First Connecticut Bancorp, Inc. (Form: S-1/A, Received: 03/28/2011 17:31:18)

John J. Patrick, Jr.

Chairman, President and Chief Executive Officer

Gregory A. White

Executive Vice President and Chief Financial Officer

Kenneth F. Burns

Executive Vice President and Director of Retail Banking

Michael T. Schweighoffer

Executive Vice President and Chief Risk Officer

S UMMARY

The following summary explains the significant aspects of the conversion, the related offering and the business of FCB and Farmington Bank. It may not contain all of the information that is important to you. For additional information and before making an investment decision, you should read this entire document carefully, including the consolidated financial statements and the section entitled “RISK FACTORS” .

Our Organization

Farmington Bank began business as Farmington Savings Bank in 1851. In March 2006, Farmington Bank reorganized into the single-tier mutual holding company structure. As part of the reorganization, Farmington Bank formed the MHC, a Connecticut-chartered mutual holding company. Farmington Bank became a Connecticut-chartered capital stock savings bank and a wholly-owned subsidiary of the MHC. Upon the completion of the conversion and stock offering, Farmington Bank will be a wholly owned subsidiary of FCB. The directors of Farmington Bank will also serve as the directors of FCB. Certain of the officers of Farmington Bank will also serve as officers of FCB without additional compensation.

The Companies

First Connecticut Bancorp, Inc.

FCB has been organized as a Maryland chartered stock holding company and will own 100% of the common stock of Farmington Bank after the completion of the conversion. FCB has not engaged in any business to date. After the conversion, FCB will replace the MHC as the owner of all of the stock of Farmington Bank. The executive office of FCB is located at One Farm Glen Boulevard, Farmington, Connecticut, and its telephone number is (860) 676-4600.

Farmington Bank

Farmington Bank is a full-service, community bank with 15 full service branch offices and 4 limited service offices, including our main office, located throughout Hartford County, Connecticut. Farmington Bank provides a diverse range of commercial and consumer services to businesses, individuals and governments across Central Connecticut. Farmington Bank is regulated by the Connecticut Department of Banking and the Federal Deposit Insurance Corporation (“FDIC”). Farmington Bank’s deposits are insured to the maximum allowable under the Deposit Insurance Fund, which is administered by the FDIC. Farmington Bank is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Farmington Bank is currently the wholly owned subsidiary of the MHC.

Our main office is located at One Farm Glen Boulevard, Farmington, Connecticut, and our telephone number is (860) 676-4600. Our website address is www.farmingtonbankct.com. Information on our website should not be considered a part of this prospectus.

Our Business

We provide a full range of banking services to businesses, individuals and governments in Central Connecticut. Our business is headed by a seasoned management team with prior experience in commercial and residential lending at financial institutions throughout New England. This management team was brought on commencing in 2008 following the planned retirements of our then President and Chief Executive Officer and soon thereafter, our Chief Financial Officer. Our new management is highlighted by John J. Patrick Jr. , hired in March 2008 as our President and Chief Executive Officer. Mr. Patrick was also named Chairman of our board of directors in July 2008, again succeeding the retiring Chairman. Mr. Patrick is a former President and Chief Executive Officer of TD Banknorth, Connecticut division and, prior to that, Mr. Patrick was President of Glastonbury Bank & Trust Co., now part of TD Bank. Mr. Patrick and the other members of our management team, including Gregory White, our Chief Financial Officer, Michael Schweighoffer, our Chief Risk Officer, and David Blitz, our Director of Commercial Banking, each of whom joined Farmington Bank in 2009, have extensive experience in such areas as commercial and consumer lending, credit analysis and risk management and in leading growth initiatives of other financial institutions.

The goal of our new management team is to make Farmington Bank the premier commercial bank in Central Connecticut with an emphasis on growing our commercial loan assets and services. Under the supervision of our new management team, we have made significant changes to our business structure including:

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strengthening our risk management and compliance procedures;

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implementing an expansion strategy, including the opening of three new branches in 2010 ;

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adding cash management services, government banking and small business banking;

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doubling the number of our commercial lenders and recruiting other experienced personnel to strengthen our finance department;

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implementing a secondary market residential lending program; and

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enhancing technology to support our risk management program.

We also offer a full range of residential mortgage loan services. We intend to continue to invest in people, technology and the business of serving our customers as we pursue our strategic initiatives.

On a consolidated basis, as of December 31, 2010, the MHC and Farmington Bank had approximately $1.4 billion in assets, $1.1 billion in deposits and total capital accounts of approximately $95.9 million. From December 31, 2009 to December 31, 2010, we experienced asset growth of approximately $160.2 million or 13%. This included significant growth in loans during 2010 of $122.0 million, or 11.6%, the result of several factors, including our purchase of $34.0 million in residential loans, a $96.3 million increase in the commercial real estate portfolio, growth in our commercial real estate swap loan product and the implementation of a home equity line of credit promotional program. We believe we would have increased assets even further in 2010 had we not purposefully slowed our growth to conserve our regulatory capital ratios.

The growth in loans during 2010 included an increase of $104.7 million, or 20.0% in our commercial loan portfolio. This compares to an increase in total loans during the period of December 31, 2009 to December 31, 2010 of $122.0 million, or 11.6%. At December 31, 2010 the commercial loan portfolio comprised 53.2% of our overall lending portfolio; it includes commercial real estate loans, commercial loans, construction loans and timeshare loans. The growth in our commercial loan portfolio was partly driven by our timeshare lending line of business. As described below, we plan to gradually exit this business and dedicate more resources toward growing core commercial lending lines of business including commercial loans, commercial real estate loans and construction loans. As of December 31, 2010, we employed 278 full-time equivalent employees.

We have increased assets over the past five years and, since 2008, emphasized commercial lending. However, commercial loans as a percentage of our total loans has declined over the past five years as result of increases in home equity loans, our purchase of residential real estate loans as investments, stricter underwriting standards (which results in our turning down certain loans) and capital constraints, as well as general economic factors experienced over the past few years. During that period we have also experienced an increase in our nonperforming loans and a corresponding increase in our provision for loan losses. The increased provision for loan losses, among other factors, resulted in lower net income over the past few years, especially in 2008 and 2009. The reason for this is due predominately to deteriorating economic conditions over the past few years and increased loan loss provisions resulting from weakening credit quality and impairment of securities beginning in 2008.

In addition, as of December 31, 2010, we had a specific reserve allocation of $4.9 million for a $4.9 million nonperforming resort (timeshare) loan. During the fourth quarter of 2010, the outcome of a bankruptcy proceeding with respect to this loan made it probable that we would not collect any amounts due on the loan and required us to fully reserve for this loan. We have recently decided to gradually exit resort (timeshare) lending to focus on our other commercial lending lines while continuing to hold outstanding loans and honoring any advances requested relating to outstanding timeshare loan commitments until they are repaid in the normal course of business.

See “BUSINESS OF FARMINGTON BANK” for a more detailed discussion of our business.

Our Business Strategy

Our business strategy is to operate as a well-capitalized and profitable community bank for businesses, individuals and governments. Our branch franchise extends throughout Hartford County with lending throughout the State of Connecticut. The key elements of our operating strategy include:

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maintaining a strong capital position in excess of the well-capitalized standards set by our banking regulators to support our current operations and future growth;

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increasing our focus on commercial lending and continuing to expand commercial banking operations;

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continuing to focus on consumer and residential lending;

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maintaining asset quality and prudent lending standards;

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expanding our existing products and services and developing new products and services to meet the changing needs of consumers and businesses in our market area;

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continuing expansion through de novo branching with a current goal of adding two to three de novo branches each year for so long as the deposit and loan generating environment continues to be favorable;

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taking advantage of acquisition opportunities that are consistent with our strategic growth plans; and

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continuing our efforts to control non-interest expenses.

See “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Our Business Strategy” for a more detailed discussion of our business strategy.

Our Market Area

We operate in a primarily suburban market area that has a stable population and household base. All of our current offices are in Hartford County, Connecticut. Our primary market area is Central Connecticut. Our main office is in Farmington, Connecticut and is approximately ten miles from the City of Hartford, Connecticut. Hartford County has a mix of industry groups and employment sectors including insurance, health services, finance, manufacturing, not-for-profit, education, government and technology. Our primary market area for deposits includes the communities in which we maintain our banking office locations. Our lending area is broader than our deposit market area and includes, in addition to Hartford County, other areas of Connecticut. In certain circumstances, we will make loans outside the State of Connecticut.

According to U.S. Census estimates, the population of Hartford County was estimated at approximately 880,000 people in 2009, with a median household income in 2008 of $64,045, approximately $10,000 more than the national average. Like many other areas in the United States, Hartford County has experienced a downturn in general economic trends over the last several years. Unemployment in the area was 9.1% as of December 2010, compared to 8.6% for the State of Connecticut and 9.8% for the United States for the same period. According to statistics provided by The Warren Group, median housing costs have begun to stabilize with the median single family home cost in Hartford County at approximately $224,000 for the year ended December 31, 2010, compared to $220,000 in 2009. While increasing from 2009 to 2010, the median single family housing cost has decreased 3.8% and 8.6% from the years ended December 31, 2008 and December 31, 2007, respectively.

Changes in Corporate Structure

Currently, the MHC is a Connecticut-chartered mutual holding company with no stockholders. The MHC owns all of the outstanding stock of Farmington Bank, a Connecticut-chartered savings bank.

The mutual-to-stock conversion involves a series of transactions by which we will convert the MHC from a mutual form of organization to a public stock holding company form of organization. In the public stock holding company structure, Farmington Bank will become a wholly-owned subsidiary of a Maryland corporation known as First Connecticut Bancorp, Inc., or “FCB,” and all of the outstanding common stock of FCB will be owned by the public, including our employee stock ownership plan, and by a charitable foundation established by Farmington Bank.

After the conversion, our ownership structure will be as follows:

Our normal business operations will continue without interruption during the conversion. The same corporators who adopted the plan of conversion and who continue to be corporators of the MHC at the time of the conversion will serve as members of an advisory board of FCB and Farmington Bank after the conversion. The executive officers of FCB and Farmington Bank will be the persons who are currently executive officers of the MHC and Farmington Bank. Please see “THE CONVERSION AND OFFERING” for a more detailed discussion of the terms of the offering.

Reasons for the Conversion and the Stock Offering

The reasons for the conversion and our decision to conduct the offering are to:

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provide us with additional capital to support our organic strategic growth plans;

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maintain a strong capital position exceeding regulatory guidelines;

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achieve enhanced profitability by growing our assets and otherwise positioning us to successfully compete in a competitive financial services marketplace;

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increase our franchise and stockholder value;

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expand products and services to meet the needs of our customers;

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allow us to continue to retain and attract talented and experienced employees through stock based compensation; and

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increase our philanthropic endeavors to the communities we serve through the formation and funding of a new charitable foundation.

Terms of the Offering

We are first offering shares of our common stock in a subscription offering to eligible depositors and our tax-qualified employee stock benefit plans. Shares of common stock not subscribed for in the subscription offering will be offered for sale to the general public in a community offering, with a preference given first to natural persons residing in Hartford County in Connecticut, then to all other natural persons residing in Connecticut. We also may offer for sale shares of common stock not subscribed for in the subscription offering or community offering in a syndicated community offering to be managed by Keefe, Bruyette & Woods, Inc.

We are offering for sale between 11,050,000 and 14,950,000 shares of common stock on a best efforts basis. All shares of common stock are being offered for sale at a price of $10.00 per share. All investors will pay the same purchase price per share. Investors will not be charged a commission to purchase shares of common stock in the offering. The amount of capital being raised is based on an independent appraisal of FCB. In the event of a greater demand for shares of our common stock or a change in financial or market conditions, with the Connecticut Banking Commissioner’s approval, we may sell up to 17,192,500 shares without giving you further notice or providing you with the opportunity to change or cancel your order.

The offering is expected to expire at 12:00 noon, Eastern Time, on [Date 1], but we may extend this expiration date without notice to you until [Date 2] or longer if the Connecticut Banking Commissioner approves a later date. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], or the number of shares of common stock to be sold is increased to more than 17,192,500 shares or decreased to less than 11,050,000 shares. In the event the offering is extended beyond [Date 2] or the number of shares of common stock to be sold is increased to more than 17,192,500 shares or decreased to less than 11,050,000 shares, we will resolicit subscribers, and you will have the opportunity to confirm, change or cancel your order. If you do not provide us with a written indication of your intent, your funds will be returned to you, with interest. Funds received prior to the completion of the offering will be held in a segregated account at Farmington Bank. All subscriptions received will bear interest at Farmington Bank’s passbook savings rate, which is currently 0.2% per annum.

Keefe, Bruyette & Woods, Inc., our marketing advisor and sales agent in the offering, will use its best efforts to assist us in selling shares of our common stock. However, Keefe, Bruyette & Woods, Inc. is not obligated to purchase any shares of common stock in the offering.

How We Intend to Use the Proceeds From the Offering

The following table summarizes how we intend to use the proceeds of the offering, based on the sale of shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, assuming that all of the shares of common stock will be sold in the subscription and community offerings.


( Dollars In Thousands)	Minimum 11,050,000 Shares at $10.00 per share		Midpoint 13,000,000 Shares at $10.00 per share		Maximum 14,950,000 Shares at $10.00 per share		Adjusted Maximum 17,192,500 Shares at $10.00 per share

Gross offering proceeds	$	110,500	$	130,000	$	149,500	$	171,925
Less: offering expenses		2,893		3,072		3,251		3,457
Net offering proceeds		107,607		126,928		146,249		168,468

Distribution of net proceeds:
Proceeds contributed to Farmington Bank	$	53,803	$	63,464	$	73,125	$	84,234
Loan to employee stock ownership plan		9,194		10,816		12,438		14,304
Proceeds retained by FCB	$	44,610	$	52,468	$	60,686	$	69,930

Initially, we intend to invest the proceeds retained in the offering by FCB in short-term liquid investments, such as U.S. treasury and government agency securities, mortgage-backed securities , cash and cash equivalents, deposit the funds in Farmington Bank, or repay certain short-term borrowings. FCB may also use the funds, subject to any regulatory restrictions, to:

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contribute additional capital to Farmington Bank;

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fund strategic growth opportunities, including the acquisition of other banking institutions or other financial services related businesses (although there are no plans for any such acquisitions at this time);

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pay cash dividends to stockholders;

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fund stock based compensation plans and other general corporate purposes;

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repurchase shares of its common stock; and

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other general corporate purposes.

The proceeds contributed to Farmington Bank by FCB will be used by Farmington Bank to support its general business operations. The proceeds will be utilized by Farmington Bank to grow its balance sheet through loan origination, deposit generation and enhancing existing products and services along with supporting the development of new products and services. In addition, in the future the funds are expected to be used by Farmington Bank to finance de novo branching. Farmington Bank expects to continue to extend its branch network at a rate of approximately two to three new branches per year for so long as the deposit and loan generating environment continues to be favorable.

Please see the section of this prospectus entitled “HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING” for more information on the proposed use of the proceeds from the offering.

How We Determined the Offering Range

The amount of common stock we are offering is based on an independent appraisal of the estimated market value of FCB, assuming the conversion and offering are completed. RP Financial, LC. (“RP Financial”), our independent appraiser, has estimated that, as of March 15, 2011, the estimated pro forma market value of the common stock of FCB, including shares sold in the offering and contributed to the charitable foundation, was $ 135,200,000. This pro forma market value is the midpoint of a valuation range established by regulation with a minimum of $ 114,920,000 and a maximum of $ 155,480,000 . Based on this valuation and the $10.00 per share price, the number of shares of our common stock that will be outstanding upon completion of the stock offering, including shares sold in the offering and contributed to the charitable foundation, will range from 11,492,000 to 13,520,000 with a midpoint of 11,492,000, and the number of shares of our common stock that will be sold in the stock offering will range from 11,050,000 shares to 14,950,000 shares with a midpoint of 13,000,000 shares.

If a greater demand for shares of our common stock or a change in financial or market conditions warrant, the offering range may be increased by 15.0%, which would result in an adjusted maximum pro forma market value, including shares sold in the offering and contributed to the charitable foundation, of $ 178,802,000 , total shares outstanding of 17,880,200 and total shares sold in the stock offering of 17,192,500. If the appraised value changes to either below $ 114,920,000 or above $ 178,802,000 , we will resolicit persons who submitted stock orders and you will have the opportunity to confirm, change or cancel your order.

The appraisal was based in part on our consolidated financial condition and results of operations, the pro forma effect of the additional capital raised by the sale of shares of our common stock in the offering, and an analysis of a peer group of publicly-traded companies utilized by RP Financial in its appraisal that RP Financial considers comparable to FCB. In the original appraisal, dated December 14, 2010, the peer group was comprised of ten publicly-traded companies. In the March 15, 2011 appraisal, the peer group has been reduced to eight companies because two companies announced acquisition transactions and are no longer appropriately comparable to FCB.

Ticker	Financial Institution	Exchange	Primary Market	Total Assets (in millions)

BFED	Beacon Federal Bancorp	NASDAQ	East Syracuse, NY	$	1,059
BRKL	Brookline Bancorp, Inc.	NASDAQ	Brookline, MA		2,720
CBNJ	Cape Bancorp, Inc.	NASDAQ	Cape May, NJ		1,061
ESSA	ESSA Bancorp, Inc.	NASDAQ	Stroudsburg, PA		1,081
CSHC	Ocean Shore Holding Co.	NASDAQ	Ocean City, NJ		838
OCFC	OceanFirst Financial Corp.	NASDAQ	Toms River, NJ		2,251
UBNK	United Financial Bancorp	NASDAQ	W. Springfield, MA		1,585
WFD	Westfield Financial Inc.	NASDAQ	Westfield, MA		1,240

In selecting the comparable group companies, RP Financial limited the group to financial institutions located in New England and the Mid-Atlantic regions of the United States whose common stock is traded on a national securities exchange. The group was further limited by asset size, tangible capital ratio and earnings factors.

In preparing its appraisal, RP Financial considered the information in this prospectus, including our financial statements. RP Financial also considered the following factors, among others:

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our historical, present and projected operating results and financial condition;

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the economic, demographic and competition characteristics of our market area;

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a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded thrifts and thrift holding companies;

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the effect of the capital raised in this offering on our net worth and earnings potential; and

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the trading market for securities of comparable institutions and general economic conditions in the market for such securities.

Three measures that investors often use to analyze an issuer’s stock are the ratio of the offering price to the issuer’s reported book value, the ratio of the offering price to the issuer’s tangible book value and the ratio of the offering price to the issuer’s annual net income. According to RP Financial, while appraisers (as well as investors) use all of these ratios to evaluate an issuer’s stock, the price-to-book-value ratio has historically been the most frequently used method due to the volatility of earnings in the thrift industry in the mid-to-late 2000’s and, more recently, due to decreasing interest rates and increased expenses related to credit quality. Tangible book value is total equity less intangible assets. Book value is the same as total equity and represents the difference between the issuer’s assets and liabilities. Core earnings, a non-GAAP measure, is defined as net income before extraordinary items, less the after-tax portion of income from the sale of investment securities or loans and nonrecurring items. RP Financial considered these ratios, among other factors, in preparing its appraisal.

The following table presents a summary of selected pricing ratios for us and the peer group companies, utilized by RP Financial in its appraisal. These ratios are based on estimated core earnings for the 12 months ended December 31, 2010 and book value as of December 31, 2010. The December 31, 2010 data was utilized as it is the latest financial information presented to investors in this offering circular.


	Price-to-Core Earnings Multiple (1)		Price-to-Book Value Ratio			Price-to- Tangible Book Value Ratio

FCB (on a pro forma basis)
Minimum		42.67	x	60.39	%		60.39	%
Midpoint		51.80	x	65.19	%		65.19	%
Maximum		61.53	x	69.25	%		69.25	%
Adjusted Maximum		73.55	x	73.21	%		73.21	%

Peer group companies as of March 15, 2011
Average		18.91	x	103.08	%		107.75	%
Median		19.16	x	102.61	%		109.55	%

(1)

Based on trailing twelve months net income through December 31 , 2010, adjusted by RP Financial to reflect estimated recurring “core” income.

Compared to the average pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a 225.3 % premium on a price-to-core earnings basis, a discount of 32.8 % on a price-to-book basis and a discount of 35.7 % on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be less expensive than the peer group on a book value and tangible book value basis.

Compared to the median pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a 221.1 % premium on a price-to-core earnings basis, a discount of 32.5 % on a price-to-book basis and a 36.8 % discount on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be less expensive than the peer group on a book value and tangible book value basis. For more information, see “UNAUDITED PRO FORMA DATA”.

Our board of directors determined that the offering range was reasonable and appropriate after considering the different elements of the appraisal, the methodology utilized by RP Financial and the conclusions set forth in the appraisal report. The board of directors considered the range of price-to-earnings multiples and the range of price-to-book value and price-to-tangible book value ratios at the different amounts of shares to be sold in the offering . The appraisal did not consider one valuation approach to be more important than the others and, therefore, the board of directors did not give more weight to one approach over the others . Rather, in approving the appraisal, the board of directors concluded that these ranges represented the appropriate balance of the approaches to establishing our valuation, and the number of shares to be sold, in comparison to the peer group institutions. The estimated appraised value took into consideration the potential financial impact of the offering and the stock contribution to the charitable foundation.

In addition, we intend to issue shares of common stock to Farmington Bank Community Foundation, Inc. The shares issued will be equal to 4.00% of the total of the shares sold in the offering, representing 3.85% of all shares issued and outstanding after the offering. The contribution of common stock to the charitable foundation will have the effect of reducing our pro forma valuation. See “COMPARISON OF VALUATION AND UNAUDITED PRO FORMA INFORMATION WITH AND WITHOUT THE FOUNDATION” beginning on page [___] of this prospectus.

The appraisal is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing our common stock. The independent appraisal does not indicate market value. You should not assume or expect that our valuation as indicated in the appraisal means that after the offering the shares of our common stock will trade at or above the $10.00 per share purchase price. Furthermore, the pricing ratios presented in the appraisal were utilized by RP Financial to estimate our market value and not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group. Because of differences in important factors such as operating characteristics, location, financial performance, asset size, capital structure and business prospects between us and other fully converted institutions, you should not rely on these comparative valuation ratios as an indication as to whether or not our common stock is an appropriate investment for you.

After-Market Performance Information

The appraisal prepared by RP Financial includes examples of after-market stock price performance for standard mutual-to-stock conversion offerings ( i.e. , excluding “second step” conversions by publicly traded mutual holding companies) completed during the three-month period ended March 15, 2011 ). The following table presents stock price appreciation information for all standard mutual-to-stock conversions completed between January 1, 2010 and March 15, 2011 . These companies did not constitute the group of ten comparable public companies utilized in RP Financial’s valuation analysis.

Standard Conversion Offerings

Completed Closing Dates between January 1, 2010 and March 15, 2011


					Price Performance from Initial Trading Date
Transaction	Exchange	Closing Date	Offering Size		1 day		1 week		1 month		15-Mar-11
			(Dollars in Millions)

Anchor Bancorp (ANCB)	NASDAQ	01/26/11	$	25.5	0.0	%	0.3	%	4.5	%	9.0	%
Wolverine Bancorp, Inc. (WBKC)	NASDAQ	01/20/11	$	25.1	24.5	%	22.4	%	35.0	%	35.9	%
SP Bancorp, Inc. (SPBC)	NASDAQ	11/01/10	$	17.3	-6.0	%	-6.6	%	-8.0	%	10.0	%
Standard Financial Corp. (STND)	NASDAQ	10/07/10	$	33.6	19.0	%	18.9	%	29.5	%	48.1	%
Peoples Federal Bancshares, Inc. (PEOP)	NASDAQ	07/07/10	$	66.1	4.0	%	6.9	%	4.2	%	38.1	%
OBA Financial Services, Inc. (OBAF)	NASDAQ	01/22/10	$	46.3	3.9	%	1.1	%	3.0	%	40.2	%
OmniAmerican Bancorp, Inc. (OABC)	NASDAQ	01/21/10	$	119.0	18.5	%	13.2	%	9.9	%	54.4	%
Athens Bancshares, Inc. (AFCB)	NASDQ	01/07/10	$	26.8	16.0	%	13.9	%	10.6	%	35.3	%
Madison Bancorp, Inc. (MDSN)	OTC	10/07/10	$	6.1	25.0	%	25.0	%	25.0	%	10.0	%
Century Next Financial Corp. (CTUY)	OTC	10/01/10	$	10.6	25.0	%	15.0	%	10.0	%	35.0	%
United-American Savings Bank (UASB)	OTC	08/06/10	$	2.5	0.0	%	-5.0	%	5.0	%	44.1	%
Fairmount Bancorp, Inc. (FMTB)	OTC	06/03/10	$	4.4	10.0	%	20.0	%	10.0	%	65.0	%
Harvard Illinois Bancorp, Inc. (HARI)	OTC	04/09/10	$	7.9	0.0	%	0.0	%	-1.0	%	-6.0	%
Versailles Financial Corp. (VERF)	OTC	01/13/10	$	4.3	0.0	%	0.0	%	0.0	%	75.0	%

Average			$	28.3	10.0	%	8.9	%	9.8	%	35.3	%
Median			$	21.1	7.0	%	10.1	%	7.5	%	37.0	%
NASDAQ Average			$	45.0	10.0	%	8.8	%	11.1	%	33.9	%
NASDAQ Median			$	30.2	10.0	%	10.1	%	7.2	%	37.0	%

Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of assets and market area. Accordingly, the after-market performance of other companies that have undertaken a mutual holding company conversion may not be similar to that of FCB. In addition, the pricing ratios for those other stock offerings were in some cases different from the pricing ratios for FCB’s common stock and the market conditions in which those offerings were completed were, in some cases, different from current market conditions. Any or all of these differences may cause our stock to perform differently from these other offerings. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the “Risk Factors” section beginning on page.

This table is not intended to be indicative of how our stock may perform. Furthermore, this table presents only short-term price performance with respect to several companies that only recently completed their initial public offerings and may not be indicative of the longer-term stock price performance of these companies. We can give you no assurance that our stock will not trade below the $10.00 purchase price or that our stock will perform similarly to other recent initial public offerings.

Benefits to Management and Potential Dilution to Stockholders Resulting from the Conversion and Offering

We intend to adopt the benefit plans described in more detail below. We will recognize additional compensation expense related to adopting one or more new benefit plans. The actual expense will depend on the market value of our common stock and may increase or decrease as the value of our common stock increases or decreases. As reflected under “UNAUDITED PRO FORMA DATA” based upon assumptions set forth therein, we would recognize additional after-tax expense of $2.1 million for the year ended December 31, 2010, assuming shares of our common stock are sold at the adjusted maximum of the offering range. If awards under the stock benefit plans are funded from authorized but unissued stock, your ownership interest would be diluted by up to 12.3%. See “UNAUDITED PRO FORMA DATA” for an illustration of the effects of each of these plans.

