S-1

As filed with the Securities and Exchange Commission on September 9, 2011

Registration No. 333-                    

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Wellesley Bancorp, Inc.

and

Wellesley Bank Employee 401(k) Plan

(Exact name of registrant as specified in its charter)

Maryland	6036	To be applied for
State or other jurisdiction of incorporation or organization	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

40 Central Street

Wellesley, Massachusetts 02482

(781) 235-2550

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Thomas J. Fontaine

President and Chief Executive Officer

Wellesley Bancorp, Inc.

40 Central Street

Wellesley, Massachusetts 02482

(781) 235-2550

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Gary R. Bronstein, Esq.	Michelle L. Basil, Esq.
Sean P. Kehoe, Esq.	Nutter McClennen & Fish LLP
Kilpatrick Townsend & Stockton LLP	115 Seaport Boulevard
607 14th Street, NW, Suite 900	Boston, Massachusetts 02210
Washington, DC 20005	(617) 439-2000
(202) 508-5800

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

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.

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

Calculation of Registration Fee

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price (2)	Amount of Registration Fee
Common Stock $0.01 par value	3,396,180 (1)	$10.00	$33,961,800	$3,943
Participation Interests (3)	—	—	—	—

(1) Includes shares of common stock to be issued to the Wellesley Bank Charitable Foundation, a private foundation.

(2) Estimated solely for the purpose of calculating the registration fee pursuant to Regulation 457(o) under the Securities Act.

(3) In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. The securities of Wellesley Bancorp, Inc. to be purchased by the Wellesley Bank Employee 401(k) Plan are included in the common stock being registered. Pursuant to Rule 457(h)(2) of the Securities Act of 1933, as amended, no separate fee is required for the participation interests.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

SUBSCRIPTION AND

COMMUNITY OFFERING

PROSPECTUS

(Proposed Holding Company for Wellesley Bank)

Up to 2,760,000 Shares of Common Stock

(Subject to increase to 3,174,000 shares)

Wellesley Bancorp, Inc., a newly formed Maryland corporation, is offering common stock for sale in connection with the conversion of Wellesley Bank from the mutual to stock form of organization. We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol “WEBK” upon conclusion of the stock offering. There is currently no public market for the shares of our common stock.

We are offering up to 2,760,000 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 2,040,000 shares to complete the offering. All shares are offered at a price of $10.00 per share. Purchasers will not pay a commission to purchase shares of common stock in the offering. The amount of capital being raised is based on an independent appraisal of Wellesley Bank. Most of the terms of this offering are required by regulations of the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, the independent appraiser determines that our market value has increased, we may sell up to 3,174,000 shares without giving you further notice or the opportunity to change or cancel your order.

We are offering the shares of common stock in a “subscription offering” to eligible depositors of Wellesley Bank. Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a community offering, with a preference given to natural persons residing in the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston, Massachusetts. We also may offer for sale shares of common stock not subscribed for in the subscription offering or community offering through a “syndicated community offering” managed by Sandler O’Neill + Partners, L.P. Sandler O’Neill + Partners, L.P. is not required to purchase any shares of common stock that are being offered for sale.

The minimum order is 25 shares. The subscription offering will end at         :00 p.m., Eastern time, on [Expiration Date], 2011. We expect that the community offering, if held, will terminate at the same time, although the offering may continue without notice to you until [Extension Date], 2011 or longer if the Massachusetts Commissioner of Banks approves a later date. The offering must be completed by July 20, 2013. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Extension Date], 2011, or the number of shares of common stock to be sold is increased to more than 3,174,000 shares or decreased to less than 2,040,000 shares. If we extend the offering beyond [Extension Date], 2011, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Wellesley Bank’s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 2,040,000 shares or more than 3,174,000 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order. Funds received before the completion of the subscription and community offerings will be held in a segregated account at Wellesley Bank and will earn interest at Wellesley Bank’s passbook savings rate, which is currently 0.25%.

In addition to the shares that we will sell in the offering, we intend to establish a charitable foundation in connection with the conversion and contribute to it an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with our common stock and 12.5% of which will be funded with cash (193,200 shares and $276,000 in cash at the maximum of the offering range).

We expect that our directors and executive officers, together with their associates, will subscribe for approximately 250,000 shares, which is 9.7% of the shares that would be sold in the offering and issued to the charitable foundation at the midpoint of the offering range.

This investment involves a degree of risk, including the possible loss of principal.

Please read “Risk Factors” beginning on page 10.

OFFERING SUMMARY

Price Per Share: $10.00

	Minimum		Maximum		Maximum, as Adjusted
Number of shares		2,040,000		2,760,000		3,174,000
Gross offering proceeds	$	20,400,000	$	27,600,000	$	31,740,000
Estimated offering expenses, excluding selling agent fees	$	960,000	$	960,000	$	960,000
Estimated selling agent fees(1)	$	270,000	$	270,000	$	270,000
Estimated net proceeds	$	19,170,000	$	26,370,000	$	30,510,000
Estimated net proceeds per share	$	9.40	$	9.55	$	9.61

(1) Excludes fees payable if a syndicated offering is held. For a discussion of the compensation of Sandler O’Neill + Partners, L.P. and the other broker-dealers that may participate in the syndicated offering, see “The Conversion and Stock Offering—Marketing Arrangements.”

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation, any other government agency or the Share Insurance Fund. None of the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Massachusetts Commissioner of Banks or any state securities commission has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

For assistance, please contact the Conversion Center at (            )             -                    .

SANDLER O’NEILL + PARTNERS, L.P.

The date of this prospectus is                     , 2011

Table of Contents

	PAGE
SUMMARY		1
RISK FACTORS		10
A WARNING ABOUT FORWARD-LOOKING STATEMENTS		17
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA		18
USE OF PROCEEDS		20
OUR DIVIDEND POLICY		22
MARKET FOR THE COMMON STOCK		23
CAPITALIZATION		24
REGULATORY CAPITAL COMPLIANCE		26
PRO FORMA DATA		27
COMPARISON OF INDEPENDENT VALUATION AND PRO FORMA FINANCIAL INFORMATION WITH AND WITHOUT THE FOUNDATION		32
OUR BUSINESS		33
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		40
OUR MANAGEMENT		62
SUBSCRIPTIONS BY EXECUTIVE OFFICERS AND DIRECTORS		70
REGULATION AND SUPERVISION		71
FEDERAL AND STATE TAXATION		79
THE CONVERSION AND STOCK OFFERING		80
THE WELLESLEY BANK CHARITABLE FOUNDATION		93
RESTRICTIONS ON THE ACQUISITION OF WELLESLEY BANCORP		96
DESCRIPTION OF WELLESLEY BANCORP CAPITAL STOCK		98
TRANSFER AGENT AND REGISTRAR		99
REGISTRATION REQUIREMENTS		99
LEGAL AND TAX OPINIONS		99
EXPERTS		100
WHERE YOU CAN FIND MORE INFORMATION		100
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF WELLESLEY BANK AND SUBSIDIARIES		101

i

Summary

This summary highlights selected information from this document and may not contain all the information that is important to you. To understand the stock offering fully, you should read this entire document carefully.

The Companies

Wellesley Bancorp, Inc.

Wellesley Bank

40 Central Street

Wellesley, Massachusetts 02482

(781) 235-2550

Wellesley Bancorp, Inc. This offering is made by Wellesley Bancorp, a Maryland corporation incorporated in September 2011 by Wellesley Bank to be its holding company upon completion of the conversion. Currently, Wellesley Bancorp has no assets. Following the conversion, Wellesley Bancorp will own all of Wellesley Bank’s capital stock and will direct, plan and coordinate Wellesley Bank’s business activities. In the future, Wellesley Bancorp might also acquire other financial institutions or financial services companies or organize other operating subsidiaries, although it currently has no specific plans or agreements to do so.

Wellesley Bank. Wellesley Bank operates as a community-oriented financial institution, with its executive office and two full service branches in the town of Wellesley, Massachusetts. Wellesley Bank offers deposit products and provides residential mortgage loans, commercial real estate loans, construction loans, commercial business loans and consumer loans. Wellesley Bank was not a participant in any of the U.S. Treasury’s capital raising programs for financial institutions and at June 30, 2011 exceeded all regulatory capital requirements. At June 30, 2011, Wellesley Bank had total assets of $264.8 million, total deposits of $228.4 million and total equity of $21.4 million on a consolidated basis.

Our Business

We operate as a community bank. Our primary business lines involve generating funds from deposits or borrowings and investing such funds in loans and investment securities. We currently operate our executive office and two retail banking locations in Wellesley, Massachusetts.

Our primary lines of business are:

• Commercial and Construction Lending. We offer commercial real estate loans and commercial business loans for property owners and businesses in our primary market area. We also offer residential construction loans to individuals and builders/developers to finance the construction of residential dwellings for personal use and commercial construction loans for commercial development projects, including condominiums and single family subdivisions as well as office buildings, retail and other income producing properties. Commercial and construction loans constituted 56.3% of our total loan portfolio at June 30, 2011.

• Residential Mortgage and Home Equity Lending. We offer a variety of residential mortgage loans and home equity lines of credit through our branch network. Residential mortgage loans and home equity lines of credit constituted 43.5% of our total loan portfolio at June 30, 2011.

• Deposit Products and Services. We offer a full range of traditional deposit products for consumers and businesses, such as demand deposit accounts, NOW accounts, money market accounts, regular savings accounts and certificate accounts. These products can have additional features such as direct deposit, ATM and check card services, overdraft protection, Internet banking, and remote electronic deposits, thereby providing our customers multiple channels to access their accounts.

Our Business Strategy

Our mission is to operate and grow a profitable community-oriented financial institution. The following are the key elements of our business strategy:

• increasing our deposit market share within Wellesley, Massachusetts and the surrounding communities;

• continuing to emphasize our commercial real estate, construction and commercial business loans, as well as increasing our commercial business depository relationships in our market area;

1

• increasing our residential mortgage lending in our market area;

• continuing conservative underwriting practices while maintaining a high quality loan portfolio;

• seeking to enhance fee income by growing our investment advisory services; and

• emphasizing lower cost core deposits to maintain low funding costs.

The Conversion and Offering

Description of the Conversion

Currently, we are a Massachusetts chartered mutual cooperative bank with no stockholders. Our depositors currently have the right to vote on certain matters such as the election of directors and this conversion. The conversion transaction that we are undertaking involves a change from our mutual form to a stock cooperative bank that will result in all of Wellesley Bank’s capital stock being owned by Wellesley Bancorp. Voting rights in Wellesley Bancorp will belong to its stockholders, including our employee stock ownership plan and our charitable foundation. We are conducting the conversion under the terms of our plan of conversion. The Massachusetts Commissioner of Banks has conditionally approved the plan of conversion and the Federal Deposit Insurance Corporation has conditionally provided its nonobjection to the conversion, both subject to a condition that the conversion be approved by our depositors. We have called a special meeting of depositors for                     , 2011 to vote on the plan of conversion and the establishment and funding of the charitable foundation.

The following diagram depicts our corporate structure after the conversion and offering:

Reasons for the Conversion and Offering

Our primary reasons for the conversion and offering are to:

• increase the capital of Wellesley Bank to support future lending and operational growth;

• enhance profitability and earnings through reinvesting and leveraging the proceeds, primarily through traditional funding and lending activities;

• support future branching activities;

• retain and attract qualified personnel by establishing stock-based benefit plans;

• increase our philanthropic endeavors to the community we serve through the formation and funding of the Wellesley Bank Charitable Foundation; and

• support the future acquisition of other financial institutions or financial services companies.

For further information about our reasons for the conversion and offering, see “The Conversion and Stock Offering—Reasons for the Conversion and Offering.”

Purchase Price

The purchase price is $10.00 per share. You will not pay a commission to buy any shares in the offering.

2

Number of Shares to be Sold

We are offering for sale between 2,040,000 and 2,760,000 shares of Wellesley Bancorp common stock in this offering. With regulatory approval, we may increase the number of shares to be sold to 3,174,000 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations and changes in market conditions.

How We Determined the Offering Range

We decided to offer between 2,040,000 and 2,760,000 shares, which is our offering range, based on an independent appraisal of our pro forma market value prepared by Feldman Financial Advisors, Inc., an appraisal firm experienced in appraisals of financial institutions. Feldman Financial estimates that as of August 23, 2011, our pro forma market value was between $21.8 million and $29.5 million, with a midpoint of $25.7 million, inclusive of shares to be issued to the charitable foundation.

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

• our historical and projected operating results and financial condition and the economic and demographic characteristics of our primary market area;

• a comparative evaluation of the operating and financial statistics of Wellesley Bank with those of other similarly situated, publicly traded companies;

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

• the trading market for securities of comparable institutions and general conditions in the market for such securities; and

• our intention to contribute to the Wellesley Bank Charitable Foundation an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with shares of Wellesley Bancorp’s common stock and 12.5% of which will be funded with cash.

Two measures that some investors use to analyze whether a stock might be a good investment are the ratio of the offering price to the issuer’s “book value” and the ratio of the offering price per share to the issuer’s earnings per share for the past 12 months. Feldman Financial considered these ratios, among other factors, in preparing its appraisal. Book value is the same as total equity and represents the difference between the issuer’s assets and liabilities. Feldman Financial’s appraisal also incorporates an analysis of a peer group of publicly traded companies that Feldman Financial considered to be comparable to us.

The following table presents a summary of selected pricing ratios for the peer group companies and for us utilized by Feldman Financial Advisors in its appraisal. These ratios are based on our book value, tangible book value and core earnings as of and for the 12 months ended June 30, 2011 and the latest date for which complete financial data is publicly available for the peer group.

	Price to  Core Earnings Multiple			Price to Book Value  Ratio			Price to Tangible Book Value Ratio
Wellesley Bancorp (pro forma):
Minimum		10.6	x		56.8	%		56.8	%
Midpoint		12.7			61.7			61.7
Maximum		14.9			65.8			65.8
Maximum, as adjusted		17.2			69.9			69.9
Peer group companies as of August 23, 2011:
BCSB Bancorp, Inc.		43.3	x		76.9	%		77.0	%
Central Bancorp, Inc.		N/M			80.5			85.6
Chicopee Bancorp, Inc.		N/M			90.8			90.8
CMS Bancorp, Inc.		N/M			68.4			68.4
Elmira Savings Bank, FSB		9.5			113.8			113.8
Hampden Bancorp, Inc.		N/M			86.5			86.5
Mayflower Bancorp, Inc.		14.4			76.9			76.9
Newport Bancorp, Inc.		22.6			87.3			87.3
OBA Financial Services, Inc.		N/M			78.9			78.9
WVS Financial Corp.		15.3			65.6			65.6
Average		21.0			78.9			83.1
Median		15.3			78.1			82.2

3

Compared to the average pricing ratios of the peer group at the maximum of the offering range, our stock would be priced at a discount of 29.0% to the peer group on a price-to-core earnings basis, a discount of 16.6% to the peer group on a price-to-book basis and a discount of 20.8% on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be less expensive than the peer group on an earnings, book value and tangible book value basis.

The independent appraisal does not indicate market value. You should not assume or expect that the valuation described above means that our common stock will trade at or above the $10.00 purchase price after the offering.

Possible Change in Offering Range

Feldman Financial will update its appraisal before we complete the stock offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, Feldman Financial determines that our pro forma market value has increased, we may sell up to 3,174,000 shares without further notice to you. If our pro forma market value at the end of the stock offering period is either below $21.8 million or above $34.0 million, then, after consulting with the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks, we may: terminate the offering and promptly return all funds, with interest; promptly return all funds with interest, set a new offering range and give all subscribers the opportunity to place a new order; or take such other actions as may be permitted by the Federal Deposit Insurance Corporation, the Massachusetts Commissioner of Banks and the Securities and Exchange Commission.

Conditions to Completing the Conversion and Offering

We are conducting the conversion and offering under the terms of our plan of conversion. We cannot complete the conversion and offering unless:

• we sell at least the minimum number of shares offered;

• we receive the final regulatory approvals and nonobjections from the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System to complete the offering; and

• our depositors approve the plan of conversion.

We Will Issue Shares to the Wellesley Bank Charitable Foundation

To continue our long-standing commitment to our local communities, we intend to establish a charitable foundation, the Wellesley Bank Charitable Foundation, as part of the conversion. Subject to separate approval by depositors of Wellesley Bank, we will make a contribution to the charitable foundation in an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with newly issued shares of Wellesley Bancorp common stock and 12.5% of which will be funded with cash (193,200 shares and $276,000 at the maximum of the offering range). At the maximum of the offering range, this contribution to the charitable foundation would reduce net earnings by approximately $1.3 million, after tax, in the year in which the contribution is made to the charitable foundation, which is expected to be the fourth calendar quarter of 2011. The charitable foundation will make grants and donations to nonprofit and community groups and projects that serve the communities in which Wellesley Bank maintains a banking office. The amount of common stock that we are offering for sale would be greater if the conversion were to be completed without the contribution to the charitable foundation. For a further discussion of the financial impact of the contribution to the charitable foundation, see “Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation.”

Benefits of the Offering to Management

Employee Stock Ownership Plan. We have adopted an employee stock ownership plan that will purchase 8% of the shares sold in the offering and contributed to the charitable foundation. The employee stock ownership plan’s purchase will be funded by a 15-year loan from Wellesley Bancorp. As the loan is repaid and shares are released from collateral, the plan will allocate shares to the accounts of participating employees. Participants will receive allocations based on their individual compensation as a percentage of total plan compensation. Nonemployee directors are not eligible to participate in the employee stock ownership plan. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan.

Future Equity Incentive Plan. We intend to implement an equity incentive plan no earlier than six months after completion of the conversion. If we implement the plan within one year after the conversion, the plan must be approved by a majority of the total votes eligible to be cast by our stockholders. If we implement the plan more than one year after the conversion, it must be approved by a majority of the total votes cast. If adopted within one year following the completion of the conversion, the equity

4

incentive plan will reserve a number of shares of common stock equal to not more than 4% of the shares issued in the conversion (including shares contributed to our charitable foundation), for restricted stock awards to key employees and directors, at no cost to the recipients, and will also reserve a number of stock options equal to not more than 10% of the shares of common stock issued in the conversion (including shares contributed to our charitable foundation) for key employees and directors. If the equity incentive plan is adopted after one year from the date of the completion of the conversion, the 4% and 10% limitations described above will no longer apply, and we may adopt equity incentive plans encompassing more than 14% of the shares of common stock that were issued in the conversion. We have not yet determined when we will present these plans for stockholder approval and we have not yet determined the number of shares that would be reserved for issuance under this plan. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan.

The following table summarizes at the maximum of the offering range the total number and value of the shares of common stock that the employee stock ownership plan expects to acquire in the offering and the total value of all restricted stock awards and stock options that are expected to be available under the equity incentive plan (assuming the equity incentive plan is implemented within one year following completion of the conversion). The equity incentive plan may award a greater number of options and restricted stock awards if the plan is adopted more than one year after completion of the conversion. At the maximum of the offering range and upon completion of the offering, we would sell 2,760,000 shares and have 2,953,200 shares outstanding inclusive of shares of common stock to be contributed to the charitable foundation

	Number of Shares to be Granted or Purchased
	At Maximum of Offering Range		As a %  of Common Stock Issued in Conversion			Dilution Resulting from Issuance of Additional Shares (1)			Total Estimated Value
Employee stock ownership plan (2)		236,256		8.0	%		—	%	$	2,362,560
Restricted stock awards (2)		118,128		4.0			3.8			1,181,280
Stock options (3)		295,320		10.0			9.1			1,160,608
Total		649,704		22.0	%		12.3	%	$	4,704,448

(1) Assumes the issuance of authorized but unissued shares to satisfy awards and option exercises.

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

(3) Assumes the value of a stock option is $3.93, which was determined using the Black-Scholes option-pricing formula. See “Pro Forma Data.”

Employment Agreement. Wellesley Bank and Wellesley Bancorp intend to enter into an amended and restated three-year employment agreement with Thomas J. Fontaine, President and Chief Executive Officer. This employment agreement will provide for severance benefits if the executive is terminated following a change in control of Wellesley Bancorp or Wellesley Bank. See “Our Management—Employment Agreements and Severance Arrangements.”

Supplemental Executive Retirement Plan. We intend to implement a supplemental executive retirement plan that will provide benefits to eligible employees if their retirement benefits under the employee stock ownership plan and the 401(k) plan are reduced because of federal tax law limitations. This plan will also provide benefits to eligible employees following a change in control before the complete allocation of shares under the employee stock ownership plan. See “Our Management—Pension and Nonqualified Retirement Benefits.”

Employee Severance Compensation Plan. We expect to adopt an employee severance compensation plan that will provide severance benefits to eligible employees if there is a change in control of Wellesley Bancorp or Wellesley Bank. Under the severance plan, if, within twelve months after a change in control, an employee’s employment involuntarily terminates, or if an employee voluntarily terminates employment without being offered continued employment in a comparable position (as defined in the plan), the former employee would receive a severance payment equal to two week’s of base compensation for each year of service up to a maximum of 52 week’s of base compensation and with a minimum of four week’s base compensation. Any eligible employee who is designated as a Vice President or above would receive a severance benefit equal to 52 week’s base compensation, regardless of the employee’s years of service. See “Our Management—Employment Agreements and Severance Arrangements.”

5

Persons Who Can Order Stock in the Subscription and Community Offerings

We have granted rights to subscribe for shares of Wellesley Bancorp common stock in a subscription offering to the following persons in the following order of priority:

1 Persons with $50 or more on deposit at Wellesley Bank as of the close of business on April 30, 2010.

2. Persons with $50 or more on deposit at Wellesley Bank as of the close of business on June 30, 2011.

3. Our employee stock ownership plan.

4. Wellesley Bank’s employees, officers and directors who do not have a higher priority right.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion. If we increase the number of shares to be sold above 2,760,000, the employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. See “The Conversion and Stock Offering—Subscription Offering and Subscription Rights” for a description of the allocation procedures.

Unlike our employee stock ownership plan, our 401(k) plan has not been granted priority subscription rights. Accordingly, a 401(k) plan participant who elects to purchase shares in the offering through self-directed purchases within the 401(k) plan will receive the same subscription priority, and be subject to the same purchase limitations, as if the participant had elected to purchase shares using funds outside the 401(k) plan.

We intend to offer shares not sold in the subscription offering to the general public in a community offering. Natural persons who are residents of the Massachusetts municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston will be given a preference to purchase shares in the community offering. We may, in our sole discretion, reject orders received in the community offering either in whole or in part. If your order is rejected in part, you cannot cancel the remainder of your order.

Shares not sold in the subscription offering or the community offering may be offered for sale in a syndicated offering, which would be an offering to the general public on a best efforts basis managed by Sandler O’Neill + Partners, L.P. As in the case of the community offering, we may, in our sole discretion, reject orders received in the syndicated offering either in whole or in part.

Subscription Rights

You are not allowed to transfer your subscription rights, and we will act to ensure that you do not do so. You will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding with another person involving the transfer of the shares that you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. Depositors who enter into agreements to allow other investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution.

Deadline for Ordering Stock in the Subscription and Community Offerings

The subscription offering will end at             p.m., Eastern time, on [Expiration Date]. We expect that the community offering, if held, will terminate at the same time, although the offering may continue without notice to you until [Extension Date], or longer if the Federal Deposit Insurance Corporation and Massachusetts Commissioner of Banks approve a later date. If we extend the offering beyond [Extension Date], all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will return your funds promptly with interest at our passbook savings rate or cancel your deposit account withdrawal authorization.

Purchase Limitations

Our plan of conversion establishes limitations on the purchase of stock in the offering. These limitations include the following:

• The minimum purchase is 25 shares.

• No individual (or individuals on a single deposit account) may purchase more than $200,000 of common stock (which equals 20,000 shares) in all categories of the offering combined.

6

• No individual, together with any associates, and no group of persons acting in concert, may purchase more than $350,000 of common stock (which equals 35,000 shares) in all categories of the offering combined.

Subject to the approval of the Federal Deposit Insurance Corporation and Massachusetts Commissioner of Banks, we may increase or decrease the purchase limitations at any time. Our employee stock ownership plan may purchase up to 8% of the shares sold in the offering and contributed to the charitable foundation without regard to theses purchase limitations.

How to Purchase Common Stock

If you want to place an order for shares in the offering, you must complete an original stock order form and send it to us together with full payment, or deliver it in person to the Conversion Center located at             . We must receive your stock order form before the end of the subscription offering or the end of the community offering, as appropriate, regardless of the postmark date. Once we receive your order, you cannot cancel or change it without our consent.

To ensure that we properly identify your subscription rights, you must list all of your deposit accounts as of the applicable eligibility date on the stock order form. If you fail to do so, your subscription may be reduced or rejected if the offering is oversubscribed. To preserve your purchase priority, you must register the shares only in the name(s) of person(s) listed on your deposit account at the applicable date of eligibility. You may not add the names of others who were not eligible to purchase common stock in the offering on the applicable date of eligibility.

You may pay for shares in the subscription offering or the community offering in any of the following ways:

• By check or money order made payable to Wellesley Bancorp; or

• By authorizing withdrawal from an account at Wellesley Bank.

We will pay interest on your subscription funds at the rate we pay on our passbook savings accounts, which is currently 0.25% per annum, from the date we receive your funds until the offering is completed or terminated. All funds authorized for withdrawal from deposit accounts with us will earn interest at the applicable account rate until the offering is completed or terminated. If, as a result of a withdrawal from a certificate of deposit, the balance falls below the minimum balance requirement, the remaining funds will earn interest at our passbook savings rate. There will be no early withdrawal penalty for withdrawals from certificates of deposit held at Wellesley Bank and used to pay for stock.

Using IRA Funds to Purchase Shares in the Offering

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA. If you wish to use some or all of the funds in your Wellesley Bank IRA or other retirement account, the applicable funds must first be transferred to a self-directed retirement account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. An annual fee may be payable to the new trustee. If you do not have such an account, you will need to establish one and transfer your funds before placing your stock order. Our Conversion Center can give you guidance if you wish to place an order for stock using funds held in a retirement account at Wellesley Bank or elsewhere. Because processing retirement account transactions takes additional time, we recommend that you contact our Conversion Center for guidance promptly, preferably at least two weeks before the [Expiration Date] offering deadline. Whether you may use retirement funds for the purchase of shares in the offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

7

How We Will Use the Proceeds of This Offering

The following table summarizes how we will use the proceeds of this offering, based on the sale of shares at the minimum and maximum of the offering range.

(In thousands)	Minimum 2,040,000 Shares at $10.00 per Share			Maximum 2,760,000 Shares at $10.00 per Share
Offering proceeds	$	20,400		$	27,600
Less estimated offering expenses		(1,230	)		(1,230	)
Net offering proceeds		19,170			26,370
Less:
Proceeds contributed to Wellesley Bank		(9,585	)		(13,185	)
Proceeds used for loan to employee stock ownership plan		(1,746	)		(2,363	)
Proceeds contributed to charitable foundation		(204	)		(276	)
Proceeds remaining for Wellesley Bancorp	$	7,635		$	10,546

Initially, we intend to invest the proceeds of the offering in short-term investments. In the future, Wellesley Bancorp may use the portion of the proceeds that it retains to, among other things, pay cash dividends, repurchase shares of common stock, subject to regulatory restrictions, invest in short-term liquid investments and securities or for general corporate purposes. Over time, Wellesley Bank intends to use the portion of the proceeds that it receives to fund new loans. The amount of time that it will take to deploy the proceeds of the offering into loans will depend primarily on the level of loan demand. We also may use the proceeds of the offering to diversify our business or acquire other companies or expand our branch network, although we have no specific plans to do so at this time other than the opening of our third branch in the first quarter of 2012. This new branch is expected to be funded by cash generated by our business. We do not expect to borrow funds for this expansion project. Based on current estimates, we expect the total cost of equipment and leasehold improvements required to open the new Wellesley branch location to be approximately $942,000, none of which had been incurred at June 30, 2011. Funding for this branch is not contingent on this offering.

Purchases by Directors and Executive Officers

We expect that our directors and executive officers, together with their associates, will subscribe for approximately 250,000 shares, which is 9.7% of the shares that would be sold in the offering and issued to the charitable foundation at the midpoint of the offering range. Our directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, if there is an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of conversion. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering.

Market for Wellesley Bancorp Common Stock

We have applied for approval to list our common stock on the Nasdaq Capital Market under the symbol “WEBK.” Sandler O’Neill + Partners, L.P. currently intends to become a market maker in the common stock, but it is under no obligation to do so.

Wellesley Bancorp Dividend Policy

Following the offering, our board of directors will consider adopting a policy of paying cash dividends. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations and our operating results and financial condition.

Tax Consequences

As a general matter, the conversion will not be a taxable transaction for purposes of federal income taxes to persons who receive or exercise subscription rights. We have received an opinion from our special counsel, Kilpatrick Townsend & Stockton LLP, to this effect. See “The Conversion and Offering—Material Income Tax Consequences.”

8

Delivery of Prospectus

To ensure that each person in the subscription and community offerings receives a prospectus at least 48 hours before the offering deadline, we may not mail prospectuses any later than five days before such date or hand-deliver prospectuses later than two days before that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than U.S. mail.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at             p.m., Eastern time, on [Expiration Date] whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates in the Subscription and Community Offerings

Certificates representing shares of common stock issued in the subscription and community offerings will be mailed to purchasers at the address provided by them on the order form as soon as practicable following completion of the conversion and offering. Until certificates for common stock are available and delivered to purchasers, purchasers may not be able to sell their shares, even though trading of the common stock will have commenced.

Conversion Center

If you have any questions regarding the offering, please call the Conversion Center at             to speak to a registered representative of Sandler O’Neill + Partners, L.P. The Conversion Center is open Monday through Friday, [            a.m. to             p.m.], Eastern time, except for bank holidays.

9

Risk Factors

You should consider carefully the following risk factors before purchasing Wellesley Bancorp common stock.

Risks Related to Our Business

We make and hold in our portfolio construction loans, including speculative construction loans, which are considered to have greater credit risk than other types of residential loans.

We originate construction loans for residential properties and commercial real estate properties, including properties built on speculative, undeveloped property by builders and developers who have not identified a buyer for the completed residential or commercial real estate property at the time of loan origination. At June 30, 2011, $36.7, or 17.6%, of our loan portfolio consisted of construction loans. At this date, our construction loan portfolio consisted of $23.8 million, or 11.4%, of our loan portfolio in loans that were secured by residential real estate speculative loan projects, $4.9 million, or 2.4%, of our loan portfolio in loans that were secured by owner-occupied residential real estate, and $8.0 million, or 3.8%, of our loan portfolio in loans that were secured by commercial real estate speculative loan projects. Construction lending is an important part of our business strategy and we expect this portion of our loan portfolio to continue to grow.

Construction lending involves additional risks when compared with permanent residential lending because funds are advanced upon the progress of the project, which is of uncertain value prior to its completion. Because of the uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a residential mortgage loan. These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If our appraisal of the value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. While we believe we have established adequate allowances in our financial statements to cover the credit risk of our construction loan portfolio, there can be no assurance that losses will not exceed our allowances, which could adversely impact our future earnings.

Our ability to continue to originate a significant amount of construction loans is dependent on the continued strength of the housing market in our market area. Further, if we lost our relationship with several of our larger borrowers building in this area or there is a decline in the demand for new housing in this area, it is expected that the demand for construction loans would decline and our net income would be adversely affected.

Our commercial lending exposes us to lending risks.

At June 30, 2011, $80.9 million, or 38.7%, of our loan portfolio consisted of commercial real estate and commercial business loans. Commercial loans generally expose a lender to greater risk of nonpayment and loss than residential mortgage loans because repayment of the loans often depends on the successful operation of the business and the income stream of the borrowers. Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential mortgage loans. Also, many of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a residential mortgage loan. Further, unlike residential mortgage loans or commercial real estate loans, commercial business loans may be secured by collateral other than real estate, the value of which may be more difficult to appraise, and may be more susceptible to fluctuation in value. In addition, many of our commercial real estate and commercial business loans are unseasoned, meaning that they were originated recently, with a limited significant payment history pattern with which to judge future collectibility. As a result, it may be difficult to predict the future performance of this part of our loan portfolio.

