(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

At ~~August 1,~~November 3, 2014, the registrant had ~~54,700,940~~54,708,492 shares of common stock, par value $0.01 per share, outstanding.


		June 30,			December 31,
		2014			2013				September 30, 2014			December 31, 2013
		(Dollars in thousands)							(Dollars in thousands)
ASSETS	ASSETS							ASSETS
Cash and due from banks		$	367,819		$	86,271			$	388,273		$	86,271
Securities available for sale, at fair value			182,752			201,137				168,159			201,137
Federal Home Loan Bank stock, at cost			12,681			11,907				12,725			11,907
Loans held for sale			5,900			2,363				1,996			2,363

Loans, net of fees and costs			2,395,625			2,290,735				2,508,138			2,290,735
Less allowance for loan losses			(26,131	)		(25,335	)			(26,739	)		(25,335	)

Loans, net			2,369,494			2,265,400				2,481,399			2,265,400

Bank-owned life insurance			38,020			37,446				38,314			37,446
Foreclosed real estate, net			2,503			1,390				1,806			1,390
Premises and equipment, net			38,967			39,426				38,602			39,426
Accrued interest receivable			7,118			7,127				7,003			7,127
Deferred tax asset, net			12,773			13,478				14,410			13,478
Goodwill			13,687			13,687				13,687			13,687
Other assets			4,213			2,469				2,393			2,469

Total assets		$	3,055,927		$	2,682,101			$	3,168,767		$	2,682,101


LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non interest-bearing		$	484,242		$	255,639			$	288,832		$	255,639
Interest-bearing			2,080,065			1,992,961				2,114,586			1,992,961

Total deposits			2,564,307			2,248,600				2,403,418			2,248,600

Long-term debt			211,340			161,903				172,687			161,903
Accrued expenses and other liabilities			18,345			22,393				21,623			22,393

Total liabilities			2,793,992			2,432,896				2,597,728			2,432,896

Stockholders’ equity:
Common stock, no par value, 50,000,000 shares authorized; 23,000,000 shares issued			—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; none issued										—			—
Common stock, $0.01 par value, 100,000,000 shares authorized and 54,702,764 shares issued at September 30, 2014; no par value, 100,000,000 shares authorized and 56,313,200 shares issued at December 31, 2013⁽¹⁾										547			—
Additional paid-in capital			100,068			99,553				411,134			99,553
Retained earnings			172,663			162,388				178,678			162,388
Accumulated other comprehensive income			5,485			4,104				3,052			4,104
Treasury stock, at cost, 768,361 and 778,821 shares at June 30, 2014 and December 31, 2013, respectively			(9,769	)		(9,919	)
Unearned compensation - ESOP, 558,900 and 579,600 shares at June 30, 2014 and December 31, 2013, respectively			(5,589	)		(5,796	)
Unearned compensation - restricted shares, 85,190 and 103,810 at June 30, 2014 and December 31, 2013, respectively			(923	)		(1,125	)
Treasury stock, at cost; 1,906,865⁽¹⁾ shares at December 31, 2013										—			(9,919	)
Unearned compensation - ESOP, 2,995,386 and 1,419,093⁽¹⁾shares at September 30, 2014 and December 31, 2013, respectively										(21,548	)		(5,796	)
Unearned compensation - restricted shares, 204,049 and 254,168⁽¹⁾ at September 30, 2014 and December 31, 2013, respectively										(824	)		(1,125	)

Total stockholders’ equity			261,935			249,205				571,039			249,205


Total liabilities and stockholders’ equity		$	3,055,927		$	2,682,101			$	3,168,767		$	2,682,101


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,						Nine Months Ended September 30,
	2014		2013		2014		2013		2014			2013⁽¹⁾			2014		2013⁽¹⁾
	(Dollars in thousands, except per share amounts)								(Dollars in thousands, except per share amounts)
Interest and dividend income:
Interest and fees on loans	$	25,112	$	21,730	$	49,547	$	42,524	$	26,617		$	22,889		$	76,164	$	65,413
Interest on debt securities:
Taxable		630		1,007		1,375		2,163		588			944			1,963		3,107
Tax-exempt		44		53		89		106		45			53			134		159
Dividends on equity securities		377		364		690		713		357			348			1,047		1,061
Other interest and dividend income		138		101		228		165		258			86			486		251

Total interest and dividend income		26,301		23,255		51,929		45,671		27,865			24,320			79,794		69,991

Interest expense:
Interest on deposits		4,407		4,141		8,812		8,089		4,513			4,427			13,325		12,516
Interest on borrowings		655		795		1,276		1,637		632			796			1,908		2,433

Total interest expense		5,062		4,936		10,088		9,726		5,145			5,223			15,233		14,949

Net interest income		21,239		18,319		41,841		35,945		22,720			19,097			64,561		55,042
Provision for loan losses		696		3,219		829		4,479		655			151			1,484		4,630

Net interest income, after provision for loan losses		20,543		15,100		41,012		31,466		22,065			18,946			63,077		50,412

Non-interest income:
Customer service fees		1,860		1,776		3,659		3,362		1,880			1,857			5,539		5,219
Loan fees		106		108		319		164		148			185			467		349
Mortgage banking gains, net		267		403		387		558
Mortgage banking gain (loss), net										19			(102	)		406		456
Gain on sales of securities, net		1,505		2,128		3,065		4,401		1,346			2,995			4,411		7,396
Income from bank-owned life insurance		293		296		574		587		294			299			868		886
Other income		6		9		17		9		—			—			17		9

Total non-interest income		4,037		4,720		8,021		9,081		3,687			5,234			11,708		14,315

Non-interest expenses:
Salaries and employee benefits		10,017		9,476		20,818		19,551		10,249			10,033			31,067		29,584
Occupancy and equipment		2,216		2,086		4,777		4,420		2,252			2,103			7,029		6,523
Data processing		909		1,079		2,070		2,070		1,201			1,089			3,271		3,159
Marketing and advertising		688		812		1,495		1,503		769			539			2,264		2,042
Professional services		659		537		1,300		1,138		588			453			1,888		1,591
Foreclosed real estate		199		86		210		192		(47	)		(31	)		163		161
Deposit insurance		531		522		1,082		997		515			525			1,597		1,522
Other general and administrative		1,062		997		1,950		2,016		1,180			876			3,130		2,892

Total non-interest expenses		16,281		15,595		33,702		31,887		16,707			15,587			50,409		47,474

Income before income taxes		8,299		4,225		15,331		8,660		9,045			8,593			24,376		17,253
Provision for income taxes		2,795		1,200		5,056		2,567		3,030			3,272			8,086		5,839

Net income	$	5,504	$	3,025	$	10,275	$	6,093	$	6,015		$	5,321		$	16,290	$	11,414


Income per share:
Basic	$	0.25	$	0.14	$	0.47	$	0.28	$	0.12		$	0.10		$	0.31	$	0.22
Diluted	$	0.25	$	0.14	$	0.47	$	0.28	$	0.11		$	0.10		$	0.30	$	0.21
Weighted average shares:
Basic		21,666,169		21,649,423		21,658,954		21,644,052		52,043,346			52,965,816			52,718,470		52,984,441
Diluted		22,106,586		21,962,628		22,095,156		21,957,397		53,156,287			53,866,034			53,801,448		53,795,975


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013			2014			2013			2014			2013
	(In thousands)												(In thousands)
Net income	$	5,504		$	3,025		$	10,275		$	6,093		$	6,015		$	5,321		$	16,290		$	11,414

Other comprehensive income (loss):
Other comprehensive loss:
Securities available for sale:
Unrealized holding gain (loss) on securities available for sale		3,719			(2,403	)		5,285			2,626			(2,690	)		2,123			2,595			4,749
Reclassification adjustment for gain realized in income (1)		(1,505	)		(2,128	)		(3,065	)		(4,401	)		(1,346	)		(2,995	)		(4,411	)		(7,396	)

Net unrealized gain (loss)		2,214			(4,531	)		2,220			(1,775	)
Net unrealized loss														(4,036	)		(872	)		(1,816	)		(2,647	)
Tax effect		(858	)		1,800			(839	)		698			1,603			343			764			1,041

Total other comprehensive income (loss)		1,356			(2,731	)		1,381			(1,077	)
Total other comprehensive loss														(2,433	)		(529	)		(1,052	)		(1,606	)


Comprehensive income	$	6,860		$	294		$	11,656		$	5,016		$	3,582		$	4,792		$	15,238		$	9,808


	Shares of Common Stock Outstanding (1)			Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock			Unearned Compensation - ESOP			Unearned Compensation - Restricted Shares			Total			Shares of Common Stock Outstanding ⁽¹⁾			Common Stock		Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock			Unearned Compensation - ESOP			Unearned Compensation - Restricted Shares			Total
	(Dollars in thousands)																							(Dollars in thousands)
*Six Months Ended June 30, 2013*
*Nine Months Ended September 30, 2013*
Balance at December 31, 2012		22,135,855		$	98,338		$	146,959	$	4,915		$	(8,331	)	$	(6,210	)	$	(1,728	)	$	233,943			54,488,922		$	—	$	98,338		$	146,959	$	4,915		$	(8,331	)	$	(6,210	)	$	(1,728	)	$	233,943
Comprehensive income		—			—			6,093		(1,077	)		—			—			—			5,016			—			—		—			11,414		(1,606	)		—			—			—			9,808
Purchase of treasury stock		(60,786	)		—			—		—			(1,101	)		—			—			(1,101	)		(223,015	)		—		—			—		—			(1,698	)		—			—			(1,698	)
ESOP shares earned (20,700 shares)		—			166			—		—			—			207			—			373
Share-based compensation expense		8,155			328			—		—			—			—			304			632
ESOP shares earned (76,023 shares)																									—			—		271			—		—			—			311			—			582
Restricted stock awards, net of awards surrendered																									97,373			—		513			—		—			—			—			468			981
Stock options exercised		7,472			(62	)		—		—			96			—			—			34			20,221			—		(72	)		—		—			106			—			—			34

Balance at June 30, 2013		22,090,696		$	98,770		$	153,052	$	3,838		$	(9,336	)	$	(6,003	)	$	(1,424	)	$	238,897
Balance at September 30, 2013																									54,383,501		$	—	$	99,050		$	158,373	$	3,309		$	(9,923	)	$	(5,899	)	$	(1,260	)	$	243,650


*Six Months Ended June 30, 2014*
*Nine Months Ended September 30, 2014*
Balance at December 31, 2013		22,117,369		$	99,553		$	162,388	$	4,104		$	(9,919	)	$	(5,796	)	$	(1,125	)	$	249,205			54,406,335		$	—	$	99,553		$	162,388	$	4,104		$	(9,919	)	$	(5,796	)	$	(1,125	)	$	249,205
Comprehensive income		—			—			10,275		1,381			—			—			—			11,656			—			—		—			16,290		(1,052	)		—			—			—			15,238
ESOP shares earned (20,700 shares)		—			307			—		—			—			207			—			514
Share-based compensation expense		17,860			232			—		—			—			—			202			434
ESOP shares earned (91,323 shares)																									—			—		388			—		—			—			498			—			886
Restricted stock awards, net of awards surrendered																									(1,861	)		—		345			—		—			—			—			301			646
Excess tax benefits in connection with share-based compensation		—			77			—		—			—			—			—			77			—			—		86			—		—			—			—			—			86
Stock options exercised		11,220			(101	)		—		—			150			—			—			49			29,919			—		(93	)		—		—			150			—			—			57
Corporate Reorganization:
Conversion of Meridian Interstate Bancorp, Inc.																									(1,356,629	)		531		301,750			—		—			—			—			—			302,281
Purchase by ESOP																									1,625,000			16		16,234			—		—			—			(16,250	)		—			—
Treasury stock retired																									—			—		(9,769	)		—		—			9,769			—			—			—
Contribution of Meridian Financial Services, MHC																									—			—		2,640			—		—			—			—			—			2,640

Balance at June 30, 2014		22,146,449		$	100,068		$	172,663	$	5,485		$	(9,769	)	$	(5,589	)	$	(923	)	$	261,935
Balance at September 30, 2014																									54,702,764		$	547	$	411,134		$	178,678	$	3,052		$	—		$	(21,548	)	$	(824	)	$	571,039


	Six Months Ended June 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)						(In thousands)
Cash flows from operating activities:
Net income	$	10,275		$	6,093		$	16,290		$	11,414
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of acquisition fair value adjustments		(20	)		(162	)		(31	)		(240	)
ESOP shares earned		514			373			886			582
Provision for loan losses		829			4,479			1,484			4,630
Accretion of net deferred loan origination costs/fees		(231	)		(38	)		(401	)		(50	)
Net accretion of securities available for sale		(9	)		(5	)		(20	)		(6	)
Capitalization of mortgage servicing rights		(20	)		(86	)		(28	)		(97	)
Amortization of mortgage servicing rights		111			173			173			248
Depreciation and amortization expense		1,190			1,117			1,794			1,706
Gain on sales of securities, net		(3,065	)		(4,401	)		(4,411	)		(7,396	)
Net loss and provision for foreclosed real estate		79			88			78			42
Deferred income tax benefit		(134	)		(55	)		(168	)		(92	)
Income from bank-owned life insurance		(574	)		(587	)		(868	)		(886	)
Share-based compensation expense		434			632			646			981
Excess tax benefits in connection with share-based compensation		(77	)		—			(86	)		—
Net changes in:
Loans held for sale		(3,537	)		4,314			367			8,208
Accrued interest receivable		9			(94	)		124			(140	)
Other assets		(1,199	)		(2,570	)		(69	)		(595	)
Accrued expenses and other liabilities		(3,971	)		283			(684	)		(43	)

Net cash provided by operating activities		604			9,554			15,076			18,266


Cash flows from investing activities:
Activity in securities available for sale:
Proceeds from maturities, calls and principal payments		26,853			20,704			36,873			31,607
Redemption of mutual funds, net		1,019			9,911			1,015			11,792
Proceeds from sales		14,814			27,775			24,311			45,826
Purchases		(19,661	)		(15,816	)		(26,631	)		(27,088	)
Loans originated, net of principal payments received		(106,440	)		(223,966	)		(218,822	)		(331,139	)
Purchases of premises and equipment		(690	)		(2,045	)		(908	)		(2,293	)
(Purchase) redemption of Federal Home Loan Bank stock		(774	)		157			(818	)		157
Cash received in MHC merger								2,640			—
Proceeds from sales of foreclosed real estate		540			926			1,223			1,133

Net cash used in investing activities		(84,339	)		(182,354	)		(181,117	)		(270,005	)


	Six Months Ended June 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)						(In thousands)
Cash flows from financing activities:
Net increase in deposits		315,720			196,653			154,835			339,693
Proceeds from Federal Home Loan Bank advances with maturities of three months or more		55,000			47,500			57,131			47,500
Repayment of Federal Home Loan Bank advances with maturities of three months or more		(5,563	)		(19,974	)		(46,347	)		(20,749	)
Stock options exercised		49			34			57			34
Excess tax benefits in connection with share-based compensation		77			—			86			—
Net proceeds from sale of common stock								302,281			—
Purchase of treasury stock		—			(1,101	)		—			(1,698	)

Net cash provided by financing activities		365,283			223,112			468,043			364,780


Net change in cash and cash equivalents		281,548			50,312			302,002			113,041

Cash and cash equivalents at beginning of period		86,271			93,192			86,271			93,192


Cash and cash equivalents at end of period	$	367,819		$	143,504		$	388,273		$	206,233


Supplemental cash flow information:
Interest paid on deposits	$	8,825		$	8,097		$	13,331		$	12,503
Interest paid on borrowings		1,265			1,862			1,931			2,759
Income taxes paid, net of refunds		7,033			4,440			7,493			6,465
Non-cash investing and financing activities:
Transfers from loans to foreclosed real estate		1,732			200			1,717			353
Net change in amounts due to broker on security transactions		636			828			—			475

Meridian Bancorp, Inc. (the “Company”) is a Maryland corporation incorporated on March 6, 2014 to be the successor to Meridian Interstate Bancorp, Inc. (“Old Meridian”) upon completion of the second step mutual-to-stock conversion (the “Conversion”) of Meridian Financial Services, Incorporated, (the “MHC”), the top tier mutual holding company of Old Meridian. Old Meridian was the former mid-tier holding company for East Boston Savings Bank (the “Bank”). Prior to completion of the Conversion, approximately 59% of the shares of common stock of Old Meridian were owned by the MHC. In conjunction with the Conversion, the MHC and Meridian Interstate Funding Corporation were merged into Old Meridian (and ceased to exist), and Old Meridian merged into the Company and the Company became its successor under the name Meridian Bancorp, Inc. The Conversion was completed July 28, 2014. The Company raised gross proceeds of $325.0 million by selling a total of 32,500,000 shares of common stock at $10.00 per share in the second step stock offering. Concurrent with the completion of the stock offering, each share of Old Meridian common stock owned by public stockholders (stockholders other than the MHC) was exchanged for 2.4484 shares of Company common stock. A total of 22,200,316 shares of Company common stock were issued in the exchange. The Conversion was accounted for as a capital raising transaction by entities under common control. The historical financial results of the MHC are immaterial to the results of the Company and therefore the net assets of the MHC have been reflected as an increase to stockholders’ equity.

As a result of the Conversion, all share and per share information has been revised to reflect the 2.4484-to-one exchange ratio. Such revised financial information presented in this Form 10-Q is derived from the consolidated financial statements of Old Meridian and its subsidiaries.

