 2006 filed on March 16, 2007)10.2
    
    Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and Joseph F. Jeamel, Jr., effective May 20, 2005 (incorporated
herein by reference to Exhibit 10.4.1 to the Post Effective Amendment No. 1 to the
Registration Statement on Form S-1 filed for Rockville Financial, Inc. filed on
April 22, 2005)10.2.1
    
    Amendment dated December 22, 2006 to the Employment Agreement dated as of May
20, 2005 between Rockville Financial, Inc., Rockville Bank and Joseph F. Jeamel,
Jr. (incorporated herein by reference to Exhibit 10.2.1 to the Companys Annual
Report on Form 10-K for the year ended December 31, 2006 filed on March 16, 2007)10.3
    
    Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and Gregory A. White effective May 20, 2005 (incorporated herein by
reference to Exhibit 10.4.2 to the Post Effective Amendment No. 1 to the
Registration Statement filed on Form S-1 filed for Rockville Financial, Inc. filed
on April 22, 2005)10.3.1
    
    Amendment dated December 22, 2006 to the Employment Agreement dated as of May
20, 2005 between Rockville Financial, Inc., Rockville Bank and Gregory A. White
(incorporated herein by reference to Exhibit 10.3.1 to the Companys Annual Report
on Form 10-K for the year ended December 31, 2006 filed on March 16, 2007)10.4
    
    Employment Agreement by and among Rockville Financial, Inc.,
Rockville Bank and Charles J. DeSimone, Jr., effective May 20, 2005 (incorporated
herein by reference to Exhibit 10.4.2 to the Post Effective Amendment No. 1 to the
Registration Statement filed on Form S-1 filed for Rockville Financial, Inc. filed
on April 22, 2005)10.4.1
    
    Amendment dated December 22, 2006 to the Employment Agreement dated as of May
20, 2005 between Rockville Financial, Inc., Rockville Bank and Charles J.
DeSimone, Jr. (incorporated herein by reference to Exhibit 10.5.1 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2006 filed on March 16,
2007)10.5
    
    Supplemental Savings and Retirement Plan of Rockville Bank
(incorporated herein by reference to Exhibit 10.13 to the Pre-Effective Amendment
No. 1 to the Registration Statement filed on Form S-1 filed for Rockville
Financial, Inc. filed on March 29, 2005)10.5.1
    
    First amendment to Exhibit 10.5, the Supplemental Savings and Retirement Plan of
Rockville Bank (incorporated herein by reference to Exhibit 10.2.2 to the
Companys
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Annual Report on Form 10-K for the year ended December 31, 2005 filed on
March 31, 2006)10.6
    
    Rockville Bank Officer Incentive Compensation Plan (incorporated
herein by reference to Exhibit 10.2.3 to the Companys Annual Report on Form 10-K
for the year ended December 31, 2005 filed on March 31, 2006)10.7
    
    Rockville Bank Supplemental Executive Retirement Agreement for Joseph
F. Jeamel, Jr. (incorporated herein by reference to Exhibit 10.9 to the
Registration Statement filed on Form S-1 filed for Rockville Financial, Inc. filed
on December 17, 2004)10.8
    
    Executive Split Dollar Life Insurance Agreement for Joseph F. Jeamel,
Jr. (incorporated herein by reference to Exhibit 10.11 to the Registration
Statement filed on Form S-1 filed for Rockville Financial, Inc. filed on December
17, 2004)10.9
    
    Rockville Bank Supplemental Executive Retirement Plan (incorporated
herein by reference to Exhibit 10.12 to the Registration Statement filed on Form
S-1 filed for Rockville Financial, Inc. filed on December 17, 2004)10.10
    
    Rockville Financial, Inc. 2006 Stock Incentive Award Plan
(incorporated herein by reference to Appendix B in the Definitive Proxy Statement
on Form 14A for Rockville Financial, Inc. filed on July 3, 2006)31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
filed herewith.31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
filed herewith.32.0
    
    Section 1350 Certification of the Chief Executive Officer and Chief
Financial Officer attached hereto.
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SIGNATURES
  Rockville Financial, Inc.By:
    /s/ Gregory A. WhiteGregory A. WhiteSVP, Chief Financial Officer and TreasurerDate:
    November 9, 2007 Rockville Financial, Inc.
    
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