Our level of nonperforming loans and classified assets expose us to increased risk of loss. Further, our allowance for loan losses may prove to be insufficient to absorb losses in our loan portfolio.

At June 30, 2011, loans that were classified as either special mention, substandard, doubtful or loss totaled $10.3 million, representing 4.9% of total loans, including nonperforming loans of $3.5 million, representing 1.7% of total loans. If these loans do not perform according to their terms and the value of the collateral is insufficient to pay the remaining loan balance or if the

10

economy and/or the real estate market continues to weaken, we could experience loan losses or be required to record further provisions to our allowance for loan losses, either of which could have a material adverse effect on our operating results. Like all financial institutions, we maintain an allowance for loan losses at a level representing management’s best estimate of inherent losses in the portfolio based upon management’s evaluation of the portfolio’s collectibility as of the corresponding balance sheet date. However, our allowance for loan losses may be insufficient to cover actual loan losses, and future provisions for loan losses could materially adversely affect our operating results.

At June 30, 2011, our allowance for loan losses totaled $3.2 million, which represented 1.6% of total loans and 93.3% of nonperforming loans. Our regulators, as an integral part of their examination process, periodically review the allowance for loan losses and may require us to increase the allowance for loan losses by recognizing additional provisions for loan losses charged to income, or to charge off loans, which, net of any recoveries, would decrease the allowance for loan losses. Any such additional provisions for loan losses or charge-offs, as required by these regulatory agencies, could have a material adverse effect on our operating results.

A return of recessionary conditions in our national economy and, in particular, local economy could continue to increase our level of nonperforming loans and/or reduce demand for our products and services, which would lead to lower revenue, higher loan losses and lower earnings.

Our business activities and earnings are affected by general business conditions in the United States and, in particular, our local market area as a result of our geographic concentration of lending activities. These conditions include short-term and long-term interest rates, inflation, unemployment levels, monetary supply, consumer confidence and spending, fluctuations in both debt and equity capital markets, and the strength of the economy in the United States generally, and in our market area in particular. Following a national home price peak in mid-2006, falling home prices and sharply reduced sales volumes, along with the collapse of the United States’ subprime mortgage industry in early 2007, significantly contributed to a recession that officially lasted until June 2009, although the effects continued thereafter. Dramatic declines in real estate values and high levels of foreclosures resulted in significant asset write-downs by financial institutions, which have caused many financial institutions to seek additional capital, to merge with other institutions and, in some cases, to fail. While our primary market area was not affected by the recessionary conditions as much as the United States generally, our primary market area was negatively impacted by the downturn in the economy and experienced increased unemployment levels and a softening of the local real estate market, including reductions in local property values.

Concerns over the United States’ credit rating (which was downgraded by Standard & Poor’s), the European sovereign debt crisis, and continued high unemployment in the United States, among other economic indicators, have contributed to increased volatility in the capital markets and diminished expectations for the economy. A return of recessionary conditions and/or continued negative developments in the domestic and international credit markets may significantly affect the markets in which we do business, the value of our loans and investments, and our ongoing operations, costs and profitability. In particular, unlike larger financial institutions that are more geographically diversified, our profitability depends on the general economic conditions in our primary market area. Most of our loans are secured by real estate or made to businesses in the town of Wellesley and the surrounding communities. As a result of this concentration, a prolonged or more severe downturn in the local economy could result in significant increases in nonperforming loans, which would negatively impact our interest income and result in higher provisions for loan losses, which would reduce our earnings. The economic downturn could also result in reduced demand for credit or fee-based products and services, which would negatively impact our revenues.

Our residential mortgage loans and home equity lines of credit exposes us to lending risks.

At June 30, 2011, $68.3 million, or 32.7%, of our loan portfolio consisted of residential mortgage loans and $22.6 million, or 10.8%, of our loan portfolio consisted of home equity lines of credit. We intend to continue to emphasize and grow these types of lending, in particular residential mortgage lending, after the offering. Recent declines in the housing market have resulted in declines in real estate values in our market area. Declines in real estate values could cause some of our residential mortgage and home equity lines of credit to be inadequately collateralized, which would expose us to a greater risk of loss if we seek to recover on defaulted loans by selling the real estate collateral.

Changes in interest rates may hurt our profits and asset value.

Like other financial institutions, we are subject to interest rate risk. Our primary source of income is net interest income, which is the difference between interest earned on loans and investments and the interest paid on deposits and borrowings. Changes in the general level of interest rates can affect our net interest income by affecting the difference between the weighted-average yield earned on our interest-earning assets and the weighted-average rate paid on our interest-bearing liabilities, or interest rate

11

spread, and the average life of our interest-earning assets and interest-bearing liabilities. Changes in interest rates also can affect: (1) the ability to originate loans; (2) the value of our interest-earning assets and our ability to realize gains from the sale of such assets; (3) the ability to obtain and retain deposits in competition with other available investment alternatives; and (4) the ability of our borrowers to repay adjustable or variable rate loans. Interest rates are highly sensitive to many factors, including government monetary policies, domestic and international economic and political conditions and other factors beyond our control. Although we believe that the estimated maturities of our interest-earning assets currently are well balanced in relation to the estimated maturities of our interest-bearing liabilities, our profitability could be adversely affected as a result of changes in interest rates.

Strong competition within our market area could reduce our profits and slow growth.

As the economy recovers, we will face more intense competition both in making loans and attracting deposits. This competition may make it more difficult for us to make new loans and may force us to offer lower loan rates and higher deposit rates. Pricing competition for loans and deposits might result in our earning less on our loans and paying more on our deposits, which would reduce net interest income. Competition also makes it more difficult to grow loans and deposits. At June 30, 2010, which is the most recent date for which data is available from the Federal Deposit Insurance Corporation, we held 1.19% of the deposits in Norfolk County, which was the 19^th largest market share out of 45 financial institutions with offices in Norfolk County. At June 30, 2010, we also held 12.71% of the deposits in the town of Wellesley, which was the third largest market share out of 12 financial institutions with offices in Wellesley. Some of the institutions with which we compete have substantially greater resources and lending limits than we have and may offer services that we do not provide. We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Our profitability depends upon our continued ability to compete successfully in our market area.

Our business strategy includes moderate growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

We have experienced moderate growth during the past five years and this offering will further add to this growth. Upon completion of the offering, at the maximum of the offering range, our assets will have increased on a pro forma basis $101.8 million, or 54.6%, from $186.4 million at December 31, 2006 to $288.2 million at June 30, 2011. In the future, we expect to experience further growth in our assets, our deposits and the scale of our operations, whether through organic growth or acquisitions. We anticipate opening our third full service branch in Wellesley in the first quarter of 2012. However, achieving our moderate growth targets requires us to successfully execute our business strategies. Our business strategies include continuing to expand our loan portfolio with more residential mortgage lending and larger commercial lending relationships and increased emphasis on competitive deposit products, in particular business deposit and checking products, to become a full-service community banking institution. Our ability to successfully grow will also depend on the continued availability of loan opportunities that meet our more stringent underwriting standards. If we do not manage our growth effectively, we may not be able to achieve our business plan, and our business and prospects could be adversely affected.

The loss of our President and Chief Executive Officer could hurt our operations.

We rely heavily on our President and Chief Executive Officer, Thomas J. Fontaine. The loss of Mr. Fontaine could have an adverse effect on us because, as a small community bank, Mr. Fontaine has more responsibility than would be typical at a larger financial institution with more employees. In addition, as a small community bank, we have fewer management-level personnel who are in position to succeed and assume the responsibilities of Mr. Fontaine. We intend to enter into an amended and restated three-year employment contract with Mr. Fontaine. In addition, we have bank-owned life insurance on Mr. Fontaine. For further discussion, see “Our Management—Executive Compensation.”

We own stock in the Federal Home Loan Bank of Boston, which recently had to suspend its dividend as a result of its financial difficulties.

As a member bank, Wellesley Bank is required to purchase capital stock in the Federal Home Loan Bank in an amount commensurate with the amount of Wellesley Bank’s advances and unused borrowing capacity. This stock is carried at cost and was $1.9 million at June 30, 2011. In response to unprecedented market conditions and potential future losses, the Federal Home Loan Bank announced in February 2009 an initiative to preserve capital by the adoption of a revised retained earnings target, declaration of a moratorium on excess stock repurchases and the suspension of cash dividend payments. If the Federal Home Loan Bank is unable to meet minimum regulatory capital requirements or is required to aid the remaining Federal Home Loan Banks, our holding of Federal Home Loan Bank stock may be determined to be other-than-temporarily impaired and may require a charge to earnings.

12

Financial reform legislation recently enacted by Congress will, among other things, tighten capital standards, create a new Consumer Financial Protection Bureau and result in new laws and regulations that are expected to increase our costs of operations.

The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) has and will continue to change the current bank regulatory structure and affect the lending, investment, trading and operating activities of financial institutions and their holding companies. The Dodd-Frank Act requires the Federal Reserve Board to set minimum capital levels for bank holding companies that are as stringent as those required for insured depository institutions, and the components of Tier 1 capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. The legislation also establishes a floor for capital of insured depository institutions that cannot be lower than the standards in effect today, and directs the federal banking regulators to implement new leverage and capital requirements within 18 months of the date of enactment of the Dodd-Frank Act that take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

The Dodd-Frank Act also created a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as Wellesley Bank, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10.0 billion in assets. Banks and savings institutions with $10.0 billion or less in assets will be examined by their applicable bank regulators.

In addition, the Dodd-Frank Act increased stockholder influence over boards of directors by requiring certain public companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments, and by authorizing the Securities and Exchange Commission to promulgate rules that would allow stockholders to nominate and solicit votes for their own candidates using a company’s proxy materials.

Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several years. While it is difficult to anticipate the overall impact of the Dodd-Frank Act on us and the financial service industry, it is expected that at a minimum it will increase our operating costs.

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

Wellesley Bank is subject to extensive government regulation, supervision and examination by the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks. Wellesley Bancorp will also be subject to regulation and supervision by the Federal Reserve Board upon the consummation of the conversion and offering. Such regulation, supervision and examination govern the activities in which we may engage and are intended primarily for the protection of the deposit insurance fund and our depositors. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations.

Increased and/or special Federal Deposit Insurance Corporation assessments will hurt our earnings.

The recent economic recession has caused a high level of bank failures, which has dramatically increased Federal Deposit Insurance Corporation resolution costs and led to a significant reduction in the balance of the Deposit Insurance Fund. As a result, the Federal Deposit Insurance Corporation has significantly increased the initial base assessment rates paid by financial institutions for deposit insurance. Increases in the base assessment rate have increased our deposit insurance costs and negatively impacted our earnings. In addition, in May 2009, the Federal Deposit Insurance Corporation imposed a special assessment on all insured institutions. Our special assessment, which was reflected in earnings for the quarter ended June 30, 2009, was $118,000. In lieu of imposing an additional special assessment, the Federal Deposit Insurance Corporation required all institutions to prepay their assessments for all of calendar years 2010, 2011 and 2012, which for us totaled $1.1 million. Additional increases in the assessment base, or the base assessment rate, or additional special assessments would negatively impact our earnings.

Risks Related to This Offering

We expect our return on equity will initially be low following the offering which may negatively impact the value of our common stock.

Return on equity, which equals net income divided by average equity, is a ratio used by many investors to compare the performance of a particular company with other companies. Our pro forma return on equity for the six months ended June 30, 2011, (annualized) and the year ended December 31, 2010 is expected to be 3.87% and 4.64%, respectively, and our pro forma

13

stockholders’ equity to assets ratio at June 30, 2011 is 15.55%, assuming the sale of shares at the maximum of the offering range. Our publicly traded thrift peers used in the independent appraisal as of August 23, 2011 had an average return on equity of 3.27% for the twelve months ended June 30, 2011. Over time, we intend to use the net proceeds from this offering to increase earnings per share and book value per share, without assuming undue risk, with the goal of achieving a return on equity that is competitive with other publicly held companies. This goal could take a number of years to achieve, and it may not be attained. The expected increase in our noninterest expenses following the offering due to operating as a public company and from new equity benefit plans will likely further deter our ability to achieve a competitive return on equity. Consequently, you should not expect a competitive return on equity in the near future. Failure to achieve a competitive return on equity might make an investment in our common stock unattractive to some investors and might cause our common stock to trade at lower prices than comparable companies with higher returns on equity. See “Pro Forma Data” for an illustration of the financial impact of this offering.

We have broad discretion in allocating the proceeds of the offering. Our failure to effectively utilize such proceeds would reduce our profitability.

We intend to contribute approximately 50% of the net proceeds of the offering to Wellesley Bank. Wellesley Bancorp may use the portion of the proceeds that it retains to, among other things, invest in securities, pay cash dividends and repurchase shares of common stock, subject to regulatory restrictions. Wellesley Bank may use the portion of the proceeds that it receives to fund new loans, open new branches, invest in securities, introduce new deposit products and technologies and expand its other business activities. Wellesley Bancorp and Wellesley Bank also may use the proceeds of the offering to diversify their businesses and acquire other companies, although we have no specific plans to do so at this time. Except as discussed above, we have not allocated specific amounts of proceeds for any of these purposes, and we will have significant flexibility in determining how much of the net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these funds effectively would reduce our profitability.

Our stock price may decline when trading commences.

If you purchase shares in the offering, you may not be able to sell them at or above the $10.00 purchase price. After the shares of our common stock begin trading, the trading price of the common stock will be determined by the marketplace and will be influenced by many factors outside of our control, including prevailing interest rates, investor perceptions, securities analyst research reports and general industry, geopolitical and economic conditions. Publicly traded stocks, including stocks of financial institutions, often experience substantial market price volatility. These market fluctuations might not be related to the operating performance of particular companies whose shares are traded. Additionally, the stock prices of many recently converted thrift institutions have declined below, and remain below, their initial offering prices.

There may be a limited market for our common stock, which may adversely affect our stock price.

Although we have applied for approval to list our shares of common stock for trading on the Nasdaq Capital Market, our shares of common stock may not be actively traded. If an active trading market for our common stock does not develop, you may not be able to sell all of your shares of common stock on short notice, and the sale of a large number of shares at one time could temporarily depress the market price. There also may be a wide spread between the bid and asked price for our common stock. When there is a wide spread between the bid and asked price, the price at which you may be able to sell our common stock may be significantly lower than the price at which you could buy it at that time.

Additional expenses following the offering from operating as a public company will adversely affect our profitability.

Following the offering, our noninterest expenses will increase as a result of the additional financial accounting, legal and various other additional expenses usually associated with operating as a public company and complying with public company disclosure obligations. Due to these public company obligations, we hired a new Chief Financial Officer in August 2011 and in the future may be required to expand our accounting staff further and to expand our internal audit and risk management functions, all of which will increase our operating expenses and adversely affect our profitability.

Additional expenses following the offering from the implementation of new equity benefit plans will adversely affect our profitability.

We will recognize additional annual employee compensation and benefit expenses stemming from options and shares of common stock granted to employees, directors and executives under new benefit plans if approved by stockholders. These additional expenses will adversely affect our profitability. We cannot determine the actual amount of these new stock-related compensation and benefit expenses at this time because applicable accounting practices generally require that they be based on the

14

fair value of the options or shares of common stock at the date of the grant; however, we expect them to be material. We will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for restricted stock awards and stock options generally over the vesting period of awards made to recipients. These benefit expenses in the first year following the offering have been estimated to be approximately $445,000 after taxes at the maximum of the offering range as set forth in the pro forma financial information under “Pro Forma Data” assuming the $10.00 per share purchase price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock. For further discussion of these plans, see “Our Management—Benefit Plans.”

A significant percentage of our common stock will be held by our directors, executive officers and employee benefit plans.

We expect that our directors and executive officers, together with their associates, will subscribe for 250,000 shares in the offering. In addition, we intend to establish an employee stock ownership plan that will purchase an amount of shares equal to 8.0% of the sum of the shares sold in the offering and contributed to the Wellesley Bank Charitable Foundation. As a result, upon consummation of the offering and the issuance of shares to the charitable foundation, a total of up to 424,624, or 19.5%, and 486,256, or 16.5%, of our outstanding shares will be held by our directors and executive officers and our employee stock ownership plan at the minimum and maximum of the offering range, respectively. Additional shares will be held by management following the implementation of an equity incentive plan, which we intend to implement no earlier than six months following the completion of the offering. The articles of incorporation and bylaws of Wellesley Bancorp contain supermajority voting provisions that require that the holders of at least 75% of Wellesley Bancorp’s outstanding shares of voting stock approve certain actions including, but not limited to, the amendment of certain provisions of Wellesley Bancorp’s articles of incorporation and bylaws. If our directors and executive officers and benefit plans hold more than 25% of our outstanding common stock following the completion of the offering, the shares held by these individuals and benefit plans could be voted in a manner that would ensure that the 75% supermajority needed to approve such actions could not be attained. For more information on the restrictions included in the articles of incorporation and bylaws of Wellesley Bancorp, see “Restrictions on the Acquisition of Wellesley Bancorp.”

Issuance of shares for benefit programs will dilute your ownership interest.

We intend to adopt an equity incentive plan following the offering. If stockholders approve the new equity incentive plan, we intend to issue shares to our officers, employees and directors through this plan. If the restricted stock awards under the equity incentive plan are funded from authorized but unissued stock, your ownership interest in the shares will be diluted by up to approximately 3.8%, assuming awards of common stock equal to 4% of the sum of the shares sold in the offering and contributed to the Wellesley Bank Charitable Foundation are awarded under the plan. If the shares issued upon the exercise of stock options under the equity incentive plan are issued from authorized but unissued stock, your ownership interest in the shares will be diluted by up to approximately 9.1%, assuming stock option grants equal to 10% of the sum of the shares sold in the offering and contributed to the Wellesley Bank Charitable Foundation are granted under the plan. See “Pro Forma Data” and “Our Management—Equity Incentive Plan.”

The articles of incorporation and bylaws of Wellesley Bancorp and certain regulations may prevent or make more difficult certain transactions, including a sale or merger of Wellesley Bancorp.

Provisions of the articles of incorporation and bylaws of Wellesley Bancorp, state corporate law and federal and state banking regulations may make it more difficult for companies or persons to acquire control of Wellesley Bancorp. Consequently, our stockholders may not have the opportunity to participate in such a transaction and the trading price of our common stock may not rise to the level of other institutions that are more vulnerable to hostile takeovers. The factors that may discourage takeover attempts or make them more difficult include:

• Articles of incorporation and bylaws. Provisions of the articles of incorporation and bylaws of Wellesley Bancorp that may make it more difficult and expensive to pursue a takeover attempt that the board of directors opposes include:

• supermajority voting requirements for certain business combinations and changes to some provisions of the articles of incorporation and bylaws;

• a limitation on the right to vote shares;

• the election of directors to staggered terms of three years;

• the removal of directors only for cause;

• the absence of cumulative voting by stockholders in the election of directors;

• provisions restricting the calling of special meetings of stockholders; and

• provisions regarding the timing and content of stockholder proposals and nominations.

15

• Massachusetts and federal banking regulations and Maryland corporate law. Massachusetts banking regulations prohibit, for three years following the completion of a mutual-to-stock conversion, the offer to acquire or the acquisition of more than 10% of any class of equity security of a converted institution without the prior approval of the Massachusetts Commissioner of Banks. Additional state corporate law and federal banking regulations place limitations on the acquisition of certain percentages of our common stock and impose restrictions on these significant stockholders.

For further information, see “Restrictions on the Acquisition of Wellesley Bancorp.”

Risks Related to the Contribution to the Charitable Foundation

The contribution to the Wellesley Bank Charitable Foundation will decrease our profits for 2011.

Wellesley Bancorp intends to contribute to the Wellesley Bank Charitable Foundation an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with shares of Wellesley Bancorp common stock and 12.5% of which will be funded with cash (193,200 shares and $276,000 in cash at the maximum of the offering range). This contribution will be an additional operating expense and will reduce net income during the fiscal year in which the foundation is funded, which is expected to be the fiscal year ending December 31, 2011. Assuming the offering is completed at the maximum of the offering range, the contribution to the Wellesley Bank Charitable Foundation would reduce net earnings by approximately $1.3 million, after tax, in 2011. See “Pro Forma Data.”

The contribution to the Wellesley Bank Charitable Foundation will decrease the ownership interest and voting interest in the shares sold to the public by 6.5% after the contribution.

Purchasers of shares will have their ownership and voting interests diluted at the close of the conversion when Wellesley Bancorp makes a contribution to the Wellesley Bank Charitable Foundation. This dilution will be 6.5% throughout the valuation range. For a further discussion regarding the effect of the contribution to the charitable foundation, see “Pro Forma Data” and “Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation.”

Our contribution to the Wellesley Bank Charitable Foundation may not be tax deductible, which could decrease our profits.

We believe that our contribution to the Wellesley Bank Charitable Foundation, valued at $2.2 million at the maximum of the offering range, pre-tax, will be deductible for federal income tax purposes. However, we may not have sufficient profits to be able to use the deduction fully. If it is more likely than not that we will be unable to use the entire deduction, we will be required to establish a valuation allowance related to that portion of the deferred tax asset that is not deemed to be realizable.

16

A Warning About Forward-Looking Statements

This prospectus contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Forward-looking statements include:

• statements of our goals, intentions and expectations;

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

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

• estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

• increased lending risks associated with increased construction and commercial lending;

• general economic conditions, either nationally or in our primary market area, that are worse than expected;

• a continued decline in real estate values;

• changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;

• increased competitive pressures among financial services companies;

• changes in consumer spending, borrowing and savings habits;

• legislative, regulatory or supervisory changes that adversely affect our business;

• adverse changes in the securities markets; and

• changes in accounting or auditing standards, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board.

Any of the forward-looking statements that we make in this prospectus and in other public statements we make may later prove incorrect because of inaccurate assumptions, the factors illustrated above or other factors that we cannot foresee. Consequently, no forward-looking statement can be guaranteed. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this prospectus.

17

Selected Consolidated Financial and Other Data

The summary financial information presented below is derived in part from our consolidated financial statements. The following is only a summary and you should read it in conjunction with the consolidated financial statements and notes beginning on page F-1. The information at December 31, 2010 and 2009 and for the years then ended is derived in part from the audited consolidated financial statements that appear in this prospectus. The information at December 31, 2008, 2007 and 2006 and for the years then ended are derived in part from our audited consolidated financial statements that do not appear in this prospectus. The information at June 30, 2011 and 2010 and for the six months then ended was not audited, but in the opinion of management, reflects all adjustments necessary for a fair presentation. All of these adjustments are normal and recurring. The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results of operations that may be expected for the entire year.

	At June  30, 2011		At December 31,
(In thousands)			2010		2009		2008		2007		2006
Selected Financial Condition Data:
Total assets	$	264,774	$	262,002	$	245,829	$	241,284	$	214,919	$	186,445
Cash and cash equivalents		18,637		18,397		9,370		5,072		5,624		4,901
Securities available for sale		28,506		25,565		28,188		29,621		25,669		20,971
Loans receivable, net		205,386		204,117		184,370		194,640		174,141		152,011
Deposits		228,375		222,140		195,625		187,804		158,361		143,816
Short-term borrowings		6,423		5,804		6,270		4,395		4,238		4,133
Long-term debt		7,500		12,500		24,500		30,000		34,600		22,350
Total surplus		21,445		20,408		18,303		16,958		16,199		15,034

	Six Months Ended June 30,				Years Ended December 31,
(In thousands)	2011		2010		2010		2009		2008			2007		2006
Operating Data:
Interest and dividend income	$	6,450	$	6,526	$	13,337	$	13,382	$	13,553		$	13,214	$	11,192
Interest expense		1,427		1,787		3,379		5,553		6,739			6,875		4,921
Net interest income		5,023		4,739		9,958		7,829		6,814			6,339		6,271
Provision for loan losses		600		500		1,100		300		445			260		70
Net interest income, after provision for loan losses		4,423		4,239		8,858		7,529		6,369			6,079		6,201
Noninterest income (loss) (1)		229		211		552		258		(347	)		339		254
Noninterest expenses		3,153		2,849		5,999		5,945		5,030			4,782		4,338
Income before income taxes		1,499		1,601		3,411		1,842		992			1,636		2,117
Provision for income taxes		541		589		1,258		697		305			553		749
Net income	$	958	$	1,012	$	2,153	$	1,145	$	687		$	1,083	$	1,368

	At or For the Six Months Ended June 30,						At or For the Years Ended December 31,
	2011			2010			2010			2009			2008			2007			2006
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on average assets (2)		0.73	%		0.81	%		0.84	%		0.45	%		0.31	%		0.54	%		0.78	%
Return on average equity (2)		9.27			10.89			11.17			6.50			4.12			6.84			9.35
Interest rate spread (2)(3)		3.75			3.71			3.82			2.84			2.81			2.71			3.24
Net interest margin (2)(4)		3.96			3.97			4.07			3.21			3.22			3.29			3.77
Noninterest expense to average assets (2)		2.40			2.29			2.35			2.36			2.24			2.37			2.48
Efficiency ratio (5)		60.03			57.56			57.08			73.51			77.75			71.61			66.48
Average interest-earning assets to average interest-bearing liabilities		119.11			117.10			117.70			116.14			112.98			115.81			117.17
Average equity to average total assets		7.86			7.47			7.57			6.99			7.41			7.85			8.37

18

	At or For the Six Months Ended June 30,						At or For the Years Ended December 31,
	2011			2010			2010			2009			2008			2007			2006
Asset Quality Ratios:
Nonperforming loans to total assets (6)		1.31	%		0.99	%		0.77	%		0.29	%		0.81	%		—	%		—	%
Nonperforming loans to total loans (6)		1.66			1.27			0.97			0.38			0.99			—			—
Allowance for loan losses to nonperforming loans (6)		93.27			95.02			133.96			292.20			104.55			—			—
Allowance for loan losses to total loans		1.55			1.23			1.30			1.10			1.04			0.91			0.92
Net charge-offs to average loans outstanding during the period (7)		0.03			0.05			0.24			0.15			0.00			0.04			—
Capital Ratios:
Total capital to risk-weighted assets		12.14	%		11.72	%		11.90	%		11.86	%		11.10	%		11.39	%		12.37	%
Tier I capital to risk-weighted assets		10.88			10.47			10.64			10.63			9.90			10.36			11.32
Tier I capital to total average assets (8)		7.95			7.53			7.74			7.00			7.06			7.45			8.33
Other Data:
Number of full service offices		2			2			2			2			2			2			2

(1) The noninterest loss in 2008 includes other-than-temporary impairment losses on securities of $701,000.

(2) Ratios for the six-month periods have been annualized.

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

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

(5) Represents noninterest expense divided by the sum of net interest income and other income, excluding gains or losses on the sale of securities.

(6) There were no nonperforming loans at December 31, 2007 and 2006.

(7) There were no charge-offs during 2006 and $4,000 of charge-offs during 2008.

(8) Average assets represent average assets for the most recent quarter within the respective period.

19

Use of Proceeds

The following table shows how we intend to use the net proceeds of the offering. The actual net proceeds will depend on the number of shares of common stock sold in the offering and the expenses incurred in connection with the offering. Payments for shares made through withdrawals from deposit accounts at Wellesley Bank will reduce deposits and will not result in the receipt of new funds for investment. See “Pro Forma Data” for the assumptions used to arrive at these amounts.

	Minimum of Offering Range						Midpoint of Offering Range						Maximum of Offering Range						15% Above Maximum of Offering Range
(Dollars in thousands)	2,040,000 Shares at $10.00 Per Share			Percent of Net Proceeds			2,400,000 Shares at $10.00 Per Share			Percent of Net Proceeds			2,760,000 Shares at $10.00 Per Share			Percent of Net Proceeds			3,174,000 Shares at $10.00 Per Share			Percent of Net Proceeds
Offering proceeds	$	20,400					$	24,000					$	27,600					$	31,740
Less: offering expenses		(1,230	)					(1,230	)					(1,230	)					(1,230	)
Net offering proceeds		19,170			100.0	%		22,770			100.0	%		26,370			100.0	%		30,510			100.0	%
Less:
Proceeds contributed to Wellesley Bank		(9,585	)		(50.0	)		(11,385	)		(50.0	)		(13,185	)		(50.0	)		(15,255	)		(50.0	)
Proceeds used for loan to employee stock ownership plan		(1,746	)		(9.1	)		(2,054	)		(9.0	)		(2,363	)		(9.0	)		(2,717	)		(8.9	)
Proceeds contributed to foundation		(204	)		(1.1	)		(240	)		(1.1	)		(276	)		(1.0	)		(317	)		(1.0	)
Proceeds remaining for Wellesley Bancorp	$	7,635			39.8	%	$	9,091			39.9	%	$	10,546			40.0	%	$	12,221			40.1	%

Wellesley Bancorp initially intends to invest the proceeds it retains from the offering in short-term, liquid investments, such as U.S. treasury and government agency securities, mortgage-backed securities and cash and cash equivalents. The actual amounts to be invested in different instruments will depend on the interest rate environment and Wellesley Bancorp’s liquidity requirements. In the future, Wellesley Bancorp may liquidate its investments and use those funds:

• to pay dividends to stockholders;

• to repurchase shares of its common stock, subject to regulatory restrictions;

• to finance the possible acquisition of other financial institutions or other businesses that are related to banking, although we currently have no plans, arrangements or understandings regarding potential acquisition opportunities; and

• for general corporate purposes, including contributing additional capital to Wellesley Bank.

Under current Federal Deposit Insurance Corporation regulations, Wellesley Bancorp may not repurchase shares of its common stock during the first year following the offering, except that stock repurchases of no greater than 5% of outstanding capital stock may be made during this one-year period where compelling and valid business reasons are established to the satisfaction of the Federal Deposit Insurance Corporation. In addition, Wellesley Bancorp will be subject to the Federal Reserve Board’s notice provisions for stock repurchases. See “Regulation and Supervision—Holding Company Regulation.”

Wellesley Bank initially intends to invest the proceeds that it receives from the offering, which is shown in the table above as the amount contributed to Wellesley Bank, in short-term liquid investments. Over time, Wellesley Bank may use the proceeds it receives from the offering:

• to fund new loans;

• to invest in securities;

• to finance the possible expansion of its business activities; and

• for general corporate purposes.

We may need regulatory approval to engage in some of the activities listed above. We currently have no specific plans or agreements regarding any expansion activities or acquisitions other than the opening of our third branch in the first quarter of 2012. This new branch is expected to be funded by cash generated by our business. We do not expect to borrow funds for this expansion project. Based on current estimates, we expect the total cost of equipment and leasehold improvements required to open the new Wellesley branch location to be approximately $942,000, none of which had been incurred at June 30, 2011. Funding for this branch is not contingent on this offering.

20

We currently anticipate that the proceeds of the offering contributed to Wellesley Bank will primarily be used to fund new loans. The amount of time that it will take to deploy the proceeds of the offering into loans will depend primarily on the level of loan demand. During the six months ended June 30, 2011 and year ended December 31, 2010, we originated $41.4 million and $74.1 million of loans, respectively.

Except as described above, neither Wellesley Bancorp nor Wellesley Bank has any specific plans, arrangements or understandings for the investment of the proceeds of this offering and has not allocated a specific portion of the proceeds to any particular use. For a discussion of our business reasons for undertaking the offering, see “The Conversion and Stock Offering—Reasons for the Conversion and Offering.”

21

Our Dividend Policy

Following the offering, our board of directors will consider adopting a policy of paying cash dividends. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future.

The board of directors may declare and pay periodic special cash dividends in addition to, or in lieu of, regular cash dividends. In determining whether to declare or pay any dividends, whether regular or special, the board of directors will take into account our financial condition and results of operations, tax considerations, capital requirements, industry standards, and economic conditions. We will also consider the regulatory restrictions that affect the payment of dividends by Wellesley Bank to us, discussed below.

Wellesley Bancorp is subject to Maryland law, which generally permits a corporation to pay dividends on its common stock unless, after giving effect to the dividend, the corporation would be unable to pay its debts as they become due in the usual course of its business or the total assets of the corporation would be less than its total liabilities.