The consolidated financial statements include the accounts of ~~Meridian Interstate Bancorp, Inc., a 59.2%-owned subsidiary of Meridian Financial Services, Incorporated (“Meridian”), a mutual holding company,~~the Company and all other entities in which it has a controlling financial ~~interest (collectively referred to as the “Company”).~~interest. The Company ~~was formed in a corporate reorganization in 2006 and~~ owns ~~East Boston Savings Bank and its subsidiaries (the “Bank”) and Meridian Interstate Funding Corporation, which was established in 2008 to fund a loan to~~ the ~~Company’s Employee Stock Ownership Plan (“ESOP”).~~Bank. The Bank’s subsidiaries include Prospect, Inc., which engages in securities transactions on its own behalf, EBOSCO, LLC and Berkeley Riverbend Estates LLC, both of which hold foreclosed real ~~estate;~~estate, and East Boston Investment Services, Inc., which is authorized for third-party investment sales and is currently inactive. All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Such adjustments were of a normal recurring nature. The results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2014 are not necessarily indicative of the results that may be expected for the entire year or any other interim period. For additional information, refer to the consolidated financial statements and footnotes thereto of ~~the Company~~Old Meridian included in ~~the Company’s~~Old Meridian’s Form 10-K for the year ended December 31, 2013 which was filed with the Securities and Exchange Commission (“SEC”) on March 17, 2014, and is available through the SEC’s website atwww.sec.gov.

In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the evaluation of goodwill for impairment, other-than-temporary impairment of securities and the valuation of deferred tax assets.

On March 5, 2014, the Boards of Directors of the Company and the Bank and the Board of Trustees of Meridian unanimously adopted a Plan of Conversion of the Meridian pursuant to which Meridian undertook a “second-step” conversion and now ceases to exist. The Bank reorganized from a two-tier mutual holding company structure to a fully public stock holding company structure effective July 28, 2014, and, as a result is now the wholly-owned subsidiary of Meridian Bancorp, Inc., a Maryland corporation. Because the conversion occurred after June 30, 2014, the information included in this quarterly report is that of the Company. For further information, see Note 17 of the Notes to the financial statements of the Company included in the Company’s Form 10-K for the year ended December 31, 2013.

In January 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (the “ASU”) No. 2014-04,Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.This update is intended to reduce diversity in the application of guidance by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. Amendments in this update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09,Revenue from Contracts with Customers (Topic 606).The objective of this ASU was to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principal of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently reviewing this ASU to determine if it will have an impact on its consolidated financial statements.

Basic earnings per share excludes dilution and is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. If rights to dividends on unvested stock awards are non-forfeitable, these unvested stock awards are considered outstanding in the computation of basic earnings per share. Diluted earnings per share is computed in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental common shares (computed using the treasury method) that would have been outstanding if all potentially dilutive common stock equivalents (such as options) were issued during the period. Unallocated common shares held by the ESOP are shown as a reduction in stockholders’ equity and are not included in the weighted-average number of common shares outstanding for either basic or diluted earnings per share calculations.


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013		2014		2013		2014		2013
	*(Dollars in thousands, except per share amounts)*								*(Dollars in thousands, except per share amounts)*

Net income available to common stockholders	$	5,504	$	3,025	$	10,275	$	6,093	$	6,015	$	5,321	$	16,290	$	11,414


Average number of common shares outstanding		21,577,080		21,507,247		21,563,792		21,514,555
Effect of unvested stock awards		89,089		142,176		95,162		129,497

Basic weighted average shares outstanding		21,666,169		21,649,423		21,658,954		21,644,052		52,043,346		52,965,816		52,718,470		52,984,441
Effect of dilutive stock options		440,417		313,205		436,202		313,345		1,112,941		900,218		1,082,978		811,534

Diluted weighted average shares outstanding		22,106,586		21,962,628		22,095,156		21,957,397		53,156,287		53,866,034		53,801,448		53,795,975


Earnings per share:
Basic	$	0.25	$	0.14	$	0.47	$	0.28	$	0.12	$	0.10	$	0.31	$	0.22
Diluted	$	0.25	$	0.14	$	0.47	$	0.28	$	0.11	$	0.10	$	0.30	$	0.21

Share and per share amounts related to periods prior to the date of completion of the Conversion (July 28, 2014) have been restated to give retroactive recognition to the exchange ratio applied in the Conversion (2.4484-to-one). There were no anti-dilutive options for the three and ~~six~~nine months ended ~~June~~September 30, 2014. For the three and ~~six~~nine months ended ~~June~~September 30, 2013, options for the exercise of ~~46,700~~17,056 and ~~23,350,~~43,824, respectively, were not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive.

The amortized cost and fair values of securities available for sale, with gross unrealized gains and losses, follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)									(In thousands)
June 30, 2014
September 30, 2014
Debt securities:
Corporate bonds:
Financial services	$	48,677	$	909	$	(44	)	$	49,542	$	42,829	$	715	$	(37	)	$	43,507
Industry and manufacturing		9,916		198		—			10,114		8,927		160		—			9,087
Technology		2,501		7		—			2,508
Healthcare		4,004		83		—			4,087		4,003		57		—			4,060
Other		1,008		32		—			1,040		1,006		26		—			1,032

Total corporate bonds		66,106		1,229		(44	)		67,291		56,765		958		(37	)		57,686
Government-sponsored enterprises		34,554		3		(568	)		33,989		34,552		1		(617	)		33,936
Municipal bonds		5,694		216		—			5,910		5,692		198		—			5,890
Residential mortgage-backed securities:
Government-sponsored enterprises		10,117		622		(6	)		10,733		9,475		570		(6	)		10,039
Private label		1,481		86		—			1,567		1,455		89		—			1,544

Total debt securities		117,952		2,156		(618	)		119,490		107,939		1,816		(660	)		109,095

Marketable equity securities:
Common stocks:
Financial services		9,233		813		(11	)		10,035		10,534		662		(166	)		11,030
Industry and manufacturing		20,216		2,966		(14	)		23,168		18,402		1,353		(850	)		18,905
Consumer products and services		13,521		1,966		(318	)		15,169		12,996		1,423		(701	)		13,718
Technology		2,934		218		(115	)		3,037		2,964		207		(12	)		3,159
Healthcare		4,772		1,261		—			6,033		5,234		1,445		—			6,679
Other		3,442		1,368		—			4,810		3,441		1,143		(23	)		4,561

Total common stocks		54,118		8,592		(458	)		62,252		53,571		6,233		(1,752	)		58,052
Money market mutual funds		1,046		—		(36	)		1,010		1,049		—		(37	)		1,012

Total marketable equity securities		55,164		8,592		(494	)		63,262		54,620		6,233		(1,789	)		59,064


Total securities available for sale	$	173,116	$	10,748	$	(1,112	)	$	182,752	$	162,559	$	8,049	$	(2,449	)	$	168,159

December 31, 2013
Debt securities:
Corporate bonds:
Financial services	$	58,166	$	1,148	$	(66	)	$	59,248	$	58,166	$	1,148	$	(66	)	$	59,248
Industry and manufacturing		13,893		264		(16	)		14,141		13,893		264		(16	)		14,141
Consumer products and services		7,234		32		—			7,266		7,234		32		—			7,266
Technology		2,503		18		—			2,521		2,503		18		—			2,521
Healthcare		9,009		149		—			9,158		9,009		149		—			9,158
Other		1,011		43		—			1,054		1,011		43		—			1,054

Total corporate bonds		91,816		1,654		(82	)		93,388		91,816		1,654		(82	)		93,388
Government-sponsored enterprises		34,562		3		(1,417	)		33,148		34,562		3		(1,417	)		33,148
Municipal bonds		5,721		137		—			5,858		5,721		137		—			5,858
Residential mortgage-backed securities:
Government-sponsored enterprises		11,138		592		—			11,730		11,138		592		—			11,730
Private label		1,578		86		—			1,664		1,578		86		—			1,664

Total debt securities		144,815		2,472		(1,499	)		145,788		144,815		2,472		(1,499	)		145,788

Marketable equity securities:
Common stocks:
Financial services		6,909		614		—			7,523		6,909		614		—			7,523
Industry and manufacturing		18,092		2,413		(58	)		20,447		18,092		2,413		(58	)		20,447
Consumer products and services		9,909		1,530		(3	)		11,436		9,909		1,530		(3	)		11,436
Technology		3,442		132		(66	)		3,508		3,442		132		(66	)		3,508
Healthcare		5,048		1,115		—			6,163		5,048		1,115		—			6,163
Other		3,441		807		—			4,248		3,441		807		—			4,248

Total common stocks		46,841		6,611		(127	)		53,325		46,841		6,611		(127	)		53,325
Money market mutual funds		2,065		—		(41	)		2,024		2,065		—		(41	)		2,024

Total marketable equity securities		48,906		6,611		(168	)		55,349		48,906		6,611		(168	)		55,349


Total securities available for sale	$	193,721	$	9,083	$	(1,667	)	$	201,137	$	193,721	$	9,083	$	(1,667	)	$	201,137

At ~~June~~September 30, 2014, securities with an amortized cost of ~~$23.7~~$23.3 million and ~~$2.1~~$1.8 million, respectively, were pledged as collateral for Federal Home Loan Bank of Boston borrowings and Federal Reserve Bank discount window borrowings.

The amortized cost and fair value of debt securities by contractual maturity at ~~June~~September 30, 2014 are as follows. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties.


					After One Year
	One Year or Less				Through Five Years				After Five Years				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		One Year or Less				After One Year Through Five Years				After Five Years				Total
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)																(In thousands)
Corporate bonds:
Financial services	$	13,370	$	13,497	$	35,307	$	36,045	$	—	$	—	$	48,677	$	49,542	$	15,491	$	15,664	$	27,338	$	27,843	$	—	$	—	$	42,829	$	43,507
Industry and manufacturing		3,999		4,027		5,917		6,087		—		—		9,916		10,114		3,000		3,008		5,927		6,079		—		—		8,927		9,087
Technology		2,501		2,508		—		—		—		—		2,501		2,508
Healthcare		4,004		4,087		—		—		—		—		4,004		4,087		4,003		4,060		—		—		—		—		4,003		4,060
Other		—		—		1,008		1,040		—		—		1,008		1,040		1,006		1,032		—		—		—		—		1,006		1,032

Total corporate bonds		23,874		24,119		42,232		43,172		—		—		66,106		67,291		23,500		23,764		33,265		33,922		—		—		56,765		57,686
Government-sponsored enterprises		—		—		54		56		34,500		33,933		34,554		33,989		51		53		11,500		11,404		23,001		22,479		34,552		33,936
Municipal bonds		250		251		5,444		5,659		—		—		5,694		5,910		250		250		5,442		5,640		—		—		5,692		5,890
Residential mortgage-backed securities:
Government-sponsored enterprises		1		1		—		—		10,116		10,732		10,117		10,733		1		1		—		—		9,474		10,038		9,475		10,039
Private label		—		—		—		—		1,481		1,567		1,481		1,567		—		—		—		—		1,455		1,544		1,455		1,544


Total	$	24,125	$	24,371	$	47,730	$	48,887	$	46,097	$	46,232	$	117,952	$	119,490	$	23,802	$	24,068	$	50,207	$	50,966	$	33,930	$	34,061	$	107,939	$	109,095

For the three months ended ~~June~~September 30, 2014 and 2013, proceeds from sales of securities available for sale amounted to ~~$7.2~~$9.5 million and ~~$8.0~~$18.1 million, respectively. ~~Gross~~During the 2014 and 2013 periods, gross gains of ~~$1.5~~$1.3 million and ~~$2.1~~$3.0 million ~~respectively,~~ and no gross losses of $11,000 and $0, respectively, were realized on those sales. For the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, proceeds from sales of securities available for sale amounted to ~~$14.8~~$24.3 million and ~~$27.8~~$45.8 million, respectively. ~~Gross~~During the 2014 and 2013 periods, gross gains of ~~$3.1~~$4.4 million and ~~$4.4~~$7.4 million and gross losses of $0$11,000 and $10,000, respectively, were realized on those sales.

Information pertaining to securities available for sale as of ~~June~~September 30, 2014 and December 31, 2013, with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


	Less Than Twelve Months				Twelve Months or Longer				Less Than Twelve Months				Twelve Months or Longer
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(In thousands)								(In thousands)
June 30, 2014
September 30, 2014
Debt securities:
Corporate bonds - financial services	$	3	$	1,998	$	41	$	1,459	$	—	$	—	$	37	$	1,463
Government-sponsored enterprises		—		—		568		33,932		—		—		617		33,884
Residential mortgage-backed securities:
Government-sponsored enterprises		6		226		—		—		6		224		—		—

Total debt securities		9		2,224		609		35,391		6		224		654		35,347

Marketable equity securities:
Common stocks:
Financial services		11		1,531		—		—		166		4,036		—		—
Industry and manufacturing		14		411		—		—		850		5,989		—		—
Consumer products and services		318		2,142		—		—		701		4,273		—		—
Technology		115		1,272		—		—		12		949		—		—
Other										23		444

Total common stocks		458		5,356		—		—		1,752		15,691		—		—
Money market mutual funds		—		—		36		1,010		—		—		37		1,012

Total marketable equity securities		458		5,356		36		1,010		1,752		15,691		37		1,012


Total temporarily impaired securities	$	467	$	7,580	$	645	$	36,401	$	1,758	$	15,915	$	691	$	36,359


	Less Than Twelve Months				Twelve Months or Longer
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(In thousands)
December 31, 2013
Debt securities:
Corporate bonds:
Financial services	$	19	$	6,981	$	47	$	1,453
Industry and manufacturing		16		984		—		—

Total corporate bonds		35		7,965		47		1,453
Government-sponsored enterprises		1,296		31,205		121		1,879

Total debt securities		1,331		39,170		168		3,332

Marketable equity securities:
Common stocks:
Industry and manufacturing		58		3,089		—		—
Consumer products and services		3		606		—		—
Technology		66		1,872		—		—

Total common stocks		127		5,567		—		—
Money market mutual funds		—		—		41		998

Total marketable equity securities		127		5,567		41		998

Total temporarily impaired securities	$	1,458	$	44,737	$	209	$	4,330

Management evaluates securities for other-than-temporary impairment on a quarterly basis, with more frequent evaluation for selected issuers or when economic or market concerns warrant such evaluations.

As of ~~June~~September 30, 2014, the net unrealized gain on the total debt securities portfolio was ~~$1.5~~$1.2 million. At ~~June~~September 30, 2014, 3029 debt securities had unrealized losses with aggregate depreciation of ~~1.6%~~1.8% from the Company’s amortized cost basis. In analyzing a debt issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, industry analysts’ reports and, to a lesser extent given the relatively insignificant levels of depreciation in the Company’s debt portfolio, spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates. The unrealized losses are primarily caused by (a) recent declines in profitability and near-term profit forecasts by industry analysts resulting from a decline in the level of business activity (b) recent downgrades by several industry analysts and (c) recent increases in interest rates. The contractual terms of these investments do not permit the issuers to settle the security at a price less than the par value of the investment. The Company currently does not believe it is probable that it will be unable to collect all amounts due according to the contractual terms of the investments. Therefore, it is expected that the bonds would not be settled at a price less than the par value of the investment. Because (1) the Company does not intend to sell the securities; (2) the Company does not believe it is more likely than not that the Company will be required to sell the securities before recovery of its amortized cost basis; and (3) the present value of expected cash flows is sufficient to recover the entire amortized cost basis of the securities, the Company does not consider these investments to be other-than-temporarily impaired at ~~June~~September 30, 2014.

As of ~~June~~September 30, 2014, the net unrealized gain on the total marketable equity portfolio was ~~$8.1~~$4.4 million. At ~~June~~September 30, 2014, 1235 marketable equity securities had unrealized losses with aggregate depreciation of ~~7.2%~~9.7% from the Company’s cost basis. Although the issuers have shown declines in earnings as a result of the weakened economy, no credit issues have been identified that cause management to believe the decline in market value is other than temporary, and the Company has the ability and intent to hold these investments until a recovery of fair value. In analyzing an equity issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a one-year time frame. A decline of 10% or more in the value of an acquired equity security is generally the triggering event for management to review

individual securities for liquidation and/or classification as other-than-temporarily impaired. Impairment losses are recognized when management concludes that declines in the value of equity securities are other than temporary, or when they can no longer assert that they have the intent and ability to hold depreciated equity securities for a period of time sufficient to allow for any anticipated recovery in fair value. Unrealized losses on marketable equity securities that are in excess of 25% of cost and that have been sustained for more than twelve months are generally ~~considered-other-than temporary~~considered other-than-temporary and charged to earnings as impairment losses, or realized through sale of the security.

The Company’s loan portfolio consists primarily of residential real estate, commercial real estate, construction, commercial business and consumer segments. The residential real estate loans include classes for one-to four-family, multi-family and home equity lines of credit. There are no foreign loans outstanding. Interest rates charged on loans are affected principally by the demand for such loans, the supply of money available for lending purposes and the rates offered by our competitors. A summary of loans follows:


	June 30, 2014						December 31, 2013						September 30, 2014						December 31, 2013
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)												(Dollars in thousands)
Real estate loans:
Residential real estate:
One- to four-family	$	452,944			18.9	%	$	454,148			19.8	%	$	467,426			18.6	%	$	454,148			19.8	%
Multi-family		367,390			15.3			288,172			12.6			365,033			14.6			288,172			12.6
Home equity lines of credit		49,262			2.1			54,499			2.4			49,738			2.0			54,499			2.4
Commercial real estate		1,021,506			42.6			1,032,408			45.0			1,079,707			43.0			1,032,408			45.0
Construction		217,047			9.1			208,799			9.1			226,566			9.0			208,799			9.1

Total real estate loans		2,108,149			88.0			2,038,026			88.9			2,188,470			87.2			2,038,026			88.9
Commercial business loans		281,229			11.7			247,005			10.8			312,917			12.5			247,005			10.8
Consumer		7,979			0.3			7,225			0.3			8,559			0.3			7,225			0.3

Total loans		2,397,357			100.0	%		2,292,256			100.0	%		2,509,946			100.0	%		2,292,256			100.0	%

Allowance for loan losses		(26,131	)					(25,335	)					(26,739	)					(25,335	)
Net deferred loan origination fees		(1,732	)					(1,521	)					(1,808	)					(1,521	)


Loans, net	$	2,369,494					$	2,265,400					$	2,481,399					$	2,265,400

The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying balance sheets. The Company and participating lenders share ratably in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At ~~June~~September 30, 2014 and December 31, 2013, the Company was servicing loans for participants aggregating ~~$78.3~~$79.7 million and $62.8 million, respectively.