Employee Stock Ownership Plan . We intend to adopt an employee stock ownership plan in connection with the conversion. The plan will purchase up to 8.0% of the total shares of common stock issued in the offering and contributed to the charitable foundation, or 1,430,416 shares of common stock, assuming we sell shares up to the adjusted maximum of the offering range. In the event we increase the maximum amount of common stock offered after receiving the Connecticut Banking Commissioner’s approval of an increase in the stock valuation range, our employee stock ownership plan and our other tax-qualified employee stock benefit plans will have first priority to purchase shares offered over the maximum, up to a total of 10% of the shares of common stock issued in the offering and contributed to the charitable foundation. In the event our employee stock ownership plan chooses not to purchase shares in the offering, with the prior approval of the Connecticut Banking Commissioner, it may purchase shares in the open market of our common stock. The employee stock ownership plan will use the proceeds from a 15-year loan from FCB to purchase these shares in the offering. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s individual compensation (subject to compensation caps established by law) as a percentage of total plan compensation. Non-employee directors are ineligible to participate in the employee stock ownership plan.

Stock Benefit Plans . We intend to implement one or more new stock benefit plans no earlier than six months after the completion of the offering. We will submit any such plans to our stockholders for their approval. The terms and conditions of such stock benefit plans, including the number of shares available per award and the types of awards, have not been determined at this time. However, if we do implement one or more stock benefit plans within 12 months following the completion of the offering, with the Connecticut Banking Commissioner’s approval, the plans will reserve a number of shares up to 4.0% of the shares of common stock issued in the offering and contributed to the charitable foundation for awards to key employees and directors, at no cost to the recipients, and a number of shares up to 10.0% of the shares of common stock issued in the offering for issuance pursuant to the exercise of stock options. The Connecticut Department of Banking regulations impose the above percentage limitations on all stock benefit plans implemented within 12 months of the offering. The following are other limitations imposed by these regulations on stock benefit plans implemented within 12 months of the completion of the offering: (i) an individual may not receive more than 25.0% of the shares under any plan; (ii) non-employee directors may not receive more than 5.0% of the shares of any plan individually, or 30.0% of the shares of any one or more plans in the aggregate; (iii) stock options may not be granted with an exercise price at less than the market price of such stock at the time of grant; (iv) the grants may not vest earlier than one year after the plan is approved by stockholders or at a rate exceeding 20.0% per year; (v) management and employee stock benefit plans may not be funded with shares issued at the time of the offering; and (vi) officers and directors must exercise or forfeit their options if we become critically undercapitalized, are subject to an enforcement action by the Connecticut Banking Commissioner or receive a capital directive from the Connecticut Banking Commissioner. Stock benefit plans implemented more than 12 months after the completion of the offering, are not subject to the limitations set forth above , however, industry practice has been to include many of these limitations in plans adopted more than 12 months after a stock offering . We have not yet determined when we will adopt these plans but currently anticipate that these plans will be adopted more than 12 months after the offering subject to approval of our stockholders .

The following table summarizes the number of shares of common stock and the aggregate dollar value of grants under one or more stock benefit plans at the adjusted maximum of the offering range if such plans reserve a number of shares of common stock equal to 4.0% of the shares issued in the offering and contributed to the charitable foundation for restricted stock awards to key employees and directors, and a number of shares of common stock equal to 10.0% of the shares issued in the offering and contributed to the charitable foundation for stock options. Also set forth is the number of shares of common stock to be acquired by the employee stock ownership plan for allocation to all qualifying employees. The following table also shows the dilution to stockholders if shares are issued from authorized but unissued shares, instead of shares purchased in the open market.

	Number of Shares or Options to be Granted											Value of New Available Grants
	At Adjusted Maximum of Offering Range		As a percentage of Common Stock to be Issued in the Offering and to the Foundation			As a percentage of Common Stock to be Outstanding Total (1)			Maximum Dilution Resulting from the Issuance of Shares for Stock Benefit Plans			At Adjusted Maximum of Offering
												( Dollars in Thousands)
Employee stock ownership plan		1,430,416		8.00	%		8.00	%		0.00	%	$	14,304	(2)

Restricted Stock Plan		715,208		4.00	%		4.00	%		3.85	%	$	7,152	( 2)(3)

Stock option plan		1,788,020		10.00	%		10.00	%		9.09	%	$	6,222	(3)
Total		3,933,644		22.00	%		22.00	%		12.28	%	$	27,678

(1)	Reflects the amount of shares in the respective plans as a percentage of total issued and outstanding shares immediately subsequent to the offering, including shares sold in the offering.

(2)	Assumes the value of FCB common stock is $10.00 per share for purposes of determining the total estimated value of the grants.

(3)

For purposes of this table, fair value for stock awards is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $ 3.48 per option using the Black-Scholes option pricing model, with the following assumptions; a grant-date share price and option exercise price of $10.00 and vesting to take place over five years. The actual value of option grants will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted.

We may fund our stock benefit plans through open market purchases, as opposed to new issuances of stock.

The grant-date fair value of the options granted under the new stock benefit plans, which will not be implemented until at least six months after the completion of the offering, will be based in part on the price of shares of common stock of FCB at the time the options are granted. The value also will depend on the various assumptions utilized in the option pricing model ultimately adopted. The following table presents the total estimated fair value of the options to be available for grant under the stock benefit plan using the Black-Scholes option pricing model, assuming the market price and exercise price for the stock options are equal and the range of market prices for the shares is $8.00 per share to $14.00 per share. The Black-Scholes option pricing model provides an estimate only of the fair value of the options, and the actual value of the options may differ significantly from the value set forth in this table.

Exercise Price		Grant-Date Fair Value Per Option		1,149,200 Options at Minimum of Range		1,352,000 Options at Midpoint of Range		1,554,800 Options at Maximum of Range		1,788,020 Options at Adjusted Maximum of Range
$	8.00	$	2.78	$	3,194,776	$	3,758,560	$	4,322,344	$	4,970,696
	10.00		3.48		3,999,216		4,704,960		5,410,704		6,222,310
	12.00		4.18		4,803,656		5,651,360		6,499,064		7,473,924
	14.00		4.87		5,596,604		6,584,240		7,571,876		8,707,657

The value of the restricted shares awarded under the stock benefit plans, which will not be implemented until at least six months after completion of the offering, will be based on the market value of our common stock at the time the shares are awarded. The following table presents the total value of all restricted stock that would be available for award and issuance under the new stock benefit plan, assuming the market price of our common stock ranges from $8.00 per share to $14.00 per share.


Share Price		459,680 Shares Awarded at Minimum of Range		540,800 Shares Awarded at Midpoint of Range		621.920 Shares Awarded at Maximum of Range		715,210 Shares Awarded at Adjusted Maximum of Range
$	8.00	$	3,677,440	$	4,326,400	$	4,975,360	$	5,721,680
	10.00		4,596,800		5,408,000		6,219,200		7,152,100
	12.00		5,516,160		6,489,600		7,463,040		8,582,520
	14.00		6,435,520		7,571,200		8,706,880		10,012,940

Our Contribution to Farmington Bank Community Foundation, Inc.

In connection with the offering and in furtherance of our commitment to our community, we intend to establish a new charitable foundation as part of the stock offering to operate in addition to the existing charitable foundation established by Farmington Bank. We will issue shares of our common stock to the charitable foundation ranging from 442,000 shares at the minimum of the valuation range to 687,700 shares at the adjusted maximum of the valuation range, having an initial market value of $ 4.4 million at the minimum of the valuation range and $ 6.9 million at the adjusted maximum of the valuation range. We do not expect, at the present time, to issue additional shares of common stock or make other contributions to either the existing charitable foundation or the new charitable foundation in the future. As a result of the issuance of shares to the new charitable foundation, we will record an after-tax expense of approximately $ 3.0 million at the minimum of the valuation range and of approximately $ 4.6 million at the adjusted maximum of the valuation range, during the quarter in which the stock offering is completed. The new charitable foundation will be dedicated exclusively to supporting charitable causes and community development activities in the communities in which we operate.

The new charitable foundation is expected to make contributions in any year of at least 5% of its assets, that is, $ 221,000 at the minimum of the valuation range or $ 344,000 at the adjusted maximum of the valuation range.

Issuing shares of common stock to the new charitable foundation will:

●

dilute the voting interests of purchasers of shares of our common stock in the offering; and

●

result in an expense, and a reduction in earnings during the quarter in which the offering closes and the contribution is made, equal to the full amount of the contribution to the charitable foundation, offset in part by a corresponding tax benefit.

The establishment and funding of the charitable foundation has been approved by the boards of directors of FCB and Farmington Bank.

Without the contribution to the charitable foundation, RP Financial estimates that our pro forma valuation would be greater and, as a result, a greater number of shares of common stock would be issued in the offering. RP Financial will update its appraisal of our estimated pro forma market value at the conclusion of the offering. The pro forma market value reflected in that updated appraisal will be based on the facts and circumstances existing at that time, including, among other things, market and financial conditions, as well as whether we will make the proposed contribution to the charitable foundation.

See “RISK FACTORS — Our contribution to Farmington Bank Community Foundation, Inc. may not be tax deductible, which could reduce our profits”, “COMPARISON OF VALUATION AND UNAUDITED PRO FORMA INFORMATION WITH AND WITHOUT THE FOUNDATION” and “FARMINGTON BANK COMMUNITY FOUNDATION, INC.”

Persons Who May Order Shares of Common Stock in the Offering

We are offering shares of FCB common stock in a subscription offering in the following descending order of priority:

(1)

Depositors with accounts at Farmington Bank with aggregate balances of at least $50.00 at the close of business on December 31, 2009.

(2)

Our tax-qualified employee stock benefit plans (including our employee stock ownership plan), who will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to 10.0% of the shares of common stock sold in the offering and contributed to the charitable foundation. Our employee stock ownership plan currently intends to purchase up to 8.0% of the shares of common stock sold in the offering and contributed to the charitable foundation.

(3)

Depositors with accounts at Farmington Bank with aggregate balances of at least $50.00 at the close of business on March 31, 2011.

We may offer for sale shares of common stock not subscribed for in the subscription offering to the general public in a community offering, with a preference given to the below groups in the following descending order of priority:

(1)

Natural persons residing in Hartford County , Connecticut.

(2)

Other natural persons residing in Connecticut.

The community offering, if held, may begin concurrently with, during or promptly after the subscription offering as we may determine at any time. We also may offer for sale shares of our common stock not subscribed for in the subscription offering or community offering through a syndicated community offering managed by Keefe, Bruyette & Woods, Inc.

We have the right to accept or reject, in our sole discretion, orders received in the community offering or syndicated community offering. We have not established any set criteria for determining whether to accept or reject a purchase order in the community offering or the syndicated community offering and, accordingly, any determination to accept or reject purchase orders will be based on the facts and circumstances available to management at the time of the determination.

If we receive orders for more shares than we are offering, we may not be able to fully or partially fill your order. Shares will be allocated first to categories in the subscription offering. A detailed description of share allocation procedures can be found in the section of this prospectus entitled “THE CONVERSION AND OFFERING”.

You May Not Sell or Transfer Your Subscription Rights

You are prohibited by law from transferring your subscription rights. If you order stock in the subscription offering, you will be required to state that you are purchasing the stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights. We intend to take legal action, including reporting persons to federal or state regulatory agencies, against anyone who we believe sells or gives away their subscription rights. Civil suits and criminal prosecutions have been brought against individuals transferring or participating in the transfer of subscription rights in connection with other offerings. We will not accept your order if we have reason to believe that you sold or transferred your subscription rights. In addition, on the order form, you may not add the name of others for joint stock registration who do not have subscription rights or who qualify only in a lower subscription offering priority than you do. You may add only those persons who were eligible to purchase shares of common stock in the subscription offering on your eligibility date. The stock order form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility date. Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation, if there is an oversubscription.

Limits on How Much Common Stock You May Purchase

In connection with the conversion and offering, our board of directors has established the following purchase limitations:

●

The minimum number of shares of common stock that may be purchased is 25.

●

In the subscription offering, the maximum amount of common stock which may be purchased through a single deposit account is 30,000 shares, and no individual, together with one or more associates or group of persons acting in concert, may purchase more than 60,000 shares.

●

Other than tax-qualified employee stock benefit plans, the maximum amount of common stock that an individual may purchase is 30,000 shares, and no individual, together with one or more associates or group of persons acting in concert, may purchase more than 60,000 shares in the offering.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to this overall purchase limitation of 60,000 of the shares of common stock sold in the offering.

Subject to regulatory approval, we may increase or decrease the purchase limitations in the offering at any time. Our tax-qualified benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10.0% of the total of the shares sold in the offering and those contributed to Farmington Bank Community Foundation, Inc. without regard to these purchase limitations.

See the detailed description of “acting in concert” and “associate” in the section of this prospectus headed “THE CONVERSION AND OFFERING – Limitations on Common Stock Purchases”.

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 11,050,000 shares of common stock, we may take several steps in order to issue the minimum number of shares of common stock in the offering range. Specifically, subject to necessary regulatory approvals, we may:

●

increase the purchase and ownership limitations;

●

extend the offering beyond the [Date 2] expiration date, with the Connecticut Banking Commissioner’s approval, provided that any such extension will require us to resolicit subscriptions received in the offering; and/or

●

increase the number of shares to be purchased by our employee stock ownership plan.

How You May Purchase Shares of Common Stock:

To purchase shares you must deliver a properly completed and signed original stock order form, accompanied by payment or Farmington Bank deposit account withdrawal authorization, as described below. You may submit your order form in one of the following ways: by mail, using the stock order reply envelope provided, by overnight delivery to our order processing center at the address indicated on the stock order form or by hand-delivery to any of the bank ’ s full service banking locations . Stock order forms will not be accepted by mail or by hand-delivery at any of our branch offices. We are not required to accept copies or facsimiles of order forms.

In the subscription offering and community offering, you may pay for your shares only by:

Personal check , bank check or money order. Personal checks, bank checks and money orders, payable to FCB will be immediately cashed and will be deposited in a separate account with Farmington Bank. Third party and Farmington Bank line of credit checks may not be remitted as payment for your order. We will pay interest in these funds at our passbook savings rate from the date payment is received until completion or termination of the offering. Wire transfers as payment for shares of common stock ordered will not be permitted or accepted as proper payment. You should not mail cash.

Authorized account withdrawal. The stock order form outlines the types of Farmington Bank deposit accounts that you may authorize for direct withdrawal. You may not request a direct withdrawal from any checking account. A hold will be placed on these funds when your stock order form is received, making the funds unavailable to you, provided, however, these funds will not be withdrawn from your accounts until the completion or termination of the offering and will earn interest at the applicable deposit account rate until then. The funds you authorize must be in your account at the time your stock order form is received. You may authorize funds from your certificate of deposit accounts without incurring an early withdrawal penalty, with the agreement that the withdrawal is being made for the purchase of shares in the offering. If a withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate will be canceled at the time of withdrawal without penalty and the remaining balance will earn interest at the current passbook rate subsequent to the withdrawal. You may not authorize direct withdrawals from retirement accounts held by Farmington Bank. Funds withdrawn from deposit accounts at Farmington Bank may reduce or eliminate a depositor’s liquidation rights. Please see the section of this prospectus entitled “THE CONVERSION AND OFFERING – Liquidation Rights” for further information.

We may not lend funds or extend a line of credit (including line of credit or overdraft checking) to anyone for the purpose of purchasing shares in the offering.

We reserve the right to waive, or permit the correction of, incomplete or improperly executed stock order forms on a case by case basis, but do not represent that we will do so. Once your order is received by us, you may not change, modify or cancel your order. Our employees and Stock Information Center staff are not responsible for correcting or completing the information provided on the stock order forms we receive, including the account information requested for the purpose of verifying subscription rights.

By signing the stock order form, you are acknowledging both receipt of this prospectus and that the shares of common stock are not deposits or savings accounts that are federally insured or otherwise guaranteed by us or the federal government.

Using IRA Funds to Purchase Shares of Common Stock

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA. However, shares of common stock must be held in a self-directed retirement account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. Farmington Bank’s individual retirement accounts are not self-directed, so funds in such accounts cannot be invested in our common stock. You may transfer some or all of the funds in your Farmington Bank individual retirement account to a self-directed account maintained by an unaffiliated institutional trustee or custodian. If you do not have such an account, you will need to establish one and transfer your funds before placing your stock order. Because individual circumstances differ and processing of retirement account transactions takes additional time, we recommend that you promptly contact (preferably at least two weeks before the [Date 1] offering deadline) our Stock Information Center for assistance with purchases using your individual retirement account or other retirement account that you may have at Farmington Bank or elsewhere. Whether you may use such funds for the purchase of shares in the stock offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held. See “THE CONVERSION AND OFFERING – Using IRA Funds to Purchase Shares of Common Stock”.

Deadline for Orders of Common Stock

If you wish to purchase shares of common stock, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received (not postmarked) by us no later than 12:00 noon, Eastern Time, on [Date 1], unless we extend this deadline. We expect that the community offering, if held, will terminate at the same time, although it may continue until [Date 2] or longer if the Connecticut Banking Commissioner approves a later date. Once submitted, your order is irrevocable unless the offering is terminated or extended beyond [Date 2] or the number of shares of common stock to be sold is increased to more than 17,192,500 shares or decreased to fewer than 11,050,000 shares. In either of these cases, you will have the opportunity to confirm, change or cancel your order. If we do not receive a written response from you regarding your intent, we will cancel your order, promptly return to you all funds received by us with interest at Farmington Bank’s passbook savings rate, and cancel any deposit account withdrawal authorizations. No single extension may last longer than 90 days. All extensions, in the aggregate, may not last beyond [Date 3].

Delivery of Prospectus

To ensure that each purchaser in the subscription and community offering receives a prospectus at least 48 hours before the offering deadline in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, we will not mail a prospectus any later than five days prior to such date or hand-deliver a prospectus later than two days prior to that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than United States mail.

We will make reasonable attempts to deliver a prospectus and offering materials to holders of subscription rights. However, the subscription offering and all subscription rights will expire at 12:00 noon, Eastern Time, on [Date 1], 2011 whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates

Certificates representing shares of common stock sold in the offering will be mailed to the persons entitled thereto at the certificate registration address noted by them on their order form, as soon as practicable following consummation of the offering and receipt of all necessary regulatory approvals. It is possible that until certificates for the common stock are delivered to purchasers, purchasers might not be able to sell the shares of common stock that they ordered, even though the common stock will have begun trading.

Market for Common Stock

FCB has never issued capital stock to the public. We anticipate that our common stock will be quoted on the Nasdaq Global Market under the symbol “FBNK”. We will try to secure at least three market makers to make a market in our common stock. Keefe, Bruyette & Woods, Inc. has advised us that it intends to make a market in our common stock following the offering, but it is under no obligation to do so. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in our common stock, there can be no assurance that we will be successful in obtaining such commitments.

The development and maintenance of a public market, having the desirable characteristics of depth, liquidity and orderliness, depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of shares of our common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of our common stock can be sold. There can be no assurance that persons purchasing the shares of common stock will be able to sell their shares at or above the $10.00 offering purchase price per share. You should recognize that there may be a limited trading market in the shares of common stock. See “RISK FACTORS –There Will Be a Limited Trading Market in Our Common Stock, Which Will Hinder Your Ability to Sell Our Common Stock and May Lower the Market Price of the Stock” on page [____].

Our Dividend Policy

Following completion of the offering, our board of directors will have the authority to declare dividends on our common stock, subject to statutory and regulatory requirements. In the future, our board of directors intends to consider a policy of paying cash dividends on the common stock. However, no decision has been made with respect to the payment of dividends. The payment of dividends will depend upon a number of factors, including capital requirements, FCB’s and Farmington Bank’s financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions and regulatory restrictions that affect the payment of dividends by Farmington Bank to FCB. No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future. Special cash dividends, stock dividends or returns of capital, to the extent permitted by applicable policy and regulation, may be paid in addition to, or in lieu of, regular cash dividends.

Restrictions on the Acquisition of FCB and Farmington Bank

Maryland and Connecticut law, as well as provisions contained in the plan of conversion and FCB’s Certificate of Incorporation, restricts the ability of any person, firm or entity to acquire FCB, Farmington Bank, or their respective capital stock. The restrictions in FCB’s Certificate of Incorporation include the requirement that for a period of seven years from the completion of the offering a potential acquirer of any capital stock of FCB obtain the prior approval of the Connecticut Banking Commissioner before acquiring in excess of 10% of the voting stock of FCB or Farmington Bank.

Proposed Stock Purchases by Management

FCB’s directors and executive officers and their associates are expected to purchase approximately 197,500 shares of common stock in the offering, which represents 1.7 %, 1.5 %, 1.3 % and 1.1 % of the shares outstanding upon the completion of the conversion and offering and the contribution of shares to the charitable foundation , at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. Directors and executive officers will pay the same $10.00 per share price paid by all other persons who purchase shares in the offering. These shares will be counted in determining whether the minimum of the range of the offering is reached. Directors and executive officers and their associates may not purchase greater than 25% of the outstanding shares of common stock of FCB.

How You Can Obtain Additional Information—Stock Information Center

Our banking personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the offering, please call our Stock Information Center, Monday through Friday between 10 :00 a.m. and 5:00 p.m., Eastern Time. The Stock Information Center will be closed on weekends and bank holidays. The toll-free phone number is ( 877) 860- 2086 . In addition, a representative of Keefe, Bruyette and Woods, Inc. will be available to meet with you in person on Monday between 12:00 p.m. and 5:00 p.m., Tuesday through Thursday between 9:00 a.m. and 5:00 p.m., and Friday between 9:00 a.m. and 12 :00 p.m. at our branch office at 32 Main Street, Farmington, Connecticut.

R ISK FACTORS

You should consider carefully the following risk factors in evaluating an investment in shares of our common stock. An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all other information included in this prospectus.

Risks Related to Our Business

A substantial portion of our loan portfolio consists of commercial real estate loans and commercial loans, which expose us to increased risks and could adversely impact our earnings.

Our new executive management team has brought an increased focus to transitioning Farmington Bank’s balance sheet to be more like a commercial bank. At December 31, 2010, our commercial real estate loans and commercial business loans totaled $ 361.8 million and $ 112.5 million or 30.8 % and 9.6%, respectively , of our total loan portfolio. These types of loans generally expose a lender to greater risk of non-payment and loss than one-to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the property and business of the borrowers and the collateral securing these loans may not be sold as easily as residential real estate. In addition, commercial real estate and commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to four-family residential mortgage loans. Also, many of our commercial real estate and commercial loan borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to four-family residential mortgage loan.

Due to the economic recession and slow economic recovery, the real estate market and local economy has deteriorated . While the value of our real estate collateral securing loans has not been substantially impacted, further deterioration in the real estate market or a prolonged economic recovery could adversely affect the value of the properties securing the loans or revenues from borrowers’ businesses, thereby increasing the risk of non-performing loans. A continued deterioration in the economy and slow economic recovery may also have a negative effect on the ability of our commercial borrowers to make timely repayments of their loans, which could have an adverse impact on our earnings.

All of these factors could have a material adverse effect on our financial condition and results of operations. See further discussion on the commercial loan portfolio in “Lending Activities” within “BUSINESS OF FARMINGTON BANK”.

Our loan portfolio possesses increased risk due to its rapid expansion and unseasoned nature.

From December 31, 2008 to December 31, 2010, our total loan portfolio increased by $ 336.4 million or 40.0 %. As a result of this rapid expansion, a significant portion of our portfolio is unseasoned. Our limited experience with these loans does not provide us with a significant payment history pattern with which to judge future collectibility. As a result, it may be difficult to predict the future performance of this part of our loan portfolio. These loans may have delinquency or charge-off levels above our expectations, which could adversely affect our future performance.

Our loan portfolio includes timeshare loans, the performance of which has been negatively impacted by the downturn in the economy and in turn could negatively impact our profitability.

In November 2007, prior to the arrival of our new management team, we hired a team of experienced, industry-specific lenders to begin lending to developers and operators of timeshare vacation resorts as a component of our commercial loan portfolio. This program was instituted with lending restrictions based on total commitments, capital and geographic concentrations. In mid-2009, larger lenders began to pull back their activities in this area at which time we began to shift our lending focus in this lending area strictly to hypothecation loans which have historically, and to this date, performed well. In early 2010, we placed a moratorium on future loans in this portion of our portfolio with lending only extended on outstanding commitments. We have recently decided to gradually exit this line of lending in its entirety and are in the process of an orderly phase-out of this line in order to devote our full resources to our core commercial lending services.

Like the real estate market as a whole, the timeshare industry continues to be negatively impacted by the weakened economy and slow economic recovery and borrowers are depending on their existing liquidity to make loan payments, which at some point could be reduced to the point where such borrowers are no longer able to make payments on their loans absent sale of timeshare units. If this were to occur, it could negatively impact our earnings.

At December 31, 2010, we had a specific reserve allocation of $ 4.9 million for a $4.9 million nonperforming resort ( timeshare ) loan. During the fourth quarter of 2010, the outcome of a borrower bankruptcy proceeding with respect to this loan made it probable that we would not collect any amounts due on the loan and required us to fully reserve for this loan . We have recently decided to gradually exit resort (timeshare) lending to focus on our other commercial lending lines while continuing to hold our outstanding resort (timeshare) loans and honoring any advances requested relating to approved and unadvanced loan commitments until they are repaid in the normal course of business. As of December 31, 2010, there was $105.2 million in outstanding timeshare loans and $23.6 million in unadvanced commitments and $19.0 million in approved loan commitments , which will replace $12.5 million in outstanding loans or unadvanced commitments and will result in $6.5 million of new funds to exsisting borrowers . As of December 31, 2010 all of the resort ( timeshare ) loans, except for the fully reserved loan noted above, were performing according to their terms.

Our lack of geographic diversification increases our risk profile.

Our operations are located principally in Hartford County, Connecticut. As a result of this geographic concentration, our results depend largely upon economic and business conditions in this area. Deterioration in economic and business conditions in our service area could have a material adverse impact on the quality of our loan portfolio and the demand for our products and services, which in turn may have a material adverse effect on our results of operations.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. Recent declines in real estate values have impacted the collateral values that secure our real estate loans. The impact of these declines on the original appraised values of secured collateral is difficult to estimate. In determining the amount of the allowance for loan losses, we review our loss and delinquency experience on different loan categories, and we evaluate existing economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance, which would decrease our net income. Our loan loss allowance for the years ended December 31, 2010 and 2009 was $20.7 million and $16.3 million, respectively. Although we are currently unaware of any specific problems with our loan portfolio that would require any increase in our allowance at the present time, it may need to be increased further in the future due to our emphasis on loan growth and on increasing our portfolio of commercial business and commercial real estate loans.

In addition, banking regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. Any increase in the allowance for loan losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations and financial condition.

Future changes in interest rates may reduce our profits which could have a negative impact on the value of our stock.

Our ability to make a profit largely depends on our net interest income, which could be negatively affected by changes in interest rates. Net interest income is the difference between the interest income Farmington Bank earns on its interest-earning assets, such as loans and securities, and the interest expense Farmington Bank pays on its interest-bearing liabilities, such as deposits and borrowings. Increases in interest rates may decrease loan demand and make it more difficult for borrowers to repay adjustable rate loans. In addition, as market interest rates rise, we will have competitive pressures to increase the rates paid on deposits, which may result in a decrease in our net interest income.