Dividends from Wellesley Bancorp may depend, in part, upon receipt of dividends from Wellesley Bank because Wellesley Bancorp will have no source of income other than dividends from Wellesley Bank and earnings from investment of net proceeds from the offering retained by Wellesley Bancorp. Massachusetts banking law and Federal Deposit Insurance Corporation regulations limit distributions from Wellesley Bank to Wellesley Bancorp. See “Regulation and Supervision—Massachusetts Banking Laws and Supervision—Dividends” and “—Federal Regulations—Prompt Corrective Regulatory Action.” In addition, Wellesley Bancorp is subject to the Federal Reserve Board’s policy that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by Wellesley Bancorp appears consistent with its capital needs, asset quality and overall financial condition. See “Regulation and Supervision—Holding Company Regulation.”

Any payment of dividends by Wellesley Bank to us that would be deemed to be drawn out of Wellesley Bank’s bad debt reserves would require Wellesley Bank to pay federal income taxes at the then current income tax rate on the amount deemed distributed. See “Federal and State Taxation—Federal Income Taxation.” Wellesley Bancorp does not contemplate any distribution by Wellesley Bank that would result in this type of tax liability.

22

Market for the Common Stock

We have not previously issued common stock and there is currently no established market for our common stock. We have applied for approval to list our common stock for trading on the Nasdaq Capital Market under the symbol “WEBK” upon completion of the offering. In order to list our common stock on the Nasdaq Capital Market, we are required to have at least three broker-dealers who will make a market in our common stock. Sandler O’Neill + Partners, L.P. has advised us that it intends to become a market maker in our common stock following the offering, but it is under no obligation to do so. Sandler O’Neill + Partners, L.P. also may assist us, if needed, in obtaining other market makers after the offering. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for the common stock will develop or, if developed, will be maintained.

The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of our common stock at any particular time may be limited, which may have an adverse effect on the price at which our common stock can be sold. There can be no assurance that persons purchasing the common stock will be able to sell their shares at or above the $10.00 price per share in the offering. Purchasers of our common stock should recognize that there may be a limited trading market in the common stock and, therefore, should have the financial ability to withstand a longer-term investment horizon.

23

Capitalization

The following table presents the historical capitalization of Wellesley Bank on a consolidated basis at June 30, 2011 and the capitalization of Wellesley Bancorp reflecting the offering (referred to as “pro forma” information). The pro forma capitalization gives effect to the assumptions listed under “Pro Forma Data,” based on the sale of the number of shares of common stock indicated in the table. This table does not reflect the issuance of additional shares as a result of the exercise of options granted under the proposed equity incentive plan. A change in the number of shares to be issued in the offering may materially affect pro forma capitalization.

				Wellesley Bancorp Pro Forma Capitalization Based Upon the Sale of
(Dollars in thousands, except per share amounts)	Wellesley  Bank Capitalization as of June 30, 2011			2,040,000 Shares at $10.00 Per Share			2,400,000 Shares at $10.00 Per Share			2,760,000 Shares at $10.00 Per Share			3,174,000 Shares at $10.00 Per Share
Deposits (1)	$	228,375		$	228,375		$	228,375		$	228,375		$	228,375
Borrowings		13,923			13,923			13,923			13,923			13,923
Total deposits and borrowed funds	$	242,298		$	242,298		$	242,298		$	242,298		$	242,298
Stockholders’ equity:
Preferred stock:
1,000,000 shares, $0.01 par value per share, authorized; none issued or outstanding	$	—		$	—		$	—		$	—		$	—
Common stock:
12,000,000 shares, $0.01 par value per share, authorized; specified number of shares assumed to be issued and outstanding (2)		—			22			26			30			34
Additional paid-in capital		—			20,576			24,424			28,272			32,698
Retained earnings (3)		21,057			21,057			21,057			21,057			21,057
Accumulated other comprehensive income		388			388			388			388			388
Plus:
Tax benefit of contribution to charitable foundation (4)		—			653			768			883			1,016
Less :
Charitable foundation contribution expense (5)		—			(1,632	)		(1,920	)		(2,208	)		(2,539	)
Common stock acquired by employee stock ownership plan (6)		—			(1,746	)		(2,054	)		(2,363	)		(2,717	)
Common stock to be acquired by equity incentive plan (7)		—			(873	)		(1,027	)		(1,181	)		(1,358	)
Total stockholders’ equity	$	21,445		$	38,445		$	41,662		$	44,878		$	48,579
Stockholders’ equity to assets (1)		8.10	%		13.64	%		14.62	%		15.57	%		16.64	%

(1) Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Withdrawals to purchase common stock will reduce pro forma deposits and assets by the amounts of the withdrawals.

(2) Reflects total issued and outstanding shares of 2,182,800, 2,568,000, 2,953,200 and 3,396,180 at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, which includes shares sold in the offering and contributed to the charitable foundation.

(3) Retained earnings are restricted by applicable regulatory capital requirements.

(4) Represents the tax benefit of the contribution to the Wellesley Bank Charitable Foundation based on an estimated tax rate of 40.0%. The actual rate experienced by Wellesley Bancorp may vary. The realization of the tax benefit is limited annually to 10.0% of our annual taxable income. However, for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

(5) Represents the pre-tax expense of the contribution to the Wellesley Bank Charitable Foundation.

(6) Assumes that 8% of the sum of the shares of common stock sold in the offering and contributed to the charitable foundation will be acquired by the employee stock ownership plan in the offering with funds borrowed from Wellesley Bancorp. Under generally accepted accounting principles, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and is, accordingly, reflected as a reduction of capital and a liability to the employee stock ownership plan. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with the related tax benefit, and a reduction in the charge against capital will occur in the amount of the compensation expense recognized. Since the funds are borrowed from Wellesley Bancorp, the borrowing will be eliminated in consolidation and no

24

liability or interest expense will be reflected in the consolidated financial statements of Wellesley Bancorp. The loan will be repaid principally through Wellesley Bank’s contributions to the employee stock ownership plan and dividends payable on unallocated common stock held by the plan over the anticipated 15-year term of the loan. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

(7) Assumes the purchase in the open market at $10.00 per share, for restricted stock awards under the proposed equity incentive plan, of a number of shares equal to 4% of the sum of the shares of common stock sold in the offering and contributed to the charitable foundation. The shares are reflected as a reduction of stockholders’ equity. The equity incentive plan will be submitted to stockholders for approval at a meeting following the offering. See “Risk Factors—Risks Related to This Offering—Issuance of shares for benefit programs will dilute your ownership interest,” “Pro Forma Data” and “Our Management—Equity Incentive Plans.”

25

Regulatory Capital Compliance

At June 30, 2011, Wellesley Bank exceeded all regulatory capital requirements. The following table presents Wellesley Bank’s capital position relative to its regulatory capital requirements at June 30, 2011, on a historical and a pro forma basis. The table reflects receipt by Wellesley Bank of 50% of the net proceeds of the offering. For purposes of the table, the amount expected to be borrowed by the employee stock ownership plan is deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Data.” For a discussion of the capital standards applicable to Wellesley Bank, see “Regulation and Supervision—Federal Regulations—Capital Requirements.”

						Wellesley Bank Pro Forma at June 30, 2011
						Minimum of Offering Range						Midpoint of Offering Range						Maximum of Offering Range						15% Above Maximum of Offering Range
	Historical at June 30, 2011					2,040,000 Shares at $10.00 per Share						2,400,000 Shares at $10.00 per Share						2,760,000 Shares at $10.00 per Share						3,174,000 Shares at $10.00 per Share
(Dollars in thousands)	Amount		Percent of Assets (1)			Amount			Percent of Assets			Amount			Percent of Assets			Amount			Percent of Assets			Amount			Percent of Assets
Total capital under generally accepted accounting principles (GAAP)	$	21,445		8.10	%	$	28,411			10.39	%	$	29,749			10.81	%	$	31,086			11.23	%	$	32,625			11.71	%
Tier 1 capital to average assets:
Capital level (2)	$	21,057		7.96	%	$	28,023			10.25	%	$	29,361			10.68	%	$	30,698			11.10	%	$	32,237			11.57	%
Requirement		7,940		3.00			8,202			3.00			8,251			3.00			8,300			3.00			8,357			3.00
Excess	$	13,117		4.96	%	$	19,821			7.25	%	$	21,110			7.68	%	$	22,398			8.10	%	$	23,880			8.57	%
Tier 1 capital to risk- weighted assets:
Capital level (2)(3)	$	21,057		10.89	%	$	28,023			14.36	%	$	29,361			15.02	%	$	30,698			15.67	%	$	32,237			16.43	%
Requirement		7,738		4.00			7,807			4.00			7,821			4.00			7,834			4.00			7,849			4.00
Excess	$	13,319		6.69	%	$	20,216			10.36	%	$	21,540			11.02	%	$	22,864			11.67	%	$	24,388			12.43	%
Total capital to risk- weighted assets:
Capital level (2)(3)	$	23,475		12.14	%	$	30,441			15.60	%	$	31,779			16.25	%	$	33,116			16.91	%	$	34,655			17.66	%
Requirement		15,475		8.00			15,615			8.00			15,641			8.00			15,668			8.00			15,698			8.00
Excess	$	8,000		4.14	%	$	14,826			7.60	%	$	16,138			8.25	%	$	17,448			8.91	%	$	18,957			9.66	%
Reconciliation of capital infusion to Wellesley Bank:
Net proceeds of offering						$	19,170					$	22,770					$	26,370					$	30,510
Proceeds to Wellesley Bank							(9,585	)					(11,385	)					(13,185	)					(15,255	)
Less stock acquired by ESOP							(1,746	)					(2,054	)					(2,363	)					(2,717	)
Less stock acquired by equity incentive plan							(873	)					(1,027	)					(1,181	)					(1,358	)
Pro forma increase in GAAP and regulatory capital						$	6,966					$	8,304					$	9,641					$	11,180

(1) Based on average assets of $264.7 million and risk-weighted assets of $193.4 million.

(2) A portion of the net unrealized gains on securities available for sale accounts for the difference between capital calculated under generally accepted accounting principles and Tier 1 capital. See note 12 of the notes to consolidated financial statements for further information.

(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk-weighting.

26

Pro Forma Data

The following tables show information about our net income and stockholders’ equity reflecting the sale of common stock in the offering. The information provided illustrates our pro forma net income and stockholders’ equity based on the sale of common stock at the minimum, midpoint, maximum and 15% above the maximum of the offering range. The actual net proceeds from the sale of the common stock cannot be determined until the offering is completed and may vary from our estimates. Net proceeds indicated in the following tables are based upon the following assumptions:

• All shares of stock will be sold in the subscription and community offerings;

• Our employee stock ownership plan will purchase a number of shares equal to 8% of the sum of the shares sold in the offering and contributed to the charitable foundation with a loan from Wellesley Bancorp that will be repaid in equal installments over 15 years;

• Sandler O’Neill + Partners, L.P. will receive a success fee equal to $270,000;

• Total expenses of the offering, excluding fees paid to Sandler O’Neill + Partners, L.P., will be approximately $960,000; and

• We will make a charitable contribution in an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with common stock and 12.5% of which will be funded with cash.

Pro forma net income for the six months ended June 30, 2011 and the year ended December 31, 2010 has been calculated as if the offering were completed at the beginning of each period, and the net proceeds had been invested at 1.76% and 2.01%, respectively, which represents the five-year treasury rate at June 30, 2011 and December 31, 2010, respectively.

A pro forma after-tax return on net proceeds of 1.06% is used for the six months ended June 30, 2011 and 1.21% for the year ended December 31, 2010, respectively, after giving effect to a combined federal and state income tax rate of 40.0% for the period. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the number of shares of common stock indicated in the tables.

When reviewing the following tables you should consider the following:

• Since funds on deposit at Wellesley Bank may be withdrawn to purchase shares of common stock, the amount of funds available for investment will be reduced by the amount of withdrawals for stock purchases. The pro forma tables do not reflect withdrawals from deposit accounts.

• Historical per share amounts have been computed as if the shares of common stock expected to be issued in the offering had been outstanding at the beginning of the period covered by the table. However, neither historical nor pro forma stockholders’ equity has been adjusted to reflect the investment of the estimated net proceeds from the sale of the shares in the offering, the additional employee stock ownership plan expense or the proposed equity incentive plan.

• Pro forma stockholders’ equity (“book value”) represents the difference between the stated amounts of our assets and liabilities. Pro forma tangible stockholders’ equity excludes intangible assets. Book value amounts do not represent fair market values or amounts available for distribution to stockholders in the unlikely event of liquidation. The amounts shown do not reflect the federal income tax consequences of the restoration to income of Wellesley Bank’s special bad debt reserves for income tax purposes or give effect to the liquidation account in the event of liquidation, which would be required in the unlikely event of liquidation. See “Federal and State Taxation” and “The Conversion and Stock Offering—Effects of Conversion to Stock Form.”

• The amounts shown as pro forma stockholders’ equity per share do not represent possible future price appreciation of our common stock.

• The amounts shown do not include the impact of new expenses we expect to incur as a result of our operating as a public company.

27

The following pro forma data, which are based on Wellesley Bank’s capital at June 30, 2011 and December 31, 2010, and net income for the six months ended June 30, 2011 and for the year ended December 31, 2010, may not represent the actual financial effects of the offering or our operating results after the offering. The pro forma data rely exclusively on the assumptions outlined above and in the notes to the pro forma tables. The pro forma data does not represent the fair market value of our common stock, the current fair market value of our assets or liabilities, or the amount of money that would be available for distribution to stockholders if we were to be liquidated after the conversion.

	Six Months Ended June 30, 2011
	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			15% Above Maximum of Offering Range
(Dollars in thousands, except per share amounts)	2,040,000 Shares at $10.00 per Share			2,400,000 Shares at $10.00 per Share			2,760,000 Shares at $10.00 per Share			3,174,000 Shares at $10.00 per Share
Gross proceeds	$	20,400		$	24,000		$	27,600		$	31,740
Less: estimated offering expenses		(1,230	)		(1,230	)		(1,230	)		(1,230	)
Estimated net conversion proceeds		19,170			22,770			26,370			30,510
Less: cash contribution to charitable foundation		(204	)		(240	)		(276	)		(317	)
Less: common stock acquired by employee stock ownership plan (1)		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: common stock to be acquired by equity incentive plan (2)		(873	)		(1,027	)		(1,181	)		(1,358	)
Net investable proceeds	$	16,347		$	19,449		$	22,550		$	26,118
Pro forma net income:
Pro forma net income (3):
Historical	$	958		$	958		$	958		$	958
Pro forma income on net investable proceeds		87			103			120			138
Less: pro forma employee stock ownership plan adjustments (1)		(35	)		(41	)		(47	)		(54	)
Less: pro forma restricted stock award expense (2)		(52	)		(62	)		(71	)		(82	)
Less: pro forma stock option expense (4)		(77	)		(91	)		(104	)		(120	)
Pro forma net income	$	881		$	867		$	856		$	840
Pro forma net income per share (3):
Historical	$	0.48		$	0.41		$	0.35		$	0.31
Pro forma income on net investable proceeds		0.04			0.04			0.04			0.04
Less: pro forma employee stock ownership plan adjustments (1)		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Less: pro forma restricted stock award expense (2)		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Less: pro forma stock option expense (4)		(0.04	)		(0.04	)		(0.04	)		(0.04	)
Pro forma net income per share	$	0.44		$	0.37		$	0.31		$	0.27
Offering price as a multiple of annualized pro forma net income per share		11.4	x		13.5	x		16.1	x		18.5	x
Number of shares used to calculate pro forma net income per share (5)		2,013,997			2,369,408			2,724,819			3,133,542
Pro forma stockholders’ equity:
Pro forma stockholders’ equity (book value) (5):
Historical	$	21,445		$	21,445		$	21,445		$	21,445
Estimated net proceeds		19,170			22,770			26,370			30,510
Plus: common stock issued to charitable foundation		1,428			1,680			1,932			2,222
Less: expense net of tax of contribution to charitable foundation		(979	)		(1,152	)		(1,325	)		(1,524	)
Less: common stock acquired by employee stock ownership plan (1)		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: common stock to be acquired by equity incentive plan (2)		(873	)		(1,027	)		(1,181	)		(1,358	)
Pro forma stockholders’ equity	$	38,445		$	41,662		$	44,878		$	48,578
Pro forma stockholders’ equity per share (5):
Historical	$	9.83		$	8.35		$	7.27		$	6.32
Estimated net proceeds		8.78			8.87			8.93			8.98
Plus: common stock issued to charitable foundation		0.65			0.65			0.65			0.65
Less: expense net of tax of contribution to charitable foundation		(0.45	)		(0.45	)		(0.45	)		(0.45	)
Less: common stock acquired by employee stock ownership plan (1)		(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: common stock to be acquired by equity incentive plan (2)		(0.40	)		(0.40	)		(0.40	)		(0.40	)
Pro forma stockholders’ equity per share	$	17.61		$	16.22		$	15.20		$	14.30
Offering price as a percentage of pro forma stockholders’ equity per share		56.8	%		61.7	%		65.8	%		69.9	%
Number of shares used to calculate pro forma stockholders’ equity per share (5)		2,182,800			2,568,000			2,953,200			3,396,180

28

	Year Ended December 31, 2010
	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			15% Above Maximum of Offering Range
(Dollars in thousands, except per share amounts)	2,040,000 Shares at $10.00 per Share			2,400,000 Shares at $10.00 per Share			2,760,000 Shares at $10.00 per Share			3,174,000 Shares at $10.00 per Share
Gross proceeds	$	20,400		$	24,000		$	27,600		$	31,740
Less: estimated offering expenses		(1,230	)		(1,230	)		(1,230	)		(1,230	)
Estimated net conversion proceeds		19,170			22,770			26,370			30,510
Less: cash contribution to charitable foundation		(204	)		(240	)		(276	)		(317	)
Less: common stock acquired by employee stock ownership plan (1)		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: common stock to be acquired by equity incentive plan (2)		(873	)		(1,027	)		(1,181	)		(1,358	)
Net investable proceeds	$	16,347		$	19,449		$	22,550		$	26,118
Pro forma net income:
Pro forma net income (3):
Historical	$	2,153		$	2,153		$	2,153		$	2,153
Pro forma income on net investable proceeds		198			235			273			316
Less: pro forma employee stock ownership plan adjustments (1)		(70	)		(82	)		(95	)		(109	)
Less: pro forma restricted stock award expense (2)		(105	)		(123	)		(142	)		(163	)
Less: pro forma stock option expense (4)		(154	)		(182	)		(209	)		(240	)
Pro forma net income	$	2,022		$	2,001		$	1,980		$	1,957
Pro forma net income per share (3):
Historical	$	1.06		$	0.90		$	0.78		$	0.68
Pro forma income on net investable proceeds		0.10			0.10			0.10			0.10
Less: pro forma employee stock ownership plan adjustments (1)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: pro forma restricted stock award expense (2)		(0.05	)		(0.05	)		(0.05	)		(0.05	)
Less: pro forma stock option expense (4)		(0.08	)		(0.08	)		(0.08	)		(0.08	)
Pro forma net income per share	$	1.00		$	0.84		$	0.72		$	0.62
Offering price as a multiple of pro forma net income per share		10.0x			11.9x			13.9x			16.1x
Number of shares used to calculate pro forma net income per share (5)		2,019,818			2,376,256			2,732,694			3,142,599
Pro forma stockholders’ equity:
Pro forma stockholders’ equity (book value) (5):
Historical	$	20,408		$	20,408		$	20,408		$	20,408
Estimated net proceeds		19,170			22,770			26,370			30,510
Plus: common stock issued to charitable foundation		1,428			1,680			1,932			2,222
Less: expense net of tax of contribution to charitable foundation		(979	)		(1,152	)		(1,325	)		(1,524	)
Less: common stock acquired by employee stock ownership plan (1)		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: common stock to be acquired by equity incentive plan (2)		(873	)		(1,027	)		(1,181	)		(1,358	)
Pro forma stockholders’ equity	$	37,408		$	40,625		$	43,841		$	47,541
Pro forma stockholders’ equity per share (5):
Historical	$	9.35		$	7.95		$	6.92		$	6.01
Estimated net proceeds		8.79			8.87			8.93			8.99
Plus: common stock issued to charitable foundation		0.65			0.65			0.65			0.65
Less: expense net of tax of contribution to charitable foundation		(0.45	)		(0.45	)		(0.45	)		(0.45	)
Less: common stock acquired by employee stock ownership plan (1)		(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: common stock to be acquired by equity incentive plan (2)		(0.40	)		(0.40	)		(0.40	)		(0.40	)
Pro forma stockholders’ equity per share	$	17.14		$	15.82		$	14.85		$	14.00
Offering price as a percentage of pro forma stockholders’ equity per share		58.3	%		63.2	%		67.3	%		71.4	%
Number of shares used to calculate pro forma stockholders’ equity per share (5)		2,182,800			2,568,000			2,953,200			3,396,180

(1) Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 8% of the sum of the shares sold in the offering and contributed to the charitable foundation (174,624, 205,440, 236,256 and 271,694 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively). The employee stock ownership plan will borrow the funds to acquire these shares from the net offering proceeds retained by Wellesley Bancorp. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. This borrowing will have an interest rate equal to the prime rate as published in the Wall Street Journal, which is currently 3.25%, which will be fixed at the consummation of the offering and be for a term of 15 years. Wellesley Bank intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. Interest income that Wellesley Bancorp will earn on the loan will offset a portion of the compensation expense recorded by Wellesley Bank as it contributes to the ESOP. As the debt is paid

29

down, shares will be released for allocation to participants’ accounts and stockholders’ equity will be increased. The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. The combined federal and state income tax rate is assumed to be 40.0%. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon the market value of shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares (1/15 of the total, based on a 15-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released would be based upon the average market value of the shares during the year, which, for purposes of this calculation, was assumed to be equal to the $10.00 per share purchase price. If the average market value per share is greater than $10.00 per share, total employee stock ownership plan expense would be greater.

(2) Assumes that Wellesley Bancorp will purchase in the open market a number of shares of stock equal to 4% of the sum of the shares sold in the offering and contributed to the charitable foundation (87,312, 102,720, 118,128 and 135,847 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively), that will be reissued as restricted stock awards under an equity incentive plan to be adopted following the offering. Purchases will be funded with cash on hand at Wellesley Bancorp or with dividends paid to Wellesley Bancorp by Wellesley Bank. The cost of these shares has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. In calculating the pro forma effect of the restricted stock awards, it is assumed that the required stockholder approval has been received, that the shares used to fund the awards were acquired at the beginning of the respective period and that the shares were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued shares of the common stock instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 3.8%. The adjustment to pro forma net income for the restricted stock awards reflects the after-tax compensation expense associated with the awards. It is assumed that the fair market value of a share of Wellesley Bancorp common stock was $10.00 at the time the awards were made, that shares of restricted stock issued under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the shares awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 40.0%. If the fair market value per share is greater than $10.00 per share on the date shares are awarded under the equity incentive plan, total equity incentive plan expense would be greater.

(3) Does not give effect to the nonrecurring expense that is expected to be recognized in fiscal 2011 as a result of the contribution of common stock and cash to the charitable foundation.

The following table shows the estimated after-tax expense associated with the contribution to the foundation, as well as pro forma net income (loss) and pro forma net income (loss) per share assuming the contribution to the foundation was expensed during the periods presented.

(Dollars in thousands, except per share amounts)	Minimum  of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			15% Above Maximum of Offering Range
Before-tax expense of contribution to foundation:
Six months ended June 30, 2011	$	1,632		$	1,920		$	2,208		$	2,539
Year ended December 31, 2010		1,632			1,920			2,208			2,539
After-tax expense of contributions to foundation:
Six months ended June 30, 2011		979			1,152			1,325			1,523
Year ended December 31, 2010		979			1,152			1,325			1,523
Pro forma net income (loss):
Six months ended June 30, 2011		(98	)		(285	)		(469	)		(683	)
Year ended December 31, 2010		1,043			849			655			434
Pro forma net income (loss) per share:
Six months ended June 30, 2011		(0.05	)		(0.12	)		(0.17	)		(0.22	)
Year ended December 31, 2010		0.52			0.36			0.24			0.14
Pro forma tax benefit:
Six months ended June 30, 2011		653			768			883			1,016
Year ended December 31, 2010		653			768			883			1,016

The pro forma data assume that we will realize 100.0% of the income tax benefit as a result of the contribution to the foundation based on a 40.0% income tax rate. The realization of the tax benefit is limited annually to 10.0% of our annual taxable income. However, for federal and state tax purposes, we can carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

(4) The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the stock options that may be granted under the equity incentive plan expected to be adopted following the offering. The table assumes that a number of shares equal to 10% of the sum of the shares sold in the offering and contributed to the charitable foundation (218,280, 256,800, 295,320 and 339,618 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively) will be reserved for future issuance upon the exercise of stock options that may be granted under the plan. Using the Black-Scholes option-pricing formula, the options are assumed to have a value of $3.93 for each option, based on the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0.00%; expected life, 10 years; expected volatility, 21.89%; and risk-free interest rate, 3.18%. Because there currently is no market for Wellesley Bancorp common stock, the assumed expected volatility is based on the SNL Index for all publicly-traded thrifts. It is assumed that stock options granted under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the options awarded was an amortized expense during each year, that 25% of the options awarded are

30

nonqualified options and that the combined federal and state income tax rate was 40.0%. If the fair market value per share is different than $10.00 per share on the date options are awarded under the equity incentive plan, or if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. Wellesley Bancorp may use a valuation technique other than the Black-Scholes option-pricing formula and that technique may produce a different value. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 9.1%.

(5) The number of shares used to calculate pro forma net income per share is equal to the total number of shares to be outstanding upon completion of the offering, less the number of shares purchased by the employee stock ownership plan not committed to be released within one year following the offering. The number of shares used to calculate pro forma stockholders’ equity per share equals the total number of shares to be outstanding upon completion of the offering.

31

Comparison of Independent Valuation and Pro Forma Financial Information

With and Without the Foundation

As set forth in the following table, if we do not fund the Wellesley Bank Charitable Foundation as part of the offering, Feldman Financial estimates that our pro forma valuation would be greater, which would have increased the amount of common stock offered for sale in the offering. If the contribution to the charitable foundation was not made, there is no assurance that the updated appraisal that Feldman Financial will prepare at the closing of the offering would conclude that our pro forma market value would be the same as the estimate set forth in the table below. The updated appraisal will be based on the facts and circumstances existing at that time, including, among other things, market and economic conditions.

The information presented in the following table is for comparative purposes only. It assumes that the offering was completed at June 30, 2011, based on the assumptions set forth under “Pro Forma Data.”

	At and for the Six Months Ended June 30, 2011
	At the Minimum of Estimated Valuation Range						At the Midpoint of Estimated Valuation Range						At the Maximum of Estimated Valuation Range						At the Maximum, as Adjusted, of Estimated Valuation Range
(Dollars in thousands, except per share amount)	With Foundation			No Foundation			With Foundation			No Foundation			With Foundation			No Foundation			With Foundation			No Foundation
Estimated offering amount (1)	$	20,400		$	22,950		$	24,000		$	27,000		$	27,600		$	31,050		$	31,740		$	35,708
Pro forma market capitalization		21,828			22,950			25,680			27,000			29,532			31,050			33,962			35,708
Estimated pro forma valuation		21,828			22,950			25,680			27,000			29,532			31,050			33,962			35,708
Pro forma total assets		281,796			283,762			285,013			287,326			288,229			290,890			291,929			294,989
Pro forma total liabilities		243,351			243,351			243,351			243,351			243,351			243,351			243,351			243,351
Pro forma stockholders’ equity		38,445			40,411			41,662			43,975			44,878			47,539			48,578			51,638
Pro forma net income (2)		881			886			867			874			856			861			840			849
Pro forma stockholders’ equity per share		17.61			17.61			16.22			16.29			15.20			15.31			14.30			14.46
Pro forma net income per share		0.44			0.42			0.37			0.35			0.31			0.30			0.27			0.26
Pro Forma Pricing Ratios:
Offering prices as a percentage of pro forma stockholders’ equity		56.79	%		56.79	%		61.65	%		61.39	%		65.79	%		65.32	%		69.93	%		69.16	%
Offering price to annualized net income per share		11.36			11.90			13.51			14.29			16.13			16.67			18.52			19.23
Offering price to assets		7.75			8.09			9.01			9.40			10.25			10.67			11.63			12.10
Pro Forma Financial Ratios:
Return on assets (3)		0.63	%		0.62	%		0.61	%		0.61	%		0.59	%		0.59	%		0.58	%		0.58	%
Return on stockholders’ equity (3)		4.58			4.38			4.16			3.97			3.81			3.63			3.46			3.29
Stockholders’ equity to total assets		13.64			14.24			14.62			15.30			15.57			16.34			16.64			17.51

(1) Based on independent valuation prepared by Feldman Financial as of August 23, 2011.

(2) Does not give effect to the nonrecurring expense that is expected to be recognized in fiscal 2011 as a result of the contribution of common stock and cash to the charitable foundation.

(3) Performances ratios have been annualized.

32

Our Business

General

Founded in 1911, Wellesley Bank is a Massachusetts chartered cooperative bank headquartered in Wellesley, Massachusetts. We operate as a community-oriented financial institution offering traditional financial services to consumers and businesses in our primary market area. We attract deposits from the general public and use those funds to originate primarily residential mortgage loans, commercial real estate loans and construction loans, and, to a lesser extent, commercial business loans, home equity lines of credit and other consumer loans. We conduct our lending and deposit activities primarily with individuals and small businesses in our primary market area.

Wellesley Bancorp, a Maryland corporation, was incorporated in September 2011 to become the holding company for Wellesley Bank upon completion of the conversion. Before the completion of the conversion, Wellesley Bancorp will not engage in any significant activities other than organizational activities. Following completion of the conversion, Wellesley Bancorp’s business activity will be the ownership of the outstanding capital stock of Wellesley Bank and management of the investment of offering proceeds retained from the conversion. Initially, Wellesley Bancorp will not own or lease any property but instead use the premises, equipment and other property of Wellesley Bank with the payment of appropriate rental fees, as required by applicable law and regulations, under the terms of an expense allocation agreement that Wellesley Bancorp and Wellesley Bank will enter into upon completion of the conversion. In addition, Wellesley Bancorp and Wellesley Bank will also enter into a tax allocation agreement upon completion of the conversion as a result of their status as members of an affiliated group under the Internal Revenue Code. In the future, Wellesley Bancorp may acquire other financial institutions or organize other operating subsidiaries; however, there are no current plans, arrangements, agreements or understandings, written or oral, to do so.

Our website address is www.wellesleybank.com. Information on our website should not be considered a part of this prospectus.

Market Area

We conduct our operations from our executive offices and two full-service branch offices located in Wellesley, Massachusetts, a community within the greater Boston metropolitan area. Our primary lending market includes the communities of Wellesley, Dover and Needham in Norfolk County and the communities of Natick, Newton and Weston in Middlesex County. Due to its proximity to Boston, our primary market area benefits from the presence of numerous institutions of higher learning, medical care and research centers and the corporate headquarters of several investment and financial services companies. The greater Boston metropolitan area also has many life science and high technology companies employing personnel with specialized skills. These factors affect the demand for residential homes, residential construction, office buildings, shopping centers, and other commercial properties in our market area. Communities within our market area include many older residential commuter towns which function partially as business and service centers.

Our market area is located largely in the Boston-Cambridge-Quincy, Massachusetts/New Hampshire Metropolitan Statistical Area. Based on the 2010 United States census, the Boston metropolitan area is the 10th largest metropolitan area in the United States. Located adjacent to major transportation corridors, the Boston metropolitan area provides a highly diversified economic base, with major employment sectors ranging from services, manufacturing and wholesale/retail trade, to finance, technology and medical care. Based on U.S. Census Bureau data, 2009 median household income was $80,000 and $77,000 for Norfolk County and Middlesex County, respectively, compared to median household income for Massachusetts of $64,000 and $51,000 for the United States for 2009. In addition, 2009 per capital income was $42,000 and $39,000 for Norfolk County and Middlesex County, respectively, compared to per capita income for Massachusetts of $33,000 and $27,000 for the United States for 2009. The town of Wellesley had 2009 median household income and per capita income of $134,000 and $64,000, respectively.