As a result of the Mt. Washington Co-operative Bank acquisition in January 2010, the Company acquired loans at fair value of $345.3 million. Included in this amount was $27.7 million of loans with evidence of deterioration of credit quality since origination for which it was probable, at the time of the acquisition, that the Company would be unable to collect all contractually required payments receivable. The Company’s evaluation of loans with evidence of credit deterioration as of the acquisition date resulted in a nonaccretable discount of $7.6 million, which is defined as the loan’s contractually required payments receivable in excess of the amount of its cash flows expected to be collected. The Company considered factors such as payment history, collateral values, and accrual status when determining whether there was evidence of deterioration of the loan’s credit quality at the acquisition date.

The following is a summary of the outstanding balance of the acquired loans with evidence of credit deterioration:


	June 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013
	(In thousands)						(In thousands)
Real estate loans:
Residential real estate:
One- to four-family	$	6,400		$	6,494		$	5,821		$	6,494
Multi-family		834			846			828			846
Home equity lines of credit		507			509			506			509
Commercial real estate		696			720			688			720

Total real estate loans		8,437			8,569			7,843			8,569
Commercial business loans		78			78			—			78
Consumer		4			4			—			4

Outstanding principal balance		8,519			8,651			7,843			8,651
Discount		(2,188	)		(2,215	)		(2,004	)		(2,215	)


Carrying amount	$	6,331		$	6,436		$	5,839		$	6,436


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013			2014			2013			2014			2013
	(In thousands)												(In thousands)
Beginning balance	$	1,170		$	1,040		$	1,181		$	1,047		$	1,154		$	903		$	1,181		$	1,047
Accretion		(16	)		(7	)		(27	)		(14	)		(17	)		(6	)		(44	)		(20	)
Disposals		—			(130	)		—			(130	)		—			(31	)		—			(161	)

Ending balance	$	1,154		$	903		$	1,154		$	903		$	1,137		$	866		$	1,137		$	866


	For the Three Months Ended June 30, 2014																						For the Three Months Ended September 30, 2014
	One- to four-family			Multi- family		Home equity lines of credit			Commercial real estate		Construction		Commercial business		Consumer			Unallocated		Total			One- to four- family			Multi- family			Home equity lines of credit			Commercial real estate			Construction			Commercial business		Consumer			Unallocated		Total
	*(In thousands)*																						*(In thousands)*
Beginning balance	$	1,960		$	3,276	$	105		$	11,924	$	4,149	$	3,928	$	98		$	—	$	25,440		$	1,913		$	3,346		$	105		$	11,981		$	4,512		$	4,185	$	89		$	—	$	26,131
Provision (credit) for loan losses		(52	)		70		5			57		353		254		9			—		696			(63	)		(87	)		(6	)		557			(61	)		293		22			—		655
Charge-offs		—			—		(5	)		—		—		—		(36	)		—		(41	)		—			—			—			(36	)		(71	)		—		(40	)		—		(147	)
Recoveries		5			—		—			—		10		3		18			—		36			23			—			—			—			57			1		19			—		100

Ending balance	$	1,913		$	3,346	$	105		$	11,981	$	4,512	$	4,185	$	89		$	—	$	26,131		$	1,873		$	3,259		$	99		$	12,502		$	4,437		$	4,479	$	90		$	—	$	26,739


	For the Three Months Ended June 30, 2013																								For the Three Months Ended September 30, 2013
	One- to four-family			Multi- family			Home equity lines of credit			Commercial real estate		Construction			Commercial business		Consumer			Unallocated		Total			One- to four- family			Multi- family		Home equity lines of credit			Commercial real estate		Construction			Commercial business		Consumer			Unallocated		Total
	*(In thousands)*																								*(In thousands)*
Beginning balance	$	2,150		$	1,315		$	177		$	10,620	$	4,459		$	2,078	$	84		$	—	$	20,883		$	1,885		$	1,308	$	160		$	12,181	$	5,247		$	2,586	$	83		$	—	$	23,450
Provision (credit) for loan losses		22			(1	)		(17	)		1,561		1,148			494		12			—		3,219			129			772		(7	)		174		(1,358	)		396		45			—		151
Charge-offs		(288	)		(6	)		—			—		(366	)		—		(21	)		—		(681	)		(135	)		—		—			—		(369	)		—		(71	)		—		(575	)
Recoveries		1			—			—			—		6			14		8			—		29			88			—		—			—		537			4		24			—		653

Ending balance	$	1,885		$	1,308		$	160		$	12,181	$	5,247		$	2,586	$	83		$	—	$	23,450		$	1,967		$	2,080	$	153		$	12,355	$	4,057		$	2,986	$	81		$	—	$	23,679


	For the Six Months Ended June 30, 2014																							For the Nine Months Ended September 30, 2014
	One- to four-family			Multi- family		Home equity lines of credit			Commercial real estate			Construction		Commercial business		Consumer			Unallocated		Total			One- to four- family			Multi- family		Home equity lines of credit			Commercial real estate			Construction			Commercial business		Consumer			Unallocated		Total
	*(In thousands)*																							*(In thousands)*
Beginning balance	$	1,991		$	2,419	$	155		$	12,831		$	4,374	$	3,433	$	132		$	—	$	25,335		$	1,991		$	2,419	$	155		$	12,831		$	4,374		$	3,433	$	132		$	—	$	25,335
Provision (credit) for loan losses		(68	)		927		(45	)		(838	)		117		746		(10	)		—		829			(131	)		840		(51	)		(281	)		56			1,039		12			—		1,484
Charge-offs		(54	)		—		(5	)		(12	)		—		—		(86	)		—		(157	)		(54	)		—		(5	)		(48	)		(71	)		—		(126	)		—		(304	)
Recoveries		44			—		—			—			21		6		53			—		124			67			—		—			—			78			7		72			—		224

Ending balance	$	1,913		$	3,346	$	105		$	11,981		$	4,512	$	4,185	$	89		$	—	$	26,131		$	1,873		$	3,259	$	99		$	12,502		$	4,437		$	4,479	$	90		$	—	$	26,739


	For the Six Months Ended June 30, 2013																								For the Nine Months Ended September 30, 2013
	One- to four-family			Multi- family			Home equity lines of credit			Commercial real estate		Construction			Commercial business		Consumer			Unallocated		Total			One- to four- family			Multi- family			Home equity lines of credit			Commercial real estate		Construction			Commercial business		Consumer			Unallocated		Total
	*(In thousands)*																								*(In thousands)*
Beginning balance	$	2,507		$	1,431		$	226		$	10,405	$	3,656		$	2,174	$	105		$	—	$	20,504		$	2,507		$	1,431		$	226		$	10,405	$	3,656		$	2,174	$	105		$	—	$	20,504
Provision (credit) for loan losses		(259	)		(27	)		(66	)		1,776		2,573			395		87			—		4,479			(130	)		745			(73	)		1,950		1,215			791		132			—		4,630
Charge-offs		(396	)		(96	)		—			—		(993	)		—		(153	)		—		(1,638	)		(531	)		(96	)		—			—		(1,362	)		—		(224	)		—		(2,213	)
Recoveries		33			—			—			—		11			17		44			—		105			121			—			—			—		548			21		68			—		758

Ending balance	$	1,885		$	1,308		$	160		$	12,181	$	5,247		$	2,586	$	83		$	—	$	23,450		$	1,967		$	2,080		$	153		$	12,355	$	4,057		$	2,986	$	81		$	—	$	23,679


	At June 30, 2014																		At September 30, 2014
	One- to four-family		Multi- family		Home equity lines of credit		Commercial real estate		Construction		Commercial business		Consumer		Unallocated		Total		One- to four-family		Multi- family		Home equity lines of credit		Commercial real estate		Construction		Commercial business		Consumer		Unallocated		Total
	*(In thousands)*																		*(In thousands)*
Amount of allowance for loan losses for impaired loans	$	94	$	172	$	—	$	—	$	101	$	54	$	—	$	—	$	421	$	67	$	171	$	—	$	68	$	31	$	84	$	—	$	—	$	421
Amount of allowance for loan losses for non-impaired loans		1,819		3,174		105		11,981		4,411		4,131		89		—		25,710		1,806		3,088		99		12,434		4,406		4,395		90		—		26,318

	$	1,913	$	3,346	$	105	$	11,981	$	4,512	$	4,185	$	89	$	—	$	26,131	$	1,873	$	3,259	$	99	$	12,502	$	4,437	$	4,479	$	90	$	—	$	26,739

Amount of allowance for loan losses for loans acquired with deteriorated credit quality included above	$	29	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	29	$	29	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	29


Impaired loans	$	4,025	$	5,311	$	20	$	7,788	$	11,888	$	1,036	$	—			$	30,068	$	3,957	$	1,453	$	20	$	13,532	$	8,477	$	1,073	$	—			$	28,512
Non-impaired loans		448,919		362,079		49,242		1,013,718		205,159		280,193		7,979				2,367,289		463,469		363,580		49,718		1,066,175		218,089		311,844		8,559				2,481,434

	$	452,944	$	367,390	$	49,262	$	1,021,506	$	217,047	$	281,229	$	7,979			$	2,397,357	$	467,426	$	365,033	$	49,738	$	1,079,707	$	226,566	$	312,917	$	8,559			$	2,509,946


	At December 31, 2013
	One- to four-family		Multi- family		Home equity lines of credit		Commercial real estate		Construction		Commercial business		Consumer		Unallocated		Total
	*(In thousands)*
Amount of allowance for loan losses for impaired loans	$	132	$	—	$	—	$	190	$	54	$	—	$	—	$	—	$	376
Amount of allowance for loan losses for non-impaired loans		1,859		2,419		155		12,641		4,320		3,433		132		—		24,959

	$	1,991	$	2,419	$	155	$	12,831	$	4,374	$	3,433	$	132	$	—	$	25,335

Amount of allowance for loan losses for loans acquired with deteriorated credit quality included above	$	44	$	—	$	—	$	12	$	—	$	—	$	—	$	—	$	56


Impaired loans	$	4,089	$	4,002	$	21	$	10,820	$	13,308	$	1,232	$	—			$	33,472
Non-impaired loans		450,059		284,170		54,478		1,021,588		195,491		245,773		7,225				2,258,784

	$	454,148	$	288,172	$	54,499	$	1,032,408	$	208,799	$	247,005	$	7,225			$	2,292,256

The following table provides information about the Company’s past due and non-accrual loans:


	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans on Non-accrual		30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans on Non-accrual
	(In thousands)										(In thousands)
June 30, 2014
September 30, 2014
Real estate loans:
Residential real estate:
One- to four-family	$	3,706	$	925	$	5,491	$	10,122	$	16,281	$	4,576	$	818	$	4,457	$	9,851	$	14,327
Home equity lines of credit		1,565		84		991		2,640		2,260		1,608		117		370		2,095		2,397
Commercial real estate		295		584		2,362		3,241		7,178		53		465		2,378		2,896		3,382
Construction		—		—		9,603		9,603		10,665		—		—		6,063		6,063		7,132

Total real estate loans		5,566		1,593		18,447		25,606		36,384		6,237		1,400		13,268		20,905		27,238
Commercial business loans		59		—		846		905		903		15		60		846		921		883
Consumer		588		468		—		1,056		—		566		334		—		900		—


Total	$	6,213	$	2,061	$	19,293	$	27,567	$	37,287	$	6,818	$	1,794	$	14,114	$	22,726	$	28,121


December 31, 2013
Real estate loans:
Residential real estate:
One- to four-family	$	6,203	$	1,185	$	6,714	$	14,102	$	17,622	$	6,203	$	1,185	$	6,714	$	14,102	$	17,622
Multi-family		75		—		85		160		—		75		—		85		160		—
Home equity lines of credit		2,504		178		744		3,426		2,689		2,504		178		744		3,426		2,689
Commercial real estate		314		—		2,742		3,056		8,972		314		—		2,742		3,056		8,972
Construction		497		—		11,297		11,794		11,298		497		—		11,297		11,794		11,298

Total real estate loans		9,593		1,363		21,582		32,538		40,581		9,593		1,363		21,582		32,538		40,581
Commercial business loans		284		50		852		1,186		949		284		50		852		1,186		949
Consumer		461		282		—		743		—		461		282		—		743		—


Total	$	10,338	$	1,695	$	22,434	$	34,467	$	41,530	$	10,338	$	1,695	$	22,434	$	34,467	$	41,530

At ~~June~~September 30, 2014 and December 31, 2013, the Company did not have any accruing loans past due 90 days or more. Delinquent loans at ~~June~~September 30, 2014 and December 31, 2013 included ~~$1.6~~$1.2 million and $1.3 million, respectively, of loans acquired with evidence of credit deterioration. At ~~both June~~September 30, 2014 and December 31, 2013, non-accrual loans included $724,000 and $1.2 million, respectively, of loans acquired with evidence of credit deterioration.

The following tables provide information with respect to the Company’s impaired loans:


	June 30, 2014						December 31, 2013						September 30, 2014						December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)												(In thousands)
Impaired loans without a valuation allowance:
One- to four-family	$	2,601	$	3,012			$	2,399	$	2,699			$	3,233	$	3,656			$	2,399	$	2,699
Multi-family		3,957		3,957				4,002		4,002				—		—				4,002		4,002
Home equity lines of credit		20		20				21		21				20		20				21		21
Commercial real estate		7,788		8,566				9,327		10,014				11,259		11,271				9,327		10,014
Construction		10,490		12,689				12,930		15,926				7,986		8,666				12,930		15,926
Commercial business loans		544		951				1,232		1,635				524		855				1,232		1,635

Total		25,400		29,195				29,911		34,297				23,022		24,468				29,911		34,297

Impaired loans with a valuation allowance:
One- to four-family		1,424		1,523	$	94		1,690		1,806	$	132		724		724	$	67		1,690		1,806	$	132
Multi-family		1,354		1,354		172		—		—		—		1,453		1,453		171		—		—		—
Commercial real estate		—		—		—		1,493		1,493		190		2,273		2,500		68		1,493		1,493		190
Construction		1,398		1,398		101		378		389		54		491		491		31		378		389		54
Commercial business loans		492		492		54		—		—		—		549		549		84		—		—		—

Total		4,668		4,767		421		3,561		3,688		376		5,490		5,717		421		3,561		3,688		376

Total impaired loans	$	30,068	$	33,962	$	421	$	33,472	$	37,985	$	376	$	28,512	$	30,185	$	421	$	33,472	$	37,985	$	376


	Three Months Ended June 30,												Three Months Ended September 30,
	2014						2013						2014						2013
	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis
	(In thousands)												(In thousands)
One- to four-family	$	4,033	$	50	$	55	$	4,688	$	59	$	46	$	4,169	$	54	$	49	$	4,484	$	54	$	42
Multi-family		5,319		77		53		5,143		90		59		1,456		14		14		4,331		81		80
Home equity lines of credit		20		—		—		22		—		—		20		—		—		21		—		—
Commercial real estate		9,546		126		77		10,332		190		152		13,525		129		84		10,373		141		95
Construction		13,876		235		69		17,260		279		118		8,142		119		103		16,160		274		41
Commercial business loans		1,051		20		3		456		16		16		1,097		23		7		887		49		19


Total impaired loans	$	33,845	$	508	$	257	$	37,901	$	634	$	391	$	28,409	$	339	$	257	$	36,256	$	599	$	277


	Six Months Ended June 30,												Nine Months Ended September 30,
	2014						2013						2014						2013
	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized on Cash Basis
	(In thousands)												(In thousands)
One- to four-family	$	4,048	$	100	$	95	$	4,621	$	117	$	94	$	4,193	$	147	$	144	$	4,547	$	163	$	134
Multi-family		5,338		155		156		5,356		179		168		1,465		43		43		5,023		247		237
Home equity lines of credit		21		—		—		22		—		—		20		1		1		22		1		1
Commercial real estate		9,593		267		135		10,937		354		226		6,691		230		107		10,920		307		184
Construction		13,673		469		123		17,613		548		276		8,164		376		202		17,002		823		317
Commercial business loans		1,060		39		8		445		22		22		1,127		62		14		650		66		39


Total impaired loans	$	33,733	$	1,030	$	517	$	38,994	$	1,220	$	786	$	21,660	$	859	$	511	$	38,164	$	1,607	$	912

At ~~June~~September 30, 2014, additional funds of ~~$5.0~~$3.6 million are committed to be advanced in connection with impaired construction loans.

The following table summarizes the troubled debt restructurings (“TDRs”) at the dates indicated:


	June 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013
	(In thousands)				(In thousands)
TDRs on accrual status:
One- to four-family	$	2,554	$	2,588	$	2,753	$	2,588
Multi-family		1,463		109		1,453		109
Home equity lines of credit		20		21		20		21
Commercial real estate		—		1,368		10,019		1,368
Commercial business loans		133		—		125		—

Total TDRs on accrual status		4,170		4,086		14,370		4,086

TDRs on non-accrual status:
One- to four-family		1,471		1,500		1,204		1,500
Commercial real estate		4,513		4,309		286		4,309
Construction		8,367		9,489		5,036		9,489
Commercial business loans		187		192		186		192

Total TDRs on non-accrual status		14,538		15,490		6,712		15,490

Total TDRs	$	18,708	$	19,576	$	21,082	$	19,576


	Nine Months Ended September 30,
	2014						2013
	Number of Loans		Pre-Modification Balance		Post-Modification Balance		Number of Loans		Pre-Modification Balance		Post-Modification Balance
	(Dollars In thousands)
Real estate loans:
One- to four-family		1	$	228	$	228		2	$	391	$	391
Commercial real estate		3		10,322		10,322		—		—		—
Construction		1		568		568		—		—		—
Commercial business loans		2		143		143		1		207		207

Total		7	$	11,261	$	11,261		3	$	598	$	598

The following provides information on how loans were modified as TDRs for the periods indicated.