In addition, changes in interest rates can affect the average life of loans and mortgage-backed and related securities. A reduction in interest rates results in increased prepayments of loans and mortgage-backed and related securities, as borrowers refinance their debt in order to reduce their borrowing costs. This creates reinvestment risk, which is the risk that we may not be able to reinvest prepayments at rates that are comparable to the rates earned on the prepaid loans or securities.

We opened new branches in 2010 and expect to continue branch expansion which may result in losses at those branches initially as they generate new deposit and loan portfolios, and negatively impact our earnings.

Farmington Bank opened new branch offices in Glastonbury, Connecticut, Plainville, Connecticut and Berlin, Connecticut in 2010 and is expected to open a new branch in West Hartford, Connecticut in early 2011. Farmington Bank intends to continue to explore opportunities to expand its branch network at a rate of approximately two to three de novo branches per year for so long as the deposit and loan generating environment continues to be favorable. Losses are expected in connection with these new branches for some time, as the expenses and costs of acquisition associated with them are largely fixed and are typically greater than the income earned at the outset as the branches build up their customer bases. No assurance can be given as to when, if ever, new branches will become profitable.

Strong competition within Farmington Bank’s market area may limit our growth and profitability.

Competition in the banking and financial services industry is intense. In our market area, we compete with commercial banks, savings institutions, mortgage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Many of these competitors have substantially greater resources and lending limits than we have and offer certain services that we do not or cannot provide. Our profitability depends upon our continued ability to compete successfully in our market area. The greater resources and deposit and loan products offered by our competitors may limit our ability to increase our interest-earning assets.

If our government banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings.

In June 2009, we created a government banking group to provide deposit and loan services to municipalities throughout Connecticut. Our municipal deposits as of December 31, 2010 and December 31, 2009 were $173.8 million or 15.7% and $114.1 million or 11.5% of our total deposits outstanding, respectively. If a significant amount of these deposits were withdrawn within a short period of time, it could have a negative impact on our short term liquidity and have an adverse impact on our earnings.

The loss of our Chief Executive Officer could adversely impact our business.

Our future success and profitability are substantially dependent upon the vision, management and banking abilities of our Chief Executive Officer, who has substantial background and significant experience in banking and financial services, as well as personal contacts in Central Connecticut and the region generally. The loss of our Chief Executive Officer may be disruptive to our business and could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to the Financial Services Industry

The local and national economies remain weak and unemployment levels are high. A prolonged economic downturn will adversely affect our business and financial results.

The financial industry experienced unprecedented turmoil in 2008 through 2010. The local economy in which we conduct business and the United States economy remains weak . Unemployment in Hartford County, Connecticut was 9.1% as of December 2010, compared to 8.6% for the State of Connecticut and 9.8% for the United States for the same period. Annual housing permits in Hartford County, Connecticut as of December 2009 decreased to their lowest levels in over a decade and single family home sales declined 9.23% from 2009 to 2010. Worsening of these conditions may adversely affect our business by materially decreasing our net interest income or materially increasing our loan losses. There can be no assurance that we will not be affected by the current economic conditions in a way we cannot currently predict or mitigate.

Passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act will increase our operational and compliance costs.

On July 21, 2010, the President of the United States signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). This new law will significantly change the current bank regulatory structure and affect the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies. The Dodd-Frank Act requires various federal agencies to adopt a broad range of new rules and regulations, and to prepare numerous studies and reports for Congress. The federal agencies are given significant discretion in drafting the rules and regulations, and consequently, many of the details and much of the impact of the Dodd-Frank Act may not be known for many months or years. Among other things, the Dodd-Frank Act creates a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws, weakens the federal preemption rules that have been applicable for national banks and federal savings associations, imposes certain capital requirements on financial institutions, eliminates the federal prohibitions on paying interest on demand deposits, broadens the base for FDIC deposit insurance assessments, requires publicly traded companies to provide non-binding votes on executive compensation and so-called “golden parachute” payments, and directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives. As a result, our revenue may be reduced due to fee income limitations and we may be required to maintain higher minimum capital ratios. It is difficult to predict at this time what specific impact the Dodd-Frank Act and the yet to be written implementing rules and regulations will have on community banks. However, it is expected that at a minimum they will increase our operating and compliance costs and could increase our interest expense.

Higher Federal Deposit Insurance Corporation insurance premiums and special assessments will adversely affect our earnings.

The FDIC increased deposit insurance premium expense effective June 30, 2009 in the form of a special assessment. The FDIC has exercised its authority to raise assessment rates beginning in 2009, and may impose another special assessment in the future. If such action is taken by the FDIC it could have an adverse effect on our earnings.

We operate in a highly regulated environment and our business may be adversely affected by changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by the Connecticut Banking Commissioner, as Farmington Bank’s chartering authority, by the FDIC, as insurer of deposits, and by the Federal Reserve Board as the regulator of FCB. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of the insurance fund and depositors. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, or legislation, may have a material impact on our operations.

We face various technological risks that could adversely affect our business.

We rely on communication and information systems to conduct business. Potential failures, interruptions or breaches in system security could result in disruptions or failures in our key systems, such as general ledger, deposit or loan systems. We have developed policies and procedures aimed at preventing and limiting the effect of failure, interruption or security breaches of information systems; however, there can be no assurance that these incidences will not occur, or if they do occur, that they will be appropriately addressed. The occurrence of any failures, interruptions or security breaches of our information systems could damage our reputation, result in the loss of business, subject us to increased regulatory scrutiny or subject us to civil litigation and possible financial liability, any of which could have an adverse effect on our results of operation and financial condition.

Risks Related to the Offering

The future price of the shares of common stock may be less than the $10.00 purchase price per share in the offering.

If you purchase shares of common stock in the offering, you may not be able to sell them later at or above the $10.00 purchase price in the offering. In several cases, shares of common stock issued by newly converted savings institutions have traded below the initial offering price. The aggregate purchase price of the shares of common stock sold in the offering will be based on an independent appraisal. The independent appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The independent appraisal is based on certain estimates, assumptions and projections, all of which are subject to change from time to time. After our shares begin trading, the trading price of our common stock will be determined by the marketplace, and may be influenced by many factors, including prevailing interest rates, the overall performance of the economy, investor perceptions of FCB and the outlook for the financial services industry in general. Price fluctuations may be unrelated to the operating performance of particular companies.

You may not revoke your decision to purchase FCB common stock in the subscription or community offering after you send us your order.

Orders and funds submitted or automatic withdrawals authorized in connection with a purchase of shares of common stock in the subscription and community offerings will be held by us until the completion or termination of the offering, including any extension of the expiration date. Because completion of the offering will be subject to regulatory approvals and a reconfirmation of the independent appraisal, there may be one or more delays in the completion of the offering. Orders submitted in the subscription and community offerings are irrevocable, and subscribers will have no access to subscription funds unless the offering is terminated, or extended beyond [Date 2], 2011, or the number of shares to be sold in the offering is increased to more than 17,192,500 shares or decreased to less than 11,050,000 shares of common stock.

Our failure to deploy the net proceeds effectively may have an adverse impact on our financial performance and the value of our common stock.

We intend to invest between approximately $ 53.8 million and $ 73.1 million of the net proceeds of the offering (or $ 84.2 million at the adjusted maximum of the offering range) in Farmington Bank. Farmington Bank may use the net proceeds it receives to fund new loans, to purchase investment securities, to pursue strategic growth opportunities or for other general corporate purposes. We may use the net proceeds retained at FCB to invest in short-term liquid investments, to repurchase shares of common stock, to pay dividends to our stockholders, to pursue strategic growth opportunities or for other general corporate purposes. However, with the exception of the loan to the employee stock ownership plan to purchase our common stock, we have not allocated specific amounts of the net proceeds for any of these purposes, and we will have significant flexibility in determining the amount of the net proceeds we apply to different uses and the timing of such applications. We have not established a timetable for reinvesting the net proceeds, and we cannot predict how long reinvesting the net proceeds will require.

Our return on equity will be low following the stock offering. This could negatively affect the trading price of our shares of common stock.

Net income divided by average equity, known as “return on equity,” is a ratio many investors use to compare the performance of a financial institution to its peers. Following the stock offering, we expect our consolidated equity to be between $ 190.3 million at the minimum of the offering range and $ 244.3 million at the adjusted maximum of the offering range. Based upon our income for the year ended December 31, 2010, and these pro forma equity levels, our return on equity would be 2.56 % and 1.99 % at the minimum and adjusted maximum of the offering range, respectively. We expect our return on equity to remain low until we are able to leverage the additional capital we receive from the stock offering. Although we will be able to increase net interest income using proceeds of the stock offering, our return on equity will be negatively affected by added expenses associated with our employee stock ownership plan and the stock-based benefit plan we intend to adopt. Until we can increase our net interest income and non-interest income and leverage the capital raised in the stock offering, we expect our return on equity to remain low, which may reduce the market price of our shares of common stock.

Our implementation of one or more new stock benefits plans may dilute your ownership interest.

We intend to adopt one or more new stock benefit plans following the offering, subject to receipt of stockholder approval. These plans may be funded either through open market purchases or from the issuance of authorized but unissued shares of common stock of FCB. While our intention is to fund these plans through open market purchases, stockholders would experience a 12.3% reduction in ownership interest at the maximum of the offering range in the event newly issued shares of our common stock are used to fund stock options and shares of restricted stock under the plans in an amount equal to 10.0% and 4.0%, respectively, of the shares sold in the offering. In the event we adopt the plans more than one year following the offering, the plans will not be subject to certain limitations imposed by Connecticut regulations, including limits on the total number of options or restricted shares available for award under the plans.

The implementation of our employee stock ownership plan and one or more new stock benefit plans will increase our compensation and benefit expenses and adversely affect our profitability.

We intend to adopt an employee stock ownership plan and one or more new stock benefit plans after the offering, subject to stockholder approval, which will increase our annual employee compensation and benefit expenses related to the restricted stock awards and stock options granted to participants under such plans. The actual amount of the additional compensation and benefit expenses will depend on the number of restricted shares and options actually granted under the plans, the fair market value of our shares of common stock at specific points in the future, the applicable vesting periods and other factors which we cannot predict at this time; however, we expect them to be material. If a stock benefit plan is implemented within one year of the completion of the offering, the number of shares of common stock reserved for issuance for grants of options and restricted stock awards under such stock benefit plan may not exceed 10.0% and 4.0% of the shares sold in the offering, respectively. If we award options or other stock awards in excess of these amounts under a stock benefit plan adopted more than one year after the completion of the offering, our costs would increase further.

In addition, we will recognize expense for our employee stock ownership plan when shares are committed to be released to participants’ accounts (i.e., as the loan used to acquire these shares is repaid), and we would recognize expense for stock options and restricted stock over the vesting period of awards made to recipients. The expense in the first year following the offering has been estimated to be $ 2.7 million after tax at the adjusted maximum of the offering range as set forth in the pro forma financial information under “PRO FORMA DATA,” assuming the $10.00 per share purchase price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock on the grant date. For further discussion of our proposed stock benefit plans, see “MANAGEMENT COMPENSATION DISCUSS AND ANALYSIS”.

There may be a limited market for our common stock, which may lower our stock price and make it more difficult for investors to sell their shares of our common stock.

We plan for our stock to be listed on the Nasdaq Global Market after the offering. However, the shares of our common stock may not be regularly traded. Even if a liquid market develops for our common stock, there is no assurance that it can be maintained.

Additionally, the aggregate purchase price of common stock sold in the offering is based on an independent appraisal. After our shares begin trading, the marketplace will determine the price per share, which may be influenced by various factors, such as prevailing interest rates, investor perceptions of FCB, economic conditions and the outlook for financial institutions. Price fluctuations may be unrelated to the operating performance of particular companies. In several cases, due to market volatility, shares of common stock of newly converted savings institutions traded below the price at which the shares were sold in the companies’ initial public offerings. After the offering, the trading price of our common stock may not be at or above $10.00.

The issuance of shares to Farmington Bank Community Foundation, Inc. will dilute your ownership interests and adversely affect our net income.

We intend to establish a charitable foundation, Farmington Bank Community Foundation, Inc., in connection with the stock offering. We will make a contribution to the charitable foundation in the form of shares of FCB common stock. We will issue shares of common stock to the charitable foundation ranging from 442,000 shares at the minimum of the valuation range to 687,700 shares a the adjusted maximum of the valuation range, which equals approximately 3.8% of all shares issued and outstanding after the offering. The contribution will also have an adverse effect on our net income for the quarter and year in which we make the issuance and contribution to the charitable foundation. The after-tax expense of the contribution will reduce net income in 2011 by approximately $ 3.5 million at the midpoint of the offering range. Persons purchasing shares in the offering will have their ownership and voting interests in FCB diluted by 3.8% due to the issuance of additional shares of common stock to the charitable foundation.

Our contribution to Farmington Bank Community Foundation, Inc. may not be tax deductible, which could reduce our profits.

We believe that the contribution to Farmington Bank Community Foundation, Inc., valued at approximately $ 6.9 million, pre-tax, at the adjusted maximum of the offering range will be deductible for federal income tax purposes. However, we cannot guarantee that the Internal Revenue Service will grant tax-exempt status to the foundation. If the contribution is not deductible, we would not receive any tax benefit from the contribution. In addition, even if the contribution is tax deductible, we may not have sufficient profits to be able to use the deduction fully.

Our stock value may suffer from anti-takeover provisions that may impede potential takeovers.

Maryland law and our articles of incorporation and bylaws contain provisions, sometimes known as anti-takeover provisions, that may impede efforts to acquire us, or impede stock purchases in furtherance of an acquisition, even though acquisition efforts or stock purchases might otherwise have a favorable effect on the price of our common stock. Those provisions may also make it more difficult to remove our board and management.

Our articles of incorporation include a requirement that for a period of seven years from the completion of the offering a potential acquirer of common stock obtain the prior approval of the Connecticut Banking Commissioner before acquiring in excess of 10.0% of any capital stock of FCB or Farmington Bank. Consistent with the Maryland General Corporation Law, our articles of incorporation and/or bylaws also provide for staggered directors’ terms, limit the stockholders’ ability to remove directors and empower only the directors to fill board vacancies. Our articles of incorporation and bylaws further provide for, among other things, restrictions on the voting of more than 10.0% of our outstanding voting stock and approval of certain actions, including certain business combinations, by specified percentages of our disinterested directors, as defined in the articles of incorporation, or by specified percentages of the shares outstanding and entitled to vote. The articles of incorporation also authorize the board of directors to issue shares of preferred stock, the rights and preferences of which may be designated by the board, without the approval of our stockholders. The articles of incorporation also establishes supermajority voting requirements for amendments to the charter and bylaws, limit stockholders’ ability to call special meetings of stockholders, and impose advance notice provisions on stockholders’ ability to nominate directors or propose matters for consideration at stockholder meetings.

Our employee stock ownership plan, which expects to purchase 8.0% of the shares issued in the conversion, contains provisions that permit participating employees to direct the voting of shares held in the employee stock ownership plan, and those provisions may have anti-takeover effects.

The Bank Holding Company Act of 1956, together with applicable regulations, requires that a person obtain the consent of the Federal Reserve Board before attempting to acquire control of a bank holding company, such as FCB. In addition, for a period of seven years following the conversion, no person may directly or indirectly offer to acquire or acquire beneficial ownership of more than 10.0% of any class of our capital stock without prior written approval of the Connecticut Banking Commissioner.

In addition, we intend to enter into employment agreements and change of control agreements with certain executive officers, which will require payments to be made to them in the event their employment is terminated following a change in control of FCB or Farmington Bank. We also intend to issue stock options to key employees and directors that will require payments to them in connection with a change in control of FCB or Farmington Bank. These payments may have the effect of increasing the costs of acquiring FCB or Farmington Bank, thereby discouraging future takeover attempts.

For more information about the anti-takeover effects of our charter and bylaws, the employee stock ownership plan and certain federal and state regulations and laws, see “Restrictions on the Acquisition of FCB and Farmington Bank”.

S ELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The summary financial information presented below is derived in part from the consolidated financial statements of the MHC and Farmington Bank. The following is only a summary and you should read it in conjunction with the consolidated financial statements and notes beginning on page F-1. The information at December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 is derived in part from the audited consolidated financial statements of the MHC that appear in this prospectus. The information at December 31, 2008, 2007 and 2006 and for the years ended December 31, 2007 and 2006 is derived in part from audited consolidated financial statements that do not appear in this prospectus.

	At December 31
	2010		2009		2008		2007		2006

Selected Financial Condition Data:
(Dollars in thousands)

Total assets	$	1,416,630	$	1,255,186	$	1,094,387	$	950,302	$	894,019
Cash and cash equivalents		18,608		28,299		31,732		65,960		64,146
Held to maturity securities		3,672		3,010		3,011		73		118
Available for sale securities		163,008		121,350		178,104		170,979		189,142
Federal Home Loan Bank stock		7,449		7,449		7,420		2,298		2,435
Loans receivable, net		1,157,917		1,039,995		831,911		671,305		599,810
Deposits		1,108,505		993,886		804,085		803,158		758,397
Federal Home Loan Bank advances		71,000		62,000		117,000		-		10,000
Mortgagors’ and investors’ escrow accounts		9,717		8,894		7,763		6,668		6,276
Total capital accounts		94,993		93,673		90,663		89,315		82,121
Allowance for loan losses		20,734		16,316		9,952		8,124		8,312
Non-performing loans (1)		17,722		14,846		6,115		2,647		637

(1)	Non-performing loans include loans for which Farmington Bank does not accrue interest (non-accrual loans) and loans 90 days past due and still accruing interest.

	Years Ended December 31,
	2010		2009		2008			2007			2006
(Dollars in thousands)

Selected Operating Data:
Interest income	$	61,063	$	57,975	$	55,718		$	51,417		$	46,896
Interest expense		11,613		17,408		22,605			23,325			18,139
Net interest income		49,450		40,567		33,113			28,092			28,757
Provision for (reduction in) allowances for loan losses		6,694		7,896		2,117			(706	)		(474	)
Net interest income after provision for loan losses		42,756		32,671		30,996			28,798			29,231
Noninterest income (loss)		6,889		3,635		(560	)		2,839			2,159
Noninterest expense, excluding contribution to existing charitable foundation		42,674		34,747		27,343			23,920			21,310
Contribution to existing charitable foundation		-		495		534			328			250
Total noninterest expense		42,674		35,242		27,877			24,248			21,560
Income before income taxes		6,971		1,064		2,559			7,389			9,830
Provision for income taxes		2,102		175		613			2,249			2,900

Net income	$	4,869	$	889	$	1,946		$	5,140		$	6,930

	At or For the Years Ended December 31,
	2010			2009			2008			2007			2006
Selected Financial Ratios and Other Data:

Performance Ratios:
Return on average assets		0.35	%		0.07	%		0.19	%		0.56	%		0.80	%
Return on average equity		4.95	%		0.95	%		2.13	%		6.03	%		9.12	%
Interest rate spread (1)		3.62	%		3.31	%		2.94	%		2.72	%		3.08	%
Net interest margin (2)		3.76	%		3.57	%		3.40	%		3.30	%		3.54	%
Non-interest expense to average assets		3.05	%		2.94	%		2.69	%		2.66	%		2.49	%
Efficiency ratio (3)		75.75	%		79.73	%		85.64	%		78.39	%		69.74	%
Efficiency ratio, excluding existing foundation contribution		75.75	%		78.61	%		84.00	%		77.33	%		68.93	%
Average interest-earning assets to average interest-bearing liabilities		115.46	%		117.12	%		119.43	%		121.24	%		120.81	%

Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		1.76	%		1.54	%		1.18	%		1.20	%		1.37	%
Allowance for loan losses as a percent of non-performing loans		117.00	%		109.90	%		162.75	%		306.91	%		1304.87	%
Net charge-offs (recoveries) to average loans		0.21	%		0.17	%		0.04	%		(0.08	)%		(0.09	)%
Non-performing loans as a percent of total loans		1.50	%		1.41	%		0.73	%		0.39	%		0.10	%
Non-performing assets as a percent of total assets		1.25	%		1.18	%		0.56	%		0.28	%		0.07	%

Capital Ratios:
Capital to total assets at end of period		6.71	%		7.46	%		8.28	%		9.40	%		9.19	%
Average capital to average assets		7.23	%		7.80	%		8.83	%		9.35	%		8.77	%
Tier I capital to risk-weighted assets		9.02	%		9.23	%		11.28	%		13.24	%		14.14	%
Tier I capital to total average assets		6.48	%		7.37	%		8.31	%		9.55	%		9.53	%
Total capital to risk-weighted assets		10.28	%		10.48	%		12.53	%		14.47	%		15.40	%
Total capital to total average assets		6.80	%		7.82	%		8.76	%		9.80	%		9.48	%

Other Data:
Number of full service offices		15			12			12			12			11
Number of limited service offices		4			4			4			4			4

(1)	Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities.

(2)	Represents net interest income as a percent of average interest-earning assets.

(3)	Represents non-interest expense divided by the sum of net interest income and non-interest income.

F ORWARD-LOOKING STATEMENTS

This prospectus contains “ forward-looking statements. ” You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements include, but are not limited to:

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statements of our goals, intentions and expectations;

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statements regarding our business plans, prospects, growth and operating strategies;

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statements regarding the asset quality of our loan and investment portfolios; and

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estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

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Local, regional and national business or economic conditions may differ from those expected.

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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.

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The ability to increase market share and control expenses may be more difficult than anticipated.

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Changes in laws and regulatory requirements (including those concerning taxes, banking, securities and insurance) may adversely affect us or our business.

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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.

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Future changes in interest rates may reduce our profits which could have a negative impact on the value of our stock.

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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.

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Changes in demand for loan products, financial products and deposit flow could impact our financial performance.

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Strong competition within our market area may limit our growth and profitability.

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We may not manage the risks involved in the foregoing as well as anticipated.

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If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

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Our stock value may be negatively affected by federal regulations and articles of incorporation provisions restricting takeovers.

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Implementation of stock benefit plans will increase our costs, which will reduce our income.

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The Dodd-Frank Act was signed into law on July 21, 2010 and is expected to result in dramatic regulatory changes that will affect the industry in general, and impact our competitive position in ways that can’t be predicted at this time.

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The Emergency Economic Stabilization Act (“EESA”) of 2008 has and may continue to have a significant impact on the banking industry.

Any forward-looking statements made by or on behalf of us in this Prospectus speak only as of the date of this Prospectus. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. The reader should, however, consult any further disclosures of a forward-looking nature we may make in future filings.

H OW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

Although we are unable to determine what the actual net proceeds from the sale of the shares of common stock in the offering will be until the offering is completed, we anticipate that the net proceeds will be between $ 107.6 million and $ 146.2 million, or up to $ 168.5 million if the offering range is increased by 15%, assuming that 100% of the shares of common stock will be sold in the subscription offering.

A summary of the anticipated net proceeds at the minimum, midpoint, maximum and adjusted maximum of the offering range and of the distribution of the net proceeds is as follows:


						Based Upon the Sale at $10.00 Per Share of
	Minimum 11,050,000 Shares					Midpoint 13,000,000 Shares					Maximum 14,950,000 Shares					Adjusted Maximum 17,192,500 Shares (1)
	Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds			Amount		Percent of Net Proceeds
	(Dollars in thousands)

Gross offering proceeds	$	110,500				$	130,000				$	149,500				$	171,925
Less offering expenses		2,893					3,072					3,251					3,457
Net offering proceeds	$	107,607		100.0	%	$	126,928		100.0	%	$	146,249		100.0	%	$	168,468		100.0	%

Distribution of net proceeds:
Proceeds contributed to Farmington Bank	$	53,803		50.0	%	$	63,464		50.0	%	$	73,125		50.0	%	$	84,234		50.0	%
Loan to employee stock ownership plan		9,194		8.5	%		10,816		8.5	%		12,438		8.5	%		14,304		8.5	%
Proceeds retained by FCB (1)	$	44,610		41.5	%	$	52,648		41.5	%	$	60,686		41.5	%	$	69,930		41.5	%

(1)

As adjusted to give effect to an increase in the number of shares, which could occur due to a 15.0% increase in the offering range to reflect a greater demand for the shares or changes in market or financial conditions following the commencement of the offering. Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of Farmington Bank’s deposits. The net proceeds may vary because total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if a syndicated community offering were used to sell shares of common stock not purchased in the subscription and community offerings.

FCB May Use the Proceeds it Retains From the Offering:

●

to invest in securities;

●

to deposit funds in Farmington Bank;

●

to repay short term borrowings;

●

to contribute additional capital to Farmington Bank;

●

to finance strategic growth opportunities, such as acquisitions of other banking institutions or financial services related businesses, although we do not currently have any agreements or understandings regarding any specific acquisition opportunities;

●

to pay cash dividends to stockholders;

●

to fund stock based compensation plans;

●

to repurchase shares of our common stock; and

●

for other general corporate purposes.

FCB expects to contribute 50% of the net offering proceeds to Farmington Bank for working capital to be used by Farmington Bank and 8.5% of the net offering proceeds to fund a loan to Farmington Bank’s employee stock ownership plan to purchase up to 8.0% of the shares of common stock issued and outstanding after the offering (between $ 9.2 million and $ 12.4 million, or $ 14.3 million if the offering is increased by 15.0%). The remaining 41.5% of the net offering proceeds will be retained by FCB. Initially, FCB intends to invest the proceeds retained in the offering by FCB in short-term liquid investments, such as U.S. treasury and government agency securities, mortgage-backed securities and cash and cash equivalents, or deposit the funds in Farmington Bank. Pursuant to Connecticut banking regulations, FCB may not repurchase shares of our common stock during the first year following the completion of the conversion and the offering, except under limited circumstances, such as to fund tax-qualified employee stock benefit plans or management recognition plans that have been approved by stockholders.

Farmington Bank May Use the Net Proceeds it Receives From the Offering:

●

to grow its balance sheet through loan origination and deposit generation;

●

to enhance existing products and services and support the development of new products and services;

●

to expand its banking franchise through de novo branching; and

●

for other general corporate purposes.

The use of the proceeds outlined above may change based on changes in interest rates, equity markets, laws and regulations affecting the financial services industry, our relative position in the financial services industry, the attractiveness of potential acquisitions to expand our operations, and overall market conditions.

O UR DIVIDEND POLICY

Following completion of the offering, our board of directors will have the authority to declare dividends on our common stock, subject to statutory and regulatory requirements. In the future, our board of directors intends to consider a policy of paying cash dividends on the common stock. However, no decision has been made with respect to the payment of dividends. The payment of dividends will depend upon a number of factors, including capital requirements, FCB and Farmington Bank’s financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions that affect the payment of dividends by Farmington Bank to FCB. No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future. Special cash dividends, stock dividends or returns of capital, to the extent permitted by applicable policy and regulation, may be paid in addition to, or in lieu of, regular cash dividends.