Competition

We face significant competition for deposits and loans. Our most direct competition for deposits has historically come from the financial institutions operating in our primary market area and from other financial service companies such as securities brokerage firms, credit unions and insurance companies. We also face competition for investors’ funds from money market funds and mutual funds. At June 30, 2010, which is the most recent date for which data is available from the Federal Deposit Insurance Corporation, we held 1.19% of the deposits in Norfolk County, which was the 19^th largest market share out of 45 financial institutions with offices in Norfolk County. At June 30, 2010, we also held 12.71% of the deposits in the town of Wellesley, which was the third largest market share out of 12 financial institutions with offices in Wellesley. Some of the banks owned by large national and regional holding companies and other community-based banks that also operate in our primary market area are larger than we are and, therefore, may have greater resources or offer a broader range of products and services.

33

Our competition for loans comes from financial institutions, including credit unions, in our primary market area and from other financial service providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from nondepository financial service companies entering the mortgage market, such as insurance companies, securities companies and specialty finance companies.

We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the internet, and made it possible for nondepository institutions to offer products and services that traditionally have been provided by banks. Competition for deposits and the origination of loans could limit our growth in the future.

Lending Activities

Residential Mortgage Loans. The largest segment of our loan portfolio is mortgage loans to enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the owner. At June 30, 2011, residential mortgage loans were $68.3 million, or 32.7%, of our total loan portfolio, consisting of $15.1 million and $53.2 million of fixed-rate and adjustable rate loans, respectively. We offer fixed-rate residential mortgage loans with terms up to 30 years and adjustable-rate residential mortgage loans with terms up to 30 years. Generally, our fixed-rate loans conform to Fannie Mae and Freddie Mac underwriting guidelines and are originated with the intention to sell. Our adjustable-rate mortgage loans generally adjust annually or every three years after an initial fixed period that ranges from three to seven years. Interest rates and payments on our adjustable-rate loans generally are adjusted to a rate equal to a specified percentage above the three year U.S. Treasury index. Depending on the loan type, the maximum amount by which the interest rate may be increased or decreased is generally 2% per adjustment period and the lifetime interest rate caps range from 5% to 6% over the initial interest rate of the loan. Our adjustable rate loans generally have prepayment penalties.

Borrower demand for adjustable-rate compared to fixed-rate loans is a function of the level of interest rates, the expectations of changes in the level of interest rates, and the difference between the interest rates and loan fees offered for fixed-rate mortgage loans as compared to the interest rates and loan fees for adjustable-rate loans. The relative amount of fixed-rate and adjustable-rate mortgage loans that can be originated at any time is largely determined by the demand for each in a competitive environment. The loan fees, interest rates and other provisions of mortgage loans are determined by us on the basis of our own pricing criteria and competitive market conditions.

While residential mortgage loans are normally originated with up to 30-year terms, such loans typically remain outstanding for substantially shorter periods because borrowers often prepay their loans in full either upon sale of the property pledged as security or upon refinancing the original loan. Therefore, average loan maturity is a function of, among other factors, the level of purchase and sale activity in the real estate market, prevailing interest rates and the interest rates payable on outstanding loans. Additionally, our current practice is generally to (1) sell to the secondary market newly originated 15-year or longer term conforming fixed-rate residential mortgage loans, and (2) to hold in our portfolio nonconforming loans, shorter-term fixed-rate loans and adjustable-rate loans. Generally, conforming fixed-rate loans are sold to third parties with servicing released. Wellesley Bank’s portfolio lending generally consists of conforming and non-conforming adjustable-rate loans for owner-occupied and investor properties with loan-to-value ratios of up to 80%. Mortgage amortizations range from 15 to 30 years. We do not portfolio “interest only” mortgage loans on one-to-four family residential properties nor do we offer loans that provide for negative amortization of principal such as “option ARM” loans where the borrower can pay less than the interest owed on their loan. Additionally, we generally do not offer “subprime loans” (loans that are made with low down payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies or borrower with questionable repayment capacity) or “Alt-A” loans (loans to borrowers having less than full documentation).

We will make loans with loan-to-value ratios up to 90% (95% for first time home buyers only); however, we generally require private mortgage insurance for loans with a loan-to-value ratio over 90%. We generally require all properties securing mortgage loans in excess of $250,000 to be appraised by a licensed real estate appraiser. We generally require title insurance on all first mortgage loans. Exceptions to these lending policies are based on an evaluation of credit risk related to the borrower and the size of the loan. Borrowers must obtain hazard insurance, and flood insurance is required for loans on properties located in a flood zone.

In an effort to provide financing for first-time buyers, we offer adjustable- and fixed-rate loan programs. We offer mortgage loans through this program to qualified individuals and originate the loans using modified underwriting guidelines, reduced interest rates and loan conditions and reduced closing costs.

34

Commercial Real Estate Loans. We also offer fixed- and adjustable-rate mortgage loans secured by commercial real estate, including loans secured by multi-family real estate. At June 30, 2011, commercial real estate loans were $65.7 million, or 31.4%, of our total loan portfolio, inclusive of $3.7 million in multi-family real estate loans. The commercial real estate loan portfolio consisted of $10.8 million fixed-rate loans and $54.9 million adjustable rate loans at June 30, 2011. We currently target new individual commercial real estate loan and multi-family originations to small- and mid-size owner occupants and investors in our market area between $1.0 million and $4.0 million, which is our current internal limit on loans to one borrower. Due to loan amortizations and lower than targeted size originations, the average size for loans in this portfolio was $750,000 at June 30, 2011. Our commercial real estate and multi-family loans are generally secured by properties used for business purposes such as office buildings, warehouses, retail facilities and apartment buildings. In addition to originating these loans, we also participate in commercial real estate loans with other financial institutions located primarily in Massachusetts.

We originate fixed- and adjustable-rate commercial real estate and multi-family loans for terms up to 25 years. Interest rates and payments on our adjustable-rate loans adjust every three, five or seven years and generally are adjusted to a rate equal to a specified percentage above the corresponding Federal Home Loan Bank Classic Advance borrowing rate. Most of our adjustable-rate commercial real estate and multi-family loans adjust every five years and amortize over a 25 year term. Since 2010, all commercial real estate and multi-family loan originations are generally subject to an interest rate floor. Loan amounts do not exceed 80% of the property’s appraised value at the time the loan is originated.

At June 30, 2011, our largest commercial real estate loan was for $3.9 million and was secured by a commercial research and development building located in Massachusetts outside of our primary market area. At June 30, 2011, our largest multi-family real estate loan was for $2.9 million and was secured by several income producing properties in Massachusetts outside of our primary market. Both of these loans were performing according to their original repayment terms at June 30, 2011.

At June 30, 2011, loan participations purchased totaled $325,000. The properties securing these loans are located entirely in Massachusetts. Our underwriting practices with respect to loan participations generally do not differ from loans that we originate.

Construction Loans. At June 30, 2011, construction loans were $36.7 million, or 17.6%, of our total loan portfolio. We primarily originate construction loans to contractors and builders, and to a lesser extent individuals, to finance the construction of residential dwellings. We also make construction loans for commercial development projects, including small industrial buildings and retail and office buildings. Our construction loans generally are fixed-rate interest-only loans that provide for the payment of interest only during the construction phase, which usually ranges from 12 to 24 months. The interest rates on our construction loans generally give consideration to the prime rate as published in the Wall Street Journal and market conditions. At the end of the construction phase, the loan may be paid in full or converted to a permanent mortgage loan. Construction loans generally can be made with a maximum loan to value ratio of 80% of the appraised market value estimated upon completion of the project. As appropriate to the underwriting and appraisal process, a “discounted cash flow analysis” is utilized. Before making a commitment to fund a construction loan, we generally require an appraisal of the property by an independent licensed appraiser. We also will require an inspection of the property before disbursement of funds during the term of the construction loan. Our construction loans do not provide for interest payments to be funded by interest reserves.

We lend to experienced local builders and our construction loans are primarily secured by properties located with a 15 mile radius of Wellesley, Massachusetts. Our loan policy dictates a minimum equity contribution by the borrower of 20% and an end loan-to-value ratio not greater than 80%. All borrowers are underwritten and evaluated for credit worthiness based on past experience, debt service ability, net worth analysis including available liquidity, and other credit factors. We require personal guarantees on all construction loans. Advances are only made following an inspection of the property confirming completion of the required progress on the project and an update to the title completed by a bank approved attorney.

Most of our loans for the construction of residential properties are for residences being built that have not been sold prior to commencement of construction (speculative loans). At June 30, 2011, our construction loan portfolio consisted of $23.8 million, or 11.4%, of our total loan portfolio in loans that were secured by residential real estate speculative loan projects, $4.9 million, or 2.4%, of our loan portfolio in loans that were secured by owner-occupied residential real estate, and $8.0 million, or 3.8%, of our loan portfolio in loans that were secured by commercial real estate speculative loan projects.

At June 30, 2011, our largest outstanding construction loan relationship was for a speculative project aggregating $3.4 million, substantially all of which was outstanding. This project is secured by two high-end residential homes located in Massachusetts outside of our primary market area. This relationship was performing according to its original repayment terms at June 30, 2011.

Commercial Business Loans. We make commercial business loans primarily in our market area to a variety of professionals, sole proprietorships and small businesses. At June 30, 2011, commercial business loans were $15.2 million, or 7.3% of our total loan portfolio. Commercial lending products include term loans, revolving lines of credit and equipment loans. Commercial

35

business loans and lines of credit are made with either variable or fixed rates of interest. Variable rates are based on the prime rate as published in The Wall Street Journal, plus a margin. Fixed-rate business loans are generally indexed to a corresponding U.S. Treasury rate, plus a margin. Commercial business loans typically have shorter maturity terms and higher interest spreads than real estate loans, but generally involve more credit risk because of the type and nature of the collateral. We are focusing our efforts on small- to medium-sized, privately-held companies with local or regional businesses that operate in our market area. In addition, commercial business loans are generally made only to existing customers having a business or individual deposit account and new borrowers are expected to establish appropriate deposit relationships with Wellesley Bank if not already a depositor.

When making commercial loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities of the borrower, the projected cash flows of the business and the value of the collateral, primarily accounts receivable, inventory and equipment, and are supported by personal guarantees. Depending on the collateral used to secure the loans, commercial business loans are made in amounts of up to 80% of the value of the collateral securing the loan. At June 30, 2011, our largest commercial business loan was a $1.7 million loan and our largest commercial line of credit was $1.2 million, none of which was outstanding at June 30, 2011. All of these loans are secured by assets of the respective borrowers and were performing according to their original terms at June 30, 2011.

Home Equity Lines of Credit. We offer home equity lines of credit, which are secured by owner-occupied residences. At June 30, 2011, home equity lines of credit were $22.6 million, or 10.8% of our total loan portfolio. Home equity lines of credit have adjustable rates of interest with ten-year draws amortized over 15 years that are indexed to the Prime Rate as published by The Wall Street Journal and generally are subject to an interest rate floor. Our home equity lines of credit generally have a monthly variable interest rate. We offer home equity lines of credit with cumulative loan-to-value ratios generally up to 85%, when taking into account both the balance of the home equity loans and first mortgage loan. We typically do not hold a first mortgage position on the homes that secure home equity lines of credit.

The procedures for underwriting home equity lines of credit include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral to the proposed loan amount. The procedures for underwriting residential mortgage loans apply equally to home equity loans.

Other Consumer Loans. We occasionally make fixed-rate second mortgage loans, automobile loans, loans secured by passbook or certificate accounts and overdraft loans. At June 30, 2011, other consumer loans were $429,000, or 0.2% of total loans.

The procedures for underwriting consumer loans include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount.

Loan Underwriting Risks.

Adjustable-Rate Loans. Due to historically low interest rate levels, borrowers generally have preferred fixed-rate loans in recent years. While we anticipate that our adjustable-rate loans will better offset the adverse effects on our net interest income of an increase in interest rates as compared to fixed-rate mortgages, the increased mortgage payments required of adjustable-rate loans in a rising interest rate environment could cause an increase in delinquencies and defaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate mortgage loans help make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits.

Commercial Real Estate Loans. Loans secured by commercial real estate, including multi-family real estate, generally have larger balances and involve a greater degree of risk than residential mortgage loans. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors, where applicable, to provide annual financial statements on commercial real estate loans. In reaching a decision on whether to make a commercial real estate loan, we consider the net operating income of the property, the borrower’s expertise, credit history, profitability and the value of the underlying property. We require an environmental survey for commercial real estate loans.

36

Construction Loans. Construction financing is considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction or development and the estimated cost (including interest) of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, we may be required to advance funds beyond the amount originally committed to permit completion of the development. If the estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the loan, with a project having a value which is insufficient to assure full repayment. As a result of the foregoing, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of the borrower or guarantor to repay principal and interest. If we are forced to foreclose on a project before or at completion due to a default, there can be no assurance that we will be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs.

Commercial Business Loans. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may depend substantially on the success of the business itself. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value.

Consumer Loans. Consumer loans may entail greater risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly. In such cases, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency often does not warrant further substantial collection efforts against the borrower. In addition, consumer loan collections depend on the borrower’s continuing financial stability, and therefore are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

Loan Originations, Purchases and Sales. Loan originations come from a number of sources. The primary source of loan originations are our in-house loan originators, and to a lesser extent, local mortgage brokers, advertising and referrals from customers. We occasionally purchase commercial real estate loans or participation interests in commercial real estate loans.

Additionally, our current practice is generally (1) to sell to the secondary market newly originated 15-year or longer term conforming fixed-rate residential mortgage loans, and (2) to hold in our portfolio nonconforming loans, shorter-term fixed-rate loans and adjustable-rate loans. Our decision to sell loans is based on prevailing market interest rate conditions and interest rate risk management. Generally, loans are sold to third parties with servicing released. In addition, we sell participation interests in commercial real estate loans to local financial institutions, primarily the portion of loans that exceed our borrowing limits or are in an amount that is considered prudent in concert with recognition of credit risk.

For the six months ended June 30, 2011 and year ended December 31, 2010, we originated $41.4 million and $74.1 million of total loans, and sold $2.1 million and $6.3 million of loans all of which were residential mortgage loans. At June 30, 2011, we had no loans sold with recourse.

Loan Approval Procedures and Authority. Our lending activities follow written, nondiscriminatory, underwriting standards and loan origination procedures established by our board of directors and management. Our board of directors has granted loan approval authority to certain loan officers up to $500,000. All loans in excess of $500,000 also require the President and Chief Executive Officer’s approval. Loans in excess of $1.5 million must be authorized by a member of the Security Committee of the Board of Directors.

Loans-to-One Borrower Limit and Loan Category Concentration. The maximum amount that we may lend to one borrower and the borrower’s related entities is generally limited, by statute, to 20% of our capital, which is defined under Massachusetts law as the sum of our capital stock, surplus account and undivided profits. At June 30, 2011, our regulatory limit on loans-to-one borrower was $4.2 million. At that date, our largest lending relationship consisted of commercial construction loans totaling $3.9 million and was secured by a commercial research and development building. This loan was performing in accordance with its original repayment terms at June 30, 2011. As a result of the offering, our regulatory loans-to-one borrower limit will increase, and we expect to increase our internal loans-to-one borrower limit.

Loan Commitments. We issue commitments for fixed- and adjustable-rate mortgage loans conditioned upon the occurrence of certain events. Commitments to originate mortgage loans are legally binding agreements to lend to our customers. Generally, our loan commitments expire after 60 days.

37

Investment Activities

We have legal authority to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises and municipal governments, deposits at the Federal Home Loan Bank of Boston, certificates of deposit of federally insured institutions, investment grade corporate bonds and investment grade marketable equity securities. We also are required to maintain an investment in Federal Home Loan Bank of Boston stock. While we have the authority under applicable law to invest in derivative securities, we had no investments in derivative securities through June 30, 2011.

At June 30, 2011, our investment portfolio consisted primarily of residential mortgage-backed securities issued by U.S. government agencies and government-sponsored enterprises and state and municipal bonds.

Our investment objectives are to provide and maintain liquidity, to establish an acceptable level of interest rate and credit risk, to provide an alternate source of low-risk investments when demand for loans is weak and to generate a favorable return. Our board of directors has the overall responsibility for the investment portfolio, including approval of our investment policy. Management, working with Wellesley Investment Partners, LLC, a wholly-owned subsidiary of Wellesley Bank and a registered investment advisor, is responsible for the day-to-day management of the investment portfolio. The board of directors reviews the status of the portfolio on a monthly basis. The Asset/Liability Committee, which meets on a quarterly basis, reviews an in-depth analysis of the portfolio including performance risk, credit risk and interest rate risk.

Deposit Activities and Other Sources of Funds

General. Deposits, borrowings and loan repayments are the major sources of our funds for lending and other investment purposes. Scheduled loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and money market conditions.

Deposit Accounts. Deposits are attracted, by advertising and through our website, from within our market area through the offering of a broad selection of deposit instruments, including noninterest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts and certificates of deposit. We do not utilize brokered deposits. In addition to accounts for individuals, we also offer several commercial checking accounts designed for the businesses operating in our market area and strongly encourage commercial borrowers to utilize our commercial business deposit products.

Deposit account terms vary according to the minimum balance required, the time periods the funds must remain on deposit and the interest rate, among other factors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, our liquidity needs, profitability to us, and customer preferences and concerns. We generally review our deposit mix and pricing on a weekly basis. Our deposit pricing strategy has generally been to offer competitive rates and to offer periodically special rates in order to attract deposits of a specific type or term.

Business Banking and Cash Management Services. We also offer a variety of deposit accounts designed for the businesses operating in our market area. Our business banking deposit products include a commercial checking account and checking accounts specifically designed for small businesses. We also offer remote capture products for business customers to meet their online banking needs. Additionally, we offer sweep accounts and money market accounts for businesses. We are seeking to increase our commercial deposits through the offering of these types of cash management products.

Borrowings. We may utilize advances from the Federal Home Loan Bank of Boston to supplement our supply of investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit for its member financial institutions. As a member, we are required to own capital stock in the Federal Home Loan Bank and are authorized to apply for advances on the security of such stock and certain of our whole first mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the Federal Home Loan Bank’s assessment of the institution’s creditworthiness. At June 30, 2011, we had the ability to borrow a total of $27.7 million from the Federal Home Loan Bank of Boston of which $7.5 million was outstanding. At June 30, 2011, we also had an available line of credit of $1.3 million with the Federal Home Loan Bank of Boston at an interest rate that adjusts daily. We had no overnight advances with the Federal Home Loan Bank on this date. All of our borrowings from the Federal Home Loan Bank are secured by a blanket lien on residential real estate.

The Co-operative Central Bank borrowings for liquidity purposes are available to all cooperative member banks. Loan advances will generally be made on an unsecured basis provided that the aggregate loan balance is less than 5% of total deposits of

38

the member bank; the member bank’s primary capital ratio is in excess of 5%; the member bank meets the required CAMELS rating; and the quarterly and year-to-date net income before extraordinary items is positive. At June 30, 2011, we had $11.4 million of borrowing capacity with the Co-operative Central Bank, none of which was outstanding.

Securities sold under agreements to repurchase are customer deposits that are invested overnight in mortgage-related securities. The customers, predominantly commercial customers, set a predetermined balance and deposits in excess of that amount are transferred into the repurchase account from each customer’s checking account. The next banking day, the funds are recredited to their individual checking account along with interest earned at market rates. These types of accounts are often referred to as sweep accounts. See “Management’s Discussions and Analysis of Financial Condition and Results of Operations—Comparison of Financial Condition at June 30, 2011 and December 31, 2010 and 2009—Borrowings.”

Financial Services

Our wholly-owned subsidiary, Wellesley Investment Partners, LLC, is a registered investment advisor and offers customers a range of nondeposit products, including mutual funds, stocks, bonds, and exchange traded funds through a third-party registered broker-dealer. The third-party registered broker-dealer also acts as custodian for the customers’ funds. We receive a fee for our investment services based on account values. Investment management fees totaled $52,000, $71,000, and $43,000 during the six months ended June 30, 2011 and the years ended December 31, 2010 and 2009, respectively.

Properties

At June 30, 2011, we conducted business through our executive office and two full service branch offices located in Wellesley, Massachusetts. We own our Central Street branch office. We lease our Church Street executive office (subject to a renewable lease that expires in 2018) and our Linden Street branch office (subject to a renewable lease that expires in 2012). At June 30, 2011, the total net book value of our land, buildings, furniture, fixtures and equipment was $795,000.

Personnel

As of June 30, 2011, we had 27 full-time and five part-time employees, none of whom is represented by a collective bargaining unit. We believe our relationship with our employees is good.

Legal Proceedings

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.

Subsidiaries

Wellesley Bancorp currently has no subsidiaries. The following are descriptions of Wellesley Bank’s wholly-owned subsidiaries:

Wellesley Investment Partners, LLC. Wellesley Investment Partners, LLC, established in 2007, is a Massachusetts limited liability company that offers customers a range of nondeposit investment products, including mutual funds and equities, through a third-party registered broker-dealer. Wellesley Investment Partners is a registered investment advisor.

Wellesley Securities Corporation. Wellesley Securities Corporation, established in 1992, is a Massachusetts corporation that engages in buying, selling and holding securities on its own behalf. As a Massachusetts securities corporation, the income earned on Wellesley Securities Corporation’s investment securities is subject to a lower state tax rate than that assessed on income earned on investment securities maintained at Wellesley Bank. At June 30, 2011, Wellesley Securities Corporation has total assets of $6.9 million and total equity of $6.3 million.

Central Linden LLC. Organized in 2010, Central Linden LLC is a Massachusetts limited liability company formed for the purpose of holding, managing and selling foreclosed real estate. Central Linden is currently inactive and at June 30, 2011 had no assets and no equity.

39

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The objective of this section is to help potential investors understand our views on our results of operations and financial condition. You should read this discussion in conjunction with the consolidated financial statements and the notes to consolidated financial statements that appear at the end of this prospectus.

Overview

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. Other sources of income include earnings from customer service fees (mostly from service charges on deposit accounts), bank-owned life insurance, fees from investment management services and gains on the sale of securities.

Provision for Loan Losses. The allowance for loan losses is maintained at a level representing management’s best estimate of inherent losses in the loan portfolio, based upon management’s evaluation of the portfolio’s collectibility. The allowance is established through the provision for loan losses, which is charged against income. Charge-offs, if any, are charged to the allowance. Subsequent recoveries, if any, are credited to the allowance. Allocation of the allowance may be made for specific loans or polls of loans, but the entire allowance is available for the entire loan portfolio.

Expenses. The noninterest expenses we incur in operating our business consist of salaries and employee benefits, occupancy and equipment, data processing, federal deposit insurance and other general and administrative expenses. Following the offering, our noninterest expenses are likely to increase as a result of operating as a public company. These additional expenses will consist primarily of legal and accounting fees, expenses of stockholder communications and meetings and stock exchange listing fees.

Salaries and employee benefits consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, retirement plans and other employee benefits. Following the offering, we will recognize additional annual employee compensation expenses stemming from the adoption of new equity benefit plans. We cannot determine the actual amount of these new stock-related compensation and benefit expenses at this time because applicable accounting practices require that they be based on the fair market value of the shares of common stock or related stock options at specific points in the future. For an illustration of these expenses, see “Pro Forma Data.”

Occupancy and equipment expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities. Depreciation of premises and equipment is computed using a straight-line method based on the estimated useful lives of the related assets, which range from 3 to 40 years, or the expected lease terms, if shorter. Data processing expenses are the fees we pay to third parties for the use of their software and for processing customer information, deposits and loans.

Federal deposit insurance premiums are payments we make to the Federal Deposit Insurance Corporation for insurance of our deposit accounts.

Our contribution to the charitable foundation will be an additional operating expense that will reduce net income during the quarter in which the contribution to the foundation is made. The contribution to the foundation will result in a $979,000 and $1.3 million after-tax expense at the minimum and maximum of the offering range, respectively. Any expense resulting from the contribution to the foundation will not be a recurring expense. See “Pro Forma Data” for a detailed analysis of the cost of the contribution to the foundation.

Other expenses include expenses for professional services, advertising, office supplies, postage, telephone, insurance and other miscellaneous operating expenses.

Business Strategy

Our primary objective is to operate and grow a profitable community-oriented financial institution serving customers in our primary market area. We have sought to achieve this through the adoption of a business strategy designed to maintain a strong capital position and high asset quality. Our operating strategy includes the following:

Increasing our deposit market share within Wellesley, Massachusetts and the surrounding communities. Since its inception in 1911, Wellesley Bank has primarily served the town of Wellesley, Massachusetts and the immediate surrounding communities. Despite considerable competition from larger financial institutions with greater resources than Wellesley Bank, we have made

40

significant progress in recent years to increase our market presence in the town of Wellesley. Our deposits have increased $84.6 million, or 58.8%, from $143.8 million at December 31, 2006 to $228.4 million at June 30, 2011 and at June 30, 2010 we had 12.71% of the deposits in the town of Wellesley, which represented the third largest market share out of twelve financial institutions with branches in the town of Wellesley. We believe the Wellesley market area will continue to provide us opportunities for growth, and we intend to continue to increase our market share in the town of Wellesley through the opening of our third Wellesley branch office in the first quarter of 2012.

Continuing to emphasize our commercial real estate, construction and commercial business loans, as well as increasing our commercial business depository relationships in our market area. We have worked to increase our commercial relationships by diversifying our loan portfolio beyond residential mortgage loans and offering business deposit and checking products. Since December 31, 2006, our commercial real estate, construction and commercial business loan portfolio has increased $47.0 million, or 66.5%, and at June 30, 2011 was 56.3% of our total loan portfolio. In connection with the increase in our commercial business loan portfolio, we also have focused on providing a full banking relationship and as a result experienced an increase in our business deposit and checking accounts. Since December 31, 2006, our business deposit and checking accounts increased $16.3 million, or 93.7%, and at June 30, 2011 represented 14.8% of our total deposits.

With the additional capital raised in the offering, we expect to continue to pursue the larger lending relationships associated with commercial real estate and construction lending. In addition, we will continue to expand and develop our business deposit and checking products to better serve our commercial customers. We believe our current staff of experienced commercial lenders is capable of managing these increasing commercial and construction relationships and do not expect to hire any additional commercial lending staff in the near future.

Increasing our residential mortgage lending in our market area. We believe there are significant opportunities to increase our residential mortgage lending in our market area. The town of Wellesley and its surrounding communities has a sound economy and has not been as negatively affected by the recent recession as other regions of the United States. As a result, the demand for residential mortgage loans in our market area, in particular larger “jumbo” loans, has not been significantly impacted by the downturn in the economy. In order to take advantage of these opportunities, after the offering we expect to hire an additional residential mortgage lender to complement our existing residential mortgage lending operations and expect to increase our larger residential mortgage relationships.

Continuing conservative underwriting practices while maintaining a high quality loan portfolio. We believe that strong asset quality is a key to long-term financial success. We have sought to maintain a high level of asset quality and moderate credit risk by using conservative underwriting standards and by diligent monitoring and collection efforts. Although nonperforming loans increased from $2.0 million at December 31, 2008 to $3.5 million at June 30, 2011, at June 30, 2011, nonperforming loans were 1.7% of the total loan portfolio and 1.3% of total assets. Although we intend to increase our commercial real estate, construction and commercial business lending, we intend to continue our philosophy of managing large loan exposures through conservative loan underwriting and credit administration standards.

Seeking to enhance fee income by growing investment advisory services. Our profits rely heavily on the spread between the interest earned on loans and securities and interest paid on deposits and borrowings. In order to decrease our reliance on net interest income, we have pursued initiatives to increase noninterest income. In particular, we offer a full array of investment services for individuals and small businesses, including full access to financial market instruments, such as mutual funds and equities, through our wholly-owned subsidiary, Wellesley Investment Partners, LLC, a registered investment advisor. Investment management fees relating to our investment advisory services totaled $52,000, $71,000 and $43,000 for the six months ended June 30, 2011 and years ended December 31, 2010 and 2009, respectively. After the offering, we intend to continue to enhance our fee income through Wellesley Investment Partners by engaging at least one additional sales-focused investment or financial planning professional.

Emphasizing lower cost core deposits to maintain low funding costs. We seek to increase net interest income by controlling costs of funding. Over the past several years, we have sought to reduce our dependence on traditional higher cost certificates of deposits in favor of stable lower cost demand deposits. We have utilized additional product offerings, technology and a focus on customer service in working toward this goal. In addition, we intend to seek demand deposits by growing commercial banking relationships. Core deposits (demand, NOW, money market and savings accounts) comprised 49.8% of our total deposits at June 30, 2011, as compared to 38.4% at December 31, 2008.

Critical Accounting Policies

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies.

41

Allowance for Loan Losses. The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among the material estimates required to establish the allowance are: the likelihood of default; the loss exposure at default; the amount and timing of future cash flows on impaired loans; the value of collateral; and the determination of loss factors to be applied to the various elements of the portfolio. All of these estimates are susceptible to significant change. Management reviews the level of the allowance at least quarterly and establishes the provision for loan losses based upon an evaluation of the portfolio, past loss experience, current economic conditions and other factors related to the collectibility of the loan portfolio. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic or other conditions differ substantially from the assumptions used in making the evaluation. In addition, the Federal Deposit Insurance Corporation and Massachusetts Commissioner of Banks, as an integral part of their examination process, periodically review our allowance for loan losses and may require us to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings. See notes 1 and 6 of the notes to consolidated financial statements included in this prospectus.

Deferred Tax Assets. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. Management reviews deferred tax assets on a quarterly basis to identify any uncertainties pertaining to realization of such assets. In determining whether a valuation allowance is required against deferred tax assets, management assesses historical and forecasted operating results, including a review of eligible carryforward periods, tax planning opportunities and other relevant considerations. We believe the accounting estimate related to the valuation allowance is a critical estimate because the underlying assumptions can change from period to period. For example, tax law changes or variances in future projected operating performance could result in a change in the valuation allowance. Should actual factors and conditions differ materially from those used by management, the actual realization of net deferred tax assets could differ materially from the amounts recorded in the financial statements. If we were not able to realize all or part of our deferred tax assets in the future, an adjustment to the related valuation allowance would be charged to income tax expense in the period such determination was made and could have a negative impact on earnings. In addition, if actual factors and conditions differ materially from those used by management, we could incur penalties and interest imposed by taxing authorities.

Comparison of Financial Condition at June 30, 2011 and December 31, 2010 and 2009

General. Total assets increased $2.8 million, or 1.1%, from $262.0 million at December 31, 2010 to $264.8 million at June 30, 2011. Total assets increased primarily due to an increase in investment securities of $2.9 million, or 11.5%, and an increase in total net loans of $1.3 million, or 0.6%, partially offset by a decrease in funds held in certificates of deposit of $1.7 million, or 50.7%. Funds received from maturing certificates of deposit were invested in securities during the 2011 six-month period.

Total assets increased $16.2 million, or 6.6%, from $245.8 million at December 31, 2009 to $262.0 million at December 31, 2010 due primarily to an increase of $19.7 million, or 10.7%, in total net loans partially offset by a decrease in investment securities of $2.6 million, or 9.3%. The increase in loans during 2010 was due primarily to increases in construction lending and home equity lines of credit.

Loans. Total net loans increased by $1.3 million, or 0.6%, from $204.1 million at December 31, 2010 to $205.4 million at June 30, 2011. The increase in loans was due primarily to an increase of $11.8 million, or 21.9%, in commercial real estate loans. These increases were partially offset by a decrease of $4.6 million, or 6.3%, in residential mortgage loans and a decrease of $4.0 million, or 9.9%, in construction loans. The increase in commercial real estate loans reflects our continued emphasis on originating these types of loans and increased loan demand. The decrease in construction lending was due to pay-offs of existing projects.

Total loans, net, increased by $19.7 million, or 10.7%, from $184.4 million at December 31, 2009 to $204.1 million at December 31, 2010. The increase in loans was due primarily to an increase of $9.5 million, or 30.6%, in construction loans, an increase of $6.4 million, or 35.9%, in home equity lines of credit and an increase of $4.0 million, or 8.0%, in commercial real estate loans. These increases reflect our continued emphasis on originating these types of loans and increased loan demand.

42

The following table sets forth the composition of our loan portfolio at the dates indicated.