For loans modified as TDRs during the ~~six~~three months ended ~~June~~September 30, 2014, the Company extended the maturity date for one loan to 20 years. The loans modified as TDRs during the nine months ended September 30, 2014 consisted of two loans with rate reductions ranging from 1.50% to 2.00% and ~~2013, new troubled debt restructurings were immaterial.~~ five loans with extended periods ranging from twelve months to 20 years.

The Company generally places loans modified as TDRs on non-accrual status for a minimum period of six months. Loans modified as TDRs qualify for return to accrual status once they have demonstrated performance with the modified terms of the loan agreement for a minimum of six months and future payments are reasonably assured. TDRs are reported as impaired loans with an allowance established as part of the allocated component of the allowance for loan losses when the discounted cash flows of the impaired loan is lower than the carrying value of that loan. TDRs may be removed from impairment disclosures in the year following the restructure if the borrower demonstrates compliance with the modified terms and the restructuring agreement specifies an interest rate equal to that which would be provided to a borrower with similar credit at the time of restructuring.

The following table is a summary of TDRs that defaulted (became 90 days past due) in the first twelve months after restructure during the periods presented.

The Company utilizes a nine grade internal loan rating system for multi-family, commercial real estate, construction and commercial loans as follows:

On an annual basis, or more often if needed, the Company formally reviews the ratings on all multi-family, commercial real estate, construction and commercial business loans. The Company also engages an independent third-party to review a significant portion of loans within these segments on at least an annual basis. Management uses the results of these reviews as part of its annual review process.

The following tables provide information with respect to the Company’s risk rating:


	June 30, 2014								December 31, 2013								September 30, 2014								December 31, 2013
	Multi-family residential real estate		Commercial real estate		Construction		Commercial business		Multi-family residential real estate		Commercial real estate		Construction		Commercial business		Multi-family residential real estate		Commercial real estate		Construction		Commercial business		Multi-family residential real estate		Commercial real estate		Construction		Commercial business
	(In thousands)																(In thousands)
Loans rated 1 - 3A	$	353,240	$	1,006,067	$	188,193	$	270,657	$	275,711	$	1,015,172	$	178,980	$	245,646	$	354,207	$	1,068,747	$	201,014	$	302,430	$	275,711	$	1,015,172	$	178,980	$	245,646
Loans rated 4 - 4A		2,187		5,030		—		9,458		1,665		4,315		—		4		2,172		5,684		—		9,414		1,665		4,315		—		4
Loans rated 5		11,963		10,409		28,854		1,114		10,796		12,921		29,819		1,355		8,654		5,276		25,552		1,073		10,796		12,921		29,819		1,355
Loans rated 6		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Loans rated 7		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—


Total	$	367,390	$	1,021,506	$	217,047	$	281,229	$	288,172	$	1,032,408	$	208,799	$	247,005	$	365,033	$	1,079,707	$	226,566	$	312,917	$	288,172	$	1,032,408	$	208,799	$	247,005

For one- to four-family real estate loans, home equity lines of credit and consumer loans, management uses delinquency reports as the key credit quality indicator.

In connection with the Company’s second step conversion and stock offering, cash proceeds of $206.9 million from stock subscription deposits were received during the second quarter of 2014 and are included as demand deposits as of June 30, 2014.


	June 30, 2014					December 31, 2013					September 30, 2014					December 31, 2013
Maturing	Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate
	(Dollars in thousands)										(Dollars in thousands)
Within 1 year	$	452,855		1.01	%	$	440,178		1.08	%	$	436,761		0.98	%	$	440,178		1.08	%
Over 1 year to 2 years		139,258		1.46			140,466		1.48			139,868		1.55			140,466		1.48
Over 2 years to 3 years		53,392		1.55			55,628		1.75			45,196		1.39			55,628		1.75
Over 3 years to 4 years		12,618		1.57			18,703		1.82			16,831		1.50			18,703		1.82
Over 4 years to 5 years		19,987		1.48			17,685		1.47			18,806		1.52			17,685		1.47
Greater than 5 years		3,127		5.50			3,056		5.13			3,162		5.50			3,056		5.13


	$	681,237		1.19	%	$	675,716		1.27	%	$	660,624		1.18	%	$	675,716		1.27	%


	June 30, 2014					December 31, 2013					September 30, 2014					December 31, 2013
Maturing	Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate
	(Dollars in thousands)										(Dollars in thousands)
2014	$	—		—	%	$	4,000		2.37	%	$	—		—	%	$	4,000		2.37	%
2015		39,500		1.20			19,500		2.05			39,500		1.20			19,500		2.05
2016		41,500		1.20			16,500		1.97			41,500		1.20			16,500		1.97
2017		87,500		1.31			77,500		1.35			74,632		1.38			77,500		1.35
2018		25,000		1.19			25,000		1.19			—		—			25,000		1.19
2019		9,331		1.23			10,203		1.23			8,893		1.23			10,203		1.23
2020		8,509		1.22			9,200		1.22			8,162		1.22			9,200		1.22

	$	211,340		1.25	%	$	161,903		1.48	%	$	172,687		1.28	%	$	161,903		1.48	%

During the quarter ended September 30, 2014, the Company prepaid $40.0 million of FHLB advances with a weighted average interest rate of 1.12%. The advances had fixed interest rates with maturities ranging from July 2017 through April 2018 and did not result in an FHLB prepayment penalty.

At ~~June~~September 30, 2014, advances amounting to $6.5 million are callable by the FHLB prior to maturity.

As of ~~June~~September 30, 2014, the Company also has an available line of credit of $9.4 million with the FHLB at an interest rate that adjusts daily. No amounts were drawn on the line of credit as of ~~June~~September 30, 2014 and December 31, 2013. All borrowings from the FHLB are secured by investment securities (see Note 5)4) and qualified collateral, consisting of a blanket lien on one- to four-family loans and certain multi-family and commercial real estate loans held in the Bank’s portfolio. At ~~June~~September 30, 2014, the Company pledged multi-family and commercial real estate loans with carrying values totaling ~~$61.7~~$61.5 million and ~~$216.9~~$217.2 million, respectively.

In the normal course of business, there are outstanding commitments which are not reflected in the accompanying consolidated financial statements.

The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated balance sheets. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for loan commitments is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments.

A summary of outstanding financial instruments whose contract amounts represent credit risk is as follows:


					September 30,		December 31,
	June 30, 2014		December 31, 2013		2014		2013
	*(In thousands)*				*(In thousands)*
Unadvanced portion of existing loans:
Construction	$	296,471	$	239,977	$	299,269	$	239,977
Home equity line of credit		35,518		37,422		34,118		37,422
Other lines and letters of credit		118,757		104,956		122,421		104,956
Commitments to originate:
One- to four-family		17,468		11,592		12,291		11,592
Commercial real estate		78,379		92,526		61,492		92,526
Construction		125,800		83,439		119,038		83,439
Commercial business loans		39,252		39,928		18,294		39,928
Other loans		2,188		3,749		968		3,749


Total loan commitments outstanding	$	713,833	$	613,589	$	667,891	$	613,589

Commitments to originate loans are agreements to lend to a customer provided there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments are expected to expire without being drawn upon, the total commitments do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Company for the extension of credit, is based upon management’s credit evaluation of the borrower. Collateral held includes, but is not limited to, residential real estate and deposit accounts.

Unfunded commitments under lines of credit are commitments for possible future extensions of credit to existing customers. These lines of credit are collateralized if deemed necessary and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

The Company is a party to interest rate derivatives that are not designated as hedging instruments. These derivatives relate to interest rate swaps that the Company enters into with commercial business customers to synthetically convert their loans from a variable rate to a fixed rate. The Company pays interest to the customer at a floating rate on the notional amount and receives interest from the customer at a fixed rate for the same notional amount. Concurrently, the Company enters into an offsetting interest rate swap with a third party financial institution. In the offsetting swap, the Company pays the other financial institution interest at the same fixed rate on the same notional amount as the swap entered into with the customer, and receives interest from the financial institution for the same floating rate on the same notional amount. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss of given default for all counterparties. At September 30, 2014 and December 31, 2013, the Company had $700,000 and $300,000, respectively, in cash pledged as collateral on its interest rate swap with the third party financial institution.

Residential real estate loan commitments are referred to as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential real estate loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A residential loan commitment requires the Company to originate a loan at a specific interest rate upon the completion of various underwriting requirements. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from the exercise of the loan commitment might decline from the inception of the rate lock to funding of the loan due to increases in loan interest rates. If interest rates increase, the value of these commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. Derivative loan commitments with a notional amount of ~~$10.0~~$8.7 million and $4.8 million were outstanding at ~~June~~September 30, 2014 and December 31, 2013, respectively. The fair value of such commitments was a net asset of ~~$154,000~~$58,000 and $13,000 at ~~June~~September 30, 2014 and December 31, 2013, respectively.

To protect against the price risk inherent in derivative loan commitments, the Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company generally enters into forward sale contracts on the same day it commits to lend funds to a potential borrower. The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Forward loan sale commitments with a notional amount of ~~$13.9~~$9.4 million and $7.0 million were outstanding at ~~June~~September 30, 2014 and December 31, 2013, respectively. The fair value of such commitments was a net ~~liability of $34,000 and net~~ asset of $35,000 and $75,000 at ~~June~~September 30, 2014 and December 31, 2013, respectively.

The Company is a party to interest rate derivatives that are not designated as hedging instruments. These derivatives relate to interest rate swaps that the Company enters into with commercial business customers to synthetically convert their loans from a variable rate to a fixed rate. The Company pays interest to the customer at a floating rate on the notional amount and receives interest from the customer at a fixed rate for the same notional amount. Concurrently, the Company enters into an offsetting interest rate swap with a 3^rd party financial institution. In the offsetting swap, the Company pays the other financial institution interest at the same fixed rate on the same notional amount as the swap entered into with the customer, and receives interest from the financial institution for the same floating rate on the same notional amount. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss of given default for all counterparties. At June 30, 2014 and December 31, 2013, the Company had $600,000 and $300,000, respectively, in cash pledged as collateral on its interest rate swap with the 3^rd ~~party financial institution.~~

The following table presents the fair values of derivative instruments in the balance sheet.


	Assets			Liabilities			Assets			Liabilities
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	*(In thousands)*						*(In thousands)*
June 30, 2014
September 30, 2014
Derivative loan commitments	Other assets	$	162	Other liabilities	$	8	Other assets	$	80	Other liabilities	$	22
Forward loan sale commitments	Other assets		26	Other liabilities		60	Other assets		42	Other liabilities		7
Loan level interest rate swaps	Other assets		528	Other liabilities		528	Other assets		567	Other liabilities		567


Total		$	716		$	596		$	689		$	596


December 31, 2013
Derivative loan commitments	Other assets	$	38	Other liabilities	$	25	Other assets	$	38	Other liabilities	$	25
Forward loan sale commitments	Other assets		82	Other liabilities		7	Other assets		82	Other liabilities		7
Loan level interest rate swaps	Other assets		57	Other liabilities		57	Other assets		57	Other liabilities		57


Total		$	177		$	89		$	177		$	89

The following table presents information pertaining to gains (losses) on the Company’s derivative instruments included in the consolidated statement of income.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
Derivative Instrument	Location of Gain/(Loss)	2014			2013			2014			2013			Location of Gain/(Loss)	2014			2013			2014			2013
		*(In thousands)*													*(In thousands)*
Derivative loan commitments	Mortgage banking gains, net	$	103		$	(699	)	$	141		$	(768	)	Mortgage banking gains, net	$	(96	)	$	685		$	45		$	(83	)
Forward loan sale commitments	Mortgage banking gains, net		(73	)		950			(109	)		942		Mortgage banking gains, net		69			(1,154	)		(40	)		(212	)

Total		$	30		$	251		$	32		$	174			$	(27	)	$	(469	)	$	5		$	(295	)

For the three months ended ~~June~~September 30, 2014, the Company recognized net mortgage banking gains of ~~$267,000,~~$19,000, consisting of ~~$237,000~~$46,000 in net gains on sale of loans and ~~$30,000~~$27,000 in net derivative mortgage banking losses. The Company recognized net mortgage banking losses of $102,000, consisting of $367,000 in net gains on sale of loans and $469,000 in net derivative mortgage banking losses for the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company recognized net mortgage banking gains of $406,000, consisting of $401,000 in net gains on sale of loans and $5,000 in net derivative mortgage banking gains. The Company recognized net mortgage banking gains of ~~$403,000,~~$456,000, consisting of ~~$152,000~~$751,000 in net gains on sale of loans and ~~$251,000~~$295,000 in net derivative mortgage banking ~~gains~~losses for the ~~three~~nine months ended June 30, 2013. For the six months ended June 30, 2014, the Company recognized net mortgage banking gains of $387,000, consisting of $355,000 in net gains on sale of loans and $32,000 in net derivative mortgage banking gains. The Company recognized net mortgage banking gains of $558,000, consisting of $384,000 in net gains on sale of loans and $174,000 in net derivative mortgage banking gains for the six months ended JuneSeptember 30, 2013.

The Company has a contract with its core data processing provider through December 2017 with an outstanding commitment of ~~$7.8~~$7.3 million as of ~~June~~September 30, 2014 and total annual payments of $2.2 million.

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of assets and liabilities is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

Cash and cash equivalents — The carrying amounts of cash and short-term instruments approximate fair values, based on the short-term nature of the assets.

Securities available for sale — All fair value measurements are obtained from a third party pricing service and are not adjusted by management. Marketable equity securities are measured at fair value utilizing quoted market prices (Level 1). Corporate bonds, obligations of government-sponsored enterprises, municipal bonds and mortgage-backed securities are determined by pricing models that consider standard input factors such as observable market data, benchmark yields, reported trades, broker/dealer quotes, credit spreads, benchmark securities, as well as new issue data, monthly payment information, and collateral performance, among others (Level 2).

Federal Home Loan Bank stock — The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

Loans held for sale — The fair value is based on commitments in effect from investors or prevailing market prices.

Loans — For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for non-accrual loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Deposits — The fair values disclosed for non-certificate accounts are, by definition, equal to the amount payable on demand at the reporting date which is their carrying amounts. Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Borrowings — The fair value is estimated using discounted cash flow analyses based on the current incremental borrowing rates in the market for similar types of borrowing arrangements.

Accrued interest — The carrying amounts of accrued interest approximate fair value.

Forward loan sale commitments and derivative loan commitments — Forward loan sale commitments and derivative loan commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Management judgment and estimation is required in determining these fair value measurements.

Loan level interest rate swaps— The fair value is based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves.

Off-balance sheet credit-related instruments — Fair values for off-balance-sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these instruments is considered immaterial.

Assets and liabilities measured at fair value on a recurring basis are summarized as follows:


	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
	(In thousands)								(In thousands)
June 30, 2014
September 30, 2014
Assets:
Debt securities	$	—	$	119,490	$	—	$	119,490	$	—	$	109,095	$	—	$	109,095
Marketable equity securities		63,262		—		—		63,262		59,064		—		—		59,064
Derivative loan commitments		—		—		162		162		—		—		80		80
Forward loan sale commitments		—		—		26		26		—		—		42		42
Loan level interest rate swaps		—		—		528		528		—		—		567		567


Total assets	$	63,262	$	119,490	$	716	$	183,468	$	59,064	$	109,095	$	689	$	168,848


Liabilities:
Derivative loan commitments	$	—	$	—	$	8	$	8	$	—	$	—	$	22	$	22
Forward loan sale commitments		—		—		60		60		—		—		7		7
Loan level interest rate swaps		—		—		528		528		—		—		567		567


Total liabilities	$	—	$	—	$	596	$	596	$	—	$	—	$	596	$	596


December 31, 2013
Assets:
Debt securities	$	—	$	145,788	$	—	$	145,788	$	—	$	145,788	$	—	$	145,788
Marketable equity securities		55,349		—		—		55,349		55,349		—		—		55,349
Derivative loan commitments		—		—		38		38		—		—		38		38
Forward loan sale commitments		—		—		82		82		—		—		82		82
Loan level interest rate swaps		—		—		57		57		—		—		57		57


Total assets	$	55,349	$	145,788	$	177	$	201,314	$	55,349	$	145,788	$	177	$	201,314


Liabilities:
Derivative loan commitments	$	—	$	—	$	25	$	25	$	—	$	—	$	25	$	25
Forward loan sale commitments		—		—		7		7		—		—		7		7
Loan level interest rate swaps		—		—		57		57		—		—		57		57


Total liabilities	$	—	$	—	$	89	$	89	$	—	$	—	$	89	$	89

For the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, there were no transfers in or out of Levels 1 and 2 and the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,						Nine Months Ended September 30,
	2014		2013		2014		2013		2014			2013			2014		2013
	(In thousands)								(In thousands)
Derivative loan commitments and forward sale commitments, net:
Beginning balance	$	90	$	199	$	88	$	276	$	120		$	450		$	88	$	276
Total realized and unrealized losses included in net income		30		251		32		174		(27	)		(469	)		5		(295	)


Ending balance	$	120	$	450	$	120	$	450	$	93		$	(19	)	$	93	$	(19	)

Total realized gain relating to instruments still held at period end	$	120	$	450	$	120	$	450

Total realized gain (loss) relating to instruments still held at period end									$	93		$	(19	)	$	93	$	(19	)

The Company may also be required, from time to time, to measure certain other assets on a non-recurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from the application of lower-of-cost-or market accounting or write-downs of individual assets.

The following tables summarize the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. The gain/loss represents the amount of write-down, charge-off or specific reserve recorded during the periods noted on the assets held at period end. There were no liabilities measured at fair value on a non-recurring basis.


