Diluted earnings per share increased 19% compared to the same quarter last year.

Net income grew 17% compared to the first quarter of 2011.

Total loans increased 2% to $1.139 billion at March 31, 2012 from $1.122 billion at December 31, 2011, primarily due to increases of 4% in commercial mortgages and 3% in commercial business loans.

Credit quality remained solid, as demonstrated by the non-performing loans to total loans ratio of 79 basis points at March 31, 2012 and an annualized net charge-offs to average loans ratio of 16 basis points in the first quarter of 2012.

Core deposits increased 4% to $841.4 million at March 31, 2012 from $808.2 million at December 31, 2011.

Tangible book value per share was $14.00 at March 31, 2012. During the first quarter of 2012, the Company repurchased 129,200 shares at an average price of $15.90 per share. At March 31, 2012, the Company had approximately 201,000 shares remaining to be purchased under its current plan approved in October 2010.

Net interest income increased $309,000, or 2%, to $13.1 million in the first quarter of 2012 mainly as a result of an increase in average interest earning assets. Total average earning assets increased $32.1 million, or 2%, to $1.526 billion for the first quarter of 2012 driven by loan growth of 4%. The net interest margin increased by 1 basis point to 3.43% for the three months ended March 31, 2012.

Provision for loan losses decreased by $158,000, or 20%, to $650,000 for the three months ended March 31, 2012 driven by reductions in loan loss reserve factors and classified loans. The decrease in loan loss reserve factors is a result of improving asset quality trends and positive changes in the economic conditions.

Non-interest income increased by $424,000, or 20%, to $2.6 million for the three months ended March 31, 2012. The growth in non-interest income was primarily due to:

an increase of $116,000, or 9%, in fee income on deposit accounts driven by higher overdraft fees and growth in ATM and debit card income;

growth of $109,000, or 33%, in bank-owned life insurance (BOLI) income reflecting an additional $10 million BOLI investment in May 2011; and

improvement in net gain on sales of loans of $85,000 due to increased volume and pricing.

Non-interest expense increased $335,000, or 3%, to $11.3 million for the first quarter of 2012 mainly driven by increases in other expenses and salaries and benefits, partially offset by a decrease in professional fees. Other expenses increased $278,000, or 23%, reflecting higher depreciation and mortgage servicing rights expenses. The increase in depreciation expenses was due to an adjustment in the first quarter of 2011 related to the Company’s acquisition of CNB Financial Corp. in November 2009. Salaries and benefits increased by $173,000, or 3%, mainly attributable to annual merit increases, additional staffing hired to support and facilitate the Bank’s expansion, the opening of a new loan production office in Beverly, MA in the second quarter of 2011and a higher incentive compensation accrual. These unfavorable variances were partially reduced by a $155,000, or 23%, decrease in professional fees related to lower legal and consulting activities.

Income taxes increased $136,000, or 18%, to $899,000 for the three months ended March 31, 2012 primarily due to higher pre-tax income. The Company’s effective tax rate was 24% in both quarters.

Total assets increased $36.4 million, or 2%, from 2011 year end to $1.660 billion at March 31, 2012 from $1.624 billion at December 31, 2011 reflecting growth in loans and cash balances.

Total loans increased $17.5 million, or 2%, to $1.139 billion at March 31, 2012 reflecting growth in the commercial mortgages and commercial and industrial portfolios, partially offset by modest run-off in the residential mortgage, home equity and consumer loan portfolios. Commercial mortgage and commercial and industrial loan growth was primarily attributable to business development efforts, competitive products and pricing. The decrease in residential mortgages was driven by sales of 30-year fixed rate loans, offset to a large extent by originations of 10 and 15-year fixed rate loans.

Cash and cash equivalents increased $14.0 million, or 23%, to $75.5 million at March 31, 2012 mainly driven by strong deposit growth.

Total deposits increased $28.7 million, or 2%, to $1.259 billion at March 31, 2012 reflecting growth of $33.2 million, or 4%, in core account balances, partially offset by a decrease of $4.5 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 $841.4 million, or 67% of total deposits at March 31, 2012 compared to $808.2 million, or 66% at December 31, 2011.

Short-term debt increased $6.3 million, or 37%, mainly due to growth in overnight repurchase agreements.

Non-performing assets totaled $11.6 million, or 0.70% of total assets, at March 31, 2012 compared to $10.6 million, or 0.65% of total assets, at December 31, 2011. The $1.0 million increase in non-performing assets is primarily driven by two new non-performing loans and an increase in other real estate owned.

At March 31, 2012, the ratio of the allowance for loan losses to total loans was 0.99%, equal to the prior year end level. Excluding the impact of loans acquired from CNB Financial Corp. and other financial institutions totaling $154.7 million at March 31, 2012 and $165.1 million at December 31, 2011, the ratio of the allowance for loan losses to total loans would have been 1.15% at March 31, 2012 and 1.16% at December 31, 2011. Net charge-offs totaled $457,000 or 0.16% of average loans outstanding for the quarter ended March 31, 2012 as compared to net charge-offs of $327,000 or 0.12% of average loans outstanding for the first quarter of 2011. The increase in net charge-offs resulted from write-offs of several small loans which became uncollectible.

At March 31, 2012, the Company remains well capitalized with a tangible equity-to-tangible assets ratio of 13.22% and an equity-to-assets ratio of 13.69%.

At March 31, 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.

Assets

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

Due to broker

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 March 31, 2012, December 31, 2011 and March 31, 2011

Additional paid-in capital

Retained earnings

Unearned compensation

Accumulated other comprehensive income, net of taxes

Treasury stock, at cost (3,108,811 shares at March 31, 2012, 2,994,036 shares at December 31, 2011 and 2,610,898 shares at March 31, 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

Other income

Total non-interest income

Non-interest expense:

Salaries and benefits

Occupancy expenses

Marketing expenses

Data processing expenses

Professional fees

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

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