	At June 30, 2011					At December 31,
						2010					2009
(Dollars in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Real estate loans:
Residential mortgage	$	68,329		32.70	%	$	72,890		35.18	%	$	73,443		39.32	%
Commercial real estate		65,720		31.44			53,907		26.02			49,911		26.72
Construction		36,746		17.58			40,770		19.68			31,223		16.71
Total real estate loans		170,795		81.72			167,567		80.88			154,577		82.75
Commercial loans		15,208		7.28			14,905		7.20			13,880		7.43
Consumer loans:
Home equity lines of credit		22,554		10.79			24,198		11.68			17,805		9.53
Other		429		0.21			503		0.24			539		0.29
Total loans		208,986		100.00	%		207,173		100.00	%		186,801		100.00	%
Less:
Deferred loan origination fees, net		371					366					371
Allowance for loan losses		3,229					2,690					2,060
Net loans	$	205,386				$	204,117				$	184,370
	At December 31,
	2008					2007					2006
(Dollars in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Real estate loans:
Residential mortgage	$	84,784		43.02	%	$	78,336		44.49	%	$	70,106		45.60	%
Commercial real estate		42,282		21.46			42,895		24.36			36,986		24.06
Construction		40,115		20.36			29,498		16.75			23,746		15.45
Total real estate loans		167,181		84.84			150,729		85.60			130,838		85.11
Commercial loans		12,564		6.37			11,400		6.47			9,355		6.08
Consumer loans:
Home equity lines of credit		16,745		8.50			13,362		7.59			13,226		8.60
Other		578		0.29			599		0.34			324		0.21
Total loans		197,068		100.00	%		176,090		100.00	%		153,743		100.00	%
Less:
Deferred loan origination fees, net		382					344					313
Allowance for loan losses		2,047					1,605					1,418
Net loans	$	194,639				$	174,141				$	152,012

Loan Maturity. The following tables set forth certain information at June 30, 2011 and December 31, 2010 regarding scheduled contractual maturities during the periods indicated. The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less. The amounts shown below exclude net deferred loan fees.

	June 30, 2011
(In thousands)	Residential Mortgage Loans		Commercial Real Estate Loans		Construction Loans		Commercial Loans		Consumer Loans		Total Loans
Amounts due in:
One year or less	$	222	$	6,154	$	30,535	$	8,200	$	698	$	45,809
More than one year to five years		520		604		6,211		4,245		8,008		19,588
More than five years		67,587		58,962		—		2,763		14,277		143,589
Total	$	68,329	$	65,720	$	36,746	$	15,208	$	22,983	$	208,986

43

	December 31, 2010
(In thousands)	Residential Mortgage Loans		Commercial Real Estate Loans		Construction Loans		Commercial Loans		Consumer Loans		Total Loans
Amounts due in:
One year or less	$	226	$	5,587	$	32,331	$	6,829	$	687	$	45,660
More than one year to five years		554		494		6,107		4,816		8,280		20,251
More than five years		72,110		47,826		2,332		3,260		15,734		141,262
Total	$	72,890	$	53,907	$	40,770	$	14,905	$	24,701	$	207,173

Fixed vs. Adjustable Rate Loans. The following table sets forth the dollar amount of all scheduled maturities of loans at June 30, 2011 that are due after June 30, 2012 and have either fixed interest rates or adjustable interest rates. The amounts shown below exclude net deferred loan fees.

(In thousands)	Fixed Rates		Floating  or Adjustable Rates		Total
Real estate loans:
Residential mortgage	$	14,912	$	53,195	$	68,107
Commercial real estate		4,824		54,742		59,566
Construction		6,211		—		6,211
Commercial loans		6,451		557		7,008
Consumer loans		294		21,991		22,285
Total	$	32,692	$	130,485	$	163,177

The following table sets forth the dollar amount of all scheduled maturities of loans at December 31, 2010 that are due after December 31, 2011 and have either fixed interest rates or adjustable interest rates. The amounts shown below exclude net deferred loan fees.

(In thousands)	Fixed Rates		Floating  or Adjustable Rates		Total
Real estate loans:
Residential mortgage	$	17,487	$	55,177	$	72,664
Commercial real estate		4,976		43,344		48,320
Construction		7,184		1,255		8,439
Commercial loans		7,507		569		8,076
Consumer loans		137		23,877		24,014
Total	$	37,291	$	124,222	$	161,513

Securities. Our securities portfolio consists primarily of residential mortgage-backed securities issued by U.S. government agencies and government sponsored enterprises and state and municipal bonds. Securities increased by $2.9 million, or 11.5%, in the six months ended June 30, 2011 due to the purchase of additional securities resulting from excess liquidity. Securities decreased by $2.6 million, or 9.3%, in the year ended December 31, 2010 primarily due to the sales and maturities of debt securities and paydowns of mortgage-backed securities.

44

The following table sets forth the amortized cost and fair values of our securities portfolio at the dates indicated.

	At June 30, 2011				At December 31,
					2010				2009				2008
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Residential mortgage-backed securities:
Government National Mortgage Association	$	12,257	$	12,441	$	11,418	$	11,614	$	10,162	$	10,295	$	8,903	$	8,972
Government-sponsored enterprises		4,222		4,399		4,503		4,671		7,884		8,147		6,405		6,523
SBA asset-backed securities		2,557		2,596		2,700		2,711		960		1,014		1,040		1,070
State and municipal bonds		8,031		8,246		5,606		5,713		4,450		4,571		3,791		3,834
Government-sponsored enterprise obligations		393		413		422		443		3,148		3,154		7,770		7,895
Corporate bonds		406		411		401		413		994		1,007		1,377		1,311
Total debt securities		27,866		28,506		25,050		25,565		27,598		28,188		29,286		29,605
Equity securities		—		—		—		—		—		—		49		16
Total securities available for sale	$	27,866	$	28,506	$	25,050	$	25,565	$	27,598	$	28,188	$	29,335	$	29,621

At June 30, 2011, we had no investments in a single company or entity (other than the U.S. Government or an agency of the U.S. Government), including both debt and equity securities, that had an aggregate book value in excess of 10% of equity.

The following table sets forth the stated maturities and weighted average yields of investment securities at June 30, 2011. Weighted average yields on tax-exempt securities are not presented on a tax equivalent basis. Certain mortgage related securities have adjustable interest rates and will reprice annually within the various maturity ranges. These repricing schedules are not reflected in the table below.

	One Year or Less					More than One Year to Five Years					More than Five Years to Ten Years					More than Ten Years					Total
(Dollars in thousands)	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield
Residential mortgage-backed securities:
Government National Mortgage Association	$	—		—	%	$	—		—	%	$	—		—	%	$	12,257		1.93	%	$	12,257		1.93	%
Government-sponsored enterprises		—		—			—		—			—		—			4,222		3.47			4,222		3.47
SBA asset-backed securities		—		—			—		—			272		2.20			2,285		4.02			2,557		3.83
State and municipal bonds		300		0.97			2,346		2.72			1,305		3.88			4,080		3.99			8,031		3.49
Government-sponsored enterprise obligations		—		—			203		1.52			190		5.45			—		—			393		3.41
Corporate bonds		—		—			101		6.95			305		3.46			—		—			406		4.33
Total debt securities	$	300		0.97	%	$	2,650		2.79	%	$	2,072		3.74	%	$	22,844		2.79	%	$	27,866		2.84	%

Deposits. Our primary sources of funds are retail deposit accounts held primarily by individuals and businesses within our market area. Deposits increased $6.2 million, or 2.8%, in the six months ended June 30, 2011 primarily due to an increase in money market accounts of $3.6 million, or 8.4%, and regular savings accounts of $1.3 million, or 5.4%. Deposits increased $26.5 million, or 13.6%, during the year ended December 31, 2010 due primarily to increases in noninterest bearing demand deposits of $4.5 million, or 20.6%, and money market accounts of $8.1 million, or 23.4%. Both periods reflect our continuing efforts to decrease our reliance on certificates of deposit as well as customers shifting their certificates of deposit to more liquid deposit accounts due to low interest rates. In addition, increases in our core deposits during both periods reflects our success in expanding services to small business customers.

45

The following table sets forth the balances of our deposit products at the dates indicated.

	At June 30, 2011					At December 31,
						2010					2009					2008
(Dollars In thousands)	Total		Percent			Total		Percent			Total		Percent			Total		Percent
Noninterest-bearing demand deposits	$	27,021		11.83	%	$	26,512		11.93	%	$	21,987		11.24	%	$	20,357		10.84	%
Interest bearing deposits:
NOW		15,591		6.83			14,914		6.71			12,508		6.39			13,524		7.20
Money market		46,129		20.20			42,563		19.16			34,493		17.63			27,383		14.58
Regular and other savings		24,916		10.91			23,642		10.64			15,786		8.07			10,847		5.78
Term certificates of deposit		114,718		50.23			114,509		51.55			110,851		56.67			115,693		61.60
Total	$	228,375		100.00	%	$	222,140		100.00	%	$	195,625		100.00	%	$	187,804		100.00	%

The following table indicates the amount of jumbo certificates of deposit by time remaining until maturity at June 30, 2011 and December 31, 2010. Jumbo certificates of deposit require minimum deposits of $100,000.

Maturity Period at June 30, 2011	Jumbo Certificates  of Deposits
	(In thousands)
Three months or less	$	12,485
Over three through six months		16,445
Over six through twelve months		17,424
Over twelve months		27,003
Total	$	73,357

Maturity Period at December 31, 2010	Jumbo Certificates  of Deposits
	(In thousands)
Three months or less	$	9,684
Over three through six months		17,921
Over six through twelve months		24,619
Over twelve months		20,124
Total	$	72,348

Borrowings. We use borrowings from a variety of sources to supplement our supply of funds for loans and securities.

Long-term debt, consisting entirely of Federal Home Loan Bank advances, decreased $5.0 million, or 40.0%, for the six months ended June 30, 2011 and decreased $12.0 million, or 49.0%, during the year ended December 31, 2010. Decreases in Federal Home Loan Bank advances in both periods were primarily due to our success in shifting our funding mix to lower-cost deposits, including noninterest bearing demand deposit accounts for small business customers.

Short-term borrowings, consisting entirely of securities sold under agreements to repurchase, increased $619,000, or 10.7%, for the six months ended June 30, 2011 and decreased $466,000, or 7.4%, during the year ended December 31, 2010.

46

The following table sets forth selected information regarding borrowings for the periods indicated.

	At or For the Six Months Ended June 30,						At or For the Year Ended December 31,
(Dollars in thousands)	2011			2010			2010			2009			2008
Short-term borrowings:
Balance at end of the period	$	6,423		$	7,369		$	5,804		$	6,270		$	4,394
Average balance during the period		6,957			6,569			7,113			6,403			4,815
Maximum outstanding at any month end during the period		7,441			7,369			8,123			8,042			5,999
Weighted average interest rate at end of the period		1.14	%		1.73	%		1.24	%		1.74	%		2.72	%
Weighted average interest rate during the period		1.16			1.23			1.24			1.51			2.35
Long-term debt:
Balance at end of the period	$	7,500		$	16,500		$	12,500		$	24,500		$	30,000
Average balance during the period		12,002			21,318			18,204			25,384			30,782
Maximum outstanding at any month end during the period		12,500			24,500			24,500			29,500			32,700
Weighted average interest rate at end of the period		3.65	%		4.49	%		4.40	%		4.71	%		4.77	%
Weighted average interest rate during the period		4.40			4.78			4.62			5.07			4.99

Comparison of Operating Results for the Six Months Ended June 30, 2011 and 2010

Overview. Net income was $958,000 for the six months ended June 30, 2011 compared to $1.0 million for the six months ended June 30, 2010. The $54,000, or 5.3%, decrease was primarily due to an increase in noninterest expenses of $304,000 and an increase in the provision for loan losses of $100,000, which was partially offset by an increase of $284,000 in net interest income during the period.

Net Interest Income. Net interest income for the six months ended June 30, 2011 totaled $5.0 million compared to $4.7 million for the six months ended June 30, 2010, an increase of $284,000, or 6.0%. The increase in net interest income was primarily due to a decrease in interest expense. Interest expense decreased $360,000, or 20.1%, during this period primarily due to a 43.7% decrease in the average balance of Federal Home Loan Bank advances and a decrease in the average rates paid on interest bearing liabilities, in particular certificates of deposit. The average rates paid on deposits and borrowings decreased by 41 basis points in the 2011 period. The decrease in the cost of deposits and borrowings was primarily due to a declining long-term interest rate environment and our continued focus on reducing deposit interest rates by not aggressively competing for certificates of deposit. Federal Home Loan Bank advances decreased as we paid off advances upon maturity during the 2011 period. We experienced an increase in the average balance of deposits of 9.9% in the 2011 period.

Interest income remained steady at $6.5 million for both the 2011 and 2010 six-month periods. The average balance of interest earning assets increased 6.0%, partially offset by a decrease in the average rate earned on these assets of 37 basis points. Interest income from loans increased $113,000, or 1.9%, due to a 7.6% increase in the average balance of loans, partially offset by a decrease in the average rate paid on loans of 33 basis points. Interest income from taxable investment securities decreased $170,000, or 37.4%, due to a decrease in the average rate paid on taxable investment securities of 123 basis points and a 11.2% decrease in the average balance of taxable investment securities.

47

Average Balances and Yields. The following table presents 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. Average balances have been calculated using daily balances. Loan fees are included in interest income on loans and are insignificant. Yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant.

	For the Six Months Ended June 30,
	2011								2010
(Dollars in thousands)	Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate (1)			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate (1)
Interest-earning assets:
Short-term investments	$	16,278		$	18		0.22	%	$	8,093		$	8		0.20	%
Certificates of deposit		2,127			20		1.90			10,253			80		1.57
Debt securities:
Taxable		19,495			285		2.95			21,948			455		4.18
Tax-exempt		6,643			109		3.31			4,495			81		3.63
Total loans		209,000			6,015		5.80			194,267			5,902		6.13
FHLB stock		1,930			3		0.31			1,930			—		—
Total interest-earning assets		255,473			6,450		5.09			240,986			6,526		5.46
Allowance for loan losses		(2,913	)							(2,238	)
Total interest-earning assets less allowance for loan losses		252,560								238,748
Noninterest-earning assets		12,422								12,050
Total assets	$	264,982							$	250,798
Interest-bearing liabilities:
Regular savings accounts	$	24,074			68		0.57	%	$	18,536			54		0.59	%
NOW checking accounts		13,536			13		0.19			11,646			10		0.17
Money market accounts		44,374			138		0.63			36,843			142		0.78
Certificates of deposit		113,534			906		1.61			110,875			1,036		1.88
Total interest-bearing deposits		195,518			1,125		1.16			177,900			1,242		1.41
Short-term borrowings		6,957			40		1.16			6,569			40		1.23
Long-term debt		12,002			262		4.40			21,318			505		4.78
Total interest-bearing liabilities		214,477			1,427		1.34			205,787			1,787		1.75
Noninterest-bearing demand deposits		28,212								24,867
Other noninterest-bearing liabilities		1,461								1,405
Total liabilities		244,150								232,059
Equity		20,832								18,739
Total liabilities and equity	$	264,982							$	250,798
Net interest income				$	5,023							$	4,739
Net interest rate spread (2)							3.75	%							3.71	%
Net interest-earning assets (3)	$	40,996							$	35,199
Net interest margin (4)							3.96	%							3.97	%
Average total interest-earning assets to average total interest-bearing liabilities		119.11	%							117.10	%

(1) Ratios for the six month periods have been annualized.

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

(3) Represent total average interest-earning assets less total average interest-bearing liabilities.

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

48

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our 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 total increase (decrease) 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.

	Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010
	Increase (Decrease) Due to						Total Increase (Decrease)
(In thousands)	Volume			Rate
Interest-earning assets:
Short-term investments	$	9		$	1		$	10
Certificates of deposit		(74	)		14			(60	)
Debt securities:
Taxable		(60	)		(110	)		(170	)
Tax-exempt		36			(8	)		28
Total loans		434			(321	)		113
FHLB stock		—			3			3
Total interest-earning assets		345			(421	)		(76	)
Interest-bearing liabilities:
Regular savings		16			(2	)		14
NOW checking		2			1			3
Money market		26			(30	)		(4	)
Certificates of deposit		24			(154	)		(130	)
Total interest-bearing deposits		68			(185	)		(117	)
Short-term borrowings		2			(2	)		—
Long-term debt		(200	)		(43	)		(243	)
Total interest-bearing liabilities		(130	)		(230	)		(360	)
Increase (decrease) in net interest income	$	475		$	(191	)	$	284

Provision for Loan Losses. The provision for loan losses was $600,000 for the six months ended June 30, 2011 compared to $500,000 for the six months ended June 30, 2010. The increase in the provision was due primarily to increases in nonperforming assets.

An analysis of the changes in the allowance for loan losses is presented under “—Risk Management—Analysis and Determination of the Allowance for Loan Losses.”

Noninterest Income. Noninterest income increased $18,000 to $229,000 during the six months ended June 30, 2011 from $211,000 for the six months ended June 30, 2010. The increase was primarily due to an increase in wealth management fees during the 2011 period resulting from our continuing efforts to increase our investment advisory services.

Noninterest Expense. Noninterest expense increased $304,000 to $3.2 million during the six months ended June 30, 2011 from $2.8 million for the six months ended June 30, 2010. Factors that contributed to the increase in noninterest expense during the 2011 period were increased salaries and employee benefits resulting from increased pension expense, increased occupancy and equipment resulting from costs relating to our new executive office, and increased Federal Deposit Insurance Corporation assessments.

Income Taxes. Income tax expense decreased $48,000 for the six months ended June 30, 2011 compared to the six months ended June 30, 2010 primarily due to decreased income before income taxes and an increase in tax exempt income. The effective tax rate for the 2011 six-month period was 36.1% as compared with 36.8% for the 2010 six-month period.

Comparison of Operating Results for the Years ended December 31, 2010 and 2009

Overview. Net income was $2.2 million for the year ended December 31, 2011 as compared to $1.1 million for the year ended December 31, 2010, an increase of $1.1 million, or 88.0%. The increase was primarily due to a decrease of $2.2 million in interest expense partially offset by an increase of $800,000 in the provision for loan losses and an increase of $561,000 in the income tax expense.

49

Net Interest Income. Net interest income for the year ended December 31, 2010 totaled $10.0 million compared to $7.8 million for the year ended December 31, 2009, an increase of $2.1 million, or 27.2%. The increase in net interest income was primarily due to a decrease in interest expense. Interest expense decreased $2.2 million, or 39.2%, during this period primarily due to a decrease in the average rates paid on interest-bearing liabilities, in particular certificates of deposit. The average rates paid on deposits and borrowings decreased by 103 basis points in 2010. The decrease in the cost of deposits was primarily due to a declining interest rate environment for certificates of deposit and our continued focus on reducing deposit interest rates by not aggressively competing for certificates of deposit, the average balance of which decreased 8.6% in 2010. We experienced an increase in the average balance of deposits of 2.6% in 2010, while the average balance of Federal Home Loan Bank advances decreased by 28.3% over the same period.

Interest income decreased slightly to $13.3 million for 2010 from $13.4 million for 2009. The average balance of interest earning assets increased 0.5%, offset by a decrease in the average rate earned on these assets of five basis points. Interest income from loans increased $260,000, or 2.2%, due to a 3.9% increase in the average balance of loans, partially offset by a decrease in the average rate paid on loans of 10 basis points. Interest income from taxable investment securities decreased $293,000, or 25.8%, due to a decrease in the average rate paid on taxable investment securities of 70 basis points and a 12.8% decrease in the average balance of taxable investment securities.

Average Balances and Yields

Average Balances and Yields. The following table presents 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. Average balances have been calculated using daily balances. Loan fees are included in interest income on loans and are insignificant. Yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant.

	For the Years Ended December 31,
	2010								2009								2008
	Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate
(Dollars in thousands)
Interest-earning assets:
Short-term investments	$	9,411		$	19		0.20	%	$	11,993		$	21		0.18	%	$	3,057		$	67		2.19	%
Certificates of deposit		8,181			135		1.65			9,381			159		1.69			263			13		4.94
Debt securities:
Taxable		21,175			841		3.97			24,274			1,134		4.67			16,466			924		5.61
Tax-exempt		4,767			166		3.48			4,141			152		3.67			3,914			148		3.78
Total loans		199,483			12,176		6.10			192,069			11,916		6.20			185,862			12,326		6.63
FHLB stock		1,930			—		—			1,930			—		—			1,930			75		3.89
Total interest-earning assets		244,947			13,337		5.44			243,788			13,382		5.49			211,492			13,553		6.41
Allowance for loan losses		(2,459	)							(2,174	)							(2,174	)
Total interest-earning assets less allowance for loan losses		242,488								241,614								209,318
Noninterest-earning assets		12,342								10,301								15,514
Total assets	$	254,830							$	251,915							$	224,832

50

(Dollars in thousands)	For the Years Ended December 31,
	2010								2009								2008
	Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate
Interest-bearing liabilities:
Regular savings accounts	$	19,854			118		0.59	%	$	12,059			69		0.57	%	$	11,624			136		1.17	%
NOW checking accounts		12,180			21		0.17			12,186			21		0.17			10,381			33		0.32
Money market accounts		37,928			299		0.79			30,451			306		1.00			24,553			464		1.89
Certificates of deposit		112,825			2,012		1.78			123,426			3,773		3.06			105,043			4,457		4.24
Total interest-bearing deposits		182,787			2,450		1.34			178,122			4,169		2.34			151,601			5,090		3.36
Short-term borrowings		7,113			88		1.24			6,403			97		1.51			4,815			113		2.35
Long-term debt		18,204			841		4.62			25,384			1,287		5.07			30,782			1,536		4.99
Total interest-bearing liabilities		208,104			3,379		1.62			209,909			5,553		2.65			187,198			6,739		3.60
Noninterest-bearing demand deposits		25,970								20,811								18,797
Other noninterest-bearing liabilities		1,477								3,577								2,172
Total liabilities		235,551								234,297								208,167
Equity		19,279								17,618								16,665
Total liabilities and equity	$	254,830							$	251,915							$	224,832
Net interest income				$	9,958							$	7,829							$	6,814
Net interest rate spread (1)							3.82	%							2.84	%							2.81	%
Net interest-earning assets (2)	$	36,843							$	33,879							$	24,294
Net interest margin (3)							4.07	%							3.21	%							3.22	%
Average total interest-earning assets to average total interest-bearing liabilities		117.70	%							116.14	%							112.98	%

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

(2) Represent total average interest-earning assets less total average interest-bearing liabilities.

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

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our 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 total increase (decrease) 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.

	Year Ended December 31, 2010 Compared to December 31, 2009									Year Ended December 31, 2009 Compared to December 31, 2008
	Increase (Decrease) Due to						Total  Increase (Decrease)			Increase (Decrease) Due to					Total  Increase (Decrease)
(Dollars in thousands)	Volume			Rate						Volume		Rate
Interest-earning assets:
Short-term investments	$	(5	)	$	3		$	(2	)	$	59	$	(105	)	$	(46	)
Certificates of deposit		(20	)		(4	)		(24	)		160		(14	)		146
Debt securities:
Taxable		(252	)		(41	)		(293	)		382		(172	)		210
Tax-exempt		22			(8	)		14			8		(4	)		4
Total loans		455			(195	)		260			403		(813	)		(410	)
FHLB stock		—			—			—			—		(75	)		(75	)
Total interest-earning assets		200			(245	)		(45	)		1,012		(1,183	)		(171	)

51

	Year Ended December 31, 2010 Compared to December 31, 2009									Year Ended December 31, 2009 Compared to December 31, 2008
	Increase (Decrease) Due to						Total  Increase (Decrease)			Increase (Decrease) Due to						Total  Increase (Decrease)
(Dollars in thousands)	Volume			Rate						Volume			Rate
Interest-bearing liabilities:
Regular savings		46			3			49			5			(72	)		(67	)
NOW checking		—			—			—			5			(17	)		(12	)
Money market		67			(74	)		(7	)		94			(252	)		(158	)
Certificates of deposit		(359	)		(1,402	)		(1,761	)		696			(1,380	)		(684	)
Total interest-bearing deposits		(246	)		(1,473	)		(1,719	)		800			(1,721	)		(921	)
Short-term borrowings		10			(19	)		(9	)		31			(47	)		(16	)
Long-term debt		(317	)		(129	)		(446	)		(273	)		24			(249	)
Total interest-bearing liabilities		(553	)		(1,621	)		(2,174	)		558			(1,744	)		(1,186	)
Increase in net interest income	$	753		$	1,376		$	2,129		$	454		$	561		$	1,015

Provision for Loan Losses. During the year ended December 31, 2010, we recorded a $1.1 million provision to the allowance for loan losses as compared to a provision of $300,000 for the year ended December 31, 2010. The 2010 provision reflects net loan charge-offs totaling $470,000, increased nonperforming loans and criticized and classified assets, the continuing change in the mix of the portfolio and adverse economic conditions. From December 31, 2009 to December 31, 2010, nonperforming loans increased from $705,000 to $2.0 million and criticized and classified assets increased from $4.8 million to $7.9 million. Commercial real estate, construction, commercial business loans and home equity lines of credit, which bear higher risk than our residential mortgage loans, increased from 60.4% of our total loans at December 31, 2009 to 64.6% of our total loans at December 31, 2010.

An analysis of the changes in the allowance for loan losses is presented under “—Risk Management—Analysis and Determination of the Allowance for Loan Losses.”

Noninterest Income. Noninterest income increased $294,000 to $552,000 during the year ended December 31, 2010 from $258,000 for the year ended December 31, 2009. In 2010, we recorded a gain on the sale of securities of $82,000 compared to a loss on the sale of securities of $131,000 in 2009. Income from customer service fees increased $28,000, or 20.1%, primarily due to changes in our fee structure, and wealth management fees increased $28,000, or 65.1%, resulting from our continuing efforts to increase our investment advisory services.

Noninterest Expense. Noninterest expense increased $54,000 to $6.0 million during the year ended December 31, 2010 from $5.9 million for the year ended December 31, 2009. The increase was primarily due to an increase of $230,000, or 30.7%, in other general and administrative expenses resulting from increases in advertising and professional fees. In addition, contribution expense increased $71,000, or 591.7%, due to an expansion of our community giving associated with our 100^th anniversary, and occupancy and equipment expense increased $61,000, or 8.9%, resulting from increases in certain maintenance and service contracts. Partially offsetting these increases were decreases in salaries and employee benefits due to the reduction in benefit costs associated with the retirement of the former Chief Executive Officer and a decrease in FDIC insurance. In the second quarter of 2009, the FDIC announced a special assessment of five basis points on each insured institution’s assets minus Tier-1 capital. This special assessment was recognized and paid in September 2009.

Income Taxes. Income tax expense increased $561,000 for the year ended December 31, 2010 compared to the year ended December 31, 2009 primarily due to increased income before income taxes. The effective tax rate for 2010 was 36.9% compared with 37.8% for 2009.

Risk Management

Overview. Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are credit risk, interest rate risk, market risk and liquidity risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or security when it is due. Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates. Market risk arises from fluctuations in interest rates that may result in changes in the values of financial instruments, such as available-for-sale securities that are recorded at fair value. Liquidity risk is the possible inability to fund obligations to depositors, lenders or borrowers when due. Other risks that we face are operational risks and reputation risk. Operational risks include risks related to fraud, regulatory compliance, processing errors, technology and disaster recovery. Reputation risk is the risk that negative publicity or press, whether true or not, could cause a decline in our customer base or revenue.

52

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. This strategy also emphasizes conservative loan-to-value ratios and guarantees of construction and commercial real estate loans by parties with substantial net worth. In addition, during each calendar year, we engage an outside loan review firm to perform a thorough review of our loan portfolio. This review involves analyzing all large borrowing relationships, delinquency trends and loan collateral valuation in order to identify impaired loans. We do not portfolio “interest only” mortgage loans on one-to-four family residential properties nor do we offer loans that provide for negative amortization of principal such as “option ARM” loans where the borrower can pay less than the interest owed on their loan. Additionally, we generally do not offer “subprime loans” (loans that are made with low down payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies or borrower with questionable repayment capacity) or “Alt-A” loans (loans to borrowers having less than full documentation).

When a borrower fails to make a required loan payment, management takes a number of steps to have the borrower cure the delinquency and restore the loan to current status. Management makes initial contact with the borrower when the loan becomes 15 days past due. If payment is not then received by the 30^th day of delinquency, additional letters and phone calls generally are made, and a plan of collection is pursued for each individual loan. A particular plan of collection may lead to foreclosure, the timing of which depends on the prospects for the borrower bringing the loan current, the financial strength and commitment of any guarantors, the type and value of the collateral securing the loan and other factors. 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. We may consider loan workout arrangements with certain borrowers under certain circumstances, as well as the sale of the nonperforming loans.

Management informs the board of directors on a monthly basis of the amount of loans delinquent more than 30 days. Management also provides detailed reporting of loans greater than 90 days delinquent, all loans in foreclosure and all foreclosed and repossessed property that we own.

Analysis of Nonperforming and Classified Assets. We consider foreclosed assets, loans that are maintained on a nonaccrual basis and loans that are past 90 days or more and still accruing to be nonperforming assets. Loans are generally placed on nonaccrual status when they are classified as impaired or when they become 90 days or more past due. Loans are classified as impaired when, based on current information and events, it is probable that Wellesley Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. At the time a loan is placed on nonaccrual status, the accrual of interest ceases and interest income previously accrued on such loans is reversed against current period interest income. Payments received on a nonaccrual loan are first applied to the outstanding principal balance when collectibility of principal is in doubt.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until it is sold. When property is acquired it is recorded at the lower of its cost or fair market value at the date of foreclosure. Any holding costs and declines in fair value after acquisition of the property result in charges against income.

Troubled debt restructurings occur when we grant borrowers concessions that we would not otherwise grant but for economic or legal reasons pertaining to the borrower’s financial difficulties. These concessions may include, but are not limited to, modifications of the terms of the debt, the transfer of assets or the issuance of an equity interest by the borrower to satisfy all or part of the debt, or the substitution or addition of borrower(s). We will not return a troubled debt restructuring to accrual status until the borrower has demonstrated the ability to make principal and interest payments under the restructured terms for at least six consecutive months.

53

The following table provides information with respect to our nonperforming assets, including troubled debt restructurings, at the dates indicated. We did not have any accruing loans past due 90 days or more at the dates presented.

(Dollars in thousands)	At June  30, 2011			At December 31,
				2010			2009			2008			2007		2006
Nonaccrual loans:
Real estate loans:
Residential mortgage (1)	$	1,893		$	2,008		$	705		$	549		$	—	$	—
Commercial real estate		1,425			—			—			239			—		—
Construction		—			—			—			1,170			—		—
Commercial		125			—			—			—			—		—
Consumer		19			—			—			—			—		—
Total nonaccrual loans		3,462			2,008			705			1,958			—		—
Total nonperforming loans		3,462			2,008			705			1,958			—		—
Real estate owned		—			—			—			—			—		—
Total nonperforming assets		3,462			2,008			705			1,958			—		—
Accruing troubled debt restructurings (2)		1,115			1,124			221			—			—		—
Total nonperforming assets and accruing troubled debt restructurings	$	4,577		$	3,132		$	926		$	1,958		$	—	$	—
Total nonperforming loans to total loans		1.66	%		0.97	%		0.38	%		0.99	%		—		—
Total nonperforming loans to total assets		1.31	%		0.77	%		0.29	%		0.81	%		—		—
Total nonperforming assets and accruing troubled debt restructurings to total assets		1.73	%		1.20	%		0.38	%		0.81	%		—		—

(1) At June 30, 2011, the amount includes approximately $658,000 of nonaccrual loans to be sold in the three months ended September 30, 2011.

(2) We did not have any nonaccruing troubled debt restructurings at the dates indicated.

Interest income that would have been recorded for the six months ended June 30, 2011 and the year ended December 31, 2010 had nonaccruing loans been current according to their original terms amounted to $57,000 and $56,000, respectively. Income related to nonaccrual loans included in interest income for the six months ended June 30, 2011 and the year ended December 31, 2010 amounted to $66,000 and $30,000, respectively.

Interest income that would have been recorded for the six months ended June 30, 2011 and the year ended December 31, 2010 had accruing troubled debt restructurings been current according to their original terms amounted to $28,623 and $76,034, respectively. Income related to accruing troubled debt restructurings included in interest income for the six months ended June 30, 2011 and the year ended December 31, 2010 amounted to $27,657 and $53,580, respectively.