	June 30, 2014						Three Months Ended June 30, 2014			Six Months Ended June 30, 2014			September 30, 2014						Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
	Level 1		Level 2		Level 3		Total Losses			Total Losses			Level 1		Level 2		Level 3		Total Losses			Total Losses
	(In thousands)												(In thousands)
Impaired loans	$	—	$	—	$	16,167	$	14		$	(43	)	$	—	$	—	$	12,640	$	(82	)	$	(65	)
Foreclosed real estate		—		—		2,503		(80	)		(80	)		—		—		1,806		—			(78	)

	$	—	$	—	$	18,670	$	(66	)	$	(123	)	$	—	$	—	$	14,446	$	(82	)	$	(143	)


																			Three Months Ended			Nine Months Ended
	December 31, 2013						Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			December 31, 2013						September 30, 2013			September 30, 2013
	Level 1		Level 2		Level 3		Total Losses			Total Losses			Level 1		Level 2		Level 3		Total Losses			Total Losses
	(In thousands)												(In thousands)
Impaired loans	$	—	$	—	$	8,000	$	(236	)	$	(1,016	)	$	—	$	—	$	8,000	$	(226	)	$	(627	)
Foreclosed real estate		—		—		1,390		—			(16	)		—		—		1,390		—			—

	$	—	$	—	$	9,390	$	(236	)	$	(1,032	)	$	—	$	—	$	9,390	$	(226	)	$	(627	)

Certain impaired loans were adjusted to fair value, less cost to sell, of the underlying collateral securing these loans resulting in losses. The loss is not recorded directly as an adjustment to current earnings, but rather as a component in determining the allowance for loan losses. Fair value was measured using appraised values of collateral and adjusted as necessary by management based on unobservable inputs for specific properties.

Certain properties in foreclosed real estate were adjusted to fair value using appraised values of collateral, less cost to sell, and adjusted as necessary by management based on unobservable inputs for specific properties. The loss on foreclosed assets represents adjustments in valuation recorded during the time period indicated and not for losses incurred on sales.

The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein do not represent the underlying fair value of the Company.


	Carrying		Fair Value								Carrying Amount			Fair Value
	Amount		Level 1		Level 2		Level 3		Total				Level 1			Level 2			Level 3			Total
	(In thousands)										Carrying Amount	(In thousands)
June 30, 2014
September 30, 2014
Financial assets:
Cash and due from banks	$	367,819	$	367,819	$	—	$	—	$	367,819	$	388,273		$	388,273		$	—		$	—		$	388,273
Securities available for sale		182,752		63,262		119,490		—		182,752		168,159			59,064			109,095			—			168,159
Federal Home Loan Bank stock		12,681		—		—		12,681		12,681		12,725			—			—			12,725			12,725
Loans and loans held for sale, net		2,375,394		—		—		2,403,553		2,403,553		2,483,395			—			—			2,507,804			2,507,804
Accrued interest receivable		7,118		—		—		7,118		7,118		7,003			—			—			7,003			7,003
Financial liabilities:
Deposits		2,564,307		—		—		2,568,427		2,568,427		2,403,418			—			—			2,407,302			2,407,302
Borrowings		211,340		—		210,839		—		210,839		172,687			—			172,506			—			172,506
Accrued interest payable		829		—		—		829		829		806			—			—			806			806
On-balance sheet derivative financial instruments:
Assets:
Derivative loan commitments		162		—		—		162		162		80			—			—			80			80
Forward loan sale commitments		26		—		—		26		26		42			—			—			42			42
Loan level interest rate swaps		528		—		—		528		528		567			—			—			567			567
Liabilities:
Derivative loan commitments		8		—		—		8		8		22			—			—			22			22
Forward loan sale commitments		60		—		—		60		60		7			—			—			7			7
Loan level interest rate swaps		528		—		—		528		528		567			—			—			567			567

December 31, 2013
Financial assets:
Cash and due from banks	$	86,271	$	86,271	$	—	$	—	$	86,271	$	86,271		$	86,271		$	—		$	—		$	86,271
Securities available for sale		201,137		55,349		145,788		—		201,137		201,137			55,349			145,788			—			201,137
Federal Home Loan Bank stock		11,907		—		—		11,907		11,907		11,907			—			—			11,907			11,907
Loans and loans held for sale, net		2,267,763		—		—		2,298,488		2,298,488		2,267,763			—			—			2,298,488			2,298,488
Accrued interest receivable		7,127		—		—		7,127		7,127		7,127			—			—			7,127			7,127
Financial liabilities:
Deposits		2,248,600		—		—		2,253,543		2,253,543		2,248,600			—			—			2,253,543			2,253,543
Borrowings		161,903		—		160,581		—		160,581		161,903			—			160,581			—			160,581
Accrued interest payable		818		—		—		818		818		818			—			—			818			818
On-balance sheet derivative financial instruments:
Assets:
Derivative loan commitments		38		—		—		38		38		38			—			—			38			38
Forward loan sale commitments		82		—		—		82		82		82			—			—			82			82
Loan level interest rate swaps		57		—		—		57		57		57			—			—			57			57
Liabilities:
Derivative loan commitments		25		—		—		25		25		25			—			—			25			25
Forward loan sale commitments		7		—		—		7		7		7			—			—			7			7
Loan level interest rate swaps		57		—		—		57		57		57			—			—			57			57

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis reflects our consolidated financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with our business and financial information and the Consolidated Financial Statements and related notes included in ~~the Company’s~~Old Meridian’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission.

This report contains forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to:

Management’s ability to predict results or the effect of future plans or strategies is inherently uncertain. These factors include, but are not limited to, general economic conditions, changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, adverse changes in the securities markets and changes in the quality or composition of the Company’s loan or investment portfolios. Additional factors that may affect our results are discussed in the Company’s ~~Annual Report onForm 10-K~~ ~~for the fiscal year ended December 31, 2013~~Prospectus dated May 9, 2014, filed with the Securities and Exchange Commission on ~~March 17,~~May 20, 2014, under “Risk Factors,” which is available through the SEC’s website atwww.sec.gov, as updated by subsequent filings with the SEC. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, we do not undertake, and specifically disclaim any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

A summary of significant accounting policies is described in Note 1 to the Consolidated Financial Statements included in the 2013 Annual Report on Form 10-K for the year ended December 31, 2013. Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical accounting policies are defined as those involving significant judgments and assumptions by management that could have a material impact on the carrying value of certain assets or on income under different assumptions or conditions. Management believes that the most critical accounting policies are the allowance for loan losses, the evaluation of goodwill for impairment, other-than-temporary impairment of securities and the valuation of deferred tax assets.

Comparison of Financial Condition at ~~June~~September 30, 2014 and December 31, 2013

Assets. Our total assets increased ~~$373.8~~$486.7 million, or ~~13.9%~~18.1%, to ~~$3.056~~$3.169 billion at ~~June~~September 30, 2014 from $2.682 billion at December 31, 2013, reflecting net cash proceeds of ~~$206.9~~$302.3 million ~~from stock subscription deposits received~~raised in ~~connection with~~ the Company’s second step ~~conversion during the second quarter of 2014.~~common stock offering. Net loans increased ~~$104.1~~$216.0 million, or ~~4.6%~~9.5%, to ~~$2.369~~$2.481 billion at ~~June~~September 30, 2014 from $2.265 billion at December 31, 2013. Cash and due from banks increased ~~$281.5~~$302.0 million, or ~~326.4%~~350.1%, to ~~$367.8~~$388.3 million at ~~June~~September 30, 2014 from $86.3 million at December 31, 2013. Securities available for sale decreased ~~$18.4~~$33.0 million, or ~~9.1%~~16.4%, to ~~$182.8~~$168.2 million at ~~June~~September 30, 2014 from $201.1 million at December 31, 2013.

Loan Portfolio. At ~~June~~September 30, 2014, net loans were ~~$2.369~~$2.481 billion, or ~~77.5%~~78.3% of total assets. During the ~~six~~nine months ended ~~June~~September 30, 2014, net loans increased ~~$104.1~~$216.0 million, or ~~4.6%~~9.5%. The increase was primarily due to increases of ~~$34.2~~$108.2 million in commercial real estate loans, $65.9 million in commercial business loans ~~$18.3~~and $16.0 million in multi-family ~~loans and $50.0 million in commercial real estate~~ loans, excluding a reclassification during the first quarter of $60.9 million of commercial real estate loans to multi-family loans in accordance with regulatory guidance. Refer to Note 65Loansin the Notes to the Unaudited Consolidated Financial Statements within this report for more detail regarding the loans held in the Company’s loan portfolio.

Credit Risk Management. Our strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans. Management of asset quality is accomplished by internal controls, monitoring and reporting of key risk indicators, and both internal and independent third-party loan reviews. The primary objective of our loan review process is to measure borrower performance and assess risk for the purpose of identifying loan weakness in order to minimize loan loss exposure. From the time of loan origination through final repayment, multi-family, commercial real estate, construction and commercial business loans are assigned a risk rating based on pre-determined criteria and levels of risk. The risk rating is monitored annually for most loans; however, it may change during the life of the loan as appropriate.

Internal and independent third-party loan reviews vary by loan type, as well as the nature and complexity of the loan. Depending on the size and complexity of the loan, some loans may warrant detailed individual review, while other loans may have less risk based upon size, or be of a homogeneous nature reducing the need for detailed individual analysis. Assets with these characteristics, such as consumer loans and loans secured by residential real estate, may be reviewed on the basis of risk indicators such as delinquency or credit rating. In cases of significant concern, a total re-evaluation of the loan and associated risks are documented by completing a loan risk assessment and action plan. Some loans may be re-evaluated in terms of their fair market value or net realizable value in order to determine the likelihood of potential loss exposure and, consequently, the adequacy of specific and general loan loss reserves.

When a borrower fails to make a required loan payment, we take a number of steps to have the borrower cure the delinquency and restore the loan to current status, including contacting the borrower by letter and phone at regular intervals. When the borrower is in default, we may commence collection proceedings. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure sale, the real property securing the loan generally is sold at foreclosure. Management informs the Executive Committee monthly of the amount of loans delinquent more than 30 days. Management provides detailed information to the Board of Directors on loans 60 or more days past due and all loans in foreclosure and repossessed property that we own.

Delinquencies. Total past due loans decreased ~~$6.9~~$11.7 million, or ~~20.0%~~34.1%, to ~~$27.6~~$22.7 million at ~~June~~September 30, 2014 from $34.5 million at December 31, 2013, reflecting decreases of ~~$3.1~~$8.3 million in loans 90 days or greater past due and ~~$3.8~~$3.4 million in loans 30 to 89 days past due. Delinquent loans at ~~June~~September 30, 2014 included ~~$10.7~~$9.5 million of loans acquired in the Mt. Washington Co-operative Bank merger completed in January 2010, including ~~$3.2~~$3.9 million that were 30 to 59 days past due, ~~$1.1 million~~$345,000 that were 60 to 89 days past due and ~~$6.4~~$5.3 million that were 90 days or greater past due. At ~~June~~September 30, 2014, non-accrual loans exceeded loans 90 days or greater past due primarily due to loans which were placed on non-accrual status based on a determination that the ultimate collection of all principal and interest due was not expected and certain loans that remain on non-accrual status until they attain a sustained payment history of six months.

Non-performing Assets. Non-performing assets include loans that are 90 or more days past due or on non-accrual status, including troubled debt restructurings on non-accrual status, and real estate and other loan collateral acquired through foreclosure and repossession. Loans 90 days or greater past due may remain on an accrual basis if adequately collateralized and in the process of collection. At ~~June~~September 30, 2014, we did not have any accruing loans past due 90 days or greater. For non-accrual loans, interest previously accrued but not collected is reversed and charged against income at the time a loan is placed on non-accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as foreclosed real estate until it is sold. When property is acquired, it is initially recorded at the fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Holding costs and declines in fair value after acquisition of the property result in charges against income.

The following table provides information with respect to our non-performing assets at the dates indicated.


							September 30,			December 31,
	June 30, 2014			December 31, 2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Loans accounted for on a non-accrual basis:
Real estate loans:
Residential real estate:
One- to four-family	$	16,281		$	17,622		$	14,327		$	17,622
Home equity lines of credit		2,260			2,689			2,397			2,689
Commercial real estate		7,178			8,972			3,382			8,972
Construction		10,665			11,298			7,132			11,298

Total real estate loans		36,384			40,581			27,238			40,581
Commercial business loans		903			949			883			949

Total non-accrual loans (1)		37,287			41,530			28,121			41,530
Foreclosed assets		2,503			1,390			1,806			1,390

Total non-performing assets	$	39,790		$	42,920		$	29,927		$	42,920


Non-accrual loans to total loans		1.56	%		1.81	%		1.12	%		1.81	%
Non-accrual loans to total assets		1.22	%		1.55	%		0.89	%		1.55	%
Non-performing assets to total assets		1.30	%		1.60	%		0.94	%		1.60	%

Non-performing assets decreased to ~~$39.8~~$29.9 million or ~~1.30%~~0.94% of total assets, at ~~June~~September 30, 2014, from $42.9 million, or 1.60% of total assets, at December 31, 2013. Non-performing assets at ~~June~~September 30, 2014 included ~~$13.6~~$11.9 million of assets acquired in the Mt. Washington merger, all of which were non-accrual loans. Interest income that would have been recorded for the ~~six~~nine months ended ~~June~~September 30, 2014 had non-accruing loans been current according to their original terms amounted to ~~$582,000.~~$398,000. We recognized ~~$528,000~~$722,000 of interest income, on a cash basis, on such loans for the ~~six~~nine months ended June 30, 2014. Construction loans, including related foreclosed real estate, represented approximately 31.9% of our non-performing assets at June 30, 2014. Approximately $6.6 million, or 61.8%, of our $10.7 million of non-accrual construction loans at June 30, 2014 relate to the following three construction projects originated in 2007 and 2008.

~~Together, these three non-accrual construction loan relationships comprised 17.7% of total non-accrual loans at June~~September 30, 2014.

Non-accrual loans decreased ~~$4.2~~$13.4 million, or ~~10.2%~~32.3%, to ~~$37.3~~$28.1 million, or ~~1.56%~~1.12% of total loans outstanding at ~~June~~September 30, 2014, from $41.5 million, or 1.81% of total loans outstanding at December 31, ~~2013.~~ 2013, primarily due to decreases of $5.6 million in non-accrual commercial real estate loans, $4.2 million in non-accrual construction loans and $3.3 million in non-accrual one- to four-family loans. The decrease in non-accrual commercial real estate loans resulted from one commercial TDR that was moved from non-accrual to accrual status during the quarter ended September 30, 2014. This TDR was structurally modified with additional collateral that improved the debt service coverage ratio and loan to value. The decrease in non-accrual construction loans for the quarter ended September 30, 2014 resulted from activity related to two construction loan relationships classified as TDRs. The note and loan documents for one loan relationship were sold to a third party and resulted in a charge off of $71,000 recorded against the allowance for loan losses during the quarter ended September 30, 2014. The second of these loan relationships remains; however due to liquidation of the portion of the collateral and additional payments made by the borrower, a recovery of $35,000 was realized in the allowance for loan losses. The decrease in non-accrual one- to-four family loans resulted from continued account monitoring, collection and workout efforts.

At ~~June~~September 30, 2014, our allowance for loan losses was ~~$26.1~~$26.7 million, or ~~1.09%~~1.07% of total loans and ~~70.1%~~95.1% of non-accrual loans, compared to $25.3 million, or 1.11% of total loans and 61.0% of non-accrual loans at December 31, 2013. Included in our allowance at ~~June~~September 30, 2014 was a general component of ~~$25.7~~$26.3 million, which is based upon our evaluation of various factors relating to loans not deemed to be impaired. We continue to believe our level of non-accrual loans and assets, which declined significantly during the past two years, is manageable and we believe that we have sufficient capital and human resources to manage the collection of our non-performing assets in an orderly fashion.

Foreclosed real estate increased ~~$1.1 million,~~$416,000, or ~~80.1%~~29.9%, to ~~$2.5~~$1.8 million at ~~June~~September 30, 2014 from $1.4 million at December 31, 2013. At ~~June~~September 30, 2014, foreclosed real estate consisted of ~~one~~a townhouse construction development project, ~~one~~a single family residential construction development project and ~~three~~a one- to four-family ~~loans.~~loan. We continue to be actively engaged with our borrowers in resolving remaining problem assets and with the effective management of real estate owned as a result of foreclosures.

Troubled Debt Restructurings. In the course of resolving loans of borrowers with financial difficulties, we may choose to restructure the contractual terms of certain loans, with terms modified to fit the ability of the borrower to repay in line with its current financial status. A loan is considered a ~~troubled debt restructure~~TDR if, for reasons related to the debtor’s financial difficulties, a concession is granted to the debtor that would not otherwise be considered.

Total TDRs ~~decreased $868,000,~~increased $1.5 million, or ~~4.4%~~7.7%, to ~~$18.7~~$21.1 million at ~~June~~September 30, 2014 from $19.6 million at December 31, ~~2013.~~2013, primarily due to increases of $1.3 million in multi-family and $8.7 million in commercial real estate TDRs on accrual status, partially offset by decreases of $4.0 million in commercial real estate and $5.5 million in construction TDRs on non-accrual status. Modifications of ~~one- to four-family~~ TDRs consist of rate reductions, loan term extensions or provisions for interest-only payments for specified periods up to 12 months. We have generally been successful with the concessions we have offered to borrowers to date. We generally return TDRs to accrual status when they have sustained payments for six months based on the restructured terms and future payments are reasonably assured. Interest income that would have been recorded for the ~~six~~nine months ended ~~June~~September 30, 2014 had TDRs been current according to their original terms amounted to ~~$361,000.~~$121,000. We recognized ~~$167,000~~$371,000 of interest income on TDRs for the ~~six~~nine months ended ~~June~~September 30, 2014.

Potential Problem Loans. Certain loans are identified during our loan review process that are currently performing in accordance with their contractual terms and we expect to receive payment in full of principal and interest, but it is deemed probable that we will be unable to collect all the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. This may result from deteriorating conditions such as cash flows, collateral values or creditworthiness of the borrower. These loans are classified as impaired but are not accounted for on a non-accrual basis.