Dividends from FCB will depend, in part, upon receipt of dividends from Farmington Bank, because FCB initially will have no source of income other than dividends from Farmington Bank, earnings from the investment of proceeds from the sale of shares of common stock, and interest payments with respect to FCB’s loan to the employee stock ownership plan. Under Connecticut law and regulations, Farmington Bank may pay cash dividends out of its net profits. For purposes of this restriction, “net profits” represents the remainder of all earnings from current operations. Further, the total amount of all dividends declared by Farmington Bank in any year may not exceed the sum of its net profits for the year in question combined with its retained net profits from the preceding two years. Federal law also prevents Farmington Bank from paying dividends or making other capital distributions that, if by doing so, would cause it to become “undercapitalized.” The FDIC may limit Farmington Bank’s ability to pay dividends. For information concerning additional federal and state law and regulations regarding the ability of Farmington Bank to make capital distributions, including the payment of dividends to FCB, see “SUPERVISION AND REGULATION.”

Unlike Farmington Bank, FCB is not restricted by the FDIC’s regulations on the payment of dividends to its stockholders, although the source of dividends will depend on the net proceeds retained by us and earnings thereon, and dividends from Farmington Bank. Pursuant to Connecticut banking regulations, during the three-year period following the conversion and the offering, we will not take any action to declare an extraordinary dividend to stockholders, and no dividend will be paid to our stockholders if such dividends would reduce our stockholders’ equity below the amount of the liquidation account required to be established in connection with the conversion. In addition, FCB will be subject to Maryland state law limitations on the payment of dividends. Maryland law generally limits dividends to an amount equal to the excess of our capital surplus over payments that would be owed upon dissolution to stockholders whose preferential rights upon dissolution are superior to those receiving the dividend, and to an amount that would not make us insolvent.

See “SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA” and “MARKET FOR THE COMMON STOCK” for information regarding our historical dividend payments.

M ARKET FOR THE COMMON STOCK

FCB has never issued capital stock to the public. We anticipate that our common stock will be quoted on the Nasdaq Global Market. We will try to get at least three market makers to make a market in our common stock. Keefe, Bruyette & Woods, Inc. has advised us that it intends to make a market in our common stock following the offering, but it is under no obligation to do so. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in our common stock, there can be no assurance that we will be successful in obtaining such commitments.

The development of an active trading market depends on the existence of willing buyers and sellers, the presence of which is not within our control, or that of any market maker. The number of active buyers and sellers of the shares of common stock at any particular time may be limited. Under such circumstances, you could have difficulty selling your shares of common stock on short notice, and, therefore, you should not view the shares of common stock as a short-term investment. We cannot assure you that an active trading market for the common stock will develop or that, if it develops, it will continue. Nor can we assure you that, if you purchase shares of common stock, you will be able to sell them at or above $10.00 per share. See “RISK FACTORS – There may be a limited market for our common stock, which may lower our stock price and make it more difficult for investors to sell their shares of our common stock” on page ___.

HI STORICAL AND UNAUDITED PRO FORMA REGULATORY CAPITAL COMPLIANCE

At December 31 , 2010, Farmington Bank exceeded all of the applicable regulatory capital requirements and was considered “well capitalized” under prompt corrective action provisions. The table below sets forth the historical equity capital and regulatory capital of Farmington Bank at December 31 , 2010, and the pro forma regulatory capital of Farmington Bank, after giving effect to the sale of shares of common stock at a $10.00 per share purchase price and assuming the receipt by Farmington Bank of between $ 53.8 million and $ 84.2 million of the net offering proceeds at the minimum and adjusted maximum of the offering range, respectively. The table assumes the receipt by Farmington Bank of 50% of the net offering proceeds and that 100% of the shares of common stock will be sold in the subscription offering.

						Unaudited Pro Forma at December 31 2010, Based Upon the Sale in the Offering of
	Farmington Bank Historical at December 31, 2010					Minimum 11,050,000 Shares							Midpoint 13,000,000 Shares							Maximum 14,950,000 Shares							Adjusted Maximum 17,192,500 Shares (1)
	Amount		Percent of Assets (2)				Amount			Percent of Assets (2)				Amount			Percent of Assets (2)				Amount			Percent of Assets (2)				Amount			Percent of Assets
	(Dollars in thousands)

Equity capital	$	94,893		6.70	%		$	134,906			9.17	%		$	142,133			9.60	%		$	149,360			10.03	%		$	157,671			10.51	%

Tier 1 (leverage) capital (4)(5)	$	97,194		6.47	%		$	137,207			8.82	%		$	144,434			9.23	%		$	151,661			9.63	%		$	159,972			10.09	%
Tier 1 (leverage) requirement (3)		75,098		5.00				77,788			5.00				78,271			5.00				78,754			5.00				79,309			5.00
Excess	$	22,096		1.47	%		$	59,419			3.82	%		$	66,163			4.23	%		$	72,907			4.63	%		$	80,663			5.09	%

Tier 1 risk-based capital (5)	$	97,194		9.01	%		$	137,207			12.59	%		$	144,434			13.23	%		$	151,661			13.87	%		$	159,972			14.60	%
Tier 1 risk-based requirement		64,732		6.00				65,377			6.00				65,493			6.00				65,609			6.00				65,743			6.00
Excess	$	32,462		3.01	%		$	71,830			6.59	%		$	78,941			7.23	%		$	86,052			7.87	%		$	94,229			8.60	%

Total risk-based capital (4)(5)	$	110,772		10.27	%			150,785			13.84	%			158,012			14.48	%			165,239			15.11	%			173,550			15.84	%
Total risk-based requirement (3)		107,886		10.00				108,962			10.00				109,156			10.00				109,349			10.00				109,571			10.00
Excess	$	2,886		0.27	%		$	41,823			3.84	%		$	48,856			4.48	%		$	55,890			5.11	%		$	63,979			5.84	%

Reconciliation of capital:
Net Proceeds to Farmington
Bank							$	53,803						$	63,464						$	73,125						$	84,234
Less: employee stock
ownership plan								(9,194	)						(10,816	)						(12,438	)						(14,304	)
Less: restricted stock plan								(4,597	)						(5,408	)						(6,219	)						(7,152	)
Pro Forma increase in Tier 1
and risk-based capital							$	40,012						$	47,240						$	54,468						$	62,778

(1)	As adjusted to give effect to an increase in the number of shares that could occur due to a 15.0% increase in the offering range to reflect a greater demand for the shares or changes in market or financial conditions following the commencement of the offering.

(2)	Tangible and core capital levels are shown as a percentage of total adjusted assets. Risk-based capital levels are shown as a percentage of risk-weighted assets.

(3)

The current core capital requirement for financial institutions is 4.0% of total adjusted assets for financial institutions that receive the highest supervisory rating for safety and soundness and a 4.0% to 5.0% core capital ratio requirement for all other financial institutions. In addition, the FDIC requires a Tier 1 risk-based capital ratio of 4.0% or greater.

(4)	Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20.0% risk weighting.

(5)

Pro forma capital levels assume that the employee stock ownership plan purchases 8.0% of the shares of common stock sold in the offering with funds we lend. Pro forma GAAP and regulatory capital have been reduced by the amount required to fund this plan. See “MANAGEMENT” for a discussion of our employee stock ownership plan.

C APITALIZATION

The following table presents the historical consolidated capitalization of the MHC and Farmington Bank at December 31, 2010 and the pro forma consolidated capitalization of FCB after giving effect to the conversion and offering, based upon the assumptions set forth in the “PRO FORMA DATA” section.


	Unaudited Pro Forma at December 31, 2010, Based upon the Sale at $10.00 Per Share of
	Historical at December 31, 2010			Minimum 11,050,000 Shares			Midpoint 13,000,000 Shares			Maximum 14,950,000 Shares			Adjusted Maximum 17,192,500 Shares (1)
	(Dollars in thousands)

Deposits (2)	$	1,108,505		$	1,108,505		$	1,108,505		$	1,108,505		$	1,108,505
Borrowed funds		176,029			176,029			176,029			176,029			176,029
Total deposits and borrowed funds	$	1,284,534		$	1,284,534		$	1,284,534		$	1,284,534		$	1,284,534
Stockholders’ equity:
Common stock, no par value, 30,000,000 shares authorized; shares to be issued as reflected (3)(4)	$	--		$	115		$	135		$	155		$	179
Additional paid-in capital (3)		--			111,912			131,993			152,074			175,167
Retained earnings (5)		97,513			97,513			97,513			97,513			97,513
Accumulated other comprehensive income		(2,520	)		(2,520	)		(2,520	)		(2,520	)		(2,520	)

After-tax expense of foundation (6)		--			(4,420	)		(5,200	)		(5,980	)		(6,877	)
Tax benefit of contribution to foundation		--			1,459			1,716			1,973			2,269
Common stock acquired by employee stock ownership plan (7)		--			(9,194	)		(10,816	)		(12,438	)		(14,304	)
Common stock acquired by restricted stock plan		--			(4,597	)		(5,408	)		(6,219	)		(7,152	)
Total shareholders’ equity	$	94,993		$	190,268		$	207,413		$	224,558		$	244,275

Pro Forma Shares Outstanding
Total shares issued		--			11,492,000			13,520,000			15,548,000			17,880,200
Shares sold in offering		--			11,050,000			13,000,000			14,950,000			17,192,500
Shares issued to the foundation		--			442,000			520,000			598,000			687,700

Total shareholders’ equity as a percentage of total assets (2)		6.71	%		12.58	%		13.56	%		14.52	%		15.60	%
Tangible equity as a percentage of assets		6.71	%		12.58	%		13.56	%		14.52	%		15.60	%

(1)	As adjusted to give effect to an increase in the number of shares of common stock that could occur due to a 15.0% increase in the offering range to reflect a greater demand for shares or changes in market or general financial conditions following the commencement of the offering.

(2)	Does not reflect withdrawals from deposit accounts for the purchase of shares of common stock in the offering. These withdrawals would reduce pro forma deposits and assets by the amount of the withdrawals.

(3)

On a pro forma basis, FCB common stock and additional paid-in capital have been revised to reflect the number of shares of FCB common stock to be outstanding, which is 11,050,000 shares, 13,00,000 shares, 14,950,000 shares and 17,192,500 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively.

(4)

No effect has been given to the issuance of additional shares of FCB common stock pursuant to the vesting of restricted stock awards or the exercise of options under a stock benefit plan. If this plan is implemented within the first year after the closing of the offering, an amount up to 4.0% and 10.0% of the shares of FCB common stock sold in the offering will be reserved for issuance upon the vesting and exercise of restricted stock options under the plan, respectively. See “MANAGEMENT”.

(5)	The retained earnings of Farmington Bank will be substantially restricted after the offering. See “THE CONVERSION AND OFFERING – Liquidation Rights” and “SUPERVISION AND REGULATION”.

(6)

Represents the expense of contribution to the charitable foundation based on a 33% tax rate. The realization of the deferred tax benefit is limited annually to a maximum deduction for charitable contributions equal to 10% of our annual taxable income, subject to our ability to carry forward for federal or state purposes any unused portion of the deduction for the five years following the year in which the contribution is made.

(7)

Assumes that 8.0% of the shares sold in the offering will be acquired by the employee stock ownership plan financed by a loan from FCB. The loan will be repaid principally from Farmington Bank’s contributions to the employee stock ownership plan. Since FCB will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no liability will be reflected on FCB’s consolidated financial statements. Accordingly, the amount of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total stockholders’ equity.

U NAUDITED PRO FORMA DATA

The following table summarizes historical data of the MHC and pro forma data at and for the fiscal year ended December 31, 2010. This information is based on assumptions set forth below and in the tables, and should not be used as a basis for projections of market value of the shares of common stock following the offering. Moreover, pro forma stockholders’ equity per share does not give effect to the liquidation account to be established in the offering or, in the unlikely event of a liquidation of Farmington Bank, to the tax effect of the recapture of the bad debt reserve. See “THE CONVERSION AND OFFERING – Liquidation Rights”.

The net proceeds in the tables are based upon the following assumptions:

(i)

100% of the shares of common stock will be sold in the subscription and community offering;

(ii)

197,500 shares of common stock will be purchased by our executive officers and directors;

(iii)

our employee stock ownership plan will purchase 8.0% of the shares of common stock sold in the offering and contributed to the charitable foundation, with a loan from FCB. The loan will be repaid in substantially equal payments of principal and interest over a period of 15 years;

(iv)

FCB will contribute to the charitable foundation a number of shares equal to 4.0% of the shares sold in the offering;

(v)

Keefe, Bruyette & Woods, Inc. will receive a fee equal to 1.0% of the dollar amount of shares of common stock sold in the subscription offering and the community offering. No fee will be paid to Keefe, Bruyette & Woods, Inc. with respect to shares of common stock purchased by our qualified and non-qualified employee stock benefit plans, or stock purchased by our officers, directors and employees, and their immediate families; and

(vi)

total expenses of the offering, including the marketing fees to be paid to Keefe, Bruyette & Woods, Inc., will be between $ 2.9 million at the minimum of the offering range and $ 3.5 million at the maximum of the offering range, as adjusted.

We calculated pro forma consolidated net earnings for the fiscal year ended December 31, 2010 as if the estimated net proceeds we received had been invested at the beginning of the applicable period at an assumed interest rate of 2.01 % ( 1.35 % on an after-tax basis), which represented the yield on the five-year Treasury Bond as of December 31 , 2010. This method reflects the approximate short-term use of proceeds anticipated by FCB. The effect of withdrawals from deposit accounts for the purchase of shares of common stock has not been reflected. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of common stock. No effect has been given in the pro forma stockholders’ equity calculations for the assumed earnings on the net proceeds.

The pro forma table gives effect to the implementation of one or more stock benefit plans. Subject to the receipt of stockholder approval, we have assumed that the stock benefit plan will acquire for restricted stock awards a number of shares of common stock equal to 4.0% of the shares of common stock sold in the offering and contributed to the charitable foundation at a price of $10.00 per share, and that such shares of common stock granted under the plans will vest over a five-year period. We have also assumed that the stock benefit plans will grant options to acquire shares of common stock equal to 10.0% of the shares of common stock sold in the offering and contributed to the charitable foundation. In preparing the table below, we have assumed that the exercise price of the stock options and the market price of the stock at the date of grant were $10.00 per share and that the stock options had a term of ten years and vested over five years. We applied the Black-Scholes option pricing model to estimate a grant-date fair value of $ 3.48 for each option. Finally, we assumed that 25% of the stock options were non-qualified options granted to directors, resulting in a tax benefit (at an assumed tax rate of 33%) for a deduction equal to the grant date fair value of the options.

We may grant restricted stock or options under a stock benefit plan in excess of 4.0% and 10.0%, respectively, of the shares sold in the offering if the stock benefit plan is adopted more than 12 months following the stock offering. In addition, we may grant options that vest sooner than over a five-year period if the stock benefit plan is adopted more than 12 months following the stock offering.

The pro forma stockholders’ equity calculation in the table gives effect to the estimated after-tax expense associated with the stock contribution to the charitable foundation. The expense of the stock contribution to the charitable foundation is not reflected in the pro forma net income or pro forma net income per share. The pro forma data assumes that we will realize 100.0% of the income tax benefit as a result of the contribution to the foundation based on a 33% tax rate. The realization of the tax benefit is limited annually to 10% of our annual taxable income. However for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

As discussed under “HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING,” we intend to contribute shares from the stock offering to the Farmington Bank Community Foundation, Inc. in an amount equal to 4.0% of the stock offering and contribute at least 50% of the net proceeds to Farmington Bank. We will use a portion of the proceeds we retain for the purpose of making a loan to the employee stock ownership plan, and retain the rest of the proceeds for future use.

The pro forma table does not give effect to:

●

withdrawals from deposit accounts for the purpose of purchasing shares of common stock in the stock offering;

●

our results of operations after December 31 , 2010 or after the stock offering; or

●

changes in the market price of the shares of common stock after the stock offering.

The following pro forma information may not represent the financial effects of the stock offering at the date on which the stock offering actually occurs and you should not use the table to indicate future results of operations. Pro forma stockholders’ equity represents the difference between the stated amount of our assets and liabilities, computed in accordance with generally accepted accounting principles. We did not increase or decrease stockholders’ equity to reflect the difference between the carrying value of loans and other assets and their market value. Pro forma stockholders’ equity is not intended to represent the fair market value of the shares of common stock and may be different than the amounts that would be available for distribution to stockholders if we liquidated. Pro forma stockholders’ equity does not give effect to the impact of intangible assets or the liquidation account we will establish in connection with the offering in the unlikely event we are liquidated.


	At or for the Year Ended December 31, 2010 (Unaudited) Based upon the Sale at $10.00 Per Share of
	(Dollars in thousands, except per share amounts)
	Minimum 11,050,000 Shares			Midpoint 13,000,000 Shares			Maximum 14,950,000 Shares			Adjusted Maximum 17,192,500 Shares (1)

Gross proceeds of offering	$	110,500		$	130,000		$	149,500		$	171,925
Plus: market value of shares issued to the charitable foundation		4,420			5,200			5,980			6,877
Pro forma market capitalization		114,920			135,200			155,480			178,802

Pro forma shares issued in offering		11,050,000			13,000,000			14,950,000			17,192,500
Pro forma shares issued to foundation		442,000			520,000			598,000			687,700
Total		11,492,000			13,520,000			15,548,000			17,880,200

Gross proceeds of offering	$	110,500		$	130,000		$	149,500		$	171,925
Less: Expenses		2,893			3,072			3,251			3,457
Estimated Net Proceeds		107,607			126,928			146,249			168,468
Less: common stock purchased by employee stock ownership plan (2)		(9,194	)		(10,816	)		(12,438	)		(14,304	)
Less: common stock purchased by the restricted stock plan (4)		(4,597	)		(5,408	)		(6,219	)		(7,152	)
Estimated net proceeds, as adjusted	$	93,816		$	110,704		$	127,592		$	147,012

Consolidated Net Income :
Historical	$	4,869		$	4,869		$	4,869		$	4,869
Pro forma income on net proceeds		1,263			1,491			1,718			1,980
Pro forma employee stock ownership plan adjustment (2)		(411	)		(483	)		(556	)		(639	)
Pro forma restricted stock plan adjustment (3)		(616	)		(725	)		(833	)		(958	)
Pro forma stock option plan adjustment (4)		(734	)		(863	)		(993	)		(1,142	)
Pro forma net income	$	4,371		$	4,289		$	4,205		$	4,110

Per share net income (reflects ASC 718-40)
Historical	$	0.46		$	0.39		$	0.34		$	0.30
Pro forma income on net proceeds		0.12			0.12			0.12			0.12
Pro forma employee stock ownership plan adjustment (2)		(0.04	)		(0.04	)		(0.04	)		(0.04	)
Pro forma restricted stock plan adjustment (3)		(0.06	)		(0.06	)		(0.06	)		(0.06	)
Pro forma stock option plan adjustment (4)		(0.07	)		(0.07	)		(0.07	)		(0.07	)
Pro forma net income per share (5)	$	0.41		$	0.34		$	0.29		$	0.25

Stock price as a multiple of pro forma earnings per share		18.29	x		22.06	x		25.86	x		30.00	x
Shares used for calculating pro forma earnings per share		10,633,931			12,510,507			14,387,083			16,545,145

Shareholders’ equity :
Historical	$	94,993		$	94,993		$	94,993		$	94,993
Estimated net proceeds		107,607			126,928			146,249			168,469
Plus: market value of shares issued to charitable foundation		4,420			5,200			5,980			6,877
Plus: tax benefit of contribution to charitable foundation		1,459			1,716			1,973			2,269
Less: common stock acquired by employee stock ownership plan (2)		(9,194	)		(10,816	)		(12,438	)		(14,304	)
Less: common stock acquired by restricted stock plan (3)		(4,597	)		(5,408	)		(6,219	)		(7,152	)
Less: expense of contribution to charitable foundation		(4,420	)		(5,200	)		(5,980	)		(6,877	)
Pro forma stockholders’ equity		190,268			207,413			224,558			244,275
Intangible assets		-			-			-			-
Pro forma tangible stockholders’ equity	$	190,268		$	207,413		$	224,558		$	244,275

Stockholders’ equity per share :
Historical	$	8.27		$	7.02		$	6.10		$	5.31
Estimated net proceeds		9.36			9.39			9.41			9.42
Plus: market value of shares issued to charitable foundation		0.38			0.38			0.38			0.38
Plus: tax benefit of contribution to charitable foundation		0.13			0.13			0.13			0.13
Less: common stock acquired by employee stock ownership plan (2)		(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: common stock acquired by restricted stock plan (3)		(0.40	)		(0.40	)		(0.40	)		(0.40	)
Less: expense of contribution to charitable foundation		(0.38	)		(0.38	)		(0.38	)		(0.38	)
Pro forma stockholders’ equity per share	$	16.56		$	15.34		$	14.44		$	13.66
Intangible assets		-			-			-			-
Pro forma tangible stockholders’ equity per share (5)	$	16.56		$	15.34		$	14.44		$	13.66

Offering price as percentage of equity per share		60.39	%		65.19	%		69.25	%		73.21	%

Offering price as percentage of tangible equity per share		60.39	%		65.19	%		69.25	%		73.21	%

Shares used for pro forma stockholders’ equity per share		11,492,000			13,520,000			15,548,000			17,880,200

(1) As adjusted to give effect to an increase in the number of shares of common stock that could occur due to a 15.0% increase in the offering range to reflect a greater demand for shares or changes in market or general financial conditions following the commencement of the offering.

(2) Assumes that 8.0% of shares of common stock issued in the offering (including shares contributed to the charitable foundation) will be purchased by the employee stock ownership plan. For purposes of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from FCB. Farmington Bank intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the required principal and interest payments on the debt. Farmington Bank’s total annual payments on the employee stock ownership plan debt are based upon 15 equal annual installments of principal and interest. Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans” (“SOP 93-6”), requires that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees. The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the number of loan repayment installments assumed to be paid by Farmington Bank, the fair value of the common stock remains equal to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of 33.0%. The unallocated employee stock ownership plan shares are reflected as a reduction of stockholders’ equity. No reinvestment is assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 61,291, 72,107, 82,923, and 95,361 shares were committed to be released during the period at the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively, and in accordance with SOP 93-6, only the employee stock ownership plan shares committed to be released during the period were considered outstanding for purposes of income per share calculations.

(3) If approved by FCB’s stockholders, one or more stock-based benefit plans may purchase an aggregate number of shares of common stock equal to 4.0% of the shares to be issued in the offering (including shares contributed to the charitable foundation) (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans, and purchases by the plans may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from FCB or through open market purchases. The funds to be used by the stock-based benefit plans to purchase the shares will be provided by FCB. The table assumes that (i) the stock-based benefit plans acquire the shares through open market purchases at $10.00 per share, (ii) 15.0% of the amount contributed to the stock-based benefit plans is amortized as an expense during the period and (iii) the stock-based benefit plans expense reflects an effective combined federal and state tax rate of 33.0%. Assuming stockholder approval of the stock-based benefit plans and that shares of common stock (equal to 4.0% of the shares issued sold in the offering (including shares contributed to the charitable foundation)) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 3.8%.

(4) If approved by FCB’s stockholders, one of more stock-based benefit plans may grant options to acquire an aggregate number of shares of common stock equal to 10.0% of the shares to be issued in the offering (including shares contributed to the charitable foundation) (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans may not occur earlier than six months after the completion of the conversion. In calculating the pro forma effect of the stock options to be granted under stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the date of grant were $10.00 per share. The fair value of stock options has been estimated at $ 3.48 per option using the Black-Scholes option pricing model, with the following assumptions; a grant-date share price and option exercise price of $10.00 and vesting to take place over five years. The actual value of option grants will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted. There can be no assurance that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares to satisfy the exercise of options under the stock-based benefit plans is obtained from the issuance of authorized but unissued shares, our net income per share and stockholders’ equity per share would decrease. Assuming shares of common stock used to fund stock options (equal to 10.0% of the shares issued in the offering (including shares contributed to the charitable foundation)) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 9.1%.

(5) Income per share computations are determined by taking the number of shares assumed to be issued in the offering (including shares contributed to the charitable foundation) and, in accordance with SOP 93-6, subtracting the employee stock ownership plan shares that have not been committed for release during the period and subtracting non-vested stock awards granted under one or more stock-based benefit plans. See note 2, above.

(6) The retained earnings of Farmington Bank will be substantially restricted after the conversion. See “Our Policy Regarding Dividends,” “The Conversion and Offering—Liquidation Rights” and “Supervision and Regulation.” The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering.

At December 31, 2010, income at risk (i.e., the change in net interest income) decreased 9.8 % and increased 2.4 % based on a 400 basis point average increase or a 100 basis point average decrease, respectively. At December 31, 2009, income at risk decreased 9.7% and increased 0.6% based on a 300 basis point average increase or a 100 basis point average decrease, respectively. The following table depicts the percentage increase and/or decrease in estimated net interest income over twelve months based on the two scenarios run during each of the periods presented:

	Percentage Increase/(Decrease) in Estimated Net Interest Income Over 12 Months

	At December 31 , 2010			At December 31, 2009

300 basis point increase			*		(9.71	)%
400 basis point increase		( 9.75	) %		*
100 basis point decrease		2.38	%		0.55	%

*Scenario not run during period.

Liquidity and Capital Resources:

We maintain liquid assets at levels we consider adequate to meet our liquidity needs. We adjust our liquidity levels to fund loan commitments, repay our borrowings, fund deposit outflows, fund operations and pay escrow obligations on items in our loan portfolio. We also adjust liquidity as appropriate to meet asset and liability management objectives.

Our primary sources of liquidity are deposits, principal repayment and prepayment of loans, the sale in the secondary market of loans held for sale, maturities and sales of investment securities and other short-term investments, periodic pay downs of mortgage-backed securities, and earnings and funds provided from operations. While scheduled principal repayments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions and rates offered by our competitors. We set the interest rates on our deposits to maintain a desired level of total deposits. In addition, we invest excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements. We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of December 31, 2010. We anticipate that we will maintain higher liquidity levels following the completion of the stock offering.

A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing and financing activities. At December 31, 2010, $ 18.6 million of our assets were invested in cash and cash equivalents compared to $28.3 million at December 31, 2009. Our primary sources of cash are principal repayments on loans, proceeds from the calls and maturities of investment securities, increases in deposit accounts, proceeds from residential loan sales and advances from FHLBB.

For the years ended December 31, 2010 and 2009 , loan originations and purchases, net of collected principal and loan sales, totaled $ 124.6 million and $215.8 million, respectively. Cash received from the sales and maturities of investment securities totaled $ 279.3 million and $65.1 million for the years ended December 31, 2010 and 2009, respectively, with a net gain on sale of $1.7 million for the year ended December 31 , 2010, compared to $65.1 million of available-for-sale securities sold with no gain or loss on sale for the year ended December 31, 2009. We purchased $321.7 million and $5.1 million of available-for-sale investment securities during the years ended December 31, 2010 and 2009 , respectively.

Liquidity management is both a daily and longer-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLBB, which provides an additional source of funds. At December 31 , 2010, we had $ 71.0 million in advances from the FHLBB and an additional available borrowing limit of $ 202.9 million, compared to $62.0 million in advances and an additional available borrowing limit of $252.8 million at December 31, 2009, based on collateral requirements of the FHLBB. Internal policies limit borrowings to 25.0% of total assets, or $ 354.0 million and $313.8 million at December 31 , 2010 and December 31, 2009, respectively. Other sources of funds include access to a pre-approved unsecured line of credit with PNC Bank for $10.0 million, which was undrawn at December 31, 2010. During 2010, we entered into the Federal Reserve Bank’s discount window loan collateral program that enables us to borrow up to $ 90.0 million on an overnight basis as of December 31 , 2010. The funding arrangement was collateralized by $150.0 million in pledged commercial real estate loans as of December 31 , 2010.