Total nonperforming loans increased from December 31, 2010 to June 30, 2011 primarily due to the addition of two commercial accounts that demonstrated credit weakness. Total nonperforming loans increased from December 31, 2009 to December 31, 2010 primarily due to management’s decision to place certain accounts with weak payment history on nonaccrual status. Accruing troubled debt restructurings increased during 2010 primarily due to the return to accruing status of a restructured residential loan.

Federal regulations require us to review and classify assets on a regular basis. In addition, the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks have the authority to identify problem assets and, if appropriate, require them to be classified. There are three classifications for problem assets: substandard, doubtful and loss. “Substandard assets” must have one or more defined weaknesses and are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. “Doubtful assets” have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified as “loss” is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. When management classifies an asset as substandard or doubtful, a specific allowance for loan losses may be established. If management classifies an asset as loss, an amount equal to 100% of the portion of the asset classified loss is charged to the allowance for loan losses. The regulations also provide for a “special mention” category, described as assets that do not currently expose Wellesley Bank to a sufficient degree of risk to warrant classification but do possess credit deficiencies or potential weaknesses deserving Wellesley Bank’s close attention. Wellesley Bank also utilizes an eleven grade internal loan rating system for commercial real estate, construction and commercial loans. See note 6 to the notes to the consolidated financial statements.

54

The following table shows the aggregate amounts of our regulatory criticized and classified assets at the dates indicated.

	At June  30, 2011		At December 31,
(In thousands)			2010		2009		2008
Special mention assets	$	8,754	$	7,626	$	9,329	$	—
Substandard assets		1,108		3,624		1,116		711
Doubtful assets		479		—		—		1,409
Loss assets		—		—		—		—
Total	$	10,341	$	11,250	$	10,445	$	2,120

None of the special mention assets at June 30, 2011 and December 31, 2010 were nonaccrual. Substandard assets at June 30, 2011 and December 31, 2010 included nonaccrual loans of $1.1 million and $0, respectively. Doubtful assets in the table above consist solely of nonaccrual loans. The increase in loans classified as special mention in the 2011 six-month period was due in part to the timeliness of the borrower’s financial information and general economic conditions.

Other than as disclosed in the above tables, there are no other loans where management has serious doubts about the ability of the borrowers to comply with the present loan repayment terms.

Delinquencies. The following table provides information about delinquencies in our loan portfolio at the dates indicated.

	At June 30, 2011						At December 31, 2010
(In thousands)	30 – 59  Days Past Due		60 – 90  Days Past Due		> 90 Days		30 – 59  Days Past Due		60 – 89  Days Past Due		> 90 Days
Real estate loans:
Residential mortgage	$	1,292	$	—	$	533	$	394	$	902	$	2,008
Commercial real estate		1,210		—		1,069		1,176		—		—
Construction		—		—		—		—		—		—
Commercial loans		—		—		—		90		—		—
Consumer loans		57		14		19		879		19		—
Total	$	2,559	$	14	$	1,621	$	2,539	$	921	$	2,008

	At December 31,
	2009						2008
(In thousands)	30 – 59  Days Past Due		60 – 90  Days Past Due		> 90 Days		30 – 59  Days Past Due		60 – 89  Days Past Due		> 90 Days
Real estate loans:
Residential mortgage	$	1,896	$	576	$	705	$	502	$	162	$	548
Commercial real estate		605		—		—		—		—		239
Construction		—		1,098		—		1,170		—		—
Commercial loans		165		—		—		—		—		—
Consumer loans		26		—		—		5		1		1
Total	$	2,692	$	1,674	$	705	$	1,677	$	163	$	788

The decrease in delinquencies in the 2011 six-month period is attributable primarily to improvement in customer payment patterns.

Analysis and Determination of the Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.

Our methodology for assessing the appropriateness of the allowance for loan losses consists of: (1) an allocated component related to impaired loans; (2) a general component related to the remainder of the loan portfolio, and (3) an unallocated component related to overall uncertainties that could affect management’s estimate of probable losses. Although we determine the amount of each element of the allowance separately, the entire allowance for loan losses is available for the entire portfolio.

55

Allowance on Impaired Loans. The allocated component of the allowance for loan losses relates to loans that are individually evaluated and determined to be impaired. The allowance for each impaired loan is determined by either the present value of expected future cash flows or, if the loan is collateral dependent, by the fair value of the collateral less estimated costs to sell. We identify a loan as impaired when, based upon 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. Management evaluates loans other than smaller-balance homogeneous loans for impairment. If a loan is determined to be impaired, an individual loss assessment is performed to determine the probability of a loss and, if applicable, the estimated measurement of the loss. Smaller-balance homogeneous loans, such as residential real estate loans and consumer loans, are generally excluded from an individual impairment analysis and are collectively evaluated by management to estimate losses inherent in those loans. However, certain smaller-balance homogeneous loans will be individually evaluated for impairment when they reach nonperforming status or become subject to a restructuring agreement.

Allowance on the Remainder of the Loan Portfolio. The general component of the allowance for loan losses relates to loans that are not determined to be impaired. Management determines the appropriate loss factor for each group of loans with similar risk characteristics within the portfolio based on loss experience and qualitative and environmental factors for loans in each group. Loan categories will represent groups of loans with similar risk characteristics and may include types of loans categorized by product, large credit exposures, concentrations, loan grade, or any other characteristic that causes a loan’s risk profile to be similar to another. We consider qualitative or environmental factors that are likely to cause estimated credit losses associated with our existing portfolio to differ from historical loss experience including changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; changes in experience, ability and depth of loan management; changes in the volume and severity of past due loans, nonaccrual loans and adversely graded or classified loans; changes in the quality of the loan review system; changes in the value of underlying collateral for collateral dependent loans; the existence of or changes in concentrations of credit; changes in economic or business conditions; and the effect of competition, legal and regulatory requirements on estimated credit losses. Our qualitative and environmental factors are reviewed on a quarterly basis and our historical loss experience is reviewed annually to ensure they are reflective of current conditions in our loan portfolio and economy.

Unallocated Allowance. Management maintains an unallocated component within the allowance for loan losses to cover uncertainties that could affect our overall estimate of probable losses. This component recognizes the imprecision inherent in the assumptions used in the methodologies for estimating the allocated and general components of the allowance, and is generally not a significant component of the overall allowance.

We identify loans that may need to be charged-off as a loss by reviewing all impaired loans and related loss analyses. Loan losses are charged against the allowance when we believe the uncollectibility of the loan balance is confirmed. A borrower’s inability to make payments under the terms of the loan and a shortfall in collateral value would generally result in our charging off the loan to the extent of the loss deemed to be confirmed.

At June 30, 2011, our allowance for loan losses was $3.2 million, or 1.55% of loans receivable and 93.27% of nonperforming loans. At December 31, 2010, our allowance for loan losses was $2.7 million, or 1.30% of loans receivable and 133.97% of nonperforming loans. At December 31, 2009, our allowance for loan losses was $2.1 million, or 1.10% of loans receivable and 292.20% of nonperforming loans. Nonperforming loans at June 30, 2011 were $3.5 million, or 1.66% of loans receivable, compared to $2.0 million, or 0.97% of loans receivable, at December 31, 2010 and $705,000, or 0.38% of loans receivable, at December 31, 2009. The allowance for loan losses is maintained at a level that represents management’s best estimate of losses in the loan portfolio at the balance sheet date. However, there can be no assurance that the allowance for loan losses will be adequate to cover losses which may be realized in the future or that additional provisions for loan losses will not be required.

56

The following table sets forth the breakdown of the allowance for loan losses by loan category at the dates indicated.

									At December 31,
	At June 30, 2011								2010								2009
(Dollars in thousand)	Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans
Real estate loans:
Residential mortgage	$	500		15.48	%		32.70	%	$	319		11.86	%		35.18	%	$	367		17.82	%		39.32	%
Commercial real estate		1,022		31.65			31.44			356		13.23			26.02			307		14.90			27.72
Construction		824		25.52			17.58			1,258		46.77			19.68			802		38.93			16.71
Commercial loans		441		13.66			7.28			384		14.28			7.20			379		18.40			7.43
Consumer loans		129		4.00			11.00			100		3.21			11.92			69		3.35			9.82
Total allocated allowance		2,916		90.31			100.00			2,417		89.85			100.00			1,924		93.40			100.00
Unallocated		313		9.69			—			273		10.15			—			136		6.60			—
Total	$	3,229		100.00	%		100.00	%	$	2,690		100.00	%		100.00	%	$	2,060		100.00	%		100.00	%

	At December 31,
	2008								2007								2006
(Dollars in thousand)	Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans			Amount		% of Allowance to Total Allowance			% of Loans in Category to Total Loans
Real estate loans:
Residential mortgage	$	301		14.70	%		43.02	%	$	212		13.21	%		44.49	%	$	178		12.55	%		45.60	%
Commercial real estate		363		17.73			21.46			405		25.23			24.36			359		25.32			24.06
Construction		952		46.51			20.36			538		33.52			16.75			507		35.75			15.45
Commercial loans		342		16.71			6.37			394		24.55			6.47			322		22.71			6.08
Consumer loans		71		3.47			8.79			56		3.49			7.93			52		3.67			8.81
Total allocated allowance		2,029		99.12			100.00			1,605		100.00			100.00			1,418		100.00			100.00
Unallocated		18		0.88			—			—		—			—			—		—			—
Total	$	2,047		100.00	%		100.00	%	$	1,605		100.00	%		100.00	%	$	1,418		100.00	%		100.00	%

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, there can be no assurance that the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks, in reviewing our loan portfolio, will not require us to increase our allowance for loan losses based on judgments different from ours. 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 operation.

57

Analysis of Loan Loss Experience. The following table sets forth an analysis of the allowance for loan losses for the periods indicated.

	Six Months Ended June 30,						At or For the Years Ended December 31,
(Dollars in thousands)	2011			2010			2010			2009			2008			2007			2006
Balance at beginning of period	$	2,690		$	2,060		$	2,060		$	2,047		$	1,606		$	1,418		$	1,348
Provision for loan losses		600			500			1,100			300			445			260			70
Charge-offs:
Real estate loans:
Residential		61			—			140			261			—			—			—
Commercial		—			100			149			—			—			—			—
Construction		—			—			118			—			—			—			—
Commercial loans		—			—			60			28			4			72			—
Consumer loans		—			—			3			—			—			—			—
Total charge-offs		61			100			470			289			4			72			—
Recoveries		—			—			—			2			—			—			—
Net charge- offs		61			100			470			287			4			72			—
Allowance at end of period	$	3,229		$	2,460		$	2,690		$	2,060		$	2,047		$	1,606		$	1,418
Allowance for loan losses to nonperforming loans at end of period (1)		93.27	%		95.02	%		133.96	%		292.20	%		104.55	%		—			—
Allowance for loan losses to total loans at end of period		1.55	%		1.23	%		1.30	%		1.10	%		1.04	%		0.91	%		0.92	%
Net charge-offs to average loans outstanding during the period (2)		0.03	%		0.05	%		0.24	%		0.15	%		0.00	%		0.04	%		—

(1) There were no nonperforming loans at December 31, 2007 or 2006.

(2) There were no charge-offs during 2006 and $4,000 of charge-offs during 2008.

Interest Rate Risk Management. 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 adjustable-rate loans for retention in our loan portfolio, selling in the secondary market substantially all newly originated conforming fixed rate residential mortgage loans, promoting core deposit products and short-term time deposits, adjusting the maturities of borrowings and adjusting the investment portfolio mix and duration. We currently do not participate in hedging programs, interest rate swaps or other activities involving the use of derivative financial instruments.

We have an Asset/Liability Committee, which includes members of management, to communicate, coordinate and control all aspects involving 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.

Our goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest and net income.

Interest Rate Risk Analysis. We analyze our interest rate sensitivity position to manage the risk associated with interest rate movements through the use of interest income and equity simulations. 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 and the present value of our equity. Interest income and equity 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 and the present value of our equity under a range of assumptions. The numerous assumptions used in the

58

simulation process are reviewed by the Asset/Liability Committee on a yearly 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 table below sets forth an approximation of our exposure as a percentage of estimated net interest income for the next 12 month period using interest income and equity simulations. The simulations use projected repricing of assets and liabilities at June 30, 2011 on the basis of contractual maturities, anticipated repayments and scheduled rate adjustments. Prepayment rates can have a significant impact on the simulations. 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 would increase if prepayments accelerated. 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 Wellesley Bank at June 30, 2011 through June 30, 2012.

Basis Point (“bp”) Change in Rates	Net Interest Income
	Amount		Change			% Change
	(Dollars in thousands)
300	$	10,030	$	109			1.10	%
200		9,953		32			0.32
100		9,958		37			0.37
0		9,921		—			—
(100)		9,732		(189	)		(1.90	)

The following table reflects changes in the present value of equity for Wellesley Bank at June 30, 2011.

Basis Point (“bp”) Change in Rates	Present Value of Equity
	Amount		Change			% Change
	(Dollars in thousands)
300	$	28,009	$	(5,041	)		(15.25	)%
200		29,545		(3,505	)		(10.61	)
100		31,183		(1,867	)		(5.65	)
0		33,050		—			—
(100)		34,929		1,879			5.69

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

Management regularly adjusts our investments in liquid assets based upon an 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 interest-rate risk and investment policies.

Our most liquid assets are cash and cash equivalents, interest-bearing deposits in other banks, and corporate bonds. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At June 30, 2011, cash and cash equivalents totaled $18.6 million. Securities classified as available-for-sale, whose aggregate market value exceeds cost, provide additional sources of liquidity and had a market value of $21.6 million at June 30, 2011. In addition, at June 30, 2011, we had the ability to borrow a total of approximately $27.7 million in additional funds from the Federal Home Loan Bank of Boston. On June 30, 2011, we had $13.9 million of borrowings outstanding, including $7.5 million of Federal Home Loan Bank of Boston advances and $6.4 million of securities under agreements to repurchase. In addition, at June 30, 2011, we had the ability to borrow $11.4 million from the Co-operative Central Bank, none of which was outstanding at that date.

59

At June 30, 2011, we had $45.7 million in loan commitments outstanding, which included $41.6 million in available lines of credit and unadvanced funds on construction loans. Certificates of deposit due within one year of June 30, 2011 totaled $72.6 million, or 63% of certificates of deposit. The large percentage of certificates of deposit that mature within one year reflects customers’ hesitancy to invest their funds for long periods. If these maturing deposits are not renewed, we will be required to seek other sources of funds, including other certificates of deposit and borrowings. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit. Management believes, however, based on past experience that a significant portion of our certificates of deposit will be renewed. We have the ability to attract and retain deposits by adjusting the interest rates offered.

In addition, we believe that our branch network, which is presently comprised of two full-service retail banking offices located in our primary market area, and the general cash flows from our existing lending and investment activities, will afford us sufficient long-term liquidity.

The following table presents certain of our contractual obligations as of June 30, 2011 and December 31, 2010.

(In thousands)	June 30, 2011 – Payments Due by Period
	Total		Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years
Contractual Obligations:
Long-term debt obligations	$	7,500	$	—	$	4,000	$	3,500	$	—
Operating lease obligations		861		253		204		213		191
Total	$	8,361	$	253	$	4,204	$	3,713	$	191
(In thousands)	December 31, 2010 – Payments Due by Period
	Total		Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years
Contractual Obligations:
Long-term debt obligations	$	12,500	$	5,000	$	7,500	$	—	$	—
Operating lease obligations		464		325		139		—		—
Total	$	12,964	$	5,325	$	7,639	$	—	$	—

Financing and Investing Activities

Our primary investing activities are the origination of loans and the purchase of securities. Primary financing activities consist of transactions in deposit accounts and Federal Home Loan Bank borrowings. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us, local competitors, and other factors. Management generally manages the pricing of deposits to be competitive and to increase core deposit and customer relationships. Occasionally, management offers promotional rates on certain deposit products to attract deposits.

The following table presents our primary investing and financing activities during the periods indicated.

	Six Months Ended June  30,			Year Ended December 31,
(In thousands)	2011			2010			2009
Investing activities:
Loan originations (principal payments), net	$	1,690		$	20,857		$	(10,266	)
Proceeds from calls, maturities and principal repayments of securities available for sale		2,938			8,984			13,179
Proceeds from sales of securities available for sale		—			3,515			203
Purchases of securities available for sale		5,829			10,075			11,840
Financing activities:
Increase in deposits		6,235			26,515			7,820
Decrease in long-term debt		(5,000	)		(12,000	)		(5,500	)
Increase (decrease) in short-term borrowings		619			(466	)		1,876

60

Capital Management. We are subject to various regulatory capital requirements administered by the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks, 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 30, 2011, we exceeded all of our regulatory capital requirements. We are considered “well capitalized” under regulatory guidelines. See “Regulation and Supervision—Federal Regulations—Capital Requirements,” “Regulatory Capital Compliance” and note 12 of the notes to consolidated financial statements.

This offering is expected to increase our consolidated equity by $23.4 million, to $44.9 million at the maximum of the offering range. See “Capitalization.” Following completion of this offering, we also will manage our capital for maximum stockholder benefit. The capital from the offering will significantly increase our liquidity and capital resources. Over time, the initial level of liquidity will be reduced as net proceeds from the stock offering are used for general corporate purposes, including the funding of lending activities. Our financial condition and results of operations will be enhanced by the capital from the offering, resulting in increased interest-earning assets and net income. However, the large increase in equity resulting from the capital raised in the offering will, initially, have an adverse impact on our return on equity. Following the offering, we may use capital management tools such as cash dividends and common share repurchases. However, under Federal Deposit Insurance Corporation regulations, we will not be allowed to repurchase any shares during the first year following the offering, except that stock repurchases of no greater than 5% of outstanding capital stock may be made during this one-year period where compelling and valid business reasons are established to the satisfaction of the Federal Deposit Insurance Corporation.

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, 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 information about our loan commitments and unused lines of credit, see note 14 of the notes to consolidated financial statements.

For the six months ended June 30, 2011 and years ended December 31, 2010 and 2009, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

Impact of Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements, see note 1 of the notes to consolidated financial statements included in this prospectus.

Effect of Inflation and Changing Prices

The consolidated financial statements and related financial data presented in this prospectus have been prepared according to generally accepted accounting principles in the United States, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs and the effect that general inflation may have on both short-term and long-term interest rates. Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally have a more significant impact on a financial institution’s performance than do general levels of inflation. Although inflation expectations do affect interest rates, interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

61

Our Management

Board of Directors

The board of directors of Wellesley Bancorp, Inc. and Wellesley Bank are each comprised of nine persons who are elected for terms of three years, approximately one-third of whom are elected annually. The same individuals comprise the boards of directors of Wellesley Bancorp, Inc. and Wellesley Bank.

All of our directors are independent under the current listing standards of the Nasdaq Stock Market, except for Thomas J. Fontaine, who serves as President and Chief Executive Officer of Wellesley Bancorp, Inc. and Wellesley Bank, and Edwin G. Silver the former President and Chief Executive Officer of Wellesley Bank. Information regarding the directors is provided below. Unless otherwise stated, each person has held his or her current occupation for the last five years. Ages presented are as of June 30, 2011. The starting year of service as director relates to service on the board of directors of Wellesley Bank. Based on their respective experiences, qualifications, attributes and skills set forth below, the board of directors determined that each current director should serve as a director.

The following directors have terms ending in 2012:

C. Joseph Grignaffini is a licensed builder and the President and Treasurer of L. Grignaffini & Sons. Mr. Grignaffini also owns and manages commercial property. Age 76. Director since 1993.

Mr. Grignaffini’s background offers the board of directors substantial construction and development experience, specifically within the region in which Wellesley Bank conducts its business, and provides the board of directors with valuable insight regarding the local business and consumer environment. In addition, Mr. Grignaffini’s background provides the board of directors with critical experience in certain real estate matters, which are essential to the business of Wellesley Bank.

Hugh J. Kelley is a real estate appraiser in Wellesley, Massachusetts. Mr. Kelley conducts appraisals of residential real estate for relocation, estate, mortgages, and other purposes. Age 64. Director since 1989.

Mr. Kelley’s background provides the board of directors with critical experience in certain real estate matters, specifically within the region in which Wellesley Bank conducts its business, and provides the board of directors with valuable insight regarding the local business environment.

Tina L. Wang is a partner with the dental practice of Drs. Thiel, Rubin, Wang Inc. Mrs. Wang also serves on the Metropolitan District Dental Society’s peer review committee. Age 51. Director since 2008.

Ms. Wang has strong ties to the community, through her dental practice and provides the board of directors with opportunities to continue to serve the local community. She also is a strong advocate of Wellesley Bank through her civic and community involvement.

The following directors have terms ending in 2013:

Theodore F. Parker is the Clerk of Wellesley Bank and a real estate consultant and commercial property owner in Wellesley and the surrounding communities. Age 69. Director since 1989.

Mr. Parker’s extensive experience in the real estate industry and involvement in business and civic organizations in the communities in which Wellesley Bank serves affords the board of directors with valuable insight regarding the business and operations of Wellesley Bank.

Leslie B. Shea is a partner with the law firm of Wilder & Shea. Age 66. Director since 2003.

As a practicing attorney, Mr. Shea provides the board of directors with important knowledge and insight necessary to assess the legal issues inherent to the business of Wellesley Bank. In addition, Mr. Shea has strong ties to the community and provides the board of directors with opportunities to continue to serve the local community.

Robert L. Skolnick is the Treasurer of E.A. Davis & Company, Inc., a retail department store located in Wellesley, Massachusetts. Age 70. Director since 1998.

Mr. Skolnick’s background offers the board of directors substantial small company management experience, specifically within the region in which Wellesley Bank conducts its business, and provides the board with valuable insight regarding the local business and consumer environment. In addition, Mr. Skolnick offers the board significant business experience from a setting outside of the financial services industry.

62

The following directors have terms ending in 2014:

Thomas J. Fontaine has served as the President, Chief Executive Officer and Chairman of the Board of Wellesley Bank since November 2009. Mr. Fontaine previously served as President of Wellesley Bank from April 2006 to November 2009 and as Executive Vice President prior to April 2006. Mr. Fontaine also serves as our chief lending officer. Age 47. Director since 2006.

Mr. Fontaine’s extensive knowledge of Wellesley Bank’s operations, along with his former experience in the local banking industry and involvement in business and civic organizations in the communities that we serve, affords the board of directors with valuable insight regarding the business and operations of Wellesley Bank. Mr. Fontaine’s knowledge of all aspects of our business, combined with his success and strategic vision, position him well to continue to serve as our President, Chief Executive Officer and Chairman.

Nancy Marden Goodall is Vice President of Captain Marden’s Seafood, a wholesale seafood supplier, seafood store and restaurant based out of Wellesley, Massachusetts. Age 51. Director since 2011.

Ms. Goodall’s strong ties to the community provide the board of directors with valuable insight regarding the local business and consumer environment. She also is a strong advocate of Wellesley Bank through her civic and community involvement.

Edwin G. Silver served as Chief Executive Officer and Chairman of the Board of Wellesley Bank from January 2006 until his retirement in November 2009. Prior to January 2006, Mr. Silver also served as President of Wellesley Bank. Mr. Silver currently serves as Wellesley Bank’s Connection Club director. Age 66. Director since 2000.

Mr. Silver’s extensive knowledge of Wellesley Bank’s operations, along with his experience in the local banking industry and involvement in business and civic organizations in the communities that we serve, affords the board of directors with valuable insight regarding the business and operations of Wellesley Bank. In addition, Mr. Silver’s background provides the board of directors with critical experience in certain banking industry matters, which are essential to the business of Wellesley Bank.

Executive Officers

The executive officers of Wellesley Bancorp, Inc. and Wellesley Bank are elected annually by the board of directors and serve at the board’s discretion. The executive officers of Wellesley Bancorp and Wellesley Bank are:

Name	Position
Thomas J. Fontaine	President and Chief Executive Officer of both Wellesley Bancorp and Wellesley Bank
Gary P. Culyer	Chief Financial Officer and Treasurer of Wellesley Bancorp and Senior Vice President and Chief Financial Officer of Wellesley Bank
Eloise C. Thibault	Corporate Secretary of Wellesley Bancorp and Vice President and Treasurer of Wellesley Bank

Below is information regarding our other executive officers who are not also directors. Ages presented are as of June 30, 2011.

Gary P. Culyer has served as Senior Vice President and Chief Financial Officer of Wellesley Bank since August 2011. Prior to joining Wellesley Bank, Mr. Culyer served as Executive Vice President and Chief Financial Officer of Dedham Institution for Savings in Dedham, Massachusetts from January 1986 to February 2011. Mr. Culyer is a certified public accountant. Age 60.

Eloise C. Thibault has served as Vice President and Treasurer of Wellesley Bank since April 1990. Ms. Thibault also serves as the Human Resources Manager at Wellesley Bank. Age 54.

Board Leadership Structure and Board’s Role in Risk Oversight

Wellesley Bancorp’s board of directors endorses the view that one of its primary functions is to protect stockholders’ interests by providing independent oversight of management, including the Chief Executive Officer. However, the board does not believe that mandating a particular structure, such as a separate Chairman and Chief Executive Officer, is necessary to achieve effective oversight. The board of directors is currently comprised of nine directors, seven of whom are independent directors under the listing standards of the Nasdaq Stock Market. The Chairman of the Board has no greater nor lesser vote on matters considered by

63

the board than any other director, and does not vote on any related party transaction. All directors of Wellesley Bancorp, including the Chairman, are bound by fiduciary obligations, imposed by law, to serve the best interests of the stockholders. Accordingly, separating the offices of Chairman and Chief Executive Officer would not serve to enhance or diminish the fiduciary duties of any director of Wellesley Bancorp.

To further strengthen the regular oversight of the full board, various committees of Wellesley Bancorp’s board of directors are comprised of independent directors. The Compensation Committee of the board of Wellesley Bancorp consists solely of independent directors. The Compensation Committee reviews and evaluates the performance of all executive officers of Wellesley Bancorp, including the Chief Executive Officer and reports to the board of directors. In addition, the Audit Committee, which is comprised solely of independent directors, oversees Wellesley Bancorp’s financial practices, regulatory compliance, accounting procedures and financial reporting functions.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of risks Wellesley Bancorp faces, while the board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Senior management also attends board meetings and is available to address any questions or concerns raised by the board on risk management and any other matters.

Executive Compensation

Summary Compensation Table. The following information is furnished for the principal executive officer, and the only other most highly compensated executive officer of Wellesley Bank whose total compensation for the year ended December 31, 2010 exceeded $100,000. These individuals are referred to in this prospectus as “named executive officers.”

Name and Principal Position	Year		Salary			Bonus		Nonequity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation			Total
Thomas J. Fontaine     President and Chief Executive Officer		2010	$	250,165	(1)	$	21,710	$	—	$	—	$	98,666	(2)	$	370,541
Eloise C. Thibault     Vice President and Treasurer		2010		101,680			4,287		—		—		12,596			118,563

(1) Amount includes fees for service as Chairman of the Board of $16,461.

(2) Amount includes, but is not limited to, supplemental executive retirement plan contributions of $45,368 and employer contributions to the 401(k) plan of $25,725.

Employment Agreements and Severance Arrangements

Existing Employment Agreement. Wellesley Bank and Thomas J. Fontaine entered into an employment agreement on May 16, 2007. The term of the agreement runs for three years from the effective date of the agreement and automatically renews daily so that each day the term again becomes three years, unless either party provides notice to the other party of its intention for the term of the agreement not to renew. The employment agreement establishes a base salary and certain levels of incentive compensation and bonuses for Mr. Fontaine and provides for his participation in certain benefits arrangements and also provides for certain perquisites to be provided to him, including the use of a Wellesley Bank-owned automobile, to which we will transfer title to Mr. Fontaine, plus an amount to make him whole for any taxes due as a result of the transfer, upon his retirement or other termination of employment (other than if we terminate his employment for cause). Mr. Fontaine’s current annual base salary is $255,000. Under the employment agreement, we may terminate Mr. Fontaine’s employment for “cause” at any time upon 30 days notice in accordance with the terms of the agreement. For purposes of the employment agreement, the term “cause” includes, with respect to a termination on the part of the employer, (i) a material breach of the agreement, (ii) conduct that constitutes fraud, dishonesty, malfeasance or is otherwise inappropriate, (iii) a willful violation of banking rules or regulations, the intentional failure to perform his duties and a breach of fiduciary duty involving personal profit, (iv) conduct that results in a felony conviction and (v) conduct that results in his removal from his position with Wellesley Bank by a regulatory agency. If we terminate Mr. Fontaine’s employment for cause, we will have no further financial obligation to him except for the payment of any amounts which he has earned but which have not been paid as of the effective date of his termination and benefits accrued under certain employee benefit plans. We may also terminate Mr. Fontaine’s employment for any other reason that does not constitute cause upon 60-day’s notice. Mr. Fontaine may terminate his employment with Wellesley Bank for “cause” at any time without notice. For purposes of the employment agreement, the term “cause” includes, with respect to a termination on the part of the employee,

64

(i) a material diminution in duties and responsibilities, (ii) the failure of the Bank to keep Mr. Fontaine in his current positions and as a member of the Board of Directors, (iii) termination of employment following a change in control and (iv) a material breach of the agreement by Wellesley Bank. In addition, Mr. Fontaine may terminate his employment within the period beginning three months prior to and ending 12 months after a change in control. If we terminate Mr. Fontaine for reasons that do not constitute cause (with respect to termination on the part of the employer) or if Mr. Fontaine voluntarily terminates employment with cause (with respect to a termination on the part of the employee) or in connection with a change in control, then we will pay him a lump sum amount equal to the product of his average monthly compensation by the number of months remaining during the unexpired term of the agreement or, if greater, 12. For purposes of the employment agreement, “average monthly compensation” equals the monthly average of Mr. Fontaine’s three highest year’s of compensation, as reported on Form W-2. We may reduce change in control related payments to Mr. Fontaine in order to eliminate the imposition of excise taxes on those payments, unless the payments less the excise taxes would be greater than the reduced payments. In addition, we will pay him the cost of obtaining health insurance through COBRA for the unexpired term of the agreement or, if greater, 12 months. The employment agreement provides for certain post-employment obligations with respect to Mr. Fontaine’s ability to compete with Wellesley Bank and to solicit customers and employees of Wellesley Bank in the event we terminate his employment other than for cause or he terminates his employment for cause or in connection with a change in control.

Future Employment Agreements. In connection with the conversion, Wellesley Bank and Wellesley Bancorp intend to enter into an amended and restated employment agreement with Mr. Fontaine, the substantive terms of which will be substantially similar to the existing employment agreement with Wellesley Bank. The employment agreement will be reflected in a single document executed by all three parties.

Employee Severance Compensation Plan. In connection with the conversion, we expect to adopt an employee severance plan to provide benefits to eligible employees who terminate employment in connection with or following a change in control. Employees will become eligible for severance benefits under the plan if they complete a minimum of one year of service and do not enter into a separate employment or change in control agreement. Under the severance plan, if, within twelve months after a change in control, an employee’s employment involuntarily terminates, or if an employee voluntarily terminates employment without being offered continued employment in a comparable position (as defined in the plan), the former employee would receive a severance payment equal to two week’s of base compensation for each year of service up to a maximum of 52 week’s of base compensation and with a minimum of four week’s base compensation. Any eligible employee who is designated as a Vice President or above would receive a severance benefit equal to 52 week’s base compensation, regardless of the employee’s years of service.

Pension and Nonqualified Retirement Benefits

Employees’ Pension Plan. We maintain a tax-qualified defined benefit pension plan to provide retirement benefits for eligible employees. Employees become eligible to participate in the pension plan after they reach age 21 and complete one year of service in which they work at least 1,000 hours. Eligible employees begin participating in the pension plan at the beginning of the calendar month following the time they meet the eligibility requirements. Upon retirement at or after age 65, participants in the pension plan receive an annual benefit based on their total years of service and the average of their highest three consecutive years’ compensation. The current normal retirement benefit equals 1.25% of the participant’s final average compensation multiplied by all years of service, plus 0.5% of the participant’s final average compensation in excess of the social security wage base in effect during the 35 years prior to the participants social security normal retirement multiplied by all years of service from January 1, 1989. A participant may elect early retirement after attaining (i) age 62, (ii) age 55 with at least 5 years of vesting service or (iii) age 50 with at least 15 years of vesting service. Early retirement benefits are calculated based on the participant’s age, final average compensation and period of service upon his or her termination of employment. For an unmarried participant, the normal form of benefit payment is a single life annuity. The normal form of benefit for a married participant is a qualified joint-and-100% survivor annuity. With spousal consent, a married participant may select a distribution option in the form of a lump sum or an alternatively available annuity. At December 31, 2010, Mr. Fontaine and Ms. Thibault have earned 11 and 20 years of service, respectively, under the pension plan. This plan will be frozen effective November 1, 2011 with no further benefits accruing to the participants.