Other potential problem loans are those loans that are currently performing, but where known information about possible credit problems of the borrowers causes us to have concerns as to the ability of such borrowers to comply with contractual loan repayment terms. These other potential problem loans are generally loans classified as “substandard” or 5-rated loans in accordance with our nine-grade internal loan rating system that is consistent with guidelines established by banking regulators. At ~~June~~September 30, 2014, other potential problem loans totaled ~~$26.6~~$21.9 million, including ~~$17.0~~$17.1 million of construction loans, ~~$6.7~~$3.1 million of multi-family loans and ~~$2.9~~$1.7 million of commercial real estate.

Allowance for Loan Losses.The allowance for loan losses is maintained at levels considered adequate by management to provide for probable loan losses inherent in the loan portfolio as of the consolidated balance sheet reporting dates. The allowance for loan losses is based on management’s assessment of various factors affecting the loan portfolio, including portfolio composition, delinquent and non-accrual loans, national and local business conditions and loss experience and an overall evaluation of the quality of the underlying collateral.

Changes in the allowance for loan losses during the periods indicated were as follows:


	Six Months Ended June 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Beginning balance	$	25,335		$	20,504		$	25,335		$	20,504
Provision for loan losses		829			4,479			1,484			4,630
Charge offs:
Residential real estate:
One- to four-family		(54	)		(396	)		(54	)		(531	)
Multi-family		—			(96	)		—			(96	)
Home equity lines of credit		(5	)		—			(5	)		—
Commercial real estate		(12	)		—			(48	)		—
Construction		—			(993	)		(71	)		(1,362	)
Consumer		(86	)		(153	)		(126	)		(224	)

Total charge-offs		(157	)		(1,638	)		(304	)		(2,213	)

Recoveries:
Residential real estate:
One- to four-family		44			33			67			121
Construction		21			11			78			548
Commercial business		6			17			7			21
Consumer		53			44			72			68

Total recoveries		124			105			224			758

Net charge-offs		(33	)		(1,533	)		(80	)		(1,455	)

Ending balance	$	26,131		$	23,450		$	26,739		$	23,679


Allowance to non-accrual loans		70.08	%		51.75	%		95.09	%		54.33	%
Allowance to total loans outstanding		1.09	%		1.16	%		1.07	%		1.11	%
Net charge-offs to average loans outstanding		0.00	%		0.16	%		0.00	%		0.10	%

Our provision for loan losses was ~~$829,000~~$1.5 million for the ~~six~~nine months ended ~~June~~September 30, 2014 compared to ~~$4.5~~$4.6 million for the ~~six~~nine months ended ~~June~~September 30, 2013. The changes in the provision for loan losses were based on management’s assessment of loan portfolio growth and composition changes, a decline in historical charge-off trends, an ongoing evaluation of credit quality and improving economic conditions. The allowance for loan losses was ~~$26.1~~$26.7 million or ~~1.09%~~1.07% of total loans outstanding at ~~June~~September 30, 2014, compared to ~~$23.5~~$23.7 million or ~~1.16%~~1.11% of total loans outstanding at ~~June~~September 30, 2013. The increase in the allowance for loan losses was primarily due to ~~increases in the multi-family, construction and commercial business~~ loan ~~categories, as such loans have higher inherent credit risk than loans in our residential real estate loan categories.~~growth. We continue to assess the adequacy of our allowance for loan losses in accordance with established policies.

The following tables set forth the breakdown of the allowance for loan losses by loan category at the dates indicated:


	June 30, 2014								December 31, 2013								September 30, 2014								December 31, 2013
	Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category of Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category of Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category of Total Loans			Amount		Percent of Allowance to Total Allowance			Percent of Loans in Category of Total Loans
	(Dollars in thousands)																(Dollars in thousands)
Real estate loans:
Residential real estate:
One- to four-family	$	1,913		7.3	%		18.9	%	$	1,991		7.9	%		19.8	%	$	1,873		7.0	%		18.6	%	$	1,991		7.9	%		19.8	%
Multi-family		3,346		12.9			15.3			2,419		9.5			12.6			3,259		12.1			14.6			2,419		9.5			12.6
Home equity lines of credit		105		0.4			2.1			155		0.6			2.4			99		0.4			2.0			155		0.6			2.4
Commercial real estate		11,981		45.8			42.6			12,831		50.6			45.0			12,502		46.8			43.0			12,831		50.6			45.0
Construction		4,512		17.3			9.1			4,374		17.3			9.1			4,437		16.6			9.0			4,374		17.3			9.1

Total real estate loans		21,857		83.7			88.0			21,770		85.9			88.9			22,170		82.9			87.2			21,770		85.9			88.9
Commercial business loans		4,185		16.0			11.7			3,433		13.6			10.8			4,479		16.8			12.5			3,433		13.6			10.8
Consumer		89		0.3			0.3			132		0.5			0.3			90		0.3			0.3			132		0.5			0.3


Total loans	$	26,131		100.0	%		100.0	%	$	25,335		100.0	%		100.0	%	$	26,739		100.0	%		100.0	%	$	25,335		100.0	%		100.0	%

The allowance consists of general and allocated components. The general component relates to pools of non-impaired loans and is based on historical loss experience adjusted for qualitative factors. The allocated component relates to loans that are classified as impaired, whereby an allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan.

We had impaired loans totaling ~~$30.1~~$28.5 million and $33.5 million as of ~~June~~September 30, 2014 and December 31, 2013, respectively. A loan is considered impaired when, based on current information and events, it is probable that we 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. Impairment is measured on a loan by loan basis by either 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. At ~~June~~September 30, 2014, impaired loans totaling ~~$4.7~~$5.5 million had a valuation allowance of $421,000. Impaired loans totaling $3.6 million had a valuation allowance of $376,000 at December 31, 2013. Our average investment in impaired loans was ~~$33.7~~$21.7 million and ~~$39.0~~$38.2 million for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment based on payment status. Accordingly, we do not separately identify individual one- to four-family residential and consumer loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring. We 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 TDR. All TDRs are initially classified as impaired.

We review residential and commercial loans for impairment based on the fair value of collateral, if collateral-dependent, or the present value of expected cash flows. Management has reviewed the collateral value for all impaired and non-accrual loans as of ~~June~~September 30, 2014 and considered any probable loss in determining the allowance for loan losses.

For residential loans measured for impairment based on the collateral value, we will do the following:

For commercial loans measured for impairment based on the collateral value, we will do the following:

Loans that are partially charged off generally remain on non-accrual status until foreclosure or such time that they are performing in accordance with the terms of the loan and have a sustained payment history of at least six months. The accrual of interest is generally discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. Loan losses are charged against the allowance when we believe the uncollectability of a loan balance is confirmed; for collateral-dependent loans, generally when appraised values (as adjusted values, if applicable) less estimated costs to sell are less than our carrying values.

Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses in conformity with generally accepted accounting principles in the United States of America, there can be no assurance that regulators, in

reviewing our loan portfolio, will not require us to increase our allowance for loan losses. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

Securities Portfolio. At ~~June~~September 30, 2014, our securities portfolio was ~~$182.8~~$168.2 million, or ~~6.0%~~5.3% of total assets. At that date, ~~36.8%~~34.3% of the securities portfolio, or ~~$67.3~~$57.7 million, was invested in corporate bonds. The amortized cost and fair value of corporate bonds in the financial services sector was ~~$48.7~~$42.8 million, and ~~$49.5~~$43.5 million, respectively. The remainder of the corporate bond portfolio includes companies from a variety of industries. Refer to Note 54Securities Available for Sale in the Notes to the Unaudited Consolidated Financial Statements within this report for more detail regarding the investments held in the Company’s securities portfolio.

At ~~June~~September 30, 2014, we had no investments in a single company or entity, other than ~~Government-sponsored~~government-sponsored enterprises, that had an aggregate book value in excess of 10% of our equity.

~~Money market mutual funds included in the marketable equity securities portfolio totaled $1.0 million at June 30, 2014 and $2.0 million at December 31, 2013.~~

Each reporting period, we evaluate all securities with a decline in fair value below the amortized cost of the investment to determine whether or not the impairment is deemed to be other-than-temporary (“OTTI”). OTTI is required to be recognized if (1) we intend to sell the security; (2) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. Marketable equity securities are evaluated for OTTI based on the severity and duration of the impairment and, if deemed to be other than temporary, the declines in fair value are reflected in earnings as realized losses. For impaired debt securities that we intend to sell, or more likely than not will be required to sell, the full amount of the depreciation is recognized as OTTI through earnings. For all other impaired debt securities, credit-related OTTI is recognized through earnings and non-credit related OTTI is recognized in other comprehensive income/loss, net of applicable taxes.

At ~~June~~September 30, 2014, unrealized losses in our debt portfolio ranged from 0% to ~~3.5%~~3.9% of amortized cost, and unrealized losses in our equity portfolio ranged from 0% to ~~15.6%~~28.4% of cost. As of ~~June~~September 30, 2014, the net unrealized gain on the total debt securities portfolio was ~~$1.5~~$1.2 million. The most significant market valuation decrease related to any one debt security within the portfolio at ~~June~~September 30, 2014 is ~~$70,000.~~$78,000. We have no indication that the issuer will be unable to continue to service the obligations, and management does not intend to sell, and more likely than not will not be required to sell, such bond before the earlier of recovery or maturity. As a result, management considers the decline in market value to be temporary. No other debt securities had a market value decline greater than ~~3.1%~~3.9% of amortized cost.

As of ~~June~~September 30, 2014 the net unrealized gain on the total marketable equity securities portfolio was ~~$8.1~~$4.4 million. The most significant market valuation decrease related to any one equity security within the portfolio at ~~June~~September 30, 2014 is ~~$103,000.~~$271,000. Although the issuers have shown declines in earnings as a result of the weakened economy, no credit issues have been identified that cause management to believe the decline in market value is other than temporary, and we have the ability and intent to hold these investments until a recovery of fair value. In analyzing an equity issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a one-year time frame.

Deposits. Deposits are a major source of our funds for lending and other investment purposes. Deposit inflows and outflows are significantly influenced by general interest rates and money market conditions. Our deposit base is comprised of demand, NOW, money market, regular savings and other deposits, and certificates of deposit. We consider demand, NOW, money market, and regular savings and other deposits to be core deposits. Total deposits increased ~~$315.7~~$154.8 million, or ~~14.0%~~6.9%, to ~~$2.564~~$2.403 billion at ~~June~~September 30, 2014 from $2.249 billion at December 31, 2013. Our continuing focus on the acquisition and expansion of core deposit relationships resulted in net growth in those non-term deposits ~~excluding the $206.9 million~~ of ~~stock subscription deposits, of $103.2~~$169.9 million, or ~~6.6%~~10.8%, to ~~$1.676~~$1.743 billion at ~~June~~September 30, 2014, or ~~71.1%~~72.5% of total deposits at that date. For further information about our deposits, refer to Note 76Depositsin Notes to the Unaudited Consolidated Financial Statements within this report.

The following table sets forth the average balances of deposits for the periods indicated.


	Six Months Ended June 30,																Nine Months Ended September 30,
	2014								2013								2014								2013
	Average Balance		Average Rate			Percent of Total Deposits			Average Balance		Average Rate			Percent of Total Deposits			Average Balance		Average Rate			Percent of Total Deposits			Average Balance		Average Rate			Percent of Total Deposits
	(Dollars in thousands)																(Dollars in thousands)
Demand deposits	$	275,550		—	%		18.8	%	$	210,014		—	%		11.0	%	$	305,732		—	%		12.0	%	$	218,061		—	%		11.1	%
NOW deposits		226,714		0.56			9.8			176,455		0.52			9.4			238,087		0.58			12.1			181,421		0.53			9.5
Money market deposits		853,773		0.88			34.2			638,532		0.90			33.5			864,656		0.89			37.2			677,728		0.91			36.6
Regular savings and other deposits		264,841		0.26			10.6			249,878		0.26			12.5			265,932		0.26			11.2			251,402		0.26			11.6
Certificates of deposit		678,315		1.22			26.6			667,973		1.35			33.6			675,388		1.20			27.5			674,883		1.33			31.2

Total	$	2,299,193		0.77	%		100.0	%	$	1,942,852		0.84	%		100.0	%	$	2,349,795		0.76	%		100.0	%	$	2,003,495		0.84	%		100.0	%

Borrowings. We use borrowings from the Federal Home Loan Bank of Boston to supplement our supply of funds for loans and investments. In addition, we may also purchase federal funds from local banking institutions as an additional short-term funding source for the Bank. Total borrowings increased ~~$49.4~~$10.8 million, or ~~30.5%~~6.7%, to ~~$211.3~~$172.7 million at ~~June~~September 30, 2014 from $161.9 million at December 31, 2013, reflecting new advances with the Federal Home Loan Bank of Boston totaling ~~$55.0~~$57.1 million with terms of one to three years and fixed interest rates of 0.33% to ~~0.99%~~1.44% during the ~~six~~nine months ended ~~June~~September 30, 2014. At ~~June~~September 30, 2014 and December 31, 2013, Federal Home Loan Bank of Boston advances totaled ~~$211.3~~$172.7 million and $161.9 million, respectively, with a weighted average rate of ~~1.25%~~1.28% and 1.48%, respectively. During the third quarter ended September 30, 2014, the Company prepaid $40.0 million of FHLB advances with a weighted average interest rate of 1.12%. The advances had fixed interest rates with maturities ranging from July 2017 through April 2018 and did not result in a FHLB prepayment penalty. At ~~June~~September 30, 2014, we also had an available line of credit of $9.4 million with the Federal Home Loan Bank of Boston at an interest rate that adjusts daily, none of which was outstanding at that date. For further information about our borrowings, refer to Note 87Borrowingsin Notes to the Unaudited Consolidated Financial Statements within this report.

Information relating to borrowings, including the federal funds purchased, is detailed in the following table.


	Six Months Ended June 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Balance outstanding at end of period	$	211,340		$	188,576		$	172,687		$	187,700
Average amount outstanding during the period	$	194,221		$	182,071		$	195,002		$	184,080
Weighted average interest rate during the period		1.32	%		1.81	%		1.31	%		1.77	%
Maximum outstanding at any month end	$	211,340		$	188,576		$	211,340		$	188,576
Weighted average interest rate at end of period		1.25	%		1.87	%		1.28	%		1.87	%

Stockholders’ Equity. Total stockholders’ equity increased ~~$12.7~~$321.8 million, or ~~5.1%~~129.1%, to ~~$261.9~~$571.0 million at ~~June~~September 30, 2014, from $249.2 million at December 31, 2013. The increase for the nine months ended September 30, 2014 was ~~due~~ primarily the result of the Company’s second step stock offering and to ~~$10.3~~$16.3 million in net income, ~~and $1.4~~partially offset by a decrease of $1.1 million in accumulated other comprehensive income reflecting ~~an increase~~a decrease in the fair value of available for sale securities. Stockholders’ equity to assets was ~~8.57%~~18.02% at ~~June~~September 30, 2014, compared to 9.29% at December 31, 2013. Book value per share increased to ~~$11.78~~$10.44 at ~~June~~September 30, 2014 from ~~$11.21~~$4.58 at December 31, 2013. Tangible book value per share increased to ~~$11.17~~$10.19 at ~~June~~September 30, 2014 from ~~$10.60~~$4.33 at December 31, 2013. At ~~June~~September 30, 2014, the Company and the Bank continued to exceed all regulatory capital requirements. For further information regarding regulatory capital requirements and the actual capital amounts and ratios for the Bank and the Company, refer to“Capital Management.”

Average Balance Sheets and Related Yields and Rates. The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. For purposes of the tables, average balances have been calculated using daily average balances, and non-accrual loans are included in average balances but are not deemed material. Loan fees are included in interest income on loans but are not material.


	Six Months Ended June 30,																		Nine Months Ended September 30,
	2014									2013									2014									2013
	Average Balance			Interest (1)			Yield/ Cost (1)(2)			Average Balance			Interest (1)			Yield/ Cost (1)(2)			Average Balance			Interest (1)			Yield/ Cost (1)(2)			Average Balance			Interest (1)			Yield/ Cost (1)(2)
	(Dollars in thousands)																		(Dollars in thousands)
Assets:
Interest-earning assets:
Loans (3)	$	2,339,074		$	50,763			4.38	%	$	1,883,894		$	43,085			4.61	%	$	2,380,840		$	78,106			4.39	%	$	1,946,945		$	66,310			4.55	%
Securities and certificates of deposits		189,151			2,452			2.61			242,655			3,297			2.74			185,867			3,597			2.59			234,989			4,796			2.73
Other interest-earning assets (4)		124,706			228			0.37			135,247			165			0.25			211,801			486			0.31			143,639			251			0.23

Total interest-earning assets		2,652,931			53,443			4.06			2,261,796			46,547			4.15			2,778,508			82,189			3.95			2,325,573			71,357			4.10

Noninterest-earning assets		113,970									119,128									115,846									118,802

Total assets	$	2,766,901								$	2,380,924								$	2,894,354								$	2,444,375


Liabilities and stockholders’ equity:
Interest-bearing liabilities:
NOW deposits	$	226,714			633			0.56		$	176,455			459			0.52		$	238,087			1,027			0.58		$	181,421			713			0.53
Money market deposits		853,773			3,744			0.88			638,532			2,844			0.90			864,656			5,730			0.89			677,728			4,615			0.91
Regular savings and other deposits		264,841			342			0.26			249,878			327			0.26			265,932			515			0.26			251,402			495			0.26
Certificates of deposit		678,315			4,093			1.22			667,973			4,459			1.35			675,388			6,053			1.20			674,883			6,693			1.33

Total interest-bearing deposits		2,023,643			8,812			0.88			1,732,838			8,089			0.94			2,044,063			13,325			0.87			1,785,434			12,516			0.94
Borrowings		194,221			1,276			1.32			182,071			1,637			1.81			195,002			1,908			1.31			184,080			2,433			1.77

Total interest-bearing liabilities		2,217,864			10,088			0.92			1,914,909			9,726			1.02			2,239,065			15,233			0.91			1,969,514			14,949			1.01

Noninterest-bearing demand deposits		275,550									210,014									305,732									218,061
Other noninterest-bearing liabilities		18,609									17,821									19,058									17,263

Total liabilities		2,512,023									2,142,744									2,563,855									2,204,838
Total stockholders’ equity		254,878									238,180									330,499									239,537

Total liabilities and stockholders’ equity	$	2,766,901								$	2,380,924								$	2,894,354								$	2,444,375


Net interest-earning assets	$	435,067								$	346,887								$	539,443								$	356,059

Fully tax-equivalent net interest income					43,355									36,821									66,956									56,408
Less: tax-equivalent adjustments					(1,514	)								(876	)								(2,395	)								(1,366	)

Net interest income				$	41,841								$	35,945								$	64,561								$	55,042

Interest rate spread (1)(5)								3.14	%								3.13	%								3.04	%								3.09	%
Net interest margin (1)(6)								3.30	%								3.28	%								3.22	%								3.24	%
Average interest-earning assets to average interest-bearing liabilities		119.62	%								118.12	%								124.09	%								118.08	%

Supplemental Information:
Total deposits, including noninterest-bearing demand deposits	$	2,299,193		$	8,812			0.77	%	$	1,942,852		$	8,089			0.84	%	$	2,349,795		$	13,325			0.76	%	$	2,003,495		$	12,516			0.84	%
Total deposits and borrowings, including noninterest-bearing demand deposits	$	2,493,414		$	10,088			0.82	%	$	2,124,923		$	9,726			0.92	%	$	2,544,797		$	15,233			0.80	%	$	2,187,575		$	14,949			0.91	%

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our fully tax-equivalent net interest income. 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 prior columns. For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.


