Excluding acquisition related expenses totaling $592,000, Q2 2012 net income increased 18% from the same period last year and 11% compared to the first quarter of 2012.

Excluding acquisition related expenses, diluted earnings per share for the second quarter of 2012 increased 17% compared to the same quarter last year and 11% from Q1 2012.

Total loans increased by $40.5 million, or 4%, to $1.162 billion at June 30, 2012 from $1.122 billion at December 31, 2011, primarily due to growth of 6% in commercial mortgages and 10% in commercial business loans.

Credit quality remained solid, as demonstrated by the non-performing loans to total loans ratio of 74 basis points at June 30, 2012 and an annualized net charge-offs to average loans ratio of 11 basis points for the second quarter of 2012.

Core deposits increased by $36.7 million, or 5%, to $844.9 million at June 30, 2012 from $808.2 million at December 31, 2011.

Tangible book value per share increased 2% to $14.12 at June 30, 2012 from $13.90 at December 31, 2012. During the first six months of 2012, the Company repurchased 199,400 shares at an average price of $15.88 per share.

Net interest income decreased $88,000, or 1%, to $13.3 million for the second quarter of 2012 mainly as a result of contraction in the net interest margin, partially offset by an increase in average interest-earning assets. The net interest margin decreased by 11 basis points to 3.44% for the three months ended June 30, 2012 reflecting the downward re-pricing of certain fixed-rate loans and investments as a result of the lower interest rate environment, offset in part by reduced funding costs. Total average interest-earning assets increased $37.7 million, or 2%, to $1.547 billion for the second quarter of 2012 driven by loan growth of 4%, partially offset by decreases in investment securities and interest-earning cash balances.

Provision for loan losses increased by $77,000, or 11%, to $750,000 for the three months ended June 30, 2012 primarily reflecting strong loan growth.

Non-interest income increased by $359,000, or 16%, to $2.6 million for the three months ended June 30, 2012. Fee income on deposit accounts increased $156,000, or 11%, driven by higher overdraft fees and growth in ATM and debit card income. Net gains from sales of loans increased

$112,000 due to an increase in sales of 30-year fixed rate loans and improved pricing. Wealth management income increased $75,000, or 35% reflecting higher fee-based assets under management and transaction based commissions.

Non-interest expense increased $65,000, or 1%, to $11.5 million in the second quarter of 2012. Excluding acquisition related costs of $592,000, non-interest expense would have declined by $527,000, or 5%. Low income housing tax credit fund expense decreased by $197,000 due to a true-up of prior period expenses. Other expenses decreased $180,000, or 10%, reflecting a lower write-down of mortgage servicing rights and decreases in postage and contribution expenses. Marketing expense fell by $134,000, or 21%, due to reduced newspaper advertising and other promotional activities. Salaries and benefits decreased by $128,000, or 2%, mainly attributable to lower stock-based compensation. These items were partially reduced by a $65,000, or 8%, increase in occupancy expense driven by higher building maintenance costs.

Income taxes increased $237,000, or 29%, to $1.1 million for the three months ended June 30, 2012 primarily due to increases in pre-tax income and the effective tax rate (excluding the impact of acquisition related expenses). The Company’s effective tax rate (excluding the impact of acquisition related costs) increased to 25% in the second quarter of 2012 from 24% for the same period last year.

Total assets increased $29.9 million, or 2%, to $1.654 billion at June 30, 2012 from $1.624 billion at December 31, 2011 reflecting growth in loans and investment securities offset in part by lower cash balances.

Total loans increased $40.5 million, or 4%, to $1.162 billion at June 30, 2012 reflecting growth in the commercial mortgages and commercial and industrial portfolios, partially offset by modest run-off in the residential mortgage and consumer loan portfolios. Commercial mortgage and commercial and industrial loan growth was primarily attributable to business development efforts, competitive products and pricing, and the establishment of a loan production office in Beverly, Massachusetts in 2011. The decrease in residential mortgages was driven by sales of 30-year fixed rate loans and payments, offset to a large extent by originations of 10 and 15-year fixed rate loans.

Cash and cash equivalents decreased $19.1 million, or 31%, to $42.4 million at June 30, 2012 mainly driven by the use of excess cash to fund new loans and investment purchases.

Total deposits increased $30.6 million, or 2%, to $1.261 billion at June 30, 2012 reflecting growth of $36.7 million, or 5%, in core account balances, partially offset by a decrease of $6.0 million, or 1%, in certificates of deposit. The strong growth in core account balances was driven by the success of sales and marketing initiatives, competitive products and pricing and excellent customer service. Core deposit balances were $844.9 million, or 67% of total deposits at June 30, 2012 compared to $808.2 million, or 66% at December 31, 2011.