Salary Continuation Agreement. In addition to his participation in the pension plan, Mr. Fontaine has entered into a salary continuation agreement with Wellesley Bank to provide him with supplemental retirement benefits. Under the salary continuation agreement, upon separating from service on or after reaching age 65, we will pay Mr. Fontaine a lump sum benefit equivalent to a 15-year annual benefit equal to 85% of his highest earnings (as defined in the agreement), less our portion of social security benefits, pension plan benefits and our matching contributions under the 401(k) plan. We will pay the normal retirement benefit within 30 days of his separation from service. If Mr. Fontaine separates from service or dies prior to receiving benefits under the agreement, we will pay him or his beneficiary a lump sum benefit equal to his accrued liability retirement account under the agreement. We will pay the lump sum benefit to his beneficiary within 60 days of his death or the early retirement benefit to

65

Mr. Fontaine no later than the first day of the second month following his separation from service (subject to certain possible restrictions under the federal tax code). Mr. Fontaine is always 100% vested in his benefits under the salary continuation agreement. Under the agreement, the accrued liability account for Mr. Fontaine generally reflects the amount of the liability of the supplemental benefit accrued by the Bank for financial statement purposes. Upon a change in control, Mr. Fontaine will become entitled to the benefit to which he would have otherwise become entitled at his normal retirement age of 65 (regardless of his actual age). We will pay the change in control benefit in a single lump sum payment on the first day of the month following the month in which Mr. Fontaine attains age 65.

Supplemental Executive Retirement Plan. In connection with the conversion, we intend to implement a supplemental executive retirement plan (“SERP”) to provide participants with supplemental retirement benefits to those benefits we provide under the employee stock ownership plan and 401(k) Plan. The SERP will provide participating executives with benefits otherwise limited under the employee stock ownership plan and/or 401(k) Plan due to limitations under the Internal Revenue Code or the terms of the employee stock ownership plan loan. Specifically, the plan will provide benefits to eligible individuals (those designated by our Board of Directors) that we cannot provide under the employee stock ownership plan and/or 401(k) Plan as a result of these limitations, but that we would have provided under those plans but for these limitations. In addition to providing for benefits lost under the tax-qualified plans as a result of limitations imposed by the Internal Revenue Code, the SERP will also provide supplemental benefits to designated individuals upon a change of control prior to the complete scheduled repayment of the employee stock ownership plan loan. Generally, upon a change in control, the SERP will provide the participant with a benefit equal to the benefit the individual would have received under the employee stock ownership plan had he or she remained employed throughout the term of the loan less the benefits actually provided under the employee stock ownership plan on behalf of the participant. An individual’s benefit under the supplemental executive retirement plan will become payable upon a separation from service. At this time, we expect to designate only Mr. Fontaine as a participant in the SERP.

Benefit Plans

401(k) Profit Sharing Plan. We maintain a tax-qualified defined contribution plan with a cash or deferred arrangement (the “401(k) Plan”) for the benefit of eligible employees of Wellesley Bank. Employees become eligible to participate in the 401(k) Plan after they reach age 21 and complete one year of service in which they work at least 1,000 hours. Eligible employees begin participating in the 401(k) Plan at the beginning of the calendar month following the time they meet the eligibility requirements. Participants may make elective deferrals of compensation under the 401(k) Plan on a pre- or post-tax basis of up to 75% of their compensation, subject to limitations imposed by the Internal Revenue Code. For 2011, the pre-tax deferral contribution limit is $16,500; provided, however, that participants over age 50 may make additional elective contributions of up to $5,500 to the 401(k) Plan. Participants are always 100% vested in their elective deferral contributions. In addition to participants making elective deferral contributions under the 401(k) Plan, we currently make matching contributions at a level of 150% of the participant’s contributions up to the first 7% of the participant’s compensation. Participants fully vest in the employer matching contributions after six years of service. Participants may elect to invest their account balances under the 401(k) Plan in a number of investments. In connection with the conversion, we intend to allow participants to invest a portion of their account balances under the plan in Wellesley Bancorp common stock. We may also allow participants in the 401(k) Plan to invest future elective deferrals and employer matching contributions in the employer stock fund.

Employee Stock Ownership Plan. In connection with the offering, Wellesley Bank intends to adopt a tax-qualified employee stock ownership plan (“ESOP) for the benefit of eligible employees. Employees will become eligible to participate in the ESOP after they have reached age 21 and complete one year of service in which they work at least 1,000 hours. Eligible employees will begin participating in the ESOP on the first day of the calendar month following the time they meet the eligibility requirements. Participants will fully vest in the accounts under the ESOP after 6 years of service. Participants will also become fully vested in their accounts upon age 65, death or disability, a change in control, or termination of the plan. For eligibility and vesting purposes, all eligible employees will be given credit for prior service worked from their date of hire.

We expect to engage a third party trustee to purchase, on behalf of the ESOP, 8% of the sum of the shares of Wellesley Bancorp common stock sold in the offering and contributed to the charitable foundation (174,624, 205,440, 236,256 and 271,694 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively). We intend that the ESOP will fund its stock purchase through a loan from Wellesley Bancorp equal to 100% of the aggregate purchase price of the common stock. The ESOP trustee will repay the loan principally through Wellesley Bank’s contributions to the ESOP and, possibly, dividends paid on common stock held by the plan over a 15-year loan term. The fixed interest rate for the ESOP will be the prime rate as of the date of closing. See “Pro Forma Data.”

The trustee will hold the shares purchased in a loan suspense account and will release the shares from the suspense account on a pro rata basis as it repays the loan. The trustee will allocate the shares released among active participants on the basis of each active participant’s proportional share of compensation for the plan year. Generally, participants will receive distributions from the

66

ESOP upon separation from service. The plan will reallocate any unvested shares of common stock forfeited by participants upon their separation from service among the remaining participants in the plan.

Participants may direct the plan trustee how to vote the shares of common stock credited to their accounts. The plan trustee will vote all unallocated shares and allocated shares for which participants do not provide instructions on any matter in the same ratio as it votes those shares for which participants provide instructions, subject to fulfillment of its fiduciary responsibilities as trustee.

Under applicable accounting requirements, Wellesley Bank will record a compensation expense for a leveraged employee stock ownership plan at the fair market value of the shares when they are committed to be released from the suspense account to participants’ accounts under the plan.

Equity Incentive Plan

Following the conversion, Wellesley Bank intends to adopt an equity incentive plan that will provide for grants of stock options, restricted stock and related forms of equity-based compensation. In accordance with applicable regulations, Wellesley Bank anticipates that the plan, if adopted within the first year after the offering, will authorize a number of stock options equal to 10% of the shares sold in the offering and contributed to the charitable foundation and a number of shares of restricted stock equal to 4% of the shares sold in the offering and contributed to the charitable foundation. Therefore, the number of shares reserved under the plan, if adopted within that one-year period, would range from 305,592 shares, assuming 2,182,800 shares are sold in the offering and contributed to the charitable foundation at the minimum of the offering range, to 413,448 shares, assuming 2,953,200 shares are sold in the offering and contributed to the foundation at the maximum of the offering range. If Wellesley Bank adopts the equity incentive plan more than one year after completion of the offering, Wellesley Bank would not be subject to certain government regulations limiting the number of awards it may reserve or grant under the plan or certain other requirements applicable to a plan implemented within the first year of conversion. Wellesley Bank may fund the plan with shares it purchases in the open market or with authorized, but unissued shares, of common stock. Wellesley Bank may also establish a trust to hold shares subject to the terms of the plan. In determining the source of shares transferred to participants of the plan, Wellesley Bank will consider our financial condition and results of operations, capital requirements, economic conditions and whether sufficient shares are available for purchase in the open market. The equity incentive plan will comply with all applicable regulatory requirements except to the extent waived by any applicable regulatory agency.

Director Compensation

The following table sets forth the compensation received by individuals who served as nonemployee directors of Wellesley Bank during the year ended December 31, 2010.

	Fees Earned or Paid in Cash		All Other Compensation		Total
C. Joseph Grignaffini	$	21,457	$	—	$	21,457
Hugh J. Kelley		21,457		—		21,457
Keith A. Marden (1)		21,457		—		21,457
Theodore F. Parker		22,819		—		22,819
Leslie B. Shea		21,457		—		21,457
Edwin G. Silver		21,457		—		21,457
Robert L. Skolnick		21,457		—		21,457
Tina L. Wang		21,457		—		21,457

(1) Mr. Marden retired as a director of Wellesley Bank effective March 15, 2011.

Retainer and Meeting Fees For Directors. The following table sets forth the applicable retainers and fees that will be paid to our directors for their service on the board of directors of Wellesley Bank for the year ending December 31, 2011.

Annual retainer for Chairman of the Board	$	8,379
Annual retainer for the Clerk of the Board		7,686
Annual retainer of all other board members		6,993
Board meeting fee for Chairman of the Board		698
Board meeting fee for the Clerk of the Board		641
Board meeting fee for all other board members		583
Committee meeting fee for all directors (except for Mr. Fontaine)		8,106

67

Following completion of the conversion Wellesley Bancorp intends to pay its directors an annual retainer of $4,800.

Transactions with Related Persons

Loans and Extensions of Credit. The Sarbanes-Oxley Act of 2002 generally prohibits loans by Wellesley Bancorp to its executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by Wellesley Bank to its executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Wellesley Bank is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public. Notwithstanding this rule, federal regulations permit Wellesley Bank to make loans to executive officers and directors at reduced interest rates if the loan is made under a benefit program generally available to all other employees and does not give preference to any executive officer or director over any other employee. All outstanding loans made by Wellesley Bank to its related persons (as defined under the Securities and Exchange Commission rules), were made in accordance with Wellesley Bank’s mortgage discount program which applies only to fixed- or adjustable-rate mortgage loans that are held in the portfolio of Wellesley Bank. The discount offered under this program is 50 basis points less than the published rate offered to the public. The program is offered to all full and part-time employees of Wellesley Bank and to all members of the board of directors.

Set forth below is certain information as to loans made by Wellesley Bank to certain of its directors and executive officers, or their affiliates, whose aggregate indebtedness to Wellesley Bank exceeded $120,000 at any time since January 1, 2010, and participated in the above-referenced benefit program generally available to all other employees and that does not give preference to any executive officer or director over any other employee.

Name of Individual	Loan Type	Date Originated		Original Loan  Amount		Highest Balance During Fiscal 2010		Balance on December 31, 2010		Interest Rate on December  31, 2010
Thomas J. Fontaine	Residential mortgage		12/18/2009	$	675,000	$	673,428	$	653,997		5.375	%
	Home equity line of credit		11/18/2009		75,000		—		—		2.250
Eloise C. Thibault	Residential mortgage		1/3/2006	$	286,200	$	269,278	$	264,320		3.250	%
	Home equity line of credit		2/4/2009		40,000		39,937		39,886		2.250
Robert L. Skolnick	Home equity line of credit		8/7/2000	$	125,000	$	74,000	$	66,000		2.250	%
Theodore F. Parker	Residential mortgage		3/10/2009	$	400,000	$	395,987	$	389,367		5.500	%
	Home equity line of credit		12/2/2002		450,000		290,967		290,967		2.250
Leslie B. Shea	Residential mortgage		7/29/2010	$	350,000	$	350,000	$	347,660		5.500	%
Tina L. Wang	Home equity line of credit		7/21/2003	$	250,000	$	—	$	—		2.250	%

Other than as described above, all loans the principal balances of which exceeded $120,000 at any time during the year ended December 31, 2010, made by Wellesley Bank to executive officers, directors, immediate family members of executive officers and directors, or organizations with which executive officers and directors are affiliated, were made in the ordinary course of business, on substantially the same terms including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than normal risk of collectibility or present other unfavorable features.

In addition, loans made to a director or executive officer must be approved in advance by a majority of the disinterested members of the Board of Directors. The aggregate amount of our loans to our officers and directors and their related entities was $2.6 million at December 31, 2010. These loans were performing according to their original terms at December 31, 2010.

Pursuant to Wellesley Bancorp’s audit committee charter, the audit committee will periodically review, no less frequently than quarterly, a summary of Wellesley Bancorp’s transactions with directors and executive officers of Wellesley Bancorp and with firms that employ directors, as well as any other related person transactions, to recommend to the disinterested members of the board of directors that the transactions are fair, reasonable and within Wellesley Bancorp policy and should be ratified and approved. Also, in accordance with banking regulations and its policy, the board of directors will review all loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her

68

related interests, exceed the greater of $25,000 or 5% of Wellesley Bancorp’s capital and retained earnings (up to a maximum of $500,000) and such loans must be approved in advance by a majority of the disinterested members of the board of directors. Additionally, pursuant to Wellesley Bancorp’s Code of Ethics and Business Conduct, all executive officers and directors of Wellesley Bancorp must disclose any existing or potential conflicts of interest to the President and Chief Executive Officer of Wellesley Bancorp. Such potential conflicts of interest include, but are not limited to, the following: (1) Wellesley Bancorp conducting business with or competing against an organization in which a family member of an executive officer or director has an ownership or employment interest and (2) the ownership of more than 5% of the outstanding securities or 5% of total assets of any business entity that does business with or is in competition with Wellesley Bancorp.

Indemnification for Directors and Officers

Wellesley Bancorp’s articles of incorporation provide that Wellesley Bancorp shall indemnify all officers, directors and employees of Wellesley Bancorp to the fullest extent permitted under Maryland law against all expenses and liabilities reasonably incurred by them in connection with or arising out of any action, suit or proceeding in which they may be involved by reason of their having been a director or officer of Wellesley Bancorp. Such indemnification may include the advancement of funds to pay for or reimburse reasonable expenses incurred by an indemnified party to the fullest extent permitted under Maryland law. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Wellesley Bancorp pursuant to its articles of incorporation or otherwise, Wellesley Bancorp has been advised by counsel that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

69

Subscriptions by Executive Officers and Directors

The following table presents certain information as to the approximate purchases of common stock by our directors and executive officers, including their associates, if any, as defined by applicable regulations. No individual has entered into a binding agreement to purchase these shares and, therefore, actual purchases could be more or less than indicated. Directors and executive officers and their associates may not purchase more than 30% of the shares sold in the offering. Like all of our depositors, our directors and officers have subscription rights based on their deposits. For purposes of the following table, sufficient shares are assumed to be available to satisfy subscriptions in all categories. These percentages reflect the shares to be issued to the charitable foundation.

	Proposed Purchases of Stock in the Offering
Name	Number of Shares		Dollar Amount		Percent of Common  Stock Outstanding at Midpoint of Offering Range
Directors:
Thomas J. Fontaine		35,000	$	350,000		1.4	%
Nancy Marden Goodall		35,000		350,000		1.4
C. Joseph Grignaffini		20,000		200,000		*
Hugh J. Kelley		20,000		200,000		*
Theodore F. Parker		20,000		200,000		*
Leslie B. Shea		35,000		350,000		1.4
Edwin G. Silver		20,000		200,000		*
Robert L. Skolnick		20,000		200,000		*
Tina L. Wang		20,000		200,000		*
Executive Officers Who Are Not Directors:
Gary P. Culyer		5,000		50,000		*
Eloise C. Thibault		20,000		200,000		*
All directors and executive officers as a group (11 persons)		250,000	$	2,500,000		9.7	%

* Less than 1.0%.

70

Regulation and Supervision

General

Wellesley Bank is a Massachusetts-chartered cooperative bank and will be the wholly-owned subsidiary of Wellesley Bancorp, a Maryland corporation, which will be a registered bank holding company. Wellesley Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation and by the Share Insurance Fund of the Co-Operative Central Bank for amounts in excess of the Federal Deposit Insurance Corporation insurance limits. Wellesley Bank is subject to extensive regulation by the Massachusetts Commissioner of Banks, as its chartering agency, and by the Federal Deposit Insurance Corporation, its primary federal regulator and deposit insurer. Wellesley Bank is required to file reports with, and is periodically examined by, the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, including, but not limited to, mergers with or acquisitions of other financial institutions. As a registered bank holding company, Wellesley Bancorp will be regulated by the Board of Governors of the Federal Reserve System, or the “Federal Reserve Board.”

The regulatory and supervisory structure establishes a comprehensive framework of activities in which an institution can engage and is intended primarily for the protection of depositors and the deposit insurance funds, rather than for the protection of stockholders and creditors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies concerning the establishment of deposit insurance assessment fees, classification of assets and establishment of adequate loan loss reserves for regulatory purposes. Any change in such regulatory requirements and policies, whether by the Massachusetts legislature, the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation, the Federal Reserve Board or Congress, could have a material adverse impact on the financial condition and results of operations of Wellesley Bancorp and Wellesley Bank. As is further described below, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), has significantly changed the current bank regulatory structure and may affect the lending, investment and general operating activities of depository institutions and their holding companies.

Set forth below is a summary of certain material statutory and regulatory requirements applicable to Wellesley Bancorp and Wellesley Bank. The summary is not intended to be a complete description of such statutes and regulations and their effects on Wellesley Bancorp and Wellesley Bank.

The Dodd-Frank Act

The Dodd-Frank Act will significantly change the current bank regulatory structure and affect the lending and investment activities and general operations of depository institutions and their holding companies.

The Dodd-Frank Act requires the Federal Reserve Board to establish minimum consolidated capital requirements for bank holding companies that are as stringent as those required for insured depository institutions; the components of Tier 1 capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. In addition, the proceeds of trust preferred securities are excluded from Tier 1 capital unless (i) such securities are issued by bank holding companies with assets of less than $500 million or (ii) such securities were issued prior to May 19, 2010 by bank or savings and loan holding companies with less than $15 billion of assets. The legislation also establishes a floor for capital of insured depository institutions that cannot be lower than the standards in effect today, and directs the federal banking regulators to implement new leverage and capital requirements within 18 months. These new leverage and risk-based capital requirements must take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

The Dodd-Frank Act also creates a new Consumer Financial Protection Bureau with extensive powers to implement and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rulemaking authority for a wide range of consumer protection laws that apply to all banks and savings associations, among other things, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings associations with more than $10 billion in assets. Banks and savings associations with $10 billion or less in assets will continue to be examined for compliance with federal consumer protection and fair lending laws by their applicable primary federal bank regulators. The new legislation also weakens the federal preemption available for national banks and federal savings associations and gives state attorneys general certain authority to enforce applicable federal consumer protection laws.

The Dodd-Frank Act made many other changes in banking regulation. Those include authorizing depository institutions, for the first time, to pay interest on business checking accounts, requiring originators of securitized loans to retain a percentage of the risk for transferred loans, establishing regulatory rate-setting for certain debit card interchange fees and establishing a number of reforms for mortgage originations.

71

The Dodd Frank Act also broadens the base for Federal Deposit Insurance Corporation insurance assessments. The Federal Deposit Insurance Corporation was required to promulgate rules revising its assessment system so that it is based on the average consolidated total assets less tangible equity capital of an insured institution instead of deposits. That rule took effect April 1, 2011. The Dodd-Frank Act also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2008 and provided for noninterest bearing transaction accounts with unlimited deposit insurance through December 31, 2012.

The Dodd-Frank Act increased stockholder influence over boards of directors by requiring companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments, and by authorizing the Securities and Exchange Commission to promulgate rules that would allow stockholders to nominate and solicit votes for their own candidates using a company’s proxy materials. The legislation also directed the Federal Reserve Board to promulgate rules prohibiting excessive incentive compensation paid to bank holding company executives, regardless of whether the company is publicly traded.

Many of the provisions of the Dodd-Frank Act are not yet effective, and the legislation requires various federal agencies to promulgate numerous and extensive implementing regulations over the next several years. It is therefore difficult to predict at this time what impact the new legislation and implementing regulations will have on community banks such as Wellesley Bank. Although the substance and scope of many of these regulations cannot be determined at this time, it is expected that the legislation and implementing regulations, particularly those provisions relating to the new Consumer Financial Protection Bureau, may increase our operating and compliance costs.

Massachusetts Banking Laws and Supervision

General. As a Massachusetts-chartered cooperative bank, Wellesley Bank is subject to supervision, regulation and examination by the Massachusetts Commissioner of Banks and to various Massachusetts statutes and regulations which govern, among other things, investment powers, lending and deposit-taking activities, borrowings, maintenance of surplus and reserve accounts, distribution of earnings and payment of dividends. In addition, Wellesley Bank is subject to Massachusetts consumer protection and civil rights laws and regulations. The approval of the Massachusetts Commissioner of Banks or the Massachusetts Board of Bank Incorporation is required for a Massachusetts-chartered bank to establish or close branches, merge with other financial institutions, issue stock and undertake certain other activities.

Massachusetts regulations generally allow Massachusetts banks, with appropriate regulatory approvals, to engage in activities permissible for federally chartered banks or banks chartered by another state. The Commissioner also has adopted procedures reducing regulatory burdens and expense and expediting branching by well-capitalized and well-managed banks.

Dividends. A Massachusetts stock bank may declare cash dividends from net profits not more frequently than quarterly. Noncash dividends may be declared at any time. No dividends may be declared, credited or paid if the bank’s capital stock is impaired. The approval of the Massachusetts Commissioner of Banks is required if the total of all dividends declared in any calendar year exceeds the total of its net profits for that year combined with its retained net profits of the preceding two years. Dividends from Wellesley Bancorp may depend, in part, upon receipt of dividends from Wellesley Bank. The payment of dividends from Wellesley Bank would be restricted by federal law if the payment of such dividends resulted in Wellesley Bank failing to meet regulatory capital requirements.

Loans to One Borrower Limitations. Massachusetts banking law grants broad lending authority. However, with certain limited exceptions, total obligations to one borrower may not exceed 20% of the total of the bank’s capital, surplus and undivided profits.

Loans to a Bank’s Insiders. Massachusetts banking laws prohibit any executive officer or director of a bank from borrowing or guaranteeing extensions of credit by such bank except for any of the following loans or extensions of credit with the approval of a majority of the Board of Directors: (i) loans or extension of credit, secured or unsecured, to an officer of the bank in an amount not exceeding $100,000; (ii) loans or extensions of credit intended or secured for educational purposes to an officer of the bank in an amount not exceeding $200,000; (iii) loans or extensions of credit secured by a mortgage on residential real estate to be occupied in whole or in part by the officer to whom the loan or extension of credit is made, in an amount not exceeding $750,000; and (iv) loans or extensions of credit to a director of the bank who is not also an officer of the bank in an amount permissible under the bank’s loan to one borrower limit. No such loan or extension of credit may be granted with an interest rate or other terms that are preferential in comparison to loans granted to persons not affiliated with the bank.

Investment Activities. In general, Massachusetts-chartered banks may invest in preferred and common stock of any corporation organized under the laws of the United States or any state provided such investments do not involve control of any corporation and do not, in the aggregate, exceed 4% of the bank’s deposits. Federal law imposes additional restrictions on Wellesley Bank’s investment activities. See “—Federal Regulations—Business and Investment Activities.”

72

Regulatory Enforcement Authority. Any Massachusetts bank that does not operate in accordance with the regulations, policies and directives of the Massachusetts Commissioner of Banks may be subject to sanctions for noncompliance, including revocation of its charter. The Massachusetts Commissioner of Banks may, under certain circumstances, suspend or remove officers or directors who have violated the law, conducted the bank’s business in an unsafe or unsound manner or contrary to the depositors’ interests or been negligent in the performance of their duties. Upon finding that a bank has engaged in an unfair or deceptive act or practice, the Massachusetts Commissioner of Banks may issue an order to cease and desist and impose a fine on the bank concerned. The Commissioner also has authority to take possession of a bank and appoint a liquidating agent under certain conditions such as an unsafe and unsound condition to transact business, the conduct of business in an unsafe or unauthorized manner or impaired capital. In addition, Massachusetts consumer protection and civil rights statutes applicable to Wellesley Bank permit private individual and class action law suits and provide for the rescission of consumer transactions, including loans, and the recovery of statutory and punitive damages and attorney’s fees in the case of certain violations of those statutes.

Insurance Fund. All Massachusetts-chartered cooperative banks are required to be members of the Co-operative Central Bank, which maintains the Share Insurance Fund that insures cooperative bank deposits in excess of federal deposit insurance coverage. The Co-operative Central Bank is authorized to charge cooperative banks an annual assessment fee on deposit balances in excess of amounts insured by the Federal Deposit Insurance Corporation. Assessment rates are based on the institution’s risk category, similar to the method currently used to determine assessments by the Federal Deposit Insurance Corporation discussed below under “—Federal Regulations—Federal Insurance of Deposit Accounts.”

Protection of Personal Information. Massachusetts has adopted regulatory requirements intended to protect personal information. The requirements, which became effective March 1, 2010, are similar to existing federal laws such as the Gramm-Leach-Bliley Act, discussed below under “—Federal Regulations—Privacy Regulations”, that require organizations to establish written information security programs to prevent identity theft. The Massachusetts regulation also contains technology system requirements, especially for the encryption of personal information sent over wireless or public networks or stored on portable devices.

Massachusetts has other statutes or regulations that are similar to certain of the federal provisions discussed below.

Federal Regulations

Capital Requirements. Under the Federal Deposit Insurance Corporation’s regulations, federally insured state-chartered banks that are not members of the Federal Reserve System (“state nonmember banks”), such as Wellesley Bank, are required to comply with minimum leverage capital requirements. For an institution not anticipating or experiencing significant growth and deemed by the Federal Deposit Insurance Corporation to be, in general, a strong banking organization rated composite 1 under Uniform Financial Institutions Ranking System, the minimum capital leverage requirement is a ratio of Tier 1 capital to total assets of 3.0%. For all other institutions, the minimum leverage capital ratio is not less than 4.0%. Tier 1 capital is the sum of common stockholder’s equity, noncumulative perpetual preferred stock (including any related surplus) and minority investments in certain subsidiaries, less intangible assets (except for certain servicing rights and credit card relationships) and certain other specified items.

Federal Deposit Insurance Corporation regulations also require state nonmember banks to maintain certain ratios of regulatory capital to regulatory risk-weighted assets, or “risk-based capital ratios.” Risk-based capital ratios are determined by allocating assets and specified off-balance sheet items to four risk-weighted categories ranging from 0.0% to 100.0%. State nonmember banks must maintain a minimum ratio of total capital to risk-weighted assets of at least 8.0%, of which at least one-half must be Tier 1 capital. Total capital consists of Tier 1 capital plus Tier 2 or supplementary capital items, which include allowances for loan losses in an amount of up to 1.25% of risk-weighted assets, cumulative preferred stock, subordinated debentures and certain other capital instruments, and a portion of the net unrealized gain on equity securities. The includable amount of Tier 2 capital cannot exceed the amount of the institution’s Tier 1 capital.

Standards for Safety and Soundness. As required by statute, the federal banking agencies adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement safety and soundness standards. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. The guidelines address internal controls and information systems, internal audit system, credit underwriting, loan documentation, interest rate exposure, asset growth, asset quality, earnings, compensation, fees and benefits and, more recently, safeguarding customer information. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

73

Business and Investment Activities. Under federal law, all state-chartered Federal Deposit Insurance Corporation-insured banks have been limited in their activities as principal and in their debt and equity investments to the type and the amount authorized for national banks, notwithstanding state law. Federal law permits exceptions to these limitations. For example, certain state-chartered cooperative banks may, with Federal Deposit Insurance Corporation approval, continue to exercise state authority to invest in common or preferred stocks listed on a national securities exchange or the Nasdaq Global Market and in the shares of an investment company registered under the Investment Company Act of 1940, as amended. The maximum permissible investment is the lesser of 100.0% of Tier 1 capital or the maximum amount permitted by Massachusetts law. Any such grandfathered authority may be terminated upon the Federal Deposit Insurance Corporation’s determination that such investments pose a safety and soundness risk or upon the occurrence of certain events such as the cooperative bank’s conversion to a different charter.

The Federal Deposit Insurance Corporation is also authorized to permit state banks to engage in state authorized activities or investments not permissible for national banks (other than nonsubsidiary equity investments) if they meet all applicable capital requirements and it is determined that such activities or investments do not pose a significant risk to the Federal Deposit Insurance Corporation insurance fund. The Federal Deposit Insurance Corporation has adopted regulations governing the procedures for institutions seeking approval to engage in such activities or investments. The Gramm-Leach-Bliley Act of 1999 specified that a state bank may control a subsidiary that engages in activities as principal that would only be permitted for a national bank to conduct in a “financial subsidiary,” if a bank meets specified conditions and deducts its investment in the subsidiary for regulatory capital purposes.

Prompt Corrective Regulatory Action. Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet minimum capital requirements. For these purposes, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

The Federal Deposit Insurance Corporation has adopted regulations to implement the prompt corrective action legislation. An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater and a leverage ratio of 5.0% or greater. An institution is “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 4.0% or greater, and generally a leverage ratio of 4.0% or greater. An institution is “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 4.0%, or generally a leverage ratio of less than 4.0%. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 3.0%, or a leverage ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.

“Undercapitalized” banks must adhere to growth, capital distribution (including dividend) and other limitations and are required to submit a capital restoration plan. A bank’s compliance with such a plan must be guaranteed by any company that controls the undercapitalized institution in an amount equal to the lesser of 5% of the institution’s total assets when deemed undercapitalized or the amount necessary to achieve the status of adequately capitalized. If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly undercapitalized” banks must comply with one or more of a number of additional measures, including, but not limited to, a required sale of sufficient voting stock to become adequately capitalized, a requirement to reduce total assets, cessation of taking deposits from correspondent banks, the dismissal of directors or officers and restrictions on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company. “Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after it obtains such status.

Transactions with Affiliates. Transactions between a bank (and, generally, its subsidiaries) and its related parties or affiliates are limited by Sections 23A and 23B of the Federal Reserve Act. An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. In a holding company context, the parent bank holding company and any companies which are controlled by such parent holding company are affiliates of the bank. Generally, Sections 23A and 23B of the Federal Reserve Act limit the extent to which the bank or its subsidiaries may engage in “covered transactions” with any one affiliate to 10% of such institution’s capital stock and surplus and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such institution’s capital stock and surplus. The term “covered transaction” includes the making of loans, purchase of assets, issuance of a guarantee and similar transactions. In addition, loans or other extensions of credit by the institution to the affiliate are required to be collateralized in accordance with specified requirements. The law also requires that affiliate transactions be on terms and conditions that are substantially the same, or at least as favorable to the institution, as those provided to nonaffiliates.

74

The Sarbanes-Oxley Act of 2002 generally prohibits loans by a company to its executive officers and directors. The law contains a specific exception for loans by a depository institution to its executive officers and directors in compliance with federal banking laws, assuming such loans are also permitted under the law of the institution’s chartering state. Under such laws, a bank’s authority to extend credit to executive officers, directors and 10% stockholders (“insiders”), as well as entities such persons control, is restricted. The law limits both the individual and aggregate amount of loans that may be made to insiders based, in part, on the bank’s capital position and requires certain board approval procedures to be followed. Such loans are required to be made on terms substantially the same as those offered to unaffiliated individuals and not involve more than the normal risk of repayment. There is an exception for loans made pursuant to a benefit or compensation program that is widely available to all employees of the institution and does not give preference to insiders over other employees. Loans to executive officers are further limited to loans of specific types and amounts.

Enforcement. The Federal Deposit Insurance Corporation has extensive enforcement authority over insured state banks, including Wellesley Bank. That enforcement authority includes, among other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors and officers. In general, enforcement actions may be initiated in response to violations of laws and regulations and unsafe or unsound practices. The Federal Deposit Insurance Corporation also has authority under federal law to appoint a conservator or receiver for an insured bank under certain circumstances. The Federal Deposit Insurance Corporation is required, with certain exceptions, to appoint a receiver or conservator for an insured state nonmember bank if that bank was “critically undercapitalized” on average during the calendar quarter beginning 270 days after the date on which the institution became “critically undercapitalized.”