	Three Months Ended June 30, 2014 Compared to 2013 Increase (Decrease) Due to									Six Months Ended June 30, 2014 Compared to 2013 Increase (Decrease) Due to									Three Months Ended September 30, 2014 Compared to 2013 Increase (Decrease) Due to									Nine Months Ended September 30, 2014 Compared to 2013 Increase (Decrease) Due to
	Volume			Rate			Net			Volume			Rate			Net			Volume			Rate			Net			Volume			Rate			Net
	(In thousands)																		(In thousands)
Interest Income:
Loans	$	4,685		$	(986	)	$	3,699		$	9,971		$	(2,293	)	$	7,678		$	4,354		$	(235	)	$	4,119		$	14,311		$	(2,515	)	$	11,796
Securities and certificates of deposits		(330	)		(42	)		(372	)		(699	)		(146	)		(845	)		(263	)		(92	)		(355	)		(961	)		(238	)		(1,199	)
Other interest-earning assets		(5	)		42			37			(14	)		77			63			145			27			172			142			93			235

Total		4,350			(986	)		3,364			9,258			(2,362	)		6,896			4,236			(300	)		3,936			13,492			(2,660	)		10,832
Interest Expense:
Deposits		494			(228	)		266			1,171			(448	)		723			347			(261	)		86			1,514			(705	)		809
Borrowings		69			(209	)		(140	)		103			(464	)		(361	)		35			(199	)		(164	)		137			(662	)		(525	)

Total		563			(437	)		126			1,274			(912	)		362			382			(460	)		(78	)		1,651			(1,367	)		284

Change in fully tax-equivalent net interest income	$	3,787		$	(549	)	$	3,238		$	7,984		$	(1,450	)	$	6,534		$	3,854		$	160		$	4,014		$	11,841		$	(1,293	)	$	10,548

Results of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2014 and 2013

Net Income. Our primary source of income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income. A secondary source of income is non-interest income, which includes revenue that we receive from providing products and services. The majority of our non-interest income generally comes from customer service fees, loan fees, bank-owned life insurance, mortgage banking gains and gains on sales of securities.

Net income information is as ~~follows:~~follows (annualized where appropriate):


	Three Months Ended June 30,						Change						Six Months Ended June 30,						Change						Three Months Ended September 30,						Change						Nine Months Ended September 30,						Change
	2014			2013			Amount			Percent			2014			2013			Amount			Percent			2014			2013			Amount			Percent			2014			2013			Amount			Percent
	(Dollars in thousands)																								(Dollars in thousands)
Net interest income	$	21,239		$	18,319		$	2,920			15.9	%	$	41,841		$	35,945		$	5,896			16.4	%	$	22,720		$	19,097		$	3,623			19.0	%	$	64,561		$	55,042		$	9,519			17.3	%
Provision for loan losses		696			3,219			(2,523	)		(78.4	)		829			4,479			(3,650	)		(81.5	)		655			151			504			333.8			1,484			4,630			(3,146	)		(67.9	)
Non-interest income		4,037			4,720			(683	)		(14.5	)		8,021			9,081			(1,060	)		(11.7	)		3,687			5,234			(1,547	)		(29.6	)		11,708			14,315			(2,607	)		(18.2	)
Non-interest expenses		16,281			15,595			686			4.4			33,702			31,887			1,815			5.7			16,707			15,587			1,120			7.2			50,409			47,474			2,935			6.2
Net income		5,504			3,025			2,479			82.0			10,275			6,093			4,182			68.6			6,015			5,321			694			13.0			16,290			11,414			4,876			42.7
Return on average assets		0.78	%		0.50	%		0.28			56.0			0.74	%		0.51	%		0.23			45.9			0.76	%		0.83	%		(0.07	)		(8.4	)		0.75	%		0.62	%		0.13			21.0
Return on average equity		8.52	%		5.03	%		3.49			69.4			8.06	%		5.12	%		2.95			57.7			5.02	%		8.79	%		(3.77	)		(42.9	)		6.57	%		6.35	%		0.22			3.5

Net Interest Income. Net interest income increased ~~$2.9~~$3.6 million, or ~~15.9%~~19.0%, to ~~$21.2~~$22.7 million for the quarter ended ~~June~~September 30, 2014 from ~~$18.3~~$19.1 million for the quarter ended ~~June~~September 30, 2013. The net interest rate spread and net interest margin were ~~3.00%~~2.76% and ~~3.16%~~2.98%, respectively, for ~~both quarters~~the quarter ended ~~June~~September 30, 2014 compared to 2.94% and ~~June~~3.09%, respectively, for the quarter ended September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, net interest income increased ~~$5.9~~$9.5 million, or ~~16.4%~~17.3%, to ~~$41.8~~$64.6 million from ~~$35.9~~$55.0 million for the ~~six~~nine months ended ~~June~~September 30, 2013. The net interest rate spread and net interest margin were ~~3.03%~~2.93% and ~~3.18%~~3.11%, respectively, for the ~~six~~nine months ended ~~June~~September 30, 2014 compared to ~~3.05%~~3.01% and ~~3.20%~~3.16%, respectively, for the ~~six~~nine months ended ~~June~~September 30, 2013. The increases in net interest income were due primarily to loan growth along with declines in the cost of funds, partially offset by declines in yields on interest-earning assets and deposit growth for the ~~second~~ quarter and ~~six~~nine months ended ~~June~~September 30, 2014 compared to the same periods in 2013.

The Company’s yield on interest-earning assets declined 29 basis points to 3.65% for the quarter ended September 30, 2014 compared to 3.94% for the quarter ended September 30, 2013, while the cost of funds declined 13 basis points to 0.77% for the quarter ended September 30, 2014 compared to 0.90% for the quarter ended September 30, 2013. For the nine months ended September 30, 2014, the yield on interest-earning assets declined by 18 basis points to 3.84% compared to 4.02% for the nine months ended September 30, 2013, while the cost of funds declined by 11 basis points to 0.80% for the nine months ended September 30, 2014 compared to 0.91% for the nine months ended September 30, 2013.

The average balance of the Company’s loan portfolio increased ~~$427.4~~$392.0 million, or ~~22.1%~~18.9%, to ~~$2.365~~$2.463 billion, which was partially offset by the decline in the yield on loans of 24nine basis points to ~~4.26%~~4.29% for the quarter ended ~~June~~September 30, 2014 compared to the quarter ended ~~June~~September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, the average balance of the loan portfolio increased ~~$455.2~~$433.9 million, or ~~24.2%~~22.3%, to ~~$2.339~~$2.381 billion, which was partially offset by the decrease in the yield on loans of 2821 basis points to ~~4.27%~~4.28% compared to the ~~six~~nine months ended ~~June~~September 30, 2013.

The Company’s ~~cost~~average balance of total deposits ~~declined seven basis points~~increased $326.5 million, or 15.4%, to ~~0.76%,~~$2.449 billion, which was partially offset by the ~~increase~~decline in the ~~average balance~~cost of total deposits of ~~$334.7 million, or 16.8%,~~10 basis points to ~~$2.331 billion~~0.73% for the quarter ended ~~June~~September 30, 2014 compared to the quarter ended ~~June~~September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, ~~the cost of total deposits declined seven basis points to 0.77%, which was partially offset by the increase in~~ the average balance of total deposits ~~of $356.3~~increased $346.3 million, or ~~18.3%~~17.3%, to ~~$2.299~~$2.350 billion, which as partially offset by the decline in cost of total deposits of eight basis points to 0.76% compared to the ~~six~~nine months ended ~~June 30, 2013.~~

The Company’s yield on interest-earning assets declined 10 basis points to 3.91% for the quarter ended June 30, 2014 compared to 4.01% for the quarter ended June 30, 2013, while the cost of funds declined 11 basis points to 0.80% for the quarter ended June 30, 2014 compared to 0.91% for the quarter ended June 30, 2013. For the six months ended June 30, 2014, the yield on interest-earning assets declined by 12 basis points to 3.95% compared to 4.07% for the six months ended June 30, 2013, while the cost of funds declined by 10 basis points to 0.82% for the six months ended June 30, 2014 compared to 0.92% for the six months ended JuneSeptember 30, 2013.

Provision for Loan Losses. Our provision for loan losses was ~~$696,000~~$655,000 for the three months ended ~~June~~September 30, 2014 compared to ~~$3.2 million~~$151,000 for the three months ended ~~June~~September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, the provision for loan losses was ~~$829,000~~$1.5 million compared to ~~$4.5~~$4.6 million for the ~~six~~nine months ended ~~June~~September 30, 2013. For further discussion of the changes in the provision and allowance for loan losses, refer to ~~“Asset~~“Asset Quality—Allowance for Loan Losses.”


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change						Three Months Ended September 30,					Change						Nine Months Ended September 30,				Change
	2014		2013		Amount			Percent			2014		2013		Amount			Percent			2014		2013			Amount			Percent			2014		2013		Amount			Percent
	(Dollars in thousands)																				(Dollars in thousands)
Customer service fees	$	1,860	$	1,776	$	84			4.7	%	$	3,659	$	3,362	$	297			8.8	%	$	1,880	$	1,857		$	23			1.2	%	$	5,539	$	5,219	$	320			6.1	%
Loan fees		106		108		(2	)		(1.9	)		319		164		155			94.5			148		185			(37	)		(20.0	)		467		349		118			33.8
Mortgage banking gains, net		267		403		(136	)		(33.7	)		387		558		(171	)		(30.6	)
Mortgage banking gain (loss), net																						19		(102	)		121			118.6			406		456		(50	)		(11.0	)
Gain on sales of securities, net		1,505		2,128		(623	)		(29.3	)		3,065		4,401		(1,336	)		(30.4	)		1,346		2,995			(1,649	)		(55.1	)		4,411		7,396		(2,985	)		(40.4	)
Income from bank-owned life insurance		293		296		(3	)		(1.0	)		574		587		(13	)		(2.2	)		294		299			(5	)		(1.7	)		868		886		(18	)		(2.0	)
Other income		6		9		(3	)		(33.3	)		17		9		8			88.9			—		—			—			—			17		9		8			88.9

Total non-interest income	$	4,037	$	4,720	$	(683	)		(14.5	)%	$	8,021	$	9,081	$	(1,060	)		(11.7	)%	$	3,687	$	5,234		$	(1,547	)		(29.6	)%	$	11,708	$	14,315	$	(2,607	)		(18.2	)%

Non-interest income decreased ~~$683,000,~~$1.5 million, or ~~14.5%~~29.6%, to ~~$4.0~~$3.7 million for the quarter ended ~~June~~September 30, 2014 from ~~$4.7~~$5.2 million for the quarter ended ~~June~~September 30, 2013, primarily due to ~~decreases~~a decrease of ~~$623,000~~$1.6 million in gain on sales of securities, ~~net and $136,000 in mortgage banking gains, net partially offset by an increase of $84,000 in customer service fees.~~net. For the ~~six~~nine months ended ~~June~~September 30, 2014, non-interest income decreased ~~$1.1~~$2.6 million, or ~~11.7%~~18.2%, to ~~$8.0~~$11.7 million from ~~$9.1~~$14.3 million for the ~~six~~nine months ended ~~June~~September 30, 2013, primarily due to ~~decreases~~a decrease of ~~$1.3~~$3.0 million in gain on sales of securities, net ~~and $171,000 in mortgage banking gains, net~~ partially offset by ~~increases~~an increase of ~~$297,000~~$320,000 in customer service ~~fees and $155,000 in loan~~ fees.


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change						Three Months Ended September 30,						Change						Nine Months Ended September 30,				Change
	2014		2013		Amount			Percent			2014		2013		Amount			Percent			2014			2013			Amount			Percent			2014		2013		Amount		Percent
	(Dollars in thousands)																				(Dollars in thousands)
Salaries and employee benefits	$	10,017	$	9,476	$	541			5.7	%	$	20,818	$	19,551	$	1,267			6.5	%	$	10,249		$	10,033		$	216			2.2	%	$	31,067	$	29,584	$	1,483		5.0	%
Occupancy and equipment		2,216		2,086		130			6.2			4,777		4,420		357			8.1			2,252			2,103			149			7.1			7,029		6,523		506		7.8
Data processing		909		1,079		(170	)		(15.8	)		2,070		2,070		—			—			1,201			1,089			112			10.3			3,271		3,159		112		3.5
Marketing and advertising		688		812		(124	)		(15.3	)		1,495		1,503		(8	)		(0.5	)		769			539			230			42.7			2,264		2,042		222		10.9
Professional services		659		537		122			22.7			1,300		1,138		162			14.2			588			453			135			29.8			1,888		1,591		297		18.7
Foreclosed real estate		199		86		113			131.4			210		192		18			9.4			(47	)		(31	)		(16	)		(51.6	)		163		161		2		1.2
Deposit insurance		531		522		9			1.7			1,082		997		85			8.5			515			525			(10	)		(1.9	)		1,597		1,522		75		4.9
Other general and administrative		1,062		997		65			6.5			1,950		2,016		(66	)		(3.3	)		1,180			876			304			34.7			3,130		2,892		238		8.2

Total non-interest expenses	$	16,281	$	15,595	$	686			4.4	%	$	33,702	$	31,887	$	1,815			5.7	%	$	16,707		$	15,587		$	1,120			7.2	%	$	50,409	$	47,474	$	2,935		6.2	%

Non-interest expenses increased ~~$686,000,~~$1.1 million, or ~~4.4%~~7.2%, to ~~$16.3~~$16.7 million for the quarter ended ~~June~~September 30, 2014 from $15.6 million for the quarter ended ~~June~~September 30, 2013, primarily due to increases of ~~$541,000~~$216,000 in salaries and employee benefits, ~~$130,000~~$149,000 in occupancy and equipment, ~~$122,000~~$112,000 in data processing, $230,000 in marketing and advertising, $135,000 in professional services and ~~$113,000~~$304,000 in ~~foreclosed real estate, partially offset by decreases of $170,000 in data processing~~other general and ~~$124,000 in marketing and advertising.~~administrative expenses. For the ~~six~~nine months ended ~~June~~September 30, 2014, non-interest expenses increased ~~$1.8~~$2.9 million, or ~~5.7%~~6.2%, to ~~$33.7~~$50.4 million from ~~$31.9~~$47.5 million for the ~~six~~nine months ended ~~June~~September 30, 2013, primarily due to increases of ~~$1.3~~$1.5 million in salaries and employee benefits, ~~$357,000~~$506,000 in occupancy and equipment, $112,000 in data processing, $222,000 in marketing and ~~$162,000~~advertising, $297,000 in professional ~~services.~~services and $238,000 in other general and administrative expenses. The increases in salaries and employee benefits and occupancy and equipment expenses were primarily associated with the opening of three new branches in 2013 and costs associated with the expansion of residential and commercial lending capacity. The Company’s efficiency ratio was ~~68.49%~~66.67% for the quarter ended ~~June~~September 30, 2014 compared to ~~74.58%~~73.05% for the quarter ended ~~June~~September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, the efficiency ratio was ~~72.02%~~70.15% compared to ~~78.49%~~76.62% for the ~~six~~nine months ended ~~June~~September 30, 2013.

Income Tax Provision. We recorded a provision for income taxes of ~~$2.8~~$3.0 million for the quarter ended ~~June~~September 30, 2014, reflecting an effective tax rate of ~~33.7%~~33.5%, compared to ~~$1.2~~$3.3 million, or ~~28.4%~~38.1%, for the quarter ended ~~June~~September 30, 2013. For the ~~six~~nine months ended ~~June~~September 30, 2014, the provision for income taxes was ~~$5.1~~$8.1 million, reflecting an effective tax rate of ~~33.0%~~33.2%, compared to ~~$2.6~~$5.8 million, or ~~29.6%~~33.8%, for the ~~six~~nine months ended ~~June~~September 30, 2013. The change in the effective tax rate was primarily due to changes in the components of pre-tax income.

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, maturities of and payments on investment securities and borrowings from the Federal Home Loan Bank of Boston. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We regularly adjust our investments in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management policy.

Our most liquid assets are cash and cash equivalents. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At ~~June~~September 30, 2014, cash and due from banks totaled ~~$367.8~~$388.3 million, including ~~$206.9~~$302.3 million of ~~stock subscription deposits received~~net cash proceeds raised in ~~connection with~~ the Company’s second step ~~conversion.~~common stock offering. In addition, at ~~June~~September 30, 2014, we had ~~$178.1~~$218.5 million of available borrowing capacity with the Federal Home Loan Bank of Boston, including a $9.4 million line of credit. On ~~June~~September 30, 2014, we had ~~$211.3~~$172.7 million of advances outstanding.