We had outstanding commitments to originate loans of $ 45.4 million and $41.5 million and unfunded commitments under construction loans, lines of credit and stand-by letters of credit of $ 188.6 million and $178.4 million at December 31 , 2010 and December 31, 2009, respectively. At December 31 , 2010 and December 31, 2009, time deposits scheduled to mature in less than one year totaled $ 362.7 million and $397.7 million, respectively. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as FHLBB advances, brokered deposits, our $10.0 million unsecured line of credit with PNC Bank, our $8.8 million secured line of credit with the FHLBB or our $ 90.0 million overnight borrowing arrangement with the Federal Reserve Bank in order to maintain our level of assets. Alternatively, we would reduce our level of liquid assets, such as our cash and cash equivalents in order to meet funding needs. In addition, the cost of such deposits may be significantly higher if market interest rates are higher or if there is an increased amount of competition for deposits in our market area at the time of renewal.

Net Interest Income Analysis: Average Balance Sheets, Interest and Yields/Costs

The following tables present the average balance sheets, average yields and costs and certain other information for the periods indicated therein. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero percent yield. The yields set forth below include the effect of net deferred costs and premiums that are amortized to interest income or expense.

	For the Years Ended December 31,
	2010							2009								2008
			Interest								Interest								Interest
	Average		and		Yield/				Average		and		Yield/				Average		and		Yield/
	Balance		Dividends		Cost				Balance		Dividends		Cost				Balance		Dividends		Cost
									(Dollars in thousands)
Interest-earning assets:
Loans receivable, net (1)	$	1,095,848	$	56,131		5.12	%		$	918,703	$	50,480		5.49	%		$	756,258	$	45,543		6.02	%
Investment securities		139,824		4,437		3.17	%			146,212		6,902		4.72	%			182,276		8,818		4.84	%
FHLBB stock		7,449		-		-				7,448		-		-				4,437		-		-
Federal funds sold and other short-term investments		70,991		495		0.70	%			63,466		593		0.93	%			32,299		1,357		4.20	%
Total interest-earning assets		1,314,112	$	61,063		4.65	%			1,135,829	$	57,975		5.10	%			975,270	$	55,718		5.71	%
Noninterest-earning assets		82,984								62,590								59,905

Total assets	$	1,397,096							$	1,198,419								1,035,175

Interest-bearing liabilities:
NOW and money market accounts	$	426,348	$	2,368		0.56	%		$	236,385	$	2,457		1.04	%		$	137,819		1,828		1.33	%
Savings accounts (2)		132,677		283		0.21	%			119,133		250		0.21	%			104,987		414		0.39	%
Time deposits		430,934		5,678		1.32	%			471,452		10,819		2.29	%			461,369		17,335		3.76	%
Total interest-bearing deposits		989,959		8,329		0.84	%			826,970		13,526		1.64	%			704,175		19,577		2.78	%
FHLB Advances		66,586		2,149		3.23	%			77,024		2,738		3.55	%			56,063		1,747		3.12	%
Repurchase agreement
borrowing		21,000		719		3.42	%			21,000		719		3.42	%			16,869		577		3.42	%
Repurchase liabilities		60,600		416		0.69	%			44,834		425		.95	%			39,516		704		1.78	%
Total interest-bearing liabilities		1,138,145	$	11,613		1.02	%			969,828	$	17,408		1.79	%			816,623	$	22,605		2.77	%
Noninterest-bearing deposits		134,924								114,060								110,869
Other noninterest-bearing liabilities		25,594								21,009								16,325
To tal liabilities		1,298,663								1,104,897								943,817
Shareholders’ equity		98,433								93,522								91,358
Total liabilities and shareholders’ equity	$	1,397,096							$	1,198,419							$	1,035,175

Net interest income			$	49,450							$	40,567							$	33,113
Net interest rate spread (3)						3.63	%							3.31	%							2.94	%
Net interest-earning assets (4)	$	175,967							$	166,001							$	158,647
Net interest margin (5)						3.76	%							3.57	%							3.40	%
Average interest-earning assets to average interest-bearing liabilities						115.46	%							117.12	%							119.43	%

(1)	Includes loans held for sale

(2)	Includes mortgagors’ and investors’ escrow accounts.

(3)	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5)	Net interest margin represents the annualized net interest income divided by average total interest-earning assets.

Rate Volume Analysis

The following tables set forth the effects of changing rates and volumes on net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the volume and rate columns. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Year Ended December 31, 2010 Compared to December 31, 2009									Year Ended December 31, 2009 Compared to December 31, 2008
	Increase (Decrease) Due To									Increase (Decrease) Due To
		Volume			Rate			Net			Volume			Rate			Net
	( Dollars in thousands)
Interest and dividend income:
Loans receivable, net	$	8,701		$	(3,050	)	$	5,651		$	8,342		$	(3,405	)	$	4,937
Investment securities		(104	)		(2,361	)		(2,465	)		(1,707	)		(209	)		(1,916	)
Federal Home Loan Bank stock		-			-			-			-			-			-
Fed Funds and other interest-earning assets		13			(111	)		(98	)		(3,937	)		3,173			(764	)
Total interest- earning assets		8,610			(5,522	)		3,088			2,698			(441	)		2,257
Interest expense:
NOW and money market accounts		374			(463	)		(89	)		902			(273	)		629
Savings accounts(1)		(4	)		37			33			66			(230	)		(164	)
Time deposits		(409	)		(4,732	)		(5,141	)		388			(6,904	)		(6,516	)
Total interest-bearing deposits		(39	)		(5,158	)		(5,197	)		1,356			(7,407	)		(6,051	)
FHLB Advances		(71	)		(518	)		(589	)		720			271			991
Repurchase agreement borrowing		-			-			-			141			1			142
Repurchase liabilities		5			(14	)		(9	)		113			(392	)		(279	)
Total interest-bearing liabilities		(105	)		(5,690	)		(5,795	)		2,330			(7,527	)		(5,197	)
Change in net interest income	$	8,715		$	168		$	8,883		$	368		$	7,086		$	7,454

(1)	Includes mortgagors’ and investors’ escrow accounts.

Contractual Obligations

The following tables present information indicating various obligations made by us as of December 31, 2010 and the respective maturity dates:


	Total		One Year or Less		More than One Year Through Three Years		More than Three Years Through Five Years		Over Five Years
	( Dollars in thousands)
FHLB advances (1)	$	71,000	$	8,000	$	27,000	$	36,000	$	--
Interest expense payable on FHLB Advances		6,327		2,035		3,355		937		--
Repurchase agreement borrowings		21,000		--		--		10,500		10,500
Operating leases (2)		18,133		1,951		4,066		3,889		8,227
Other liabilities (3)		11,715		897		1,997		2,208		6,613
Total Contractual Obligations	$	128,175	$	12,883	$	36,418	$	53,534	$	25,340

(1) Secured under a blanket security agreement on qualifying assets, principally mortgage loans.

(2) Represents non-cancelable operating leases for offices and office equipment.

(3) Consists of estimated benefit payments over the next 10 years to retirees under unfunded nonqualified pension plans.

Other Commitments

The following tables present information indicating various other commitments made by us as of December 31 , 2010 and the respective maturity dates:

	Total		One Year or Less		More than One Year Through Three Years		More than Three Years Through Five Years		Over Five Years
	( Dollars in thousands)
Real estate loan commitments (1)	$	23,189	$	23,189	$	--	$	--	$	--
Commercial business loan commitments (1)		3,220		3,220		--		--		--
Resort loan commitments (1)		19,000		19,000		--		--		--
Commercial business loan lines of credit		54,048		54,048		--		--		--
Unused portion of home equity lines of credit (2)		80, 410		937		6,971		11,719		60,783
Unused portion of construction loans		20,290		4,867		15,255		--		168
Unused portion of resort loans		23,602		3,876		8,237		784		10,705
Unused revolving lines of credit		355		355		--		--		--
Standby letters of credit		9,885		2,645		2,215		4,949		76
Total Other Commitments	$	233,999	$	112,137	$	32,678	$	17,452	$	71,732

General: Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract and generally have fixed expiration dates or other termination clauses.

(1) Commitments for loans are extended to customers for up to 60 days after which they expire.

(2) Unused portions of home equity lines of credit are available to the borrower for up to 10 years.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, other than noted above, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Recent Accounting Pronouncements

Intangibles-Goodwill and Other (Topic 350): In December 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-28, “Intangibles—Goodwill and Other (Topic 350), When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts”—ASU 2010-28 affects all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. ASU 2010-28 modifies Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For public entities, this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Adoption of ASU 2010-28 is not expected to have a significant impact on our consolidated financial statements.

Receivables (Topic 310) : In January 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. The amendments in this update temporarily delay the effective date of disclosures about troubled debt restructurings in ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The effective date for the troubled debt restructuring disclosures will be aligned with the effective date for new guidance for determining what constitutes a troubled debt restructuring. Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011. The adoption of ASU No. 2011-01 will not have a material impact on the financial statements as it impacts disclosures only.

In July 2010, the FASB issued ASU No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The statement is intended to improve the transparency of financial reporting by requiring enhanced disclosures about a bank’s allowance for loan losses and the credit quality of its financing receivables (generally defined as loans and leases). The primary goal of the disclosure requirements is to provide more information about the credit risk in a bank’s portfolio of loans and how that risk is analyzed and assessed in arriving at the allowance for loan loss. The guidance is effective for public entities for annual and interim reporting periods ending on or after December 15, 2010. The adoption of ASU No. 2010-06 on December 31, 2010 did not have a material impact on the financial statements as it only impacted disclosures .

Fair Value Measurement and Disclosure (Topic 820): In February 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements. The amendment to Topic 820, Fair Value Measurements and Disclosures, requires additional disclosures about fair value measurements including transfer in and out of Levels 1 and 2 and higher levels of disaggregation for the different types of financial instruments. For the reconciliation of Level 3 fair values measurements, information about purchases, sales, issuances and settlements should be presented separately. The guidance was effective for annual and interim reporting periods beginning after December 15, 2009, except for the disclosure of information about sales, issuances and settlements on a gross basis for assets and liabilities classified as level 3, which is effective for reporting periods beginning after December 15, 2010. The adoption of ASU No. 2010-06 on January 1, 2010 did not have a material impact on the financial statements as it impacts disclosures only .

Business Combinations (Topic 805): In December 2010, the FASB issued ASU 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations. The objective of this update is to address diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting only. This update also expands supplemental pro forma disclosures under Topic 805. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of ASU No. 2010-29 will not have an impact on the financial statements as it affects disclosures only and will apply prospectively to future business combinations.

Transfers of Financial Assets ( Topic 860 ) : In December 2009, the FASB issued ASU No. 2009- 16 codifying the new guidance issued in June 2009 regarding the Transfer of Financial Assets. This guidance requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk in the assets. The guidance eliminates the concept of a qualifying special-purpose entity, changes the requirements for the derecognition of financial assets, and enhances the disclosure requirements for sellers of the assets. This guidance was effective for the fiscal year beginning after November 15, 2009. The adoption of ASU No. 2009-16 on January 1, 2010 did not have a material impact on the financial statements .

Consolidation (Topic 810): In December 2009, the FASB issued ASU No. 2009-17 codifying the new guidance issued in June 2009 regarding Consolidations. The guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity (which would result in the enterprise being deemed the primary beneficiary of that entity and, therefore, obligated to consolidate the variable interest entity in its financial statements); to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to revise guidance for determining whether an entity is a variable interest entity; and to require enhanced disclosures that will provide more transparent information about an enterprise’s involvement with a variable interest entity. The guidance was effective for interim periods as of the beginning of the first annual reporting period beginning after November 15, 2009. The adoption of ASU No. 2009-17 on January 1, 2010 did not have a material impact on the financial statements.

Management has reviewed the recent accounting pronouncements discussed above and believes the adoption of these pronouncements will not have a material impact on our consolidated financial statements.

Impact of Inflation and Changing Prices

A financial institution’s asset and liability structure is substantially different from that of an industrial firm in that primarily all assets and liabilities of a bank are monetary in nature, with relatively little investments in fixed assets or inventories. Inflation has an important impact on the growth of total assets and the resulting need to increase equity capital at higher than normal rates in order to maintain an appropriate equity to assets ratio. Management believes that the impact of inflation on financial results depends on our ability to react to changes in interest rates and, by such reaction, reduce the inflationary impact on performance. Management has attempted to structure the mix of financial instruments and manage interest rate sensitivity in order to minimize the potential adverse effects of inflation or other market forces on net interest income and, therefore, earnings and capital.

B USINESS OF FCB

Since being formed in January, 2011, FCB has not engaged in any business. Upon completion of the offering, FCB will own all of the issued and outstanding common stock of Farmington Bank. FCB will direct, plan and coordinate Farmington Bank’s business activities. We expect FCB will retain no more than 50.0% of the net proceeds from the offering. A portion of the net proceeds retained by FCB will be used to make a loan to fund the purchase of shares of common stock by the Farmington Bank employee stock ownership plan. FCB intends to invest its capital as discussed in “HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING” on page [___].

In the future, FCB, as the holding company of Farmington Bank, will be authorized to pursue other business activities permitted by applicable laws and regulations for bank holding companies, which may include the acquisition of banking and financial services companies. We have no plans for any mergers or acquisitions, or other diversification of the activities of FCB at the present time.

Our cash flow will depend on earnings from the investment of the net proceeds we retain and any dividends received from Farmington Bank. FCB neither owns nor leases any property, but instead uses the premises, equipment and furniture of Farmington Bank. At the present time, we employ as officers only certain persons who are also officers of Farmington Bank. However, we use the support staff of Farmington Bank from time to time. These persons are not separately compensated by FCB. FCB may hire additional employees, as appropriate, to the extent it expands its business in the future.

B USINESS OF FARMINGTON BANK

Established in 1851, Farmington Bank is a full-service, community bank with 15 full service branch offices and four limited services offices, including our main office, located throughout Hartford County, Connecticut. We provide a full range of banking services to businesses, individuals and governments in Central Connecticut. Farmington Bank is regulated by the Connecticut Department of Banking and the FDIC. Farmington Bank’s deposits are insured to the maximum extent allowable under the Deposit Insurance Fund, which is administered by the FDIC. Farmington Bank is a member of the FHLBB. At December 31, 2010, Farmington Bank had approximately $ 1.4 billion in assets, $ 1.1 billion in deposits and total capital accounts of approximately $ 95.0 million.

Our business is headed by a seasoned management team with experience in commercial and residential lending at financial institutions throughout New England. This seasoned management team was brought on commencing in 2008, highlighted by the addition of John J. Patrick Jr. in March 2008 as our Chairman, President and Chief Executive Officer. Mr. Patrick is a former President and Chief Executive Officer of TD Banknorth, Connecticut division and, prior to that, Mr. Patrick was President of Glastonbury Bank & Trust Co., now a part of TD Bank Connecticut. Mr. Patrick and the other members of our management team, including Gregory White, our Chief Financial Officer, Michael Schweighoffer, our Chief Risk Officer, and David Blitz, our Director of Commercial Banking, each of whom joined Farmington Bank in 2009, have vast experience in such areas as commercial and consumer lending, credit analysis and risk management and in leading growth initiatives of other financial institutions.

●

strengthening our risk management and compliance procedures;

●

implementing an expansion strategy, opening three new branches since 2008;

●

adding cash management services, government banking and small business banking;

●

doubling the number of our commercial lenders and recruiting other experienced personnel to strengthen our finance department;

●

implementing a secondary market residential lending program; and

●

enhancing our technology to support our risk management program.

We also offer a full range of residential mortgage loan services. We will continue to invest in people, technology and the business of serving our customers as we pursue our strategic goals.

Since December 31, 2009, we have experienced asset growth of approximately $ 161.4 million or 12.9 %. We employed 278 full-time equivalent employees as of December 31, 2010. See “BUSINESS OF FARMINGTON BANK” for a more detailed discussion of our business.

Market Area

We operate in a primarily suburban market area that has a stable population and household base. All of our current offices are in Hartford County, Connecticut. Our primary market area is Central Connecticut. Our main office is in Farmington, Connecticut and is approximately ten miles from the City of Hartford, Connecticut. Hartford County has a mix of industry groups and employment sectors including insurance, health services, finance, manufacturing, not-for-profit, education, government and technology. Hartford County is also located on two of Connecticut’s major highways: Interstate 91 and Interstate 84. Our primary market area for deposits includes the communities in which we maintain our banking office locations. Our lending area is broader than our deposit market area and includes, in addition to Hartford County, other areas of Connecticut. In certain circumstances, we will make loans outside the State of Connecticut.

While the Hartford County, Connecticut market area has seen slight improvement over the past year, unemployment is still high at 9.1% as of December 2010, compared to 8.6% for Connecticut and 9.8% for the United States for the same period. Recent job growth has been negative in Hartford County with a 3.7% decrease over the last year. The population of Hartford County is approximately 880,000 people as of 2009 census estimates. Based on U.S. Census estimates, from 2000 to 2009, the population of Hartford County increased 2.6%. This compares to population increases of 3.3% for Connecticut and 9.1% for the United States for the comparable period. Population growth is estimated at slightly positive over the next five years at just under 1.0% for Hartford County, compared to an estimated population decline of 0.1% for the State of Connecticut and population growth ofapproximately 4.0% for the United States Bureau of Labor statistics. According to U.S. census statistics, median household income as of 2009 was estimated at $62,000 for Hartford County, compared to median household income of $67,000 for Connecticut and $50,000 for the United States for 2009.

According to statistics provided by The Warren Group, for the year ended December 31, 2010, the median single family home cost in Hartford County was approximately $224,000, compared to $220,000 in 2009. However, this 2010 median home cost represents a decrease of 3.8% and 8.6% from the years ended December 31, 2008 and 2007, respectively. Also, in February 2011, 1 in every 1,989 housing units in Hartford County, Connecticut received a foreclosure filing compared to 1 in every 1,936 in the State of Connecticut and 1 in every 577 in the United States during the same period.

Competition

We face competition within our market area both in making loans and attracting deposits. Hartford County has a high concentration of financial institutions including large commercial banks, community banks, credit unions and mortgage companies. Some of our competitors offer products and services that we currently do not offer, such as trust services and private banking.

Based on the most recent data available from the FDIC, we possess a 3.5% deposit market share in Hartford County as of June 30, 2010. Our market share rank is 8 th out of 25 financial institutions. All of the institutions who possess a greater deposit market share are headquartered outside of Hartford County.

Our competition for loans and deposits comes principally from commercial banks, savings institutions, mortgage banking firms and credit unions. We face additional competition for deposits from money market funds, brokerage firms, mutual funds and insurance companies. Our primary focus is to build and develop profitable customer relationships across all lines of business while continuing to support the communities within our service area.

Properties

We operate through our 15 full service branch offices, four limited services offices, including our main office, and two stand-alone ATM facilities. Of the 15 full service branch offices, nine are owned and six are leased. Lease expiration dates of our branches range from 3 months to 15 years with renewal options ranging up to 15 years.

Our full service branch offices and limited service offices are located as follows:


Branch Name	Address	Owned or Leased

Avon West	427 West Avon Road	Lease (expires 2019)
	Avon, Connecticut
Avon 44	310 West Main Street	Own
	Avon, Connecticut
Berlin	1191 Farmington Avenue	Lease (expires 2020)
	Berlin, Connecticut
Bristol	475 Broad Street	Own
	Bristol, Connecticut
Burlington	253 Spielman Highway	Own
	Burlington, Connecticut
Main Street	32 Main Street	Own
	Farmington, Connecticut
Gables(1)	20 Devonwood Drive	Own
	Farmington, Connecticut
Village Gate(1)	88 Scott Swamp Road	Own
	Farmington, Connecticut
Westwoods	Routes 6 and 177	Own
	Farmington, Connecticut
Westfarms	550 South Road	Lease (expires 2016)
	Farmington, Connecticut
Farm Glen(1)(2)	One Farm Glen Boulevard/3 Melrose	Lease (expires 2019)
	Farmington, Connecticut
Glastonbury	669 Hebron Avenue	Own
	Glastonbury, Connecticut
New Britain	73 Broad Street	Own
	New Britain, Connecticut
Plainville – Route 10	117 East Street	Lease (expires 2015)
	Plainville, Connecticut
Plainville 372	129 New Britain Avenue	Lease (expires 2025)
	Plainville, Connecticut
Southington	One Center Street	Lease (expires 2015)
	Southington, Connecticut
Southington Drive-Thru (1)	17 Center Place	Lease (expires 2014)
	Southington, Connecticut
Unionville	1845 Farmington Avenue	Own
	Unionville, Connecticut
West Hartford	962 Farmington Avenue	Lease (expires 2014)
	West Hartford, Connecticut

(1) Limited service office.

(2) Executive office.

Lending Activities

Summary:

Historically, our principal lending activities have been residential, consumer and commercial lending. In 2008, the board of directors initiated an organic growth strategy, and in 2008 Mr. Patrick replaced our former Chairman, President and Chief Executive Officer who retired. Mr. Patrick has led our business in this period of growth focusing on increasing our commercial portfolio and attracting larger, more comprehensive long-term borrowing relationships in the areas of commercial real estate lending (both owner and non-owner-occupied) and commercial lending, and supplementing these areas with more extensive cash management and depository services.

Since the initiative began in 2008, we have added cash management services and implemented a small business banking program, providing small qualified businesses throughout Connecticut with greater access to capital. To support these new areas, we made numerous strategic hires, bringing in lenders with strong experience, as well as a Director of Cash Management. In addition, in early 2009, a Chief Risk Officer and a Director of Commercial Banking were hired. Our Chief Risk Officer and Director of Commercial Banking initiated significant credit policy and portfolio monitoring enhancements to ensure that the subsequent loan portfolio growth was prudent and well-managed. In early 2010, a Director of Residential Lending was hired to execute a long-term growth and earnings strategy centered in residential lending. The resulting overall loan portfolio performance has been strong with growth of 11.6% in 2010, 25.5% in 2009 and 24.0% in 2008. Our total loans at December 31, 2010 increased by 11.6 % from December 31, 2009 primarily due to increases in commercial real estate loans, timeshare loans and home equity lines of credit. Despite a challenging economy and prolonged recession, our commercial business loans grew 7.7 % from December 31, 2009 to December 31, 2010.

Our senior management has carefully built the infrastructure necessary to support this growth and provide critical on-going portfolio management and risk assessment. An enhanced risk management program has been established to better enable us to evaluate the risk in our current portfolio and to implement changes in our underwriting standards so as to minimize overall portfolio risk going forward. As part of this program, our loan portfolio is subject to concentration limits and market analyses, stress testing and ongoing monitoring, reporting and review of underwriting standards.

The composition of our loan portfolio was as follows at the dates indicated:


	At December 31,
	2010						2009						2008						2007						2006
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent

	(Dollars in thousands)
Real estate loans:
Residential	$	453,557			38.6	%	$	446,880			42.4	%	$	385,943			45.9	%	$	320,233			47.2	%	$	274,147			45.2.	%
Commercial		361,838			30.8	%		265,515			25.2	%		201,511			24.0	%		169,238			25.0	%		166,311			27.4	%
Construction (1)		46,623			4.0	%		68,704			6.5	%		59,442			7.1	%		47,823			7.1	%		39,248			6.5	%
Installment		12,597			1.1	%		16,423			1.6	%		21,518			2.6	%		23,669			3.5	%		18,621			3.1	%
Commercial		112,535			9.6	%		104,476			9.9	%		87,717			10.4	%		86,768			12.8	%		79,386			13.1	%
Collateral		1,941			0.1	%		2,486			0.2	%		2,124			0.2	%		1,998			0.3	%		1,878			0.3	%
Home equity line of credit		81,837			7.0	%		66,658			6.3	%		33,411			4.0	%		27,479			4.0	%		26,372			4.3	%
Demand		227			*			415			*			627			0.1	%		467			0.1	%		699			0.1	%
Revolving credit		84			*			75			*			74			*			65			*			66			*
Resort (timeshare)		105,215			8.8	%		82,794			7.9	%		47,674			5.7	%		-			-			-			-
Total loans		1,176,454			100.0	%		1,054,426			100.0	%		840,041			100.0	%		677,740			100.0	%		606,728			100.0	%
Less:
Allowance for loan losses		(20,734	)					(16,316	)					(9,952	)					(8,124	)					(8,312	)
Net deferred loan costs		2,197						1,885						1,822						1,689						1,394
Loans, net	$	1,157,917					$	1,039,995					$	831,911					$	671,305					$	599,810

*	Less than 0.1%.

(1) Construction loans include commercial and residential construction loans and are reported net of undisbursed construction loans of $ 20.3 million as of December 31, 2010.

Major loan customers:

Our five largest lending relationships with commercial borrowers totaled $ 68.8 million in committed loans as of December 31, 2010 of which $53.4 million, or 4.5 % of our total loan portfolio, was outstanding. These relationships and commitments consist of the following:

$ 16.0 million relationship consisting of both real estate loans to purchase and develop certain commercial and residential real estate, consisting in part of the development of an 80 lot residential subdivision in Farmington, Connecticut, and commercial lines of credit to support retail store operations, 30 % of which are participated with a local commercial bank.

2.	$ 13.7 million relationship with a commercial cruise line operator as part of a participation in a larger credit facility with a large regional bank;

$ 13.1 million relationship consisting of commercial mortgages extended to a real estate developer for the refinancing of a medical office building, the construction of a single-tenant office building and the provision of bridge financing for the renovation of a 78 unit apartment complex in Bristol, Connecticut;

4.	$ 13.0 million mortgage loan to a large New England real estate developer to refinance an 8-story building located in Hartford, Connecticut; and

5.	$ 13.0 million timeshare finance relationship consisting of hypothecation receivables loans to a timeshare developer in Colorado.

All of the credit facilities extended to our five largest borrowers as of December 31, 2010 are current and performing in accordance with their respective terms.

Real Estate Loans:

Residential Real Estate Loans: One of our primary lending activities consists of the origination of one-to-four family residential real estate loans that are primarily secured by properties located in Hartford County and surrounding counties in Connecticut. Of the $ 453.6 million and $446.9 million of residential loans outstanding at December 31, 2010 and December 31, 2009, respectively, $ 272.3 million and $ 295.7 million are fixed-rate loans, respectively. Generally, residential real estate loans are originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. We usually do not make loans secured by single-family homes with loan-to-value ratios in excess of 95.0% (with the exception of Federal Housing Administration loans which allow for a 96.5% loan-to-value ratio). Fixed-rate mortgage loans generally are originated for terms of 10, 15, 20, 25 and 30 years. Typically, all fixed-rate residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards.