Non-performing assets totaled $11.2 million, or 0.68% of total assets, at June 30, 2012 compared to $10.6 million, or 0.65% of total assets, at December 31, 2011. The $595,000 increase in non-performing assets reflects additions to other real estate owned and non-accrual loans.

At June 30, 2012, the ratio of the allowance for loan losses to total loans was 1.01%, an increase of 2 basis points from year-end 2011. Excluding the impact of acquired loans totaling $132.8 million at June 30, 2012 and $165.1 million at December 31, 2011, the ratio of the allowance for loan losses to total loans would have been 1.14% at June 30, 2012 and 1.16% at December 31, 2011. Net charge-offs totaled $781,000 or 0.14% of average loans outstanding for the six months ended June 30, 2012 as compared to net charge-offs of $828,000 or 0.15% of average loans outstanding for the same period in 2011.

At June 30, 2012, the Company remains well capitalized with a tangible equity-to-tangible assets ratio of 13.33% and an equity-to-assets ratio of 13.80%.

At June 30, 2012, the Company continued to have considerable liquidity consisting of significant balances at the Federal Reserve Bank of Boston, a large amount of marketable loans and investment securities, substantial unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston and access to funding through the repurchase agreement and brokered deposit markets.

Cash and cash equivalents

Investment securities

Loans held for sale

Loans:

Residential mortgages

Commercial mortgages

Construction loans

Commercial loans

Home equity loans

Consumer loans

Total loans

Net deferred loan costs and fees

Allowance for loan losses

Loans, net

Federal Home Loan Bank of Boston stock, at cost

Other real estate owned

Deferred tax asset, net

Premises and equipment, net

Bank-owned life insurance

Goodwill

Other intangible assets

Other assets

Total assets

Liabilities and Stockholders’ Equity

Deposits:

Demand

NOW

Savings

Money market

Certificates of deposit

Total deposits

Short-term borrowings

Long-term debt

Subordinated debentures

Escrow funds held for borrowers

Capitalized lease obligations

Accrued expenses and other liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, par value $0.01 per share, authorized 50,000,000 shares; none issued

Common stock, par value $0.01 per share; authorized 100,000,000 shares; shares issued: 18,706,933 at June 30, 2012, December 31, 2011 and June 30, 2011

Additional paid-in capital

Retained earnings

Unearned compensation

Accumulated other comprehensive income, net of taxes

Treasury stock, at cost (3,186,409 shares at June 30, 2012, 2,994,036 shares at December 31, 2011 and 2,607,458 shares at June 30, 2011)

Total stockholders’ equity

Total liabilities and stockholders’ equity

Interest and dividend income:

Loans

Investments

Other interest-earning assets

Total interest and dividend income

Interest expense:

Deposits

Borrowings

Total interest expense

Net interest income before provision for loan losses

Provision for loan losses

Net interest income after provision for loan losses

Non-interest income:

Fee income on depositors’ accounts

Wealth management income

Income from bank-owned life insurance

Net gain on sales of loans

Net gain on sales of securities

Impairment charges on securities

Other income

Total non-interest income

Non-interest expense:

Salaries and benefits

Occupancy expenses

Marketing expenses

Data processing expenses

Professional fees

Acquisition related expenses

FDIC insurance assessments

Low income housing tax credit fund

Other expenses

Total non-interest expense

Income before income taxes

Income tax expense

Net income

Earnings per share:

Basic

Diluted

Weighted average shares outstanding:

Basic

Diluted

Operating Results:

Net interest income

Loan loss provision

Non-interest income

Non-interest expense

Net income

Performance Ratios (annualized):

Return on average assets

Return on average equity

Net interest margin

Non-interest income to average total assets

Non-interest expense to average total assets

Efficiency ratio (4)

Per Share Data:

Diluted earnings per share

Book value per share

Tangible book value per share

Market price at period end

Risk Profile

Equity as a percentage of assets

Tangible equity as a percentage of tangible assets

Net charge-offs to average loans outstanding (annualized)

Non-performing assets as a percent of total assets

Non-performing loans as a percent of total loans

Allowance for loan losses as a percent of total loans

Allowance for loan losses as a percent of non-performing loans

Average Balances

Loans

Securities

Total interest-earning assets

Total assets

Deposits

FHLBB advances

Stockholders’ Equity

Average Yields/Rates (annualized)

Loans

Securities

Total interest-earning assets

Savings accounts

Money market/NOW accounts

Certificates of deposit

FHLBB advances

Total interest-bearing liabilities