A significant use of our liquidity is the funding of loan originations. At ~~June~~September 30, 2014, we had total loan commitments outstanding of ~~$713.8~~$667.9 million. Historically, many of the commitments expire without being fully drawn; therefore the total amount of commitments does not necessarily represent future cash requirements.

Another significant use of our liquidity is the funding of deposit withdrawals. Certificates of deposit due within one year of ~~June~~September 30, 2014 totaled ~~$452.9~~$436.8 million, or ~~66.5%~~66.1% of total certificates of deposit. If these maturing deposits do not remain with us, we will be required to utilize other sources of funds. Historically, a significant portion of certificates of deposit that mature have remained with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing activities are the origination of loans and the purchase of securities. Our primary financing activities consist of activity in deposit accounts and Federal Home Loan Bank advances. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our deposits to be competitive. Occasionally, we offer promotional rates on certain deposit products to attract deposits.

We have a contract with our core data processing provider through December 2017, with a related outstanding commitment of ~~$7.8~~$7.3 million as of ~~June~~September 30, 2014 and with total annual payments of $2.2 million.

The net proceeds from the stock offering significantly increased our liquidity and capital resources. Over time, our level of liquidity may be reduced as the net proceeds from the stock offering are used for general corporate purposes, including the funding of loans. Our financial condition and results of operations are expected to be enhanced and result in increases in net interest-earning assets and net interest income. However, due to the increase in equity from the stock offering proceeds, our return on equity will initially be lower but is expected to increase over time.

Capital Management.Both the Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve Board and the Federal Deposit Insurance Corporation, respectively, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At ~~June~~September 30, 2014, both the Company and the Bank exceeded all of their respective regulatory capital requirements. The Bank is considered “well capitalized” under regulatory guidelines.


	Actual					Minimum Capital Requirement					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
September 30, 2014
Total Capital (to Risk Weighted Assets):
Company	$	582,982		21.9	%	$	213,395		8.0	%		N/A		N/A
Bank		407,513		15.4			211,342		8.0		$	264,177		10.0	%

Tier 1 Capital (to Risk Weighted Assets):
Company		554,243		20.8			106,697		4.0			N/A		N/A
Bank		378,774		14.3			105,671		4.0			158,506		6.0

Tier 1 Capital (to Average Assets):
Company		554,243		17.6			125,690		4.0			N/A		N/A
Bank		378,774		12.1			124,787		4.0			155,983		5.0

December 31, 2013
Total Capital (to Risk Weighted Assets):
Company	$	259,577		10.8	%	$	192,797		8.0	%		N/A		N/A
Bank		246,100		10.2			192,511		8.0		$	240,639		10.0	%

Tier 1 Capital (to Risk Weighted Assets):
Company		231,342		9.6			96,398		4.0			N/A		N/A
Bank		217,865		9.1			96,256		4.0			144,383		6.0

Tier 1 Capital (to Average Assets):
Company		231,342		8.7			105,999		4.0			N/A		N/A
Bank		217,865		8.2			105,702		4.0			132,127		5.0

A reconciliation of the Company’s and Bank’s stockholders’ equity to regulatory capital follows:


	June 30, 2014						December 31, 2013						September 30, 2014						December 31, 2013
	Consolidated			Bank			Consolidated			Bank			Consolidated			Bank			Consolidated			Bank
	(In thousands)												(In thousands)
Total stockholders’ equity per financial statements	$	261,935		$	248,439		$	249,205		$	235,728		$	571,039		$	395,570		$	249,205		$	235,728
Adjustments to Tier 1 capital:
Accumulated other comprehensive income		(5,485	)		(5,485	)		(4,104	)		(4,104	)		(3,052	)		(3,052	)		(4,104	)		(4,104	)
Goodwill disallowed		(13,687	)		(13,687	)		(13,687	)		(13,687	)		(13,687	)		(13,687	)		(13,687	)		(13,687	)
Servicing assets disallowed		(63	)		(63	)		(72	)		(72	)		(57	)		(57	)		(72	)		(72	)

Total Tier 1 capital		242,700			229,204			231,342			217,865			554,243			378,774			231,342			217,865


Adjustments to total capital:
Allowance for loan losses		26,131			26,131			25,335			25,335			26,739			26,739			25,335			25,335
45% of net unrealized gains on marketable equity securities		3,644			3,644			2,900			2,900			2,000			2,000			2,900			2,900


Total regulatory capital	$	272,475		$	258,979		$	259,577		$	246,100		$	582,982		$	407,513		$	259,577		$	246,100

WeIn July 2013, the FDIC and the other federal bank regulatory agencies issued a final rule that will revise their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them

consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the rule establishes a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets), sets the leverage ratio at a uniform 4% of total assets and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. The Bank has elected to exercise its one-time option to opt-out of the requirement under the final rule to include certain “available-for-sale” securities holdings for purposes of calculating its regulatory capital requirements. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments to executive officers if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements. The final rule is effective January 1, 2015. The “capital conservation buffer” will be phased in from January 1, 2016 to January 1, 2019, when the full capital conservation buffer will be effective.

Consolidated regulatory capital requirements identical to those applicable to the Bank will apply to bank holding companies such as the Company as of January 1, 2015. As is the case with institutions themselves, the capital conservation buffer will be phased in between 2016 and 2019.

The Company may use capital management tools such as cash dividends and common share repurchases. Pursuant to Federal Reserve Board ~~approval conditions imposed in connection with~~regulations, we may not repurchase shares for at least one year following the ~~formation of~~second step conversion. In addition, Massachusetts regulations restrict repurchases for the ~~Company, we have committed (i) to seek~~first three years following the Federal Reserve Board’s prior approval before repurchasing any equity securities from Meridian and (ii) that any repurchases of equity securities from stockholders other than Meridian will be at the current market price for such stock repurchases.second step conversion. We are also subject to the Federal Reserve Board’s notice provisions for stock repurchases.

As of June 30, 2014, we had repurchased 287,652 shares of our stock at an average price of $14.68 per share, or 31.8% of the 904,224 shares authorized for repurchase under our fourth repurchase program as adopted during 2011. We have repurchased 1,691,580 shares at an average price of $10.89 per share since December 2008. We terminated the repurchase program in connection with Meridian’s adoption of the Plan of Conversion.

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles in the United States of America are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit.

For the ~~six~~nine months ended ~~June~~September 30, 2014, we engaged in no off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

Interest Rate Risk Management. Our earnings and the market value of our assets and liabilities are subject to fluctuations caused by changes in the level of interest rates. We manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment. Deposit accounts typically react more quickly to changes in market interest rates than mortgage loans because of the shorter maturities of deposits. As a result, sharp increases in interest rates may adversely affect our earnings while decreases in interest rates may beneficially affect our earnings. To reduce the potential volatility of our earnings, we have sought to improve the match between asset and liability maturities and rates, while maintaining an acceptable interest rate spread. Our strategy for managing interest rate risk emphasizes: originating loans with adjustable interest rates; selling the residential real estate fixed-rate loans with terms greater than 10 years that we originate; promoting core deposit products; and adjusting the interest rates and maturities of funding sources, as necessary.

We have an Asset/Liability Management Committee to coordinate all aspects of asset/liability management. The committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.

Net Interest Income Simulation Analysis. We analyze our interest rate sensitivity position to manage the risk associated with interest rate movements through the use of interest income simulation. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest sensitive.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.

Our goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income. Interest income simulations are completed quarterly and presented to the Asset/Liability Committee and the Board of Directors. The simulations provide an estimate of the impact of changes in interest rates on net interest income under a range of assumptions. The numerous assumptions used in the simulation process are reviewed by the Asset/Liability Committee and the Executive Committee on a quarterly basis. Changes to these assumptions can significantly affect the results of the simulation. The simulation incorporates assumptions regarding the potential timing in the repricing of certain assets and liabilities when market rates change and the changes in spreads between different market rates. The simulation analysis incorporates management’s current assessment of the risk that pricing margins will change adversely over time due to competition or other factors.

Simulation analysis is only an estimate of our interest rate risk exposure at a particular point in time. We continually review the potential effect changes in interest rates could have on the repayment of rate sensitive assets and funding requirements of rate sensitive liabilities.

The simulation uses projected repricing of assets and liabilities on the basis of contractual maturities, anticipated repayments and scheduled rate adjustments. Prepayment rates can have a significant impact on interest income simulation. Because of the large percentage of loans we hold, rising or falling interest rates have a significant impact on the prepayment speeds of our earning assets that in turn affect the rate sensitivity position. When interest rates rise, prepayments tend to slow. When interest rates fall, prepayments tend to rise. Our asset sensitivity would be reduced if prepayments slow and vice versa. While we believe such assumptions to be reasonable, there can be no assurance that assumed prepayment rates will approximate actual future mortgage-backed security and loan repayment activity.

The following table reflects changes in estimated net interest income for the Bank due to immediate non-parallel changes in interest rates at ~~July~~October 1, 2014 through ~~June~~September 30, 2015.


Increase (Decrease) in Market Interest Rates	Net Interest Income								Net Interest Income
Increase (Decrease) in Market Interest Rates	Amount		Change			Percent			Amount		Change			Percent
	(Dollars in Thousands)								(Dollars in Thousands)
300	$	82,404	$	(1,999	)		(2.37	)%	$	86,758	$	(1,895	)		(2.14	)%
Flat		84,403								88,653
-100		84,621		218			0.26			89,477		824			0.93

Periodically, there have been various claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.

For information regarding our risk factors, see “Risk Factors,” in the Company’s ~~2013 Annual Report on Form 10-K,~~Prospectus dated May 9, 2014, filed with the SEC on ~~March 17,~~May 20, 2014, which is available through the SEC’s website atwww.sec.gov. As of ~~June~~September 30, 2014, our risk factors have not changed materially from those reported in the ~~annual report.~~prospectus. The risks described in the annual report are not the only risks that we face. Additional risks not presently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition or results of operations.

The effective date of the Company’s registration statement (Commission No. 333-194454) was May 9, 2014. The Company registered for offer and sale shares of common stock, par value $0.01, at a sales price of $10.00 per share.

The selling agent who assisted the Company in the sale of its common stock was Sterne, Agee & Leach. For their services, Sterne, Agee & Leach received a fee of $4.6 million, including a sales fee equal to 0.75% of the dollar amount of the shares of common stock sold in the subscription and community offerings and a sales fee equal to 5.0% of the dollar amount of the shares of common stock sold in the syndicated offering, except that no fee was payable to Sterne, Agee & Leach with respect to shares purchased by officers, directors and employees or their immediate families, or shares purchased by the Company’s tax-qualified and non-qualified employee benefit plans. In addition, Sterne, Agee & Leach was reimbursed for expenses, including attorney fees.

From the effective date of the registration statement until September 30, 2014 the Company utilized $16.3 million to fund the new ESOP loan and incurred expenses in connection with the offer and sale of the common stock totaling $6.5 million, resulting in net cash proceeds to the Company of $302.3 million. As of September 30, 2014, the Company had invested $159.3 million of the net proceeds it received from the sale into the Bank’s operations and has retained the remaining amount for general corporate purposes.



21		Subsidiaries of Registrant*****Registrant

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

3232.0		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following financial statements for the three and ~~six~~nine months ended ~~June~~September 30, 2014, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Net Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets at ~~June~~September 30, 2014 and December 31, 2013 (Unaudited)		3

	Consolidated Statements of Net Income for the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 (Unaudited)		4

	Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 (Unaudited)		5

	Consolidated Statements of Changes in Stockholders’ Equity for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 (Unaudited)		6

	Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 (Unaudited)		7

	Notes to Unaudited Consolidated Financial Statements		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2930

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		48

Item 4.	Controls and Procedures	��	50

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings		51

Item 1A.	Risk Factors		51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		51

Item 3.	Defaults Upon Senior Securities		51

Item 4.	Mine Safety Disclosures		51

Item 5.	Other Information		51

Item 6.	Exhibits		52

Signatures			54

Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.9
Exhibit 10.10
Exhibit 10.13
Exhibit 10.15
Exhibit 10.16
Exhibit 21
Exhibit 31.1			55
Exhibit 31.2			56
Exhibit 32.0			57


	June 30, 2014		December 31, 2013
	(In thousands)
Demand deposits	$	484,242	$	255,639
NOW deposits		250,840		210,277
Money market deposits		875,998		847,360
Regular savings and other deposits		271,990		259,608

Total non-certificate accounts		1,883,070		1,572,884


Term certificates less than $100,000		287,180		296,525
Term certificates $100,000 and greater		394,057		379,191

Total term certificates		681,237		675,716


Total deposits	$	2,564,307	$	2,248,600


						Fair Value
	Notional Amount		Maturity	Interest Rate Paid	Interest Rate Received	September 30, 2014			December 31, 2013
	*(In thousands)*
Customer interest rate swap	$	11,268	10/17/33	1 Mo. Libor + 175bp	Fixed (4.1052%)	$	567		$	57
Third party interest rate swap		11,268	10/17/33	Fixed (4.1052%)	1 Mo. Libor + 175bp		(567	)		(57	)


							Fair Value
	Notional Amount		Maturity		Interest Rate Paid	Interest Rate Received	June 30, 2014			December 31, 2013
	*(In thousands)*
Customer interest rate swap	$	11,268		10/17/33	1 Mo. Libor + 175bp	Fixed (4.1052%)	$	528		$	57
3rd party interest rate swap		11,268		10/17/33	Fixed(4.1052%)	1 Mo. Libor + 175bp		(528	)		(57	)


3.1		Articles of Incorporation of Meridian Bancorp, Inc.~~*****~~ (Incorporated by reference to the Registration Statement on Form S-1 of Meridian Bancorp, Inc. (File No. 333-194454), originally filed with the Securities and Exchange Commission on March 10, 2014)

3.2		Bylaws of Meridian Bancorp, Inc.~~*****~~ (Incorporated by reference to the Registration Statement on Form S-1 of Meridian Bancorp, Inc. (File No. 333-194454), originally filed with the Securities and Exchange Commission on March 10, 2014)

4		Form of Common Stock Certificate of Meridian Bancorp, Inc.~~*****~~ (Incorporated by reference to the Registration Statement on Form S-1 of Meridian Bancorp, Inc. (File No. 333-194454), originally filed with the Securities and Exchange Commission on March 10, 2014)

10.1		Form of East Boston Savings Bank Employee Stock Ownership Plan*[Reserved]

10.2		Form of East Boston Savings Bank Employee Stock Ownership Plan Trust Agreement*[Reserved]

10.3		East Boston Savings Bank Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and Promissory Note*[Reserved]

10.4		~~Form of~~ Amended and Restated Employment Agreement*Agreement with Richard J. Gavegnano and East Boston Savings Bank dated July 28, 2014

10.5		~~Form of~~ East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan*Plan

10.6		Form of Amended and Restated Supplemental Executive Retirement Agreements with certain directors*Directors Vincent D. Basile, Domenic A. Gambardella, Edward L. Lynch, Gregory F. Natalucci, and James G. Sartori

10.7		~~[Reserved]~~Amended and Restated Supplemental Executive Retirement Agreement with Richard J. Gavegnano

10.8		~~[Reserved]~~2008 Equity Incentive Plan (Incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement for its 2008 Annual Meeting, as filed with the Securities and Exchange Commission on July 11, 2008)

10.9		~~[Reserved]~~

~~10.10~~		~~Form of Supplemental Executive Retirement Agreement with Richard J. Gavegnano filed as an exhibit to Form 10-Q filed on May 14, 2008~~

~~10.11~~		~~Form of Employment Agreement with Richard J. Gavegnano incorporated by reference to the Form 8-K filed on January 12, 2009~~

~~10.12~~		~~[Reserved]~~

~~10.13~~		~~[Reserved]~~

~~10.14~~		2008 Equity Incentive Plan**

~~10.15~~		~~Amendment to Supplemental Executive Retirement Agreements with Certain Directors incorporated by reference to the Form 10-K/A filed on April 8, 2009~~

~~10.16~~		~~[Reserved]~~

~~10.17~~		Amended and Restated Employment Agreement between Edward J. Merritt and East Boston Savings Bank***Bank dated July 28, 2014

~~10.18~~10.10		Amended and Restated Supplemental Executive Retirement Agreement between East Boston Savings Bank and Edward J. Merritt***Merritt dated July 28, 2014

~~10.19~~10.11		Joint Beneficiary Designation Agreement between Edward J. Merritt and Mt. Washington Co-operative Bank***Bank (Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 16, 2010)

~~10.20~~10.12		First Amendment to Joint Beneficiary Designation Agreement between Edward J. Merritt and Mt. WashingtonCo-operative Bank*** Bank (Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 16, 2010)

~~10.21~~10.13		Amended and Restated Two-Year Change in Control Agreement between Mark Abbate and East Boston Savings Bank ~~incorporated by reference to the Form 8-K filed on December 15, 2009~~dated July 28, 2014

~~10.22~~10.14		Incentive Compensation Plan filed as an exhibit to Form 10-K filed on March 17, 2014

~~10.23~~10.15		Amended and Restated Two-Year Change in Control Agreement between John Migliozzi and East Boston Savings Bank ~~incorporated by reference to the Form 8-K filed on December 18, 2013~~dated July 28, 2014

10.16		East Boston Non-Qualified Supplemental Employee Stock Ownership Plan dated October 1, 2014


	MERIDIAN BANCORP, INC. (Registrant)

Date: ~~August 8,~~November 10, 2014	By:	/s/ Richard J. Gavegnano
		Richard J. Gavegnano Chairman, President and Chief Executive Officer (Principal Executive Officer)

Date: ~~August 8,~~November 10, 2014	By:	/s/ Mark L. Abbate
		Mark L. Abbate Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

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