Federal Insurance of Deposit Accounts. Deposit accounts in Wellesley Bank are insured by the Federal Deposit Insurance Corporation’s Deposit Insurance Fund, generally up to a maximum of $250,000 per separately insured depositor, pursuant to changes made permanent by the Dodd-Frank Act. The Dodd-Frank Act also extended unlimited deposit insurance on noninterest bearing transaction accounts through December 31, 2012. The Federal Deposit Insurance Corporation assesses insured depository institutions to maintain the Deposit Insurance Fund. No institution may pay a dividend if in default of its deposit insurance assessment.

Under the Federal Deposit Insurance Corporation’s risk-based assessment system, insured institutions are assigned to a risk category based on supervisory evaluations, regulatory capital levels and other factors. An institution’s assessment rate depends upon the category to which it is assigned and certain adjustments specified by the Federal Deposit Insurance Corporation, with less risky institutions paying lower assessments. Until recently, assessment rates ranged from seven to 77.5 basis points of assessable deposits.

On February 7, 2011, as required by the Dodd-Frank Act, the Federal Deposit Insurance Corporation published a final rule to revise the deposit insurance assessment system. The rule, which took effect April 1, 2011, changes the assessment base used for calculating deposit insurance assessments from deposits to total assets less tangible (Tier 1) capital. Since the new base is larger than the previous base, the Federal Deposit Insurance Corporation also lowered assessment rates so that the rule would not significantly alter the total amount of revenue collected from the industry. The range of adjusted assessment rates is now 2.5 to 45 basis points of the new assessment base. The rule is expected to benefit smaller financial institutions, which typically rely more on deposits for funding, and shift more of the burden for supporting the insurance fund to larger institutions, which are thought to have greater access to nondeposit funding.

As part of its plan to restore the Deposit Insurance Fund in the wake of a large number of bank failures following the recent financial crisis, the Federal Deposit Insurance Corporation imposed a special assessment of five basis points for the second quarter of 2009. In addition, the Federal Deposit Insurance Corporation required all insured institutions to prepay their quarterly assessments for the fourth quarter of 2009, and for all of 2010, 2011 and 2012. In calculating the required prepayment, the Federal Deposit Insurance Corporation assumed a 5% annual growth in the assessment base and applied a three basis point increase in assessment rates effective January 1, 2011. Wellesley Bank’s pre-payment of $1.1 million was recorded as a prepaid expense at December 31, 2009 and is being amortized to expense over three years.

In addition to Federal Deposit Insurance Corporation assessments, the Financing Corporation (“FICO”) is authorized to impose and collect, through the Federal Deposit Insurance Corporation, assessments for costs related to bonds issued by the FICO in the 1980s to recapitalize the former Federal Savings and Loan Insurance Corporation. The bonds issued by the FICO are due to mature in 2017 through 2019. During the calendar year ended December 31, 2010, Wellesley Bank paid $21,000 in fees related to the FICO.

The Dodd-Frank Act increased the minimum target Deposit Insurance Fund ratio from 1.15% of estimated insured deposits to 1.35% of estimated insured deposits. The Federal Deposit Insurance Corporation must seek to achieve the 1.35% ratio by September 30, 2020. In setting the assessments necessary to achieve the 1.35% ratio, the Federal Deposit Insurance Corporation is

75

supposed to offset the effect of the increased ratio on insured institutions with assets of less than $10 billion. The Dodd-Frank Act eliminated the 1.5% maximum fund ratio, instead leaving it to the discretion of the Federal Deposit Insurance Corporation. The Federal Deposit Insurance Corporation has recently exercised that discretion by establishing a long range fund ratio of 2%.

A material increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of Wellesley Bank. Management cannot predict what insurance assessment rates will be in the future.

Insurance of deposits may be terminated by the Federal Deposit Insurance Corporation upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the Federal Deposit Insurance Corporation. We do not know of any practice, condition or violation that might lead to termination of Wellesley Bank’s deposit insurance.

Community Reinvestment Act. Under the Community Reinvestment Act (“CRA”), a bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community. The CRA does require the Federal Deposit Insurance Corporation, in connection with its examination of a bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications to establish or acquire branches and merge with other depository institutions. The CRA requires the Federal Deposit Insurance Corporation to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system. Wellesley Bank’s most recent Federal Deposit Insurance Corporation CRA rating was “Satisfactory.”

Massachusetts has its own statutory counterpart to the CRA which is also applicable to Wellesley Bank. The Massachusetts version is generally similar to the CRA but utilizes a five-tiered descriptive rating system. The Massachusetts Commissioner of Banks is required to consider a bank’s record of performance under the Massachusetts law in considering any application by the bank to establish a branch or other deposit-taking facility, relocate an office or to merge or consolidate with or acquire the assets and assume the liabilities of any other banking institution. Wellesley Bank’s most recent rating under Massachusetts law was “Satisfactory.”

Federal Reserve System. The Federal Reserve Board regulations require savings institutions to maintain noninterest earning reserves against their transaction accounts (primarily Negotiable Order of Withdrawal (NOW) and regular checking accounts). The regulations generally provide that reserves be maintained against aggregate transaction accounts as follows: a 3% reserve ratio is assessed on net transaction accounts up to and including $58.8 million; a 10% reserve ratio is applied above $58.8 million. The first $10.7 million of otherwise reservable balances are exempted from the reserve requirements. The amounts are adjusted annually. Wellesley Bank complies with the foregoing requirements.

Federal Home Loan Bank System. Wellesley Bank is a member of the Federal Home Loan Bank System, which consists of twelve regional Federal Home Loan Banks. The Federal Home Loan Bank System provides a central credit facility primarily for member institutions as well as other entities involved in home mortgage lending. As a member of the Federal Home Loan Bank of Boston, Wellesley Bank is required to acquire and hold a specified amount of shares of capital stock in the Federal Home Loan Bank of Boston. As of June 30, 2011, Wellesley Bank was in compliance with this requirement.

The Federal Home Loan Bank of Boston suspended its dividend payment for the first quarter of 2009 and did not pay a dividend through 2010. The Federal Home Loan Bank has paid dividends in 2011 that are considerably less than those paid prior to 2009.

Other Regulations

Some interest and other charges collected or contracted by Wellesley Bank are subject to state usury laws and federal laws concerning interest rates and charges. Wellesley Bank’s operations also are subject to federal laws applicable to credit transactions, such as the:

• Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;

• Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services;

• Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

76

• Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed, or other prohibited factors in extending credit;

• Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and

• Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies; and

The operations of Wellesley Bank also are subject to the:

• Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;

• Electronic Funds Transfer Act and Regulation E promulgated thereunder, that govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services;

• Gramm-Leach-Bliley Act privacy statute which requires each depository institution to disclose its privacy policy, identify parties with whom certain nonpublic customer information is shared and provide customers with certain rights to “opt out” of disclosure to certain third parties; and

• Title III of The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (referred to as the “USA PATRIOT Act”), which significantly expanded the responsibilities of financial institutions, in preventing the use of the United States financial system to fund terrorist activities. Among other things, the USA PATRIOT Act and the related regulations required banks operating in the United States to develop anti-money laundering compliance programs, due diligence policies and controls to facilitate the detection and reporting of money laundering.

Holding Company Regulation

Wellesley Bancorp, as a bank holding company, will be subject to examination, supervision, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended, as administered by the Federal Reserve Board. Wellesley Bancorp is required to obtain the prior approval of the Federal Reserve Board to acquire all, or substantially all, of the assets of any bank or bank holding company. Prior Federal Reserve Board approval would be required for Wellesley Bancorp to acquire direct or indirect ownership or control of any voting securities of any bank or bank holding company if it would, directly or indirectly, own or control more than 5% of any class of voting shares of the bank or bank holding company.

A bank holding company is generally prohibited from engaging in, or acquiring, direct or indirect control of more than 5% of the voting securities of any company engaged in nonbanking activities. One of the principal exceptions to this prohibition is for activities found by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Some of the principal activities that the Federal Reserve Board has determined by regulation to be closely related to banking are: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing securities brokerage services; (iv) acting as fiduciary, investment or financial advisor; (v) leasing personal or real property under certain conditions; (vi) making investments in corporations or projects designed primarily to promote community welfare; and (vii) acquiring a savings association.

The Gramm-Leach-Bliley Act of 1999 authorizes a bank holding company that meets specified conditions, including depository institutions subsidiaries that are “well capitalized” and “well managed,” to opt to become a “financial holding company.” A “financial holding company” may engage in a broader array of financial activities than permitted a typical bank holding company. Such activities can include insurance underwriting and investment banking. Wellesley Bancorp does not anticipate opting for “financial holding company” status at this time.

Wellesley Bancorp will be subject to the Federal Reserve Board’s consolidated capital adequacy guidelines for bank holding companies. Traditionally, those guidelines have been structured similarly to the regulatory capital requirements for the subsidiary depository institutions, but were somewhat more lenient. For example, the holding company capital requirements allowed inclusion of certain instruments in Tier 1 capital that are not includable at the institution level. As previously noted, the Dodd-Frank Act requires that the guidelines be amended so that they are at least as stringent as those required for the subsidiary depository institutions. See “—General —The Dodd-Frank Act.”

A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase or redemption of then outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth. The Federal Reserve Board may disapprove such a purchase or redemption if it determines that

77

the proposal would constitute an unsafe and unsound practice, or would violate any law, regulation, Federal Reserve Board order or directive, or any condition imposed by, or written agreement with, the Federal Reserve Board. The Federal Reserve Board has adopted an exception to that approval requirement for well-capitalized bank holding companies that meet certain other conditions.

The Federal Reserve Board has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve Board’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The Federal Reserve Board’s policies also require that a bank holding company serve as a source of financial strength to its subsidiary banks by using available resources to provide capital funds during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. The Dodd-Frank Act codified the source of strength policy and requires the promulgation of implementing regulations. Under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. These regulatory policies could affect the ability of Wellesley Bancorp to pay dividends or otherwise engage in capital distributions.

The Federal Deposit Insurance Act makes depository institutions liable to the Federal Deposit Insurance Corporation for losses suffered or anticipated by the insurance fund in connection with the default of a commonly controlled depository institution or any assistance provided by the Federal Deposit Insurance Corporation to such an institution in danger of default. That law would have potential applicability if Wellesley Bancorp ever held as a separate subsidiary a depository institution in addition to Wellesley Bank.

Wellesley Bancorp and Wellesley Bank will be affected by the monetary and fiscal policies of various agencies of the United States Government, including the Federal Reserve System. In view of changing conditions in the national economy and in the money markets, it is impossible for management to accurately predict future changes in monetary policy or the effect of such changes on the business or financial condition of Wellesley Bancorp or Wellesley Bank.

The status of Wellesley Bancorp as a registered bank holding company under the Bank Holding Company Act will not exempt it from certain federal and state laws and regulations applicable to corporations generally, including, without limitation, certain provisions of the federal securities laws.

Massachusetts Holding Company Regulation. Under Massachusetts banking laws, a company owning or controlling two or more banking institutions, including a cooperative bank, is regulated by the Massachusetts Division of Banks as a bank holding company. Each such bank holding company: (i) must obtain the approval of the Massachusetts Board of Bank Incorporation before engaging in certain transactions, such as the acquisition of more than 5% of the voting stock of another banking institution; (ii) must register, and file reports, with the Massachusetts Division of Banks; and (iii) is subject to examination by the Division of Banks. Wellesley Bancorp would become a bank holding company regulated by the Massachusetts Division of Banks if it acquires a second banking institution and holds and operates it separately from Wellesley Bank.

Federal Securities Laws. Our common stock is registered with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934, as amended. We are subject to information, proxy solicitation, insider trading restrictions, and other requirements under the Exchange Act.

78

Federal and State Taxation

Federal Income Taxation

General. We report our income on a fiscal year basis using the accrual method of accounting. The federal income tax laws apply to us in the same manner as to other corporations with some exceptions, including particularly our reserve for bad debts discussed below. The following discussion of tax matters is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to us. Our federal income tax returns have not been audited in the most recent five year period. For its 2010 fiscal year, Wellesley Bank’s maximum federal income tax rate was 34%.

Bad Debt Reserves. For fiscal years beginning before June 30, 1996, thrift institutions that qualified under certain definitional tests and other conditions of the Internal Revenue Code were permitted to use certain favorable provisions to calculate their deductions from taxable income for annual additions to their bad debt reserve. A reserve could be established for bad debts on qualifying real property loans, generally secured by interests in real property improved or to be improved, under the percentage of taxable income method or the experience method. The reserve for nonqualifying loans was computed using the experience method. Federal legislation enacted in 1996 repealed the reserve method of accounting for bad debts and the percentage of taxable income method for tax years beginning after 1995 and required savings institutions to recapture or take into income certain portions of their accumulated bad debt reserves. Approximately $820,000 of our accumulated bad debt reserves would not be recaptured into taxable income unless Wellesley Bank makes a “nondividend distribution” to Wellesley Bancorp as described below.

Distributions. If Wellesley Bank makes “nondividend distributions” to Wellesley Bancorp, the distributions will be considered to have been made from Wellesley Bank’s unrecaptured tax bad debt reserves, including the balance of its reserves as of December 31, 1987, to the extent of the “nondividend distributions,” and then from Wellesley Bank’s supplemental reserve for losses on loans, to the extent of those reserves, and an amount based on the amount distributed, but not more than the amount of those reserves, will be included in Wellesley Bank’s taxable income. Nondividend distributions include distributions in excess of Wellesley Bank’s current and accumulated earnings and profits, as calculated for federal income tax purposes, distributions in redemption of stock, and distributions in partial or complete liquidation. Dividends paid out of Wellesley Bank’s current or accumulated earnings and profits will not be so included in Wellesley Bank’s taxable income.

The amount of additional taxable income triggered by a nondividend is an amount that, when reduced by the tax attributable to the income, is equal to the amount of the distribution. Therefore, if Wellesley Bank makes a nondividend distribution to Wellesley Bancorp, approximately one and one-half times the amount of the distribution not in excess of the amount of the reserves would be includable in income for federal income tax purposes, assuming a 34% federal corporate income tax rate. Wellesley Bank does not intend to pay dividends that would result in a recapture of any portion of its bad debt reserves.

State Taxation

Financial institutions in Massachusetts file combined income tax returns with affiliated companies that are not security corporations. The Massachusetts excise tax rate for cooperative banks is currently 9.5% of federal taxable income, adjusted for certain items and will be 9.0% for years beginning after December 31, 2011. Taxable income includes gross income as defined under the Internal Revenue Code, plus interest from bonds, notes and evidences of indebtedness of any state, including Massachusetts, less deductions, but not the credits, allowable under the provisions of the Internal Revenue Code, except for those deductions relating to dividends received and income or franchise taxes imposed by a state or political subdivision. Carryforwards and carrybacks of net operating losses and capital losses are not allowed. Wellesley Bank’s state tax returns, as well as those of its subsidiaries, are not currently under audit.

A financial institution or business corporation is generally entitled to special tax treatment as a “security corporation” under Massachusetts law provided that: (a) its activities are limited to buying, selling, dealing in or holding securities on its own behalf and not as a broker; and (b) it has applied for, and received, classification as a “security corporation” by the Commissioner of the Massachusetts Department of Revenue. A security corporation that is also a bank holding company under the Internal Revenue Code must pay a tax equal to 0.33% of its gross income. A security corporation that is not a bank holding company under the Internal Revenue Code must pay a tax equal to 1.32% of its gross income. Wellesley Bank’s wholly-owned subsidiary, Wellesley Securities Corporation, is a Massachusetts securities corporation.

79

The Conversion and Stock Offering

Wellesley Bank’s board of directors has approved the plan of conversion. The Massachusetts Commissioner of Banks has conditionally approved the plan of conversion and the Federal Deposit Insurance Corporation has conditionally provided its nonobjection to the plan of conversion. However, this conditional approval and nonobjection does not constitute a recommendation or endorsement of the plan of conversion by either regulatory agency.

General

On July 20, 2011, the board of directors of Wellesley Bank unanimously adopted a plan of conversion according to which Wellesley Bank will convert from a Massachusetts mutual cooperative bank to a Massachusetts stock cooperative bank and become a wholly-owned subsidiary of Wellesley Bancorp, a newly formed Maryland corporation. Wellesley Bancorp will offer 100% of its common stock to qualifying depositors of Wellesley Bank in a subscription offering and, if necessary, to members of the general public through a community offering and/or a syndicate of registered broker-dealers. The Massachusetts Commissioner of Banks has conditionally approved the plan of conversion and the Federal Deposit Insurance Corporation has conditionally provided its nonobjection to the plan of conversion, subject to the fulfillment of certain conditions.

The plan of conversion also provides for the establishment of the Wellesley Bank Charitable Foundation and the funding of the foundation by Wellesley Bancorp in an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with Wellesley Bancorp common stock and 12.5% of which will be cash (193,200 shares and $276,000 in cash at the maximum of the offering range). The establishment and funding of the foundation is subject to a separate vote of Wellesley Bank’s depositors.

The following is a brief summary of the pertinent aspects of the conversion. A copy of the plan of conversion is available from Wellesley Bank upon request and is available for inspection at the offices of Wellesley Bank and at the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. The plan of conversion is also filed as an exhibit to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

Reasons for the Conversion and Offering

The primary reasons for the conversion and related stock offering are to:

• increase the capital of Wellesley Bank to support future lending and operational growth;

• enhance profitability and earnings through reinvesting and leveraging the proceeds, primarily through traditional funding and lending activities;

• support future branching activities;

• retain and attract qualified personnel by establishing stock-based benefit plans;

• increase our philanthropic endeavors to the community we serve through the formation and funding of the Wellesley Bank Charitable Foundation; and

• support the future acquisition of other financial institutions or financial services companies.

As a stock holding company, Wellesley Bancorp will have greater flexibility than Wellesley Bank now has in structuring mergers and acquisitions, including the consideration paid in a transaction. Our current mutual cooperative bank structure, by its nature, limits our ability to offer any common stock as consideration in a merger or acquisition. Our new stock holding company structure will enhance our ability to compete with other bidders when acquisition opportunities arise by better enabling us to offer stock or cash consideration, or a combination of the two. We currently do not have any agreement or understanding as to any specific acquisition.

Effects of Conversion to Stock Form

General. Each depositor in Wellesley Bank currently has both a deposit account in the institution and a pro rata ownership interest in the net worth of Wellesley Bank based upon the balance in his or her account. However, this ownership interest is tied to the depositor’s account and has no value separate from such deposit account. Furthermore, this ownership interest may only be realized in the unlikely event that Wellesley Bank is liquidated. In such event, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of Wellesley Bank after other claims are paid. Any depositor who opens a deposit account at Wellesley Bank obtains a pro rata ownership interest in the net worth of Wellesley Bank without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her account receives a portion or all of the balance in the account but nothing for his or her ownership interest in the net worth of Wellesley Bank, which is lost to the extent that the balance in the account is reduced.

80

When a mutual cooperative bank converts to stock holding company form, depositors lose all rights to the net worth of the mutual cooperative bank, except the right to claim a pro rata share of funds representing the liquidation account established in connection with the conversion. Additionally, permanent nonwithdrawable capital stock is created and offered to depositors which represents the ownership of the institution’s net worth. The common stock of Wellesley Bancorp is separate and apart from deposit accounts and cannot be and is not insured by the Federal Deposit Insurance Corporation, any other governmental agency or the Share Insurance Fund. Certificates are issued to evidence ownership of the permanent stock. The stock certificates are transferable, and therefore the stock may be sold or traded if a purchaser is available with no effect on any deposit account the seller may hold in the institution.

Continuity. While the conversion and offering are being accomplished, the normal business of Wellesley Bank will continue without interruption, including being regulated by the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. After the conversion and offering, Wellesley Bank will continue to provide services for depositors and borrowers under its current policies by its present management and staff. The directors of Wellesley Bank at the time of conversion will serve as directors of Wellesley Bank after the conversion and offering. The initial board of directors of Wellesley Bancorp is composed of the individuals who serve on the board of directors of Wellesley Bank. All officers of Wellesley Bank at the time of conversion will retain their positions after the conversion and offering.

Deposit Accounts and Loans. Wellesley Bank’s deposit accounts, account balances and existing Federal Deposit Insurance Corporation and Share Insurance Fund of The Co-operative Central Bank insurance coverage of deposit accounts will not be affected by the conversion. Furthermore, the conversion will not affect the loan accounts, loan balances or obligations of borrowers under their individual contractual arrangements with Wellesley Bank.

Effect on Voting Rights. Voting rights in Wellesley Bank, as a mutual cooperative bank, belong to its depositors. After the conversion, depositors will no longer have voting rights in Wellesley Bank and, therefore, will no longer be able to elect directors of Wellesley Bank or control its affairs. Instead, Wellesley Bancorp, as the sole stockholder of Wellesley Bank, will possess all voting rights in Wellesley Bank. The holders of the common stock of Wellesley Bancorp will possess all voting rights in Wellesley Bancorp. Depositors of Wellesley Bank will not have voting rights after the conversion except to the extent that they become stockholders of Wellesley Bancorp by purchasing common stock.

Liquidation Account. In the unlikely event of a complete liquidation of Wellesley Bank before the conversion, each depositor in Wellesley Bank would receive a pro rata share of any assets of Wellesley Bank remaining after payment of claims of all creditors, including the claims of all depositors up to the withdrawal value of their accounts. Each depositor would receive a pro rata share of the remaining assets in the same proportion as the value of his or her deposit account to the total value of all deposit accounts in Wellesley Bank at the time of liquidation.

After the conversion, holders of withdrawable deposits in Wellesley Bank, including certificates of deposit, will not be entitled to share in any residual assets upon liquidation of Wellesley Bank. However, under applicable regulations, Wellesley Bank will, at the time of the conversion, establish a liquidation account in an amount equal to its total net worth as of the date of the latest statement of financial condition contained in the final prospectus relating to the conversion.

Wellesley Bank will maintain the liquidation account after the conversion for the benefit of eligible account holders and supplemental eligible account holders who retain their savings accounts in Wellesley Bank. Each eligible account holder and supplemental account holder will, with respect to each deposit account held, have a related inchoate interest in a sub-account portion of the liquidation account balance.

The initial sub-account balance for a savings account held by an eligible account holder or a supplemental eligible account holder will be determined by multiplying the opening balance in the liquidation account by a fraction of which the numerator is the amount of the holder’s “qualifying deposit” in the deposit account and the denominator is the total amount of the “qualifying deposits” of all eligible or supplemental eligible account holders. The initial subaccount balance will not be increased, but it will be decreased as provided below.

If the deposit balance in any deposit account of an eligible account holder or supplemental eligible account holder at the close of business on any annual closing day of Wellesley Bank (which is December 31) after April 30, 2010 or June 30, 2011, is less than the lesser of the deposit balance in a deposit account at the close of business on any other annual closing date after April 30, 2010 or June 30, 2011, or the amount of the “qualifying deposit” in a savings account on April 30, 2010 or April 30, 2011, then the subaccount balance for a savings account will be adjusted by reducing the subaccount balance in an amount equal to such reduction in the savings balance. Once reduced, the subaccount balance will not be subsequently increased, notwithstanding any increase in the savings balance of the related savings account. If any savings account is closed, the related subaccount balance will be reduced to zero.

81

Upon a complete liquidation of Wellesley Bank, each eligible account holder and supplemental account holder will be entitled to receive a liquidation distribution from the liquidation account in the amount of the then current adjusted subaccount balance(s) for deposit account(s) held by the holder before any liquidation distribution may be made to stockholders. No merger, consolidation, bulk purchase of assets with assumptions of savings accounts and other liabilities or similar transactions with another federally insured institution in which Wellesley Bank is not the surviving institution will be considered to be a complete liquidation. In any of these transactions, the liquidation account will be assumed by the surviving institution.

In the unlikely event Wellesley Bank is liquidated after the conversion, depositors will be entitled to full payment of their deposit accounts before any payment is made to Wellesley Bancorp as sole stockholder of Wellesley Bank. There are no plans to liquidate either Wellesley Bank or Wellesley Bancorp in the future.

Material Income Tax Consequences

In connection with the conversion, we have received an opinion of counsel with respect to federal tax laws that no gain or loss will be recognized by account holders receiving subscription rights, except to the extent, if any, that subscription rights are deemed to have fair market value on the date such rights are issued. We believe that the tax opinion summarized below addresses all material federal income tax consequences that are generally applicable to persons receiving subscription rights.

Kilpatrick Townsend & Stockton LLP has issued an opinion to us that, for federal income tax purposes:

• the conversion of Wellesley Bank from the mutual to the stock form of organization will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code, and no gain or loss will be recognized by account holders and no gain or loss will be recognized by Wellesley Bank by reason of such conversion;

• no gain or loss will be recognized by Wellesley Bancorp upon the sale of shares of common stock in the offering;

• it is more likely than not that the fair market value of the nontransferable subscription rights to purchase shares of common stock of Wellesley Bancorp to be issued to eligible account holders, supplemental eligible account holders and other recipients of subscription rights is zero and, accordingly, that no income will be realized by eligible account holders, supplemental eligible account holders and other recipients of subscription rights upon the issuance to them of the subscription rights or upon the exercise of the subscription rights; and

• it is more likely than not that the tax basis to the holders of shares of common stock purchased in the stock offering pursuant to the exercise of the subscription rights will be the amount paid therefor, and that the holding period for such shares of common stock will begin on the date of completion of the stock offering.

The reasoning in support of Kilpatrick Townsend & Stockton LLP’s statement set forth in the third and fourth bullet points above is set forth below. Whether subscription rights have a market value for federal income tax purposes is a question of fact, depending upon all relevant facts and circumstances. According to our counsel, the Internal Revenue Service will not issue rulings on whether subscription rights have a market value. Counsel has also advised us that they are unaware of any instance in which the Internal Revenue Service has taken the position that nontransferable subscription rights have a market value. Counsel also noted that the subscription rights will be granted at no cost to the recipients, will be nontransferable and of short duration, and will afford the recipients the right only to purchase our common stock at a price equal to its estimated fair market value, which will be the same price as the purchase price for the unsubscribed shares of common stock.

Unlike a private letter ruling issued by the Internal Revenue Service, an opinion of counsel is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with the conclusions reached in the opinion. If there is a disagreement, no assurance can be given that the conclusions reached in an opinion of counsel would be sustained by a court if contested by the Internal Revenue Service.

The opinion of Kilpatrick Townsend & Stockton LLP is filed as an exhibit to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

Subscription Offering and Subscription Rights

General. Under the plan of conversion, we have granted rights to subscribe for Wellesley Bancorp common stock to the following persons in the following order of priority:

• Persons with deposits in Wellesley Bank with balances aggregating $50 or more (“qualifying deposits”) as of the close of business on April 30, 2010 (“eligible account holders”).

• Persons with qualifying deposits in Wellesley Bank as of the close of business on June 30, 2011 (“supplemental eligible account holders”), other than our officers, directors and their associates.

82

• Our employee stock ownership plan.

• Officers, directors and employees of Wellesley Bank who do not have a higher priority right.

Unlike our employee stock ownership plan, our 401(k) Plan has not been granted priority subscription rights. Accordingly, a 401(k) plan participant who elects to purchase shares in the offering through self-directed purchases within the 401(k) plan will receive the same subscription priority, and be subject to the same purchase limitations, as if the participant had elected to purchase shares using funds outside the 401(k) plan.

The amount of common stock that any person may purchase will depend on the availability of the common stock after satisfaction of all subscriptions having priority rights in the subscription offering and to the maximum and minimum purchase limitations set forth in the plan of conversion. See “—Limitations on Purchases of Shares.” All persons on a joint account will be counted as a single depositor for purposes of determining the maximum amount that may be subscribed for by owners of a joint account.

We will strive to identify your ownership in all accounts, but cannot guarantee we will identify all accounts in which you have an ownership interest.

Category 1: Eligible Account Holders. Subject to the purchase limitations as described below under “—Limitations on Purchases of Shares,” each eligible account holder has the right to subscribe for up to the greater of:

• $200,000 of common stock (which equals 20,000 shares);

• one-tenth of 1% of the total offering of common stock; or

• 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders.

If there are insufficient shares to satisfy all subscriptions by eligible account holders, shares first will be allocated so as to permit each subscribing eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining eligible account holders whose subscriptions remain unfilled. Unless waived by the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation, subscription rights of eligible account holders who are also executive officers or directors of Wellesley Bank or their associates will be subordinated to the subscription rights of other eligible account holders to the extent attributable to increased deposits in Wellesley Bank in the one year period preceding April 30, 2010.

To ensure a proper allocation of stock, each eligible account holder must list on his or her stock order form all deposit accounts in which such eligible account holder had an ownership interest at April 30, 2010. Failure to list an account, or providing incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Category 2: Supplemental Eligible Account Holders. Subject to the purchase limitations as described below under “—Limitations on Purchases of Shares,” each supplemental eligible account holder has the right to subscribe for up to the greater of:

• $200,000 of common stock (which equals 20,000 shares);

• one-tenth of 1% of the total offering of common stock; or

• 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the supplemental eligible account holder and the denominator is the total amount of qualifying deposits of all supplemental eligible account holders.

If eligible account holders subscribe for all of the shares being sold, no shares will be available for supplemental eligible account holders. If shares are available for supplemental eligible account holders but there are insufficient shares to satisfy all subscriptions by supplemental eligible account holders, shares first will be allocated so as to permit each subscribing supplemental eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing supplemental eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining supplemental eligible account holders whose subscriptions remain unfilled.

83

To ensure a proper allocation of stock, each supplemental eligible account holder must list on his or her stock order form all deposit accounts in which such supplemental eligible account holder had an ownership interest at June 30, 2011. Failure to list an account, or providing incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Category 3: Tax-Qualified Employee Benefit Plans. Our tax-qualified employee benefit plans (other than our 401(k) plan) have the right to purchase up to 10% of the shares of common stock sold in the offering and contributed to the charitable foundation. As a tax-qualified employee benefit plan, our employee stock ownership plan intends to purchase 8% of the sum of the shares sold in the offering and contributed to the charitable foundation. Subscriptions by the employee stock ownership plan will not be aggregated with shares of common stock purchased by any other participants in the offering, including subscriptions by our officers and directors, for the purpose of applying the purchase limitations in the plan of conversion. If eligible account holders and supplemental eligible account holders subscribe for all of the shares being sold, no shares will be available for our tax-qualified employee benefit plans. However, if we increase the number of shares offered above the maximum of the offering range, the employee stock ownership plan will have a first priority right to purchase any shares exceeding that amount up to 10% of the common stock issued in the offering and contributed to the charitable foundation. If the plan’s subscription is not filled in its entirety, the employee stock ownership plan may purchase shares in the open market or may purchase shares directly from us.

Category 4: Other Members. Subject to the purchase limitations as described below under “—Limitations on Purchases of Shares,” each employee, officer and director of Wellesley Bank at the time of the offering who is not eligible in the preceding priority categories has the right to purchase $200,000 of common stock (which equals 20,000 shares); provided, however, that the aggregate number of shares of common stock that may be purchased by employees, officers and directors in the conversion is limited to 30% of the total number of shares of common stock sold in the offering and contributed to the charitable foundation (including shares purchased by employees, officers and directors under this category and under the preceding priority categories, but not including shares purchased by the employee stock ownership plan). If eligible account holders, supplement eligible account holders and the employee stock ownership plan subscribe for all of the shares being sold, no shares will be available for persons in this category. If shares are available for persons in this category but there are not sufficient shares to satisfy all subscriptions by such persons, shares will be allocated among such subscribing persons on an equitable basis, such as by giving weight to the order size, period of service, compensation and position of the individual subscriber.

Expiration Date for the Subscription Offering. The subscription offering, and all subscription rights under the plan of conversion, will terminate at __:00 p.m., Eastern time, on [Expiration Date]. We will not accept orders for common stock in the subscription offering received after the expiration date. We will make reasonable attempts to provide a prospectus and related offering materials to holders of subscription rights; however, all subscription rights will expire on the expiration date whether or not we have been able to locate each person entitled to subscription rights.

Massachusetts regulations require that we complete the sale of common stock within 45 days after the close of the subscription offering. If the sale of the common stock is not completed within that period, all funds received will