Prior to 2010, most of our residential mortgage originations were held on our balance sheet. In the first quarter of 2010, a strategic decision was made to sell most of our conforming 15, 20 and 30 year fixed-rate residential mortgage loan production in the secondary market, while retaining most of the servicing rights. Loan servicing includes collecting and remitting loan payments, accounting for principal and interest, contacting delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults, making certain insurance and tax payments on behalf of the borrowers and generally administering the loans. We originated $ 71.6 million of fixed-rate one-to-four family residential loans for the year ended December 31, 2010, $ 36.7 million of which were sold in the secondary market. We originated $75.8 million of fixed-rate one-to-four family residential loans during the year ended December 31, 2009, of which $3.5 million were sold in the secondary market. The loans sold meet secondary market guidelines and are subject to warranty exposure. Such exposure is mitigated by our quality control procedures and the fact that we are selling newly originated loans instead of seasoned loans in the secondary market. As of December 31, 2010, we have not been requested or required to repurchase any sold loans due to inadequate underwriting or documentation deficiencies. We have not and do not intend to originate subprime or alternative A paper (alt A) loans.

We also offer adjustable-rate mortgage loans for one-to-four family properties, with an interest rate that adjusts annually based on the one-year Constant Maturity Treasury Bill Index, after a one, three, four, five, seven or nine-year initial fixed-rate period. Our adjustable rate mortgage loans generally provide for maximum rate adjustments of 200 basis points per adjustment, with a lifetime maximum adjustment up to 6.0%, regardless of the initial rate. Our adjustable rate mortgage loans amortize over terms of up to 30 years. We originated $ 59.9 million adjustable rate one-to-four family residential loans for the year ended December 31, 2010 and $49.2 million in the year ended December 31, 2009. For the year ended December 31, 2010 and the year ended December 31, 2009, we purchased $ 32.4 million and $33.0 million adjustable rate mortgages, respectively.

Adjustable rate mortgage loans decrease the risks associated with changes in market interest rates by periodically repricing, but involve other risks because as interest rates increase, the underlying payments by the borrower increase, thus increasing the potential for default by the borrower. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustment of the contractual interest rate is also limited by the maximum periodic and lifetime interest rate adjustments permitted by our loan documents and, therefore, the effectiveness of adjustable rate mortgage loans may be limited during periods of rapidly rising interest rates. Of our one-to-four family residential real estate loans, $ 181.3 million and $ 151.2 million had adjustable rates of interest at December 31, 2010 and December 31, 2009, respectively, and $ 48.5 million of the adjustable loans outstanding as of December 31, 2010 will see a rate reset on or before December 31, 2011. Continued declines in real estate values and the slowdown in the housing market may make it more difficult for borrowers experiencing financial difficulty to sell their homes or refinance their debt due to their declining collateral values.

All residential mortgage loans that we originate include “due-on-sale” clauses, which give us the right to declare a loan immediately due and payable in the event that, among other things, the borrower sells or otherwise disposes of the real property. We also require homeowner’s insurance and, where circumstances warrant, flood insurance on properties securing real estate loans. At December 31, 2010 and December 31, 2009, respectively, our largest residential mortgage loan had a principal balance of $4.7 million. This loan is performing in accordance with the agreed upon repayment terms.

Commercial Real Estate Loans: We originate commercial real estate loans and loans on owner-occupied properties used for a variety of business purposes, including office buildings, industrial and warehouse facilities and retail facilities. Commercial mortgage loans totaled $ 361.8 million and $265.5 million, or 30.8 % and 25.2%, of total loans at December 31, 2010 and December 31, 2009, respectively. Our owner-occupied commercial mortgage loans constitute the largest class of our commercial real estate portfolio. At December 31, 2010 and December 30, 2009, owner-occupied commercial real estate loans totaled $ 121.4 million and $118.9 million, or 33.5 % and 44.8 %, respectively, of our commercial real estate portfolio. Our commercial real estate underwriting policies provide that typically such real estate loans may be made in amounts of up to 75.0% of the appraised value of the property. Our commercial real estate loans are made with terms of up to 20 years, amortization schedules up to 25 years and interest rates that are fixed for a period of time, generally set at a margin above the FHLBB Advance rates. Variable rate options are also available, generally tied to the prime rate as published in the Wall Street Journal , or for qualifying borrowers, tied to LIBOR plus a margin with a swap option. In reaching a credit decision on whether to make a commercial real estate loan, we consider gross revenues and the net operating income of the property, the sophistication of the borrower, the borrower’s business cash flow and credit history, and the appraised value of the underlying property. In addition, with respect to commercial real estate rental properties, we also consider the terms and conditions of the leases, the credit quality of the tenants and the borrower’s global cash flow. We typically require that the properties securing our commercial real estate loans have debt service coverage ratios (the ratio of earnings before interest, taxes, depreciation and amortization divided by interest expense and current maturities of long-term debt) of at least 1.20. Environmental reports and current appraisals are required for commercial real estate loans as governed by our written environmental and appraisal policies. Generally, a commercial real estate loan made to a corporation, partnership or other business entity requires personal guarantees by the principals and owners of 20.0% or more of the entity.

A commercial real estate borrower’s financial information and various credit quality indicators is monitored on an ongoing basis by requiring the submission of periodic financial statement updates and annual tax returns and the periodic review of payment history. In addition, we typically conduct periodic face-to-face meetings between us and the borrower, as well as property site visits. These requirements also apply to guarantors of commercial real estate loans. Borrowers with loans secured by rental investment property are required to provide an annual report of income and expenses for such property, including a tenant rent roll and copies of leases, as applicable. The largest commercial real estate loan as of December 31, 2010 was a loan for $13.0 million, which is performing in accordance with its terms.

Loans secured by commercial real estate, including multi-family properties, generally involve larger principal amounts and a greater degree of risk than one-to-four family residential mortgage loans. Because payments on loans secured by commercial real estate, including multi-family properties, are often dependent on successful operation or management of the properties, repayment of such loans may be affected by adverse conditions in the real estate market or the economy. Given our level of commercial real estate exposure, our enhanced commercial real estate portfolio risk management program better enables us to evaluate the risk in our current portfolio and to implement changes in our lending practices to minimize overall portfolio risk. As part of this program, the commercial real estate portfolio is subject to concentration limits and market analyses, stress testing and is subject to monitoring, reporting and underwriting standards.

The following table presents the amounts and percentages of commercial real estate loans held by type as of December 31, 2010 and December 31, 2009.


	At December 31, 2010					At December 31, 2009
	Amount		Percentage			Amount		Percentage
	(Dollars in thousands)
Type of Commercial Real Estate Loan:
Owner-Occupied	$	121,381		33.6	%	$	118,888		44.8	%
Industrial		34,821		9.6	%		28,991		10.9	%
Office		69,647		19.2	%		52,176		19.7	%
Retail		76,794		21.2	%		25,129		9.5	%
Multi-Family		21,658		6.0	%		17,328		6.5	%
Land		9,126		2.5	%		2,471		0.9	%
Hotel		5,792		1.6	%		14,435		5.4	%
Other		22,619		6.3	%		6,097		2.3	%
Total Commercial Real Estate Loans	$	361,838		100.0	%	$	265,515		100.0	%

The following table presents the amounts and percentages of commercial real estate loans held by geographic location of the real property securing the loan as of December 31, 2010 and December 31, 2009.

	At December 31, 2010					At December 31, 2009
	Amount		Percentage			Amount		Percentage
	(Dollars in thousands)
Geographic Region:
Connecticut	$	356,821		98.6	%	$	262,655		98.9	%
Massachusetts		394		0.1	%		419		0.2	%
New York		695		0.2	%		717		0.3	%
South Carolina		1,670		0.5	%		1,724		0.6	%
Vermont		532		0.1	%		--		--
New Hampshire		1,726		0.5	%		--		--
	$	361,838		100.0	%	$	265,515		100.0	%

Construction Loans: We offer construction loans, including commercial construction loans and real estate subdivision development loans, to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction loans outstanding, including commercial and residential, totaled $ 46.6 million and $68.7 million, or 4.0 % and 6.5% of total loans outstanding at December 31, 2010 and December 31, 2009, respectively. At December 31, 2010, the unadvanced portion of these construction loans totaled $ 20.3 million, as compared to $49.9 million at December 31, 2009. Our underwriting policies provide that construction loans may typically be made in amounts of up to 75.0% of the appraised value of the property. We extend loans to residential subdivision developers for the purpose of land acquisition, the development of infrastructure and the construction of homes. Advances are determined as a percentage of the cost or appraised value of the improvements, whichever is less, and each project is physically inspected prior to each advance either by a loan officer or an engineer approved by us. We typically limit the number of speculative units financed by a customer, with the majority of construction advances supported by purchase contracts.

We also originate construction loans to individuals and contractors for the construction and acquisition of personal residences. At December 31, 2010 and December 31, 2009, residential construction loans outstanding totaled $ 6.2 million, or 0.53 %, and $3.1 million, or 0.30%, respectively, of total loans. The unadvanced portion of these construction loans totaled $ 2.3 million and $1.9 million at December 31, 2010 and December 31, 2009, respectively. Our residential construction mortgage loans generally provide for the payment of interest only during the construction phase, which is typically up to nine months, although our policy is to consider construction periods as long as 12 months. At the end of the construction phase, the construction loan converts to a long-term owner-occupied residential mortgage loan. Construction loans can be made with a maximum loan-to-value ratio of 80.0%. Before making a commitment to fund a residential construction loan, we require an appraisal of the property by an independent licensed appraiser. We also review and inspect each property before disbursement of funds during the term of the construction loan. Loan proceeds are disbursed after inspection based on the percentage of completion method. Construction loans to individuals are generally made on the same terms as our one-to-four family mortgage loans.

Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the actual cost (including interest) of construction and other assumptions. If the estimate of construction cost is too low, we may be required to advance funds beyond the amount originally committed in order to protect the value of the property. Additionally, if the estimate of value is too high, we may be confronted with a project, when completed, with a value that is insufficient to assure full payment. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. A continued economic downturn could have an additional adverse impact on the value of the properties securing construction loans and on our borrowers’ ability to sell their units for the amounts necessary to complete their projects and repay their loans.

The following table presents the amounts and percentages of construction loans held by type as of December 31, 2010 and December 31, 2009.


	At December 31, 2010					At December 31, 2009
	Amount		Percentage			Amount		Percentage
	(Dollars in thousands)
Type of Construction Loans:
Residential	$	6,217		13.3	%	$	3,091		4.5	%
Office		6,412		13.8	%		12,236		17.8	%
Retail		5,531		11.9	%		11,175		16.3	%
Industrial		1,663		3.6	%		6,787		9.9	%
Subdivision		14,995		32.2	%		21,706		31.6	%
Condo		1,575		3.4	%		1,964		2.9	%
Subdivision Speculative		4,634		9.9	%		5,332		7.7	%
Contract		535		1.1	%		464		0.7	%
Multi-family		600		1.3	%		-		-
Commercial Owner-Occupied		4,461		9.5	%		5,949		8.6	%
Total Construction Loans	$	46,623		100.0	%	$	68,704		100.0	%

The establishment of interest reserves for construction and development loans is an established banking practice, but the handling of such interest reserves varies widely within the industry. Many of our construction and development loans provide for the use of interest reserves, and based upon our knowledge of general industry practices, we believes that our practices related to such interest reserves, discussed below, are appropriate and conservative. When we underwrite construction and development loans, we consider the expected total project costs, including hard costs such as land, site work and construction costs and soft costs such as architectural and engineering fees, closing costs, leasing commissions and construction period interest. Based on the total project costs and other factors, we determine the required borrower cash equity contribution and the maximum amount we are willing to loan. In the vast majority of cases, we require that all of the borrower’s cash equity contribution be contributed prior to any material loan advances. This ensures that the borrower’s cash equity required to complete the project will in fact be available for such purposes. As a result of this practice, the borrower’s cash equity typically goes toward the purchase of the land and early stage hard costs and soft costs. This results in our funding the loan later as the project progresses, and accordingly we typically fund the majority of the construction period interest through loan advances. In the fourth quarter of 2010, we advanced construction period interest totaling approximately $ 1.8 million on construction and development loans. While the Company advanced these sums as part of the funding process, we believe that the borrowers in effect had in most cases already provided for these sums as part of their initial equity contribution. Specifically, the maximum committed balance of all construction and development loans which provide for the use of interest reserves at December 31, 2010 was approximately $26.6 million, of which $19.6 million was outstanding at December 31, 2010 and $ 7.0 million remained to be advanced.

As of December 31, 2010, the largest commercial construction lending relationship with a single borrower totaled $ 6.2 million. The loan was originated in September 2010 as part of a 49.0% participation with a large regional bank. The loan is secured by an office building in Amherst, NY and has an outstanding balance at December 31, 2010 of $ 1.7 million . The loan is current and performing according to its terms.

Commercial Loans :

Our approach to commercial lending is centered in relationship banking. While our primary focus is to extend financing to meet the needs of creditworthy borrowers, we also endeavor to provide a comprehensive solution for all of a business’s banking needs including depository, cash management and investment needs. The commercial business loan portfolio is comprised of both middle market companies and small businesses located primarily in Connecticut. Market segments represented include manufacturers, distributors, service businesses, financial services, healthcare providers, not-for-profits and professional service companies. Typically, our middle market lending group seeks relationships with companies that have borrowing needs in excess of $350,000, while our small business lending group supports companies with borrowing needs of $350,000 or less.

We had $ 112.5 million and $104.5 million in commercial loans at December 31, 2010 and December 31, 2009, respectively. Of the loans in our commercial loan portfolio, $ 11.3 million and $ 4.0 million were guaranteed by either the Small Business Administration , the Connecticut Development Authority or the United States Department of Agriculture at December 31, 2010 and December 31, 2009, respectively. Total commercial business loans amounted to 9.6% of total loans as of December 31, 2010 and 9.9% of total loans as of December 31, 2009.

Commercial business lending products generally include term loans, revolving lines of credit for working capital needs, equipment lines of credit to facilitate the purchase of equipment and letters of credit. The maximum amount of a commercial business loan is limited by our loans-to-one-borrower limit (15.0% of equity capital plus our allowance for loan losses, pursuant to Connecticut law) and other factors as set forth in our loan policy. Commercial business loans are made with either adjustable or fixed-rates of interest. Variable rates are tied to either the prime rate, as published in The Wall Street Journal or LIBOR plus a margin. The interest rates of fixed-rate commercial business loans are typically set at a margin above the FHLBB Advance rates. Interest rate swaps are offered to qualified borrowers to effect a fixed-rate equivalent for the borrower and allows us to effectively hedge against interest rate risk on large, long-term loans.

When making commercial business loans, we consider the character and capabilities of the borrower’s management, the financial statements of the borrower, our lending history with the borrower, the debt service capabilities of the borrower, the historical and projected cash flows of the business, the value and composition of the collateral and the financial strength and commitment of the guarantors, if any. Commercial loans are generally secured by a variety of collateral, including accounts receivable, inventory and equipment, and supported by personal guarantees. Depending on the collateral used to secure the loans, commercial business loans are typically advanced at a discount to the value of the loan’s collateral. We do not typically make unsecured commercial business loans greater than $100,000. As of December 31, 2010 and December 31, 2009, unsecured commercial loans totaled $ 775,600 and $ 152,000, respectively, or less than 1.0% of total loans outstanding. Generally, a commercial loan made to a corporation, partnership or other business entity requires personal guarantees by the principals and owners of 20.0% or more of the entity.

Commercial loans generally have greater credit risk than residential real estate loans. Unlike residential mortgage loans, which largely are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans generally are made on the basis of the borrower’s ability to repay the loan from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of a commercial business loan depend substantially on the success of the business itself. Further, any collateral securing the loan may depreciate over time, be difficult to appraise and fluctuate in value. We seek to minimize these risks through our underwriting standards.

In an effort to both attract more sophisticated borrowers as well as to hedge our interest rate risk associated with long-term commercial loans, we offer interest rate swaps via our correspondent banking partner, PNC Bank. Interest rate swaps are primarily used to exchange a floating rate payment stream into a fixed-rate payment stream. The variable rates on swaps will change as market interest rates change. We will enter into swap transactions solely to limit our interest rate risk and effectively “fix” the rate for appropriate customer borrowings. We do not engage in any speculative swap transactions. Generally, swap options are offered to “pass” rated borrowers requesting long-term commercial loans or commercial mortgages in amounts of at least $1.0 million. We have established a derivative policy which sets forth the parameters for such transactions (including underwriting guidelines, rate setting process, maximum maturity, approval and documentation requirements), as well as identifies internal controls for the management of risks related to these hedging activities (such as approval of counterparties, limits on counterparty credit risk, maximum loan amounts, and limits to single dealer counterparties). Our interest rate swaps are typically collateralized by U.S. treasury obligation . As of December 31, 2010, we have 19 mirrored swap transactions with a total current notional amount of $ 87.1 million. At December 31, 2010, the fair value of the interest rate swap derivative asset and liability is $ 1.8 million.

Our small business customers typically generate annual revenues from their businesses of up to $2.5 million and have borrowing needs of up to $350,000. We deliver and promote the delivery of small business loan products to our existing and prospective customer base by leveraging our retail branch network, including our branch managers, supplemented by a team of dedicated business development officers. Our branch managers and business development officers are fully trained to assist small business owners through the entire loan process from application to closing. We offer a streamlined process for our customers by utilizing a credit scoring system as a key part of our underwriting process, along with a standardized loan documentation package. This results in our ability to deliver quick answers to questions along with cost effective loan closings to our small business customers. As a newly designated Small Business Administration preferred lender, we are also able to offer flexible financing terms to those borrowers who otherwise would not qualify under our traditional underwriting standards. The Small Business Administration program is a cornerstone of our small business loan program. We were recently awarded the “SBA Emerging Lender of the Year” award for fiscal year 2010, having originated 22 Small Business Administration loans totaling $5.0 million in 2010. As of December 31, 2010, our entire small business loan portfolio totaled $ 34.8 million, or 3.0 % of total outstanding loans, with an additional $ 8.1 million in unfunded loan commitments and an average loan size of $ 98,700.

As of December 31, 2010, our largest commercial business loan commitment totaled $ 13.7 million with $ 9.1 million advanced as of that date, which was performing according to its terms. In addition to the commercial business loans discussed above, we had $ 9.9 million and $4.5 million in letter of credit commitments as of December 31, 2010 and December 31, 2009, respectively.

Resort (Timeshare) Loans:

In the fourth quarter of 2007, an experienced team of industry-specific lenders was hired to begin lending to developers and operators of timeshare vacation resorts as a component of our commercial loan portfolio. At December 31, 2010 and December 31, 2009, our timeshare loans totaled $ 105.2 million and $82.8 million, or 8.8 % and 7.9% of total loans, respectively. At December 31, 2010, the unadvanced and approved amounts of outstanding commitments in our timeshare loans totaled $ 23.6 million.

Generally, lending to the timeshare industry consists of the following types of loans:

●

Receivables loans – loans, typically lines of credit, made to developers and operators of timeshare resorts to support timeshare interval sales. These loans are secured by a direct assignment of the consumer notes for the purchase of timeshare intervals and, as a result, typically are collateralized by a well-diversified pool of consumer notes. Receivable loans are typically underwritten utilizing a lending formula in which loan advances are based on a percentage of eligible consumer notes. In addition, these loans generally contain provisions for recourse to the developer, the obligation of the developer to replace defaulted notes, and parameters with respect to minimum FICO scores or average weighted FICO scores of the portfolio of pledged notes. Typically, payments made on the consumer notes are remitted to a lockbox which is maintained by a third party servicing company and all payments are sent directly to Farmington Bank by the servicing company.

●

Pre-sale loans – loans to developers and operators of timeshare resorts in which construction of the timeshare resort is not yet complete, but timeshare interval sales to consumers have begun. These loans are secured by the assignment of pre-sale notes and the advance rate under the lending formula is generally much lower than a receivables loan. Pre-sale loans are only made available when we also provide the receivables loan and repayment is generally from advances under the receivables loan when construction of the resort is complete.

●

“Inventory” loans – loans on unsold timeshare intervals (i.e. inventory) of the timeshare resort developer. These loans are typically advanced at a percentage of the aggregate retail value of the encumbered inventory and are secured by the unsold inventory.

●

Acquisition and development loans – loans used by the developer of a timeshare resort to acquire and construct timeshare inventory and the amenities that comprise a resort. These loans are secured by a first mortgage on the real estate being financed.

●

Homeowner association loans – loans to homeowner associations to fund repairs or renovations of timeshare or condominium units. Repayment of these loans is from the maintenance fees or special assessments paid by the individual timeshare owners. These loans are secured by a UCC filing on the equipment being purchased and/or an assignment of the fees and assessments to be paid by the unit owners.

As part of the timeshare lending program, Farmington Bank makes direct loans to timeshare developer / operators, buys participations in timeshare loans originated by experienced timeshare lending institutions, and originates and sells timeshare participations to other lending institutions. Lending to this industry is generally done on a nationwide basis, as the majority of timeshare operators are located outside of the Northeast. When the timeshare lending unit was established in 2007, Farmington Bank implemented various concentration limits with respect to overall credit exposure to this portfolio, exposure by loan portfolio segment , and exposure by geographic territory, as well as conservative underwriting policies and portfolio monitoring guidelines

Since the timeshare program’s inception, we have made a limited amount of acquisition and development loans, inventory loans, homeowner association loans, and pre-sale loans ; we have no acquisition and development loans in portfolio. As of December 31, 2010, $ 90.6 million or 86.2 % of total outstanding timeshare loans were comprised of receivable loans. Furthermore, as of December 31, 2010:

●

receivable loans represented 89.4 % of total timeshare commitments;

●

outstanding inventory loan balances totaled $ 7.5 million, or 7.1 % of outstanding timeshare balances and 0.6 % of total loans;

●

outstanding homeowner association loans totaled $ 3.8 million, or 3.6 % of outstanding timeshare balances and 0.3 % of total loans; and

●

outstanding presale loans totaled $ 318,000, or 0.3 % of the outstanding timeshare balances.

As of December 31, 2010, there is no additional lending exposure (i.e. open commitments) on any inventory or pre-sale loans and a $ 213,000 commitment available on homeowner association loans. Geographic dispersion of our timeshare portfolio, based on committed amount, is as follows:

●

Florida (38%);

●

Mountain region (25%);

●

Pacific region (23%);

●

Southeast region (9%); and

●

Central region (5%).

As of December 31, 2010, we had a specific reserve allocation of $ 4.9 million for a $4.9 million nonperforming resort ( timeshare ) loan. During the fourth quarter of 2010, the outcome of a borrower’s bankruptcy proceedings made it probable that we would not collect any amounts due on the loan and required us to fully reserve for this loan. We have recently decided to gradually exit this line of lending to focus on our other commercial lending lines of business while continuing to hold the $ 105.2 million in outstanding loans and honoring any advances requested relating to the $ 23.6 million in unadvanced loan commitments and $19.0 million in approved commitments , which will replace $12.5 million in outstanding loans or unadvanced commitments and will result in $6.5 million of new funds to exsisting borrowers, at December 31, 2010 until they are repaid in the normal course of business. As of December 31, 2010 all of the timeshare loans, except for the fully reserved loan noted above, were performing according to their terms.

Home equity line of credit:

We also offer home equity loans and home equity lines of credit, both of which are secured by owner-occupied one-to-four family residences. At December 31, 2010 and December 31, 2009, home equity loans and equity lines of credit totaled $ 81.8 million and $66.7 million, or 7.0 % and 6.3% of total loans, respectively. At December 31, 2010, the unadvanced amount of home equity lines of credit totaled $ 80.4 million, as compared to $70.2 million at December 31, 2009.

The underwriting standards utilized for home equity loans and home equity lines of credit include a determination of the borrower’s credit history, an assessment of the borrower’s ability to meet existing obligations and future payments on the proposed loan and the value of the collateral securing the loan. Home equity loans are offered with fixed-rates of interest and with terms of up to 15 years. The loan-to-value ratio for our home equity loans and our lines of credit, including any first mortgage, is generally limited to no more than 90.0%. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate, as reported in The Wall Street Journal . Interest rates on home equity lines of credit are generally limited to a maximum rate of 18.0% per annum.

Installment, Demand, Collateral and Revolving Credit Loans: We offer various types of consumer loans, including installment, demand, revolving credit and collateral loans, principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. Installment loans totaled $ 12.6 million and $16.4 million, or 1.1 % and 1.6% of our total loan portfolio, at December 31, 2010 and December 31, 2009, respectively. Collateral loans totaled $ 1.9 million and $2.5 million at December 31, 2010 and December 31, 2009, respectively. Demand loans totaled $ 227,000 and $415,000 at December 31, 2010 and December 31, 2009, respectively, and revolving credit loans totaled $ 84,000 and $75,000 at December 31, 2010 and December 31, 2009, respectively. Collateral loans, demand loans and revolving credit loans each represented less than one percent of our total loan portfolio at December 31, 2010 and December 31, 2009. While the asset quality of these portfolios is currently good, there is increased risk associated with consumer loans during economic downturns as increased unemployment and inflationary costs may make it more difficult for some borrowers to repay their loans.

Origination, Purchasing and Servicing of Loans:

Prior to 2010, we retained most of our residential mortgage originations in our portfolio. In 2010, however, in order to reduce our exposure to rising interest rates , we began to sell fixed-rate conforming loans into the secondary market while retaining the servicing for these loans. Loan servicing includes collecting and remitting loan payments, accounting for principal and interest, contacting delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults, making certain insurance and tax payments on behalf of the borrowers and generally administering the loans.

Many of the loans sold into the secondary market have been sold to the Federal Home Loan Bank. We are also an approved seller and servicer of both the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. All adjustable rate mortgages are currently being held in our residential portfolio. We also originate Federal Housing Administration loans through our “mini-eagle” designation with the U.S. Department of Housing and Urban Development.

At December 31, 2010 and December 31, 2009, we were servicing residential real estate loans sold in the amount of $ 52.9 million and $23.7 million, respectively. We anticipate our servicing asset will continue to grow as we expect to sell the majority of our fixed rate conforming loan production into the secondary market.

We also purchase adjustable rate one-to-four family residential mortgage loans from approved mortgage banking firms licensed with the Connecticut Department of Banking. These local mortgage bankers are not employed by us and sell their loans based on competitive pricing. We purchased $ 32.4 million and $33.0 million in adjustable rate loans from these firms during the years ended December 31, 2010 and 2009, respectively . The loans are underwritten to the same credit specifications as our internally originated loans. We do not, however, participate in the purchase of credit impaired loans. We expect to continue to purchase adjustable rate loans from approved mortgage banking firms so long as pricing and purchase opportunities remain favorable.

From time to time we enter into participations with other regional lenders in commercial real estate and commercial business loan transactions. We participate in transactions (purchase a share of the loan commitment), as well as sell portions of transactions that we originate. As of December 31, 2010 and December 31, 2009, our loan portfolio included $ 150.2 million and $ 137.6 million, respectively, in loans in which we purchased a participation share, and $ 56.8 million and $ 50.4 million, respectively, in loans participated to other institutions.

Loan Maturity Schedule:

The following tables set forth the loan maturity schedule at December 31, 2010 :


	Loans Maturing
	Within One Year		After One But Within Five Years		After Five Years		Total
December 31, 2010	(Dollars In thousands )
Real estate loans:
Residential	$	269	$	2,241	$	451,047	$	453,557
Commercial		6,727		39,921		315,190		361,838
Construction		30,582		15,691		350		46,623
Installment		241		2,829		9,527		12,597
Commercial		11,042		32,440		69,053		112,535
Collateral		8		-		1,933		1,941
Home equity line of credit		503		15,622		65,712		81,837
Demand		227		-		-		227
Revolving credit		84		-		-		84
Resort (timeshare)		32,341		38,355		34,519		105,215
Total	$	82,024	$	147,099	$	947,331	$	1,176,454

Loans Contractually Due Subsequent to December 30, 2010:

The following table sets forth the scheduled repayments of fixed-rate and adjustable rate loans at December 31, 2010 that are contractually due after December 31, 2011 :

	Due After December 31, 2011
	Fixed		Adjustable		Total
	( Dollars in thousands)
Real estate loans:
Residential	$	273,275	$	180,013	$	453,288
Commercial		119,479		235,631		355,110
Construction		191		15,850		16,041
Installment		12,356		-		12,356
Commercial		39,542		61,951		101,493
Collateral		13		1,920		1,933
Home equity line of credit		1,299		80,036		81,335
Demand		-		-		-
Revolving credit		-		-		-
Resort		10,78 7		62,087		72,874
Total	$	456,942	$	637,488	$	1,094,430

Loan Approval Procedures and Authority:

Our lending activities follow written, non-discriminatory and regulatory compliant underwriting standards and loan origination procedures established by our board of directors and documented in our loan policy. The loan approval process is intended to assess the borrower’s ability to repay the loan, the viability of the loan, and the adequacy of the value of the collateral that will secure the loan, if applicable. To assess a business borrower’s ability to repay, we review and analyze, among other factors: the borrower’s historical, current, and projected financial performance; its ability to repay the proposed loan(s); the value of the assets offered as collateral; the ability of management to lead the borrower through the current economic cycle; and the financial strength and commitment of the personal or corporate guarantors, if any. To assess an individual borrower’s ability to repay, we review their employment and credit history and information on their historical and projected income and expenses, as well as the adequacy of the collateral.

Our policies and loan approval limits are established by our board of directors. Our board has delegated its authority to grant loans in varying amounts to the board of directors’ loan committee, which is currently comprised of all board members. The board loan committee is charged with general oversight of our credit extension functions and has designated the responsibility for the approval of any individual loan under $2.0 million, when the total aggregate commercial debt to the obligor does not exceed $3.5 million, to our management loan committee. Loan requests above these thresholds are required to be approved by the board’s loan committee. Our management loan committee, in turn, has the right to delegate approval authority with respect to such loans to individual lenders as deemed appropriate.

Review of Credit Quality :

At the time of loan origination, a risk rating based on a nine point grading system is assigned to each commercial-related loan based on the loan officer’s and management’s assessment of the risk associated with each particular loan. This risk assessment is based on an in depth analysis of a variety of factors. More complex loans and larger commitments require that our internal Credit Risk Management Department further evaluate the risk rating of the individual loan or relationship, with Credit Risk Management having final determination of the appropriate risk rating. These more complex loans and relationships receive ongoing periodic review to assess the appropriate risk rating on a post-closing basis with changes made to the risk rating as the borrower’s and economic conditions warrant. Our risk rating system is designed to be a dynamic system and we grade loans on a “real time” basis. Over the course of 2010 and 2009, considerable emphasis has been placed on risk rating accuracy, risk rating justification, and risk rating triggers. Our risk rating process has been enhanced with our recent implementation of industry-based risk rating “cards.” The cards are used by our loan officers and promote risk rating accuracy and consistency on an institution-wide basis. Most loans are reviewed annually as part of a comprehensive portfolio review conducted by management and/or by our independent loan review firm. More frequent reviews of loans rated low pass, watch, substandard and doubtful are conducted by our Credit Risk Management Department . We utilize an independent loan review consulting firm to affirm our rating accuracy and opine on the overall credit quality of our loan portfolio. The consulting firm conducts two loan reviews per year aiming at a 65.0% or higher commercial portfolio penetration. Summary findings of all loan reviews performed by the outside consulting firm are reported to our board of directors and senior management upon completion.

Our board of directors and senior management receive monthly reporting on credit trends in the commercial, residential and consumer portfolios (delinquencies, non-performing loans, risk rating migration, charge-off requests, etc.), as well as an update on any significant or developing troubled assets. In 2009, we engaged an outside software firm to aid in the enhancement of our on-going portfolio monitoring and credit risk management reporting. After a lengthy development process, we introduced risk management “dashboards” in early 2010. The dashboards provide detailed analysis of portfolio and industry concentrations, as well as a variety of asset quality trends within industry and loan product types, and are presented to the board of directors on a monthly basis. This new reporting system also performs various credit administration tracking functions and credit grade migration analysis. We are planning to implement the next phase of this system to allow for an enhanced level of stress testing of the portfolios utilizing a multiple of variables.

In addition to the monthly dashboards, on a periodic basis our board of directors and senior management receive reports on various “highly monitored” industries and portfolios, such as investment commercial real estate, “for-sale” real estate (i.e. subdivision and condominium lending) and resort (timeshare) lending .

This comprehensive portfolio monitoring process is supplemented with several risk assessment tools including monitoring of delinquency levels, analysis of historical loss experience by loan portfolio segment , identification of portfolio concentrations by borrower and industry, and a review of economic conditions that might impact loan quality.

Non-performing and Problem Assets :

Our senior management places considerable emphasis on the early identification of problem assets, problem-resolution and minimizing loss exposure. Delinquency notices are mailed monthly to all delinquent borrowers when they have exceeded their payment grace period , advising them of the amount of their delinquency. A loan is considered delinquent when they customer does not make their payments due according to their contractual terms. Residential and consumer lending borrowers are typically given 30 days to pay the delinquent payments or to contact us to make arrangements to bring the loan current over a longer period of time. Generally, if a residential or consumer lending borrower fails to bring the loan current within 90 days from the original due date or to make arrangements to cure the delinquency over a longer period of time, the matter is referred to legal counsel and foreclosure or other collection proceedings are initiated. We may consider forbearance or a loan restructuring in certain circumstances where a temporary loss of income is the primary cause of the delinquency, and if a reasonable plan is presented by the borrower to cure the delinquency in a reasonable period of time after his or her income resumes. Problem or delinquent borrowers in our commercial real estate, commercial business and timeshare portfolios are handled on a case-by-case basis, typically by our special assets department. Appropriate problem-resolution and workout strategies are formulated based on the specific facts and circumstances.

All non-commercial mortgage loans are reviewed on a regular basis, and such loans are placed on non-accrual status when they become more than 90 days delinquent. Commercial real estate, commercial business and resort ( timeshare ) loans are evaluated for non-accrual status on a case-by-case basis, but are typically placed on a non-accrual status when they become more than 90 days delinquent. In certain cases, if a loan is less than 90 days delinquent but the borrower is experiencing financial difficulties, such loan may be placed on non-accrual status if we determine that collection of the loan in full is not probable. When loans are placed on non-accrual status, unpaid accrued interest is reversed and further income is recognized only to the extent received. If our non-accruing loans were current in accordance with their contractual terms, additional interest income would have been recorded in the amounts of $ 693,000, $753,000, $203,000 and $78,000 for the years ended December 31, 2010, 2009, 2008 and 2007, respectively.

Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period and there is a sustained period of repayment performance (generally a minimum of six months) by the borrower, in accordance with contractual terms involving payment of cash or cash equivalents. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. If a residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort loan is on non-accrual status or is considered to be impaired, cash payments are applied first to interest income and then as a reduction of principal as specified in the contractual agreement, unless the collection of the remaining principal amount due is considered doubtful.

Classified Assets: Under our internal risk rating system, we currently classify loans and other assets considered to be of lesser quality as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by either the current net worth or the paying capacity of the obligor or by the collateral pledged, if any. “Substandard” assets include those characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Assets classified as “loss” are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. In addition to the classifications discussed above, consistent with ASC 310-10-35, assets are classified as impaired when it is probable that we will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement.

The loan portfolio is reviewed on a regular basis to determine whether any loans require risk classification or reclassification. Not all classified assets constitute non-performing assets. For example, at December 31, 2010, 91.0 % of commercial real estate, construction real estate, commercial business and timeshare loans rated substandard and doubtful were current as to payments. At December 31, 2010, our classified assets included loans identified as “substandard,” and “doubtful.” We had no assets classified as “loss” at December 31, 2010 and December 31, 2009, respectively. Substandard assets consisted of $ 81.7 million and $46.8 million of our total loan portfolio at December 31, 2010 and December 31, 2009, respectively, and doubtful assets consisted of $ -0- and $1.7 million of our total loan portfolio at December 31, 2010 and December 31, 2009, respectively.

The following table sets forth the amounts and percentages of classified loans as of December 31, 2010 and December 31, 2009.


	At December 31, 2010					At December 31, 2009
	Amount		Percentage			Amount		Percentage
	(Dollars in thousands)
(Dollars in thousands)
Real Estate
Residential	$	9,277		11.4	%	$	9,277		19.1	%
Commercial		29,037		35.4	%		26,202		54.0	%
Construction		6,221		7.6	%		5,022		10.3	%
Installment		132		0.2	%		65		0.1	%
Commercial		14,687		18.0	%		6,910		14.2	%
Collateral		-		*			-		*
Home equity line of credit		2,092		2.6	%		1,079		2.2	%
Demand		25		*			25		0.1	%
Revolving credit		-		*			-		*
Resort (timeshare)		20,234		24.8	%		-		*
Total Classified Loans	$	81,705		100.0	%	$	48,580		100.0	%

*Less than 0.1%.

On a quarterly basis, our loan policy requires that we evaluate for impairment all commercial real estate, construction and commercial loans that are classified as non-accrual, secured by real property in foreclosure or are otherwise likely to be impaired, residential non-accruing loans greater than $500,000 and all troubled debt restructurings. We have determined that $ 31.0 million and $16.4 million of impaired loans existed at December 31, 2010 and December 31, 2009, respectively. Based upon our analysis, only $ 15.6 million and $10.2 million of impaired loans required an allowance of $ 5.5 million and $1.4 million to be established as of December 31, 2010 and December 31, 2009, respectively. At December 31, 2010 and December 31, 2009, $ 50.7 million and $32.2 million, respectively, were included on the classified loan list and were not considered impaired.

Loan Delinquencies: The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates indicated.

	Loans Delinquent For
	60-89 Days				90 Days and Over				Total
	Number		Amount		Number		Amount		Number		Amount
	(Dollars in thousands)
At December 31, 2010
Real estate loans:
Residential		6	$	4,624		10	$	4,128		16	$	8,752
Commercial		2		793		6		3,160		8		3,953
Construction		-		-		2		897		2		897
Installment		-		-		5		98		5		98
Commercial		-		-		10		761		10		761
Collateral		-		-		-		-		-		-
Home equity line of credit		1		24		5		1,843		6		1,867
Demand		-		-		1		25		1		25
Revolving credit		-		-		-		-		-		-
Resort (timeshare)		-		-		-		-		-		-
Total		9	$	5,441		39	$	10,912		48	$	16,353
At December 31, 2009
Real estate loans:
Residential		6	$	1,919		9	$	5,429		15	$	7,348
Commercial		3		1,176		5		5,131		8		6,307
Construction		-		-		2		1,074		2		1,074
Installment		1		5		4		87		5		92
Commercial		1		300		8		707		9		1,007
Collateral		-		-		-		-		-		-
Home equity line of credit		2		38		2		1,079		4		1,117
Demand		-		-		1		25		1		25
Revolving credit		-		-		-		-		-		-
Resort (timeshare)		-		-		-		-		-		-
Total		13	$	3,438		31	$	13,532		44	$	16,970
At December 31, 2008
Real estate loans:
Residential		3	$	619		10	$	3,049		13	$	3,668
Commercial		-		-		4		1,468		4		1,468
Construction		-		-		2		1,319		2		1,319
Installment		-		-		4		108		4		108
Commercial		3		95		4		88		7		183
Collateral		-		-		-		-		-		-
Home equity line of credit		-		-		1		80		1		80
Demand		-		-		1		3		1		3
Revolving credit		-		-		-		-		-		-
Resort (timeshare)		-		-		-		-		-		-
Total		6	$	714		26	$	6,115		32	$	6,829

Non-performing Assets: The table below sets forth the amounts and categories of our non-performing assets at the dates indicated. Once a loan is 90 days delinquent or either the borrower or the loan collateral experiences an event that makes full collectability of the loan improbable, the loan is placed on “non-accrual” status. Our policy requires six months of continuous payments in order for the loan to be removed from non-accrual status.


	At December 31,
(Dollars in thousands)	2010			2009			2008			2007			2006

Non-accrual loans:
Real estate loans:
Residential	$	5,209		$	6,441		$	3,049		$	2,236		$	298
Commercial		3,693			5,316			1,468			136			136
Construction		898			1,074			1,319			-			197
Installment		124			88			108			59			6
Commercial		862			823			88			216			-
Collateral		-			-			-			-			-
Home equity line of credit		2,031			1,079			80			-			-
Demand		25			25			3			-			-
Revolving credit		-			-			-			-			-
Resort (timeshare)		4,880			-			-			-			-
Total non-accrual loans (1)		17,722			14,846			6,115			2,647			637
Accruing loans past due 90 days or more		-			-			-			-			-
Total non-performing loans		17,722			14,846			6,115			2,647			637
Other real estate owned		238			422			-			-			-
Other non-performing assets		-			-			-			-			-
Total non-performing assets	$	17,960		$	15,268		$	6,115		$	2,647		$	637

Total non-performing loans to total loans		1.51	%		1.41	%		0.73	%		0.39	%		0.10	%
Total non-performing loans to total assets		1.25	%		1.18	%		0.56	%		0.28	%		0.07	%

( 1 )

The amount of income that was contractually due but not recognized on non-accrual loans totaled $ 693,000, $754,000, $203,000 and $78,000, respectively, for the years ended December 31, 2010, 2009, 2008 and 2007.

Troubled debt restructurings: The following table presents information on loans whose terms had been modified in a troubled debt restructuring:


	2010			2009			2008			2007			2006
(Dollars in thousands)
Restructured loans on accrual status		$	16,926		$	5,417		$	-		$	-		$	-
Restructured loans on nonaccrual status			10,067			3,515			-			-			-
Total restructured loans		$	26,993		$	8,932		$	-		$	-		$	-

A loan is considered a troubled debt restructuring when we, for economic or legal reasons related to the borrower’s financial difficulties, grant a concession to the borrower in modifying or renewing the loan that we would not otherwise consider. In connection with troubled debt restructurings, terms may be modified to fit the ability of the borrower to repay in line with their current financial status, which may include a reduction in the interest rate to market rate or below, a change in the term or movement of past due amounts to the back-end of the loan or refinancing. A loan is placed on non-accrual status upon being restructured, even if it was not previously, unless the modified loan was current for the six months prior to its modification and we believe the loan is fully collectable in accordance with its new terms. Our policy to restore a restructured loan to performing status is dependent on the receipt of regular payments, generally for a period of six months and one calendar year end. All troubled debt restructurings are classified as impaired loans and are reviewed for impairment by us on a regular basis and a calendar year-end reporting period per our policy.

Under certain circumstances, we provide non-credit related interest rate concessions on residential mortgage loans in lieu of refinancing. Our policy is to modify existing loans to our zero point rate plus 0.25% for a fee of $750. The existing loan must be at least 12 months old and had no late payments over the last 18 months, or since closing of the loan if the loan is less than 18 months old. This program is offered on both fixed rate and adjustable rate loans. During the years ended December 31, 2010 and 2009, we reduced the interest rates on loans aggregating $59.7 million and $63.7 million, respectively. None of these loans were considered impaired, non-performing or troubled debt restructurings. This is due to the fact that the borrowers for these loans were not experiencing financial difficulty, payments were current on each of these loans and the interest rates were reduced consistent with current market rates for competitive reasons.

Potential Problem Loans: We perform a comprehensive internal analysis of our loan portfolio in order to identify and quantify loans with higher than normal risk. Loans having a higher risk profile are assigned a risk rating corresponding to the level of weakness identified in the loan. All special mention, substandard and doubtful loans are included on our “watchlist” which is updated and reviewed quarterly by our Credit Risk Management Department . In addition, on a quarterly basis, loans rated special mention, substandard or doubtful are formally presented to and reviewed by management to assess the level of risk, ensure the risk ratings are appropriate, and ensure appropriate actions are being taken to minimize potential loss exposure. The review cycle is determined based on the risk rating and level of overall credit exposure. This quarterly review is performed by the Chief Risk Officer and members of the Credit Risk Management and Special Assets Departments . Loans identified as being “loss” are normally fully charged off. Loans risk rated substandard or more severe are generally transferred to the Special Assets Department , although it is not uncommon for commercial lenders to manage stable or improving substandard loans with significant oversight from the special assets department. We do not use interest reserves to keep problem loans current. Interest reserves are only used for construction loans during the construction phase of the loan. See – “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” for further discussion of non-performing assets.

Allowance for Loan Losses : Allowance for Loan Losses : The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio as of the statement of condition date. The allowance for loan losses consists of a formula allowance following FASB ASC 450 – Contingencies and FASB ASC 310 - Receivables, The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management . This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available . The allowance consists of general, allocated and unallocated components , as further described below .

General component : The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate, commercial real estate, construction, installment, commercial, collateral, home equity line of credit, demand, revolving credit and resort. Commercial construction includes classes for commercial real estate construction and residential development, commercial real estate, construction, commercial and consumer. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no material changes in the Company’s policies or methodology pertaining to the general component of the allowance for loan losses during 2010.

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential real estate –residential real estate loans are generally originated in amounts up to 95.0% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80.0%. The Company generally does not grant subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. Typically, all fixed-rate residential mortgage loans are underwritten pursuant to secondary market underwriting guidelines which include minimum FICO standards. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Commercial real estate – Loans in this segment are primarily income-producing properties throughout New England. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans.

Construction loans – Loans in this segment include commercial construction loans, real estate subdivision development loans, to developers, licensed contractors and builders for the construction and development of commercial real estate projects and residential properties. Construction lending contains a unique risk characteristic as loans are originated under market and economic conditions that may change between the time of origination and the completion and subsequent purchaser financing of the property. In addition, construction subdivision loans and commercial and residential construction loans to contractors and developers entail additional risks as compared to single-family residential mortgage lending to owner-occupants. These loans typically involve large loan balances concentrated in single borrowers or groups of related borrowers. Real estate subdivision development loans to developers, licensed contractors and builders for the construction are generally speculative real estate development loans for which payment is derived from sale of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate. Residential construction credit quality is impacted by the overall health of the economy, including unemployment rates and housing prices.

Installment, Collateral, Demand and Revolving Credit– Loans in these segments include installment, demand, revolving credit and collateral loans, principally to customers residing in our primary market area with acceptable credit ratings. Our installment and collateral consumer loans generally consist of loans on new and used automobiles, loans collateralized by deposit accounts and unsecured personal loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Excluding collateral loans which are fully collateralized by a deposit account, repayment for loans in these segments are dependent on the credit quality of the individual borrower.

Commercial– Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Home equity line of credit–Loans in this segment include home equity loans and lines of credit generally underwritten with a loan-to-value ratio generally limited to no more than 90%, including any first mortgage. Our home equity lines of credit have ten-year terms and adjustable rates of interest which are indexed to the prime rate. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Resort– Loans in this segment include direct receivable, inventory, pre-sale, homeowner association and acquisition & development loans to timeshare developer / operators and participations in timeshare loans originated by experienced timeshare lending institutions, and originates and sells timeshare participations to other lending institutions. Lending to this industry is generally done on a nationwide basis, as the majority of timeshare operators are located outside of the Northeast. The Company currently owns no acquisition & development loans, and a limited amount of inventory loans, homeowner association loans, and pre-sale loans. Receivable loans are typically underwritten utilizing a lending formula in which loan advances are based on a percentage of eligible consumer notes. In addition, these loans generally contain provisions for recourse to the developer, the obligation of the developer to replace defaulted notes, and parameters with respect to minimum FICO scores or average weighted FICO scores of the portfolio of pledged notes. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Allocated component : The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for commercial real estate, construction, commercial and resort loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. The Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement or they are nonaccrual loans with outstanding balances of $500,000 or more.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan - by - loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Management updates the analysis quarterly. The assumptions used in appraisals are reviewed for appropriateness. Updated appraisals are obtained as needed or adjusted to reflect the estimated decline in the fair value based upon current market conditions for comparable properties.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring (“TDR”). All TDRs are initially classified as impaired.

Unallocated component : An unallocated component is maintained, when needed, to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The Company’s Loan Policy allows management to utilize a high and low range of 0.0% to 5.0% of our total allowance for loan losses when establishing an unallocated allowance, when considered necessary. The unallocated allowance is used to provide for an unidentified loss that may exist in emerging problem loans that cannot be fully quantified or may be affected by conditions not fully understood as of the balance sheet date.

Based on the qualitative and qualitative assessment of the loan portfolio segments and in thorough consideration of the characteristics, risk and credit quality indicators, a detailed revewof classified, non-performing and impaired loans, management believes that the allowance for loan losses properly estimated the inherent probable credit loss that exists in the loan portfolio as of the balance sheet date. This analysis process is both quantitative and subjective as it requires management to make estimates that are susceptible to revisions as more information becomes available. Although we believe that we have established the allowance at levels to absorb probable losses, future additions may be necessary if economic or other conditions in the future differ from the current environment.

Schedule of Allowance for Loan Losses: The following table sets forth activity in the allowance for loan losses for the years indicated.


	For the Years Ended December 31
	2010			2009			2008			2007			2006
(Dollars in thousands)

Balance at beginning of year	$	16,316		$	9,952		$	8,124		$	8,312		$	8,263
Provision for (reversal of) loan losses (1)		6,694			7,896			2,117			(706	)		(474	)
Charge-offs:
Real estate
Residential		( 1,152	)		(134	)		(1	)		-			-
Commercial		( 1,138	)		(284	)		(136	)		(55	)		-
Construction		-			(246	)		-			-			-
Installment		(3	)		(41	)		(4	)		(1	)		(5	)
Commercial		(8	)		(879	)		(161	)		(238	)		(17	)
Collateral		-			(1	)		-			-			-
Home equity line of credit		-			-			-			-			-
Demand		(25	)		(20	)		(20	)		(1	)		-
Revolving credit		( 32	)		(34	)		(32	)		(28	)		(18	)
Resort (timeshare)		-			-			-			-			-
Total charge-offs		( 2,358	)		(1,639	)		(354	)		(323	)		(40	)

Recoveries:
Real estate
Residential		-			-			-			-			-
Commercial		48			-			10			794			458
Construction		-			-			-			-			-
Installment		13			2			4			2			2
Commercial		15			91			39			32			95
Collateral		-			1			-			-			-
Home equity line of credit		-			-			-			-			-
Demand		6			-			-			1			-
Revolving credit		-			13			12			12			8
Resort (timeshare)		-			-			-			-			-
Total recoveries		82			107			65			841			563

Net (charge-offs) recoveries		( 2,276	)		(1,532	)		(289	)		518			523
Allowance at end of year	$	20,734		$	16,316		$	9,952		$	8,124		$	8,312

Ratios:

Allowance for loan losses to non-performing loans at end of year		117.00	%		109.90	%		162.75	%		306.91	%		1,304.87	%
Allowance for loan losses to total loans outstanding at end of year		1.76	%		1.54	%		1.18	%		1.20	%		1.37	%
Net charge-offs (reversals) to average loans outstanding		0.21	%		0.17	%		0.04	%		(0.08	)%		(0.09	)%

( 1 )

The reversal of the provision of loan losses in the fiscal years December 31, 2006 and 2007 were a result of decreases in charge-offs and increases in recoveries.

As shown in the table above, our coverage ratio for our allowance for loan losses to non-performing loans and impaired loans has declined significantly since 2006. This decline is directly attributable to the prolonged recessionary influences during 2009 and 2010. This resulted in an increase in both non-accruing and impaired loans since December 31, 2008. Since December 31, 2008, and in response to the deterioration in the economic climate and asset quality trends, our allowance for loan losses increased $10.78 million, or 108%, to $20.73 million as of December 31, 2010. Despite this, our increase in non-accruals outpaced our increase in allowance for loan losses during this period, resulting in a decline in coverage ratio. Our increase in allowance for loan losses for the year ended December 31, 2010 from December 31, 2009, along with a slight decrease in commercial real estate and residential non-accrual loans, increased our coverage ratio to 117% for the period ended December 31, 2010. This represents a slight improvement over a non-accrual coverage ratio of 110% at December 31, 2009.


Maryland	6712	To be applied for
(State or Other Jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
Incorporation or Organization)	Classification Code Number)	Identification Number)


Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Share		Proposed Maximum Aggregate Offering Price(1)		Amount of Registration Fee
Common Stock, $0.01 par value per share	17,880,200 shares (2)	$	10.00	$	178,802,000	$	20,758.92


	Minimum		Midpoint		Maximum		Adjusted Maximum

Number of shares:		11,050,000		13,000,000		14, 950 ,000		17,192,500
Gross offering proceeds:	$	110,500,000	$	130,000,000	$	149,500,000	$	171,925,000
Estimated offering expenses, excluding selling agent fees and expenses:	$	1,750,000	$	1,750,000	$	1,750,000	$	1,750,000
Selling agent fees and expenses (1) (2) :	$	1,143,300	$	1,322,100	$	1,500,900	$	1,706,500
Estimated net proceeds:	$	107,606,700	$	126,927,900	$	146,249,100	$	168,468,500
Estimated net proceeds per share:	$	9.74	$	9.76	$	9.78	$	9.80

	Minimum of Offering Range						Midpoint of Offering Range						Maximum of Offering Range						Adjusted Maximum of Offering Range

	With Foundation			Without Foundation			With Foundation			Without Foundation			With Foundation			Without Foundation			With Foundation			Without Foundation
							(Dollars in Thousands, except per share amounts)

Estimated stock offering amounts	$	110,500		$	119,425		$	130,000		$	140,500		$	149,500		$	161,575		$	171,925		$	185,811
Pro forma market capitalization		114,920			119,425			135,200			140,500			155,480			161,575			178,802			185,811
Total assets		1,511,905			1,518,745			1,529,050			1,537,097			1,546,195			1,555,449			1,565,912			1,576,554
Total liabilities		1,321,637			1,321,637			1,321,637			1,321,637			1,321,637			1,321,637			1,321,637			1,321,637
Pro forma stockholders’ equity		190,268			197,108			207,413			215,460			224,558			233,812			244,275			254,917
Pro forma net income		4,372			4,415			4,289			4,339			4,205			4,263			4,110			4,176
Pro forma stockholders’ equity per share		16.56			16.50			15.34			15.34			14.44			14.47			13.66			13.72
Pro forma net income per share		0.41			0.40			0.34			0.33			0.29			0.29			0.25			0.24

Pro forma pricing ratios :
Offering price as percentage of pro forma stockholders’ equity per share		60.39	%		60.61	%		65.19	%		65.19	%		69.25	%		69.11	%		73.21	%		72.89	%
Offering price as percentage of pro forma net income per share		18.29	x		18.75	x		22.06	x		22.73	x		25.86	x		25.86	x		30.00	x		31.25	x

Pro forma financial ratios :
Return on assets (annualized)		0.29	%		0.29	%		0.28	%		0.28	%		0.27	%		0.27	%		0.26	%		0.26	%
Return on equity (annualized)		2.30	%		2.24	%		2.07	%		2.01	%		1.87	%		1.82	%		1.68	%		1.64	%
Equity to assets		12.58	%		12.98	%		13.56	%		14.02	%		14.52	%		15.03	%		15.60	%		16.17	%
Total shares issued		14,492,000			11,943,500			13,520,000			14,050,000			15,548,000			16,157,500			17,880,200			18,581,125


		Page
SUMMARY		7
RISK FACTORS		21
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA		26
FORWARD-LOOKING STATEMENTS		29
HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING		30
OUR DIVIDEND POLICY		31
MARKET FOR THE COMMON STOCK		31
HISTORICAL AND UNAUDITED PRO FORMA REGULATORY CAPITAL COMPLIANCE		32
CAPITALIZATION		33
UNAUDITED PRO FORMA DATA		34
COMPARISON OF VALUATION AND UNAUDITED PRO FORMA INFORMATION WITH AND WITHOUT THE FOUNDATION		37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		38
BUSINESS OF FCB		55
BUSINESS OF FARMINGTON BANK		56
SUPERVISION AND REGULATION		85
FEDERAL AND STATE TAXATION		91
MANAGEMENT		92
COMPENSATION DISCUSSION AND ANALYSIS		95
COMPENSATION OF EXECUTIVE OFFICERS AND TRANSACTIONS WITH MANAGEMENT		104
SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS		110
THE CONVERSION AND THE OFFERING		110
FARMINGTON BANK COMMUNITY FOUNDATION, INC.		126
DESCRIPTION OF CAPITAL STOCK AND STOCKHOLDERS’ RIGHTS OF FCB		128
RESTRICTIONS ON ACQUISITION OF FCB		129
TRANSFER AGENT		133
EXPERTS		133
LEGAL MATTERS		133
WHERE YOU CAN FIND ADDITIONAL INFORMATION		133
CONSOLIDATED FINANCIAL STATEMENTS		F-1
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS		II-1
SIGNATURES		II-5
POWER OF ATTORNEY		II-5
EXHIBIT INDEX		II-6


	Years Ended December 31,

	2010		2009		$ Change			% Change
	(Dollars in thousands)

Net interest income	$	49,450	$	40,567	$	8,883			21.9	%
Provision for loan losses		6,694		7,896		( 1,202	)		( 15.2	) %
Noninterest income ( loss )		6,889		3,635		3,254			89.5	%
Noninterest expense		42,674		35,242		7,432			21.1	%
Income before income taxes		6,971		1,064		5,907			555.2	%
Provision for Income taxes		2,102		175		1,927			1101.1	%
Net income	$	4,869	$	889	$	3,980			447.7	%


	Years Ended December 31,
	2009		2008			$ Change			% Change
	( Dollars in thousands)

Net interest income	$	40,567	$	33,113		$	7,454			22.5	%
Provision for loan losses		7,896		2,117			5,779			273.0	%
Noninterest income (loss)		3,635		(560	)		4,195			749.1	%
Noninterest expense		35,242		27,877			7,365			26.4	%
Income before income taxes		1,064		2,559			(1,495	)		(58.4	)%
Provision for income taxes		175		613			(438	)		(71.5	)%
Net income	$	889	$	1,946		$	(1,057	)		(54.3	)%


	Year Ended December 31,
	2009			2008			$ Change			% Change
				( Dollars in thousands)
Other-than-temporary impairment losses on securities	$	(160	)	$	(5,176	)	$	5,016			96.9	%
Fees for customer service		2,776			2,594			182			7.0	%
Net loss on sales of investments		-			(30	)		30			100.0	%
Gain on real estate investment		-			701			(701	)		(100.0	)%
Gain (loss) on loans sold		(39	)		123			(162	)		(131.7	)%
Brokerage fee income		394			408			(14	)		(3.4	)%
Bank-owned life insurance income		490			520			(30	)		(5.8	)%
Other		174			300			(126	)		(42.0	)%
Total noninterest income (loss)	$	3,635		$	(560	)	$	4,195			749.1	%

	One Year or Less					More than One Year through Five Years					More than Five Years through Ten Years					More than Ten Years					Total Securities
December 31, 2010	Fair Value		Weighted- Average Yield			Fair Value		Weighted- Average Yield			Fair Value		Weighted- Average Yield			Fair Value		Weighted- Average Yield			Fair Value		Weighted- Average Yield
	(Dollars in thousands)
Available-for-Sale
U.S treasuries and U.S. government agency obligations	$	112,974		0.1	%	$	11,081		2.1	%	$	-				$	-		-		$	124,055		0.3	%
Government-sponsored residential mortgage-backed securities		-					19,322		4.0	%		3,161		4.7	%		9,811		5.9	%		32,294		4.7	%
Corporate debt securities		-					-					1,052		5.4	%		-					1,052		5.4	%
Trust preferred debt securities		-					-					-					44		2.1	%		44		2.1	%
Preferred equity securities		-					-					-					-		-			1,860
Marketable equity securities		-					-					-					-		-			406
Mutual Funds		-					-					-					-		-			3,292
Total available-for-sale																					$	163,008

Held-to-Maturity:
Mortgage-backed securities																					$	9
Municipal debt securities																						663
Trust preferred debt securities																						3,000
Total held-to-maturity																					$	3,672


	At December 31, 2010		At December 31, 2009
	(Dollars in thousands)

Three months or less	$	85,313	$	64,587
Over three months through six months		34,860		58,796
Over six months through one year		40,376		34,434
Over one year through three years		25,045		9,082
Over three years		11,252		5,022

Total	$	196,846	$	171,921


	One Year and Under		Over One Year to Two Years		Over Two Years to Three Years		Over Three Years to Four Years		Over Four Years to Five Years		Thereafter		Total		Percentage of Total Time Deposit Accounts
	(Dollars in thousands)
Interest Rate
0.00% - 1.00%	$	249,695	$	651	$	-	$	-	$	-	$	-	$	250,346		55.2	%
1.01% - 2.00%		79,847		37,275		13,740		46		-		-		130,908		28.9	%
2.01% - 3.00%		27,798		2,467		6,161		11,473		16,560		-		64,459		14.2	%
3.01% - 4.00%		3,065		1,488		459		-		151		-		5,163		1.1	%
4.01% - 5.00%		853		478		-		-		-		-		1,331		0.3	%
5.01% - 6.00%		1,470		-		-		-		-		-		1,470		0.3	%
Total	$	362,728	$	42,359	$	20,360	$	11,519	$	16,711	$	-	$	453,677		100.0	%

Name (1)	Age (2)	Director Since	Current Term Expires
Ronald A. Bucchi	55	2000	2013
John J. Carson	67	2010	2013
David Drew	68	1991	2011
Robert F. Edmunds, Jr.	66	1989	2012
John J. Patrick, Jr. (Chairman)	52	2008	2012
Kevin S. Ray	57	1997	2013
Michael A. Ziebka	46	2007	2011

	Incentive Ranges Percent of Salary			Award Objectives Weighting of Award
Tier	Minimum	Target	Maximum	Bank	Individual/ Department
CEO	20.00%	40.00%	80.00%	85%	15%
Other Executive Officers	12.50%	25.00%	50.00%	65%	35%


Oritani Financial Corp.	Bancorp Rhode Island, Inc.
Century Bancorp, Inc.	United Financial Bancorp
Sterling Bancorp	Peapack-Gladstone Financial
Financial Institutions Inc.	Enterprise Bancorp Inc.
Northfield Bancorp Inc.	Westfield Financial Inc.
Meridian Interstate Bancorp, Inc.	Center Bancorp Inc.
Suffolk Bancorp	Hingham Institute for Savings
First of Long Island Corp.	Chemung Financial Corp.
Canandalgua National Corp.	SI Financial Group Inc.
Rockville Financial Inc.

Name and Principal Position	Year			Salary		Bonus		Stock Awards (1)		Option Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings (2)		All Other Compensation (3)		Total

John J. Patrick, Jr.	2010			$	409,692	$	160,000	$	160,000		--		--	$	53,097	$	73,529	$	856,318
President, Chief Executive Officer		2009		$	403,846	$	200,000		--		--		--	$	37,643	$	24,186	$	665,675
		2008	(4)	$	269,231		--		--		--		--		--	$	8,423	$	277,654

Gregory A. White		2010		$	213,279	$	75,000	$	55,000		--		--	$	6,516	$	34,606	$	384,401
Chief Financial Officer		2009		$	201,058	$	50,000		--		--		--	$	1,850	$	9,803	$	262,711
		2008	(5)		--		--		--		--		--		--		--		--

Michael Schweighoffer		2010		$	232,673	$	100,000	$	75,000		--		--	$	9,694	$	29,561	$	446,928
Chief Risk Officer		2009		$	181,731		--		--		--		--	$	2,662	$	19,311	$	203,704
		2008	(6)		--		--		--		--		--		--		--	$	0

Kenneth F. Burns		2010		$	183,077	$	50,000	$	43,750		--		--	$	10,147	$	12,047	$	299,021
Executive Vice President, Retail Banking		2009		$	176,077	$	43,000		--		--		--	$	7,940	$	13,501	$	240,518
		2008		$	149,548	$	30,000		--		--		--	$	6,312	$	19,528	$	205,388

David S. Blitz		2010		$	186,922	$	54,967	$	45,000		--		--		--	$	22,444	$	309,333
Senior Vice President, Commercial Lending		2009		$	138,279	$	25,000		--		--		--		--	$	9,948	$	173,438
		2008	(7)		--		--		--		--		--		--		--		--


Name and Principal Position (a)	Year		Defined Benefit Employee Pension Plan (b)		Supplemental Retirement Plan for Executives (SERP)		Total

John J. Patrick, Jr.		2010		--	$	53,097	$	53,097
President, Chief Executive Officer		2009		--	$	37,643	$	37,643
		2008		--		--		--

Gregory A. White		2010			$	6,615	$	6,516
Chief Financial Officer		2009		--	$	1,850	$	1,850
		2008		--		--		--

Michael Schweighoffer		2010			$	9,694	$	9,694
Chief Risk Officer		2009		--	$	2,662	$	2,662
		2008		--		--		--

Kenneth F. Burns		2010	$	10,147		--	$	10,147
Executive Vice President, Retail Banking		2009	$	7,940		--	$	7,940
		2008	$	6,312		--	$	6,312

Name	Year			401 (k)	Bank Owned Life Insurance		Group Term Life Insurance		Car Allowance		Executive Life Insurance		Long - Term Disability		Club Dues		Total

John J. Patrick, Jr.		2010	$	9,800		--	$	414	$	2,621	$	47,009	$	2,835	$	10,850	$	73,529

Gregory A. White		2010		9,800		--		270		--		14,598		1,098		8,840		34,606

Michael Schweighoffer		2010		9,800		--		270		7,200		--		921		11,370		29,561

Kenneth F. Burns		2010		--		203		364		--		--		684		10,796		12,047

David S. Blitz		2010		9,705		--		377		--		--		12,362		--		22,444

Name	Number of Years Credited Service		Present Value of Accumulated Benefit		Payments During Last Fiscal Year

John J. Patrick, Jr.		3	$	90,740		--

Gregory A. White		2	$	8,366		--

Michael Schweighoffer		2	$	12,356		--

Kenneth F. Burns		6	$	50,085		--

Name	Voluntary termination		Involuntary Termination other than for cause		Termination within 2 years after Change in Control		Retirement		Disability		Death

John Patrick
Supplementary Retirement Plan	$	90,740	$	90,740	$	5,052,853	$	90,740	$	2,368,974	$	193,542
Phantom Stock Plan		--		--	$	331,460	$	166,660	$	166,660	$	166,660
Annual Incentive Plan (1)		--	$	164,800	$	164,800	$	164,800	$	164,800	$	164,800

Michael Schweighoffer
Supplementary Retirement Plan	$	12,356	$	12,356	$	2,474,762	$	12,356	$	919,039	$	33,273
Phantom Stock Plan		--		--	$	136,747	$	78,121	$	78,121	$	78,121
Annual Incentive Plan (1)		--	$	58,625	$	58,625	$	58,625	$	58,625	$	58,625

Gregory White
Supplementary Retirement Plan	$	8,366	$	8,366	$	2,330,203	$	8,366	$	770,162	$	25,312
Phantom Stock Plan		--		--	$	111,102	$	57,289	$	57,289	$	57,289
Annual Incentive Plan (1)		--	$	53,813	$	53,813	$	53,813	$	53,813	$	53,813

Kenneth Burns
Phantom Stock Plan		--		--	$	91,821	$	45,571	$	45,571	$	45,571
Annual Incentive Plan (1)		--	$	46,250	$	46,250	$	46,250	$	46,250	$	46,250

David Blitz
Phantom Stock Plan		--		--	$	93,867	$	46,873	$	46,873	$	46,873
Annual Incentive Plan (1)(2)		--	$	50,000	$	50,000	$	50,000	$	50,000	$	50,000


Name	Fees earned or paid in cash		Stock Awards		Option Awards		Non Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		2010 Total

David Drew	$	59,500	$	3,748	$	--	$	--	$	36,683	$	99,931
Kevin S. Ray		60,200		3,748		--		--		28,602		92,550
Robert F. Edmunds, Jr.		60,300		3,748		--		--		36,628		100,676
John J. Carson		47,200		3,748		--		--		149		51,097
Ronald A. Bucchi		63,500		3,748		--		--		15,642		82,890
Michael A. Ziebka		56,800		3,748		--		--		5,063		65,611


Name of Beneficial Owner	Number of Shares		Amount		Percentage of Shares Outstanding (2)

Directors:
Ronald A. Bucchi		15,000	$	150,000		*
John J. Carson		10,000		100,000		*
David Drew		30,000		300,000		*
Robert E. Edmunds, Jr.		30,000		300,000		*
Kevin S. Ray		10,000		100,000		*
Michael A. Ziebka		5,000		50,000		*

Named Executive Officers:
John J. Patrick, Jr.		30,000		300,000		*
Gregory A. White		30,000		300,000		*
Michael T. Schweighoffer		15,000		150,000		*
Kenneth F. Burns		22,500		225,000		*
David S. Blitz		--		--		*

All Directors and Executive Officers as a Group
(10 Persons)		197,500	$	1,975,000		1.7	%

	Page(s)

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Financial Statements:

Consolidated Statements of Condition	F-3

Consolidated Statements of Income	F-4

Consolidated Statements of Changes in Capital Accounts	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7 to F-61

	December 31,
	2010			2009
(Dollars in thousands)
Assets
Cash and due from banks	$	18,608		$	23,299
Federal funds sold		-			5,000
Cash and cash equivalents		18,608			28,299
Securities held-to-maturity, at amortized cost		3,672			3,010
Securities available-for-sale, at fair value		163,008			121,350
Loans held for sale		862			-
Loans, net		1,157,917			1,039,995
Premises and equipment, net		21,907			20,272
Federal Home Loan Bank of Boston stock, at cost		7,449			7,449
Accrued income receivable		4,227			4,223
Bank-owned life insurance		19,657			13,983
Deferred income taxes		11,408			8,373
Prepaid expenses and other assets		7,915			8,232
Total assets	$	1,416,630		$	1,255,186

Liabilities and Capital Accounts
Deposits
Interest-bearing	$	958,319		$	865,002
Noninterest-bearing		150,186			128,884
		1,108,505			993,886
FHLB advances		71,000			62,000
Repurchase agreement borrowings		21,000			21,000
Mortgagors ’ escrow accounts		9,717			8,894
Repurchase liabilities		84,029			50,086
Accrued expenses and other liabilities		27,386			25,647
Total liabilities		1,321,637			1,161,513


Commitments and contingencies (Note 13)		-			-
Capital accounts
Undivided profits		97,513			92,644
Accumulated other comprehensive (loss) income		(2,520	)		1,029
Total capital accounts		94,993			93,673
Total liabilities and capital accounts	$	1,416,630		$	1,255,186

	For the Year Ended December 31,
	2010		2009			2008
(Dollars in thousands)
Interest income
Interest and fees on loans
Mortgage	$	42,404	$	39,337		$	34,894
Other		13,727		11,143			10,649
Interest and dividends on investments
United States Government and agency obligations		4,013		6,497			8,292
Other bonds		229		305			379
Corporate stocks		195		100			147
Other interest income		495		593			1,357
Total interest income		61,063		57,975			55,718

Interest expense
Deposits		8,329		13,526			19,577
Interest on borrowed funds		2,149		2,738			1,747
Interest on repo borrowings		719		719			577
Interest on repurchase liabilities		416		425			704
Total interest expense		11,613		17,408			22,605
Net interest income		49,450		40,567			33,113
Provision for allowance for loan losses		6,694		7,896			2,117
Net interest income after provision for loan losses		42,756		32,671			30,996

Noninterest income (loss)
Total other-than-temporary impairment losses on securities		-		(160	)		(5,176	)
Portion of losses recognized in other comprehensive income		-		-			-
Net impairment losses recognized in earnings		-		(160	)		(5,176	)
Fees for customer services		3,061		2,776			2,594
Net gain (loss) on sales of investments		1,686		-			(30	)
Gain on real estate investment		-		-			701
Net gain on loans sold		822		86			123
Brokerage and insurance fee income		377		394			408
Bank owned life insurance income		667		490			520
Other		276		49			300
Total noninterest income (loss)		6,889		3,635			(560	)

Noninterest expense
Salaries and employee benefits		23,221		18,413			14,681
Occupancy expense		4,142		2,993			2,951
Furniture and equipment expense		4,022		3,055			2,658
FDIC assessment		1,760		2,172			292
Marketing		2,583		1,588			1,224
Other operating expenses		6,946		7,021			6,071
Total noninterest expense		42,674		35,242			27,877
Income before income taxes		6,971		1,064			2,559
Provision for income taxes		2,102		175			613

Net income	$	4,869	$	889		$	1,946

				Accumulated Other Comprehensive (Loss) Income
	Undivided Profits			Unrealized Gain on Securities Available- for-Sale			Related to Employee Benefits Plans, Net of Tax Effect			Total
(Dollars in thousands)
Balance at December 31, 2007	$	89,863		$	(689	)	$	142		$	89,316
Net income		1,946			-			-			1,946
Change in accumulated other comprehensive loss related to employee benefit plans, net of tax effects		-			-			(1,647	)		(1,647	)
Increase in unrealized gain on available-for-sale securities, net of tax effects		-			1,102			-			1,102
Total comprehensive income											1,401
Effect of change in measurement date - FAS 158		(54	)		-			-			(54	)
Balance at December 31, 2008		91,755			413			(1,505	)		90,663
Net income		889			-			-			889
Change in accumulated other comprehensive loss related to employee benefit plans, net of tax effects		-			-			(167	)		(167	)
Increase in unrealized gain on available-for-sale securities, net of tax effects		-			2,288			-			2,288
Total comprehensive income											3,010
Balance at December 31, 2009		92,644			2,701			(1,672	)		93,673
Net income		4,869			-			-			4,869
Change in accumulated other comprehensive loss related to employee benefit plans, net of tax effects		-			-			(1,959	)		(1,959	)
Decrease in unrealized gain on available-for-sale securities, net of tax effects		-			(1,590	)		-			(1,590	)
Total comprehensive income											1,320
Balance at December 31, 2010	$	97,513		$	1,111		$	(3,631	)	$	94,993

	For the Year Ended
	December 31,
	2010			2009			2008
(Dollars in thousands)
Cash flows from operating activities
Net income	$	4,869		$	889		$	1,946
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for allowance for loan losses		6,694			7,896			2,117
Provision for (reduction in) off-balance sheet commitments		(16	)		74			(69	)
Provision for depreciation and amortization		3,014			2,029			1,834
(Gain) loss on sale of investments		(1,686	)		-			30
Impairment losses on securities		-			160			5,176
Loans originated for sale		(36,719	)		-			-
Proceeds from the sale of loans held for sale		36,679			-			-
Net gain on loans sold		(822	)		(86	)		(123	)
Loss on sale of foreclosed real estate		48			-			-
Accretion and amortization of investment security discounts and premiums, net		86			10			78
Amortization and accretion of loan fees and discounts, net		(312	)		(64	)		44
Gain on real estate investments		-			-			(701	)
Provision for deferred income taxes		(1,207	)		(908	)		(2,197	)
(Increase) decrease in accrued income receivable		(4	)		270			(312	)
Increase in cash surrender value of bank-owned life insurance		(667	)		(498	)		(520	)
Decrease (increase) in prepaid expenses and other assets		133			(6,470	)		3,672
(Decrease) increase in accrued expenses and other liabilities		(1,214	)		5,653			2,415
Net cash provided by operating activities		8,876			8,955			13,390
Cash flow from investing activities
Sales and maturities of securities available for sale		279,259			65,120			83,325
Purchases of securities held-to-maturity		(662	)		-			(2,938	)
Purchases of securities available-for-sale		(321,725	)		(5,070	)		(94,063	)
Purchase of Federal Home Loan Bank stock		-			(29	)		(5,121	)
Loan originations, net of principal repayments		(124,542	)		(215,830	)		(163,965	)
Purchases of bank-owned life insurance		(5,007	)		(6	)		-
Proceeds from sale of foreclosed real estate		374			-			-
Purchases of premises and equipment		(4,649	)		(8,410	)		(919	)
Net cash used in investing activities		(176,952	)		(164,225	)		(183,681	)
Cash flows from financing activities
Net increase (decrease) in borrowings		9,000			(55,000	)		138,000
Net increase in demand deposits, NOW accounts, savings accounts and money market accounts		107,647			192,525			12,346
Net increase (decrease) in certificates of deposit		6,972			(2,723	)		(14,070	)
Net increase (decrease) in repurchase liabilities		33,943			15,904			(2,202	)
Change in mortgagors ’ escrow accounts		823			1,131			1,989
Net cash provided by financing activities		158,385			151,837			136,063
Net decrease in cash and cash equivalents		(9,691	)		(3,433	)		(34,228	)
Cash and cash equivalents at beginning of year		28,299			31,732			65,960
Cash and cash equivalents at end of year	$	18,608		$	28,299		$	31,732
Supplemental disclosure of cash flow information
Cash paid for interest	$	11,611		$	17,889		$	22,641
Cash paid for income taxes		3,382			1,225			2,934
Loans transferred to other real estate owned		238			1,387			-

	December 31, 2010

			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
(Dollars in thousands)
U.S. Treasury obligations	$	112,975	$	112,975	$	-	$	-
U.S. Goverment agency obligations		11,080		-		11,080		-
Government sponsored residential mortgage-backed securities		32,294		-		32,294		-
Corporate debt securities		1,052		-		1,052		-
Trust preferred debt securities		44		-		-		44
Preferred equity securities		1,860		-		1,860		-
Marketable equity securities		406		116		290		-
Mutual funds		3,297		-		3,297		-
Securities available for sale	$	163,008	$	113,091	$	49,873	$	44
Interest rate swap derivative receivables		1,771				1,771
Interest rate swap derivative liabilities		1,771				1,771

	December 31, 2009

			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
(Dollars in thousands)
U.S. Government agency obligations	$	5,020	$	-	$	5,020	$	-
Government sponsored residential mortgage-backed securities		106,231		-		106,231		-
Corporate debt securities		1,513		-		1,513		-
Trust preferred debt securities		90		-		-		90
Preferred equity securities		1,989		-		1,989
Marketable equity securities		1,419		1,129		290		-
Mutual funds		5,088		-		5,088		-

Securities available for sale	$	121,350	$	1,129	$	120,131	$	90
Interest rate swap derivative receivables		93				93
Interest rate swap derivative liabilities		93				93

	Securities Available for Sale
	For the Year Ended December 31,
	2010			2009			2008

(Dollars in thousands)
Balance at beginning of period	$	90		$	250		$	-
Transfer into Level 3		-			-			3,379
Investment paydowns/accretion		(46	)		-			(264	)
Total losses - (realized/unrealized):
Included in earnings		-			(160	)		(2,865	)
Included in other comprehensive income		-			-			-
Purchases, issuances and settlements		-			-			-
Balance at the end of period	$	44		$	90		$	250

	At December 31, 2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Gains		Losses			Value
Available-for-sale
Debt securities:
U.S. Treasury obligations	$	112,973	$	2	$	-		$	112,975
U.S. Government agency obligations		11,004		76		-			11,080
Government sponsored residential mortgage-backed securities		30,516		1,780		(2	)		32,294
Corporate debt securities		1,000		52		-			1,052
Trust preferred debt securities		44		-		-			44
Preferred equity securities		2,110		43		(293	)		1,860
Marketable equity securities		398		10		(2	)		406
Mutual funds		3,280		17		-			3,297
Total securities available for sale	$	161,325	$	1,980	$	(297	)	$	163,008

Held-to-maturity
Government sponsored residential mortgage-backed securities	$	9	$	-	$	-		$	9
Municipal debt securities		663		-		-			663
Trust preferred debt security		3,000		-		-			3,000
Total securities held-to-maturity	$	3,672	$	-	$	-		$	3,672

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Dollars in thousands)	Value		Loss			Value		Loss			Value		Loss
December 31, 2010
Available for sale:
Government sponsored residential mortgage-backed securities	$	-	$	-		$	335	$	(2	)	$	335	$	(2	)
Preferred equity securities		95		(5	)		1,722		(288	)		1,817		(293	)
Marketable equity securities		-		-			5		(2	)		5		(2	)
Total	$	95	$	(5	)	$	2,062	$	(292	)	$	2,157	$	(297	)


December 31, 2009
Available for sale:
Government sponsored residential mortgage-backed securities	$	-	$	-		$	4,837	$	(5	)	$	4,837	$	(5	)
Preferred equity securities		-		-			1,917		(215	)		1,917		(215	)
Marketable equity securities		206		(14	)		626		(134	)		832		(148	)
Total	$	206	$	(14	)	$	7,380	$	(354	)	$	7,586	$	(368	)


	At December 31, 2010
	Available for Sale				Held to Maturity
			Estimated				Estimated
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
(Dollars in thousands)
Due in one year or less	$	112,973	$	112,975	$	663	$	663
Due after one year through five years		11,004		11,080		-		-
Due after five years through ten years		1,000		1,052		-		-
Due after ten years		44		44		3,000		3,000
Government sponsored residential mortgage-backed securities		30,516		32,294		9		9
Total debt securities	$	155,537	$	157,445	$	3,672	$	3,672

	As of December 31,
	2010			2009
(Dollars in thousands)
Real estate
Residential	$	453,557		$	446,880
Commercial		361,838			265,515
Construction		46,623			68,704
Installment		12,597			16,423
Commercial		112,535			104,476
Collateral		1,941			2,486
Home equity line of credit		81,837			66,658
Demand		227			415
Revolving credit		84			75
Resort		105,215			82,794
Total loans		1,176,454			1,054,426
Less:
Allowance for loan losses		(20,734	)		(16,316	)
Net deferred loan costs		2,197			1,885
Loans, net	$	1,157,917		$	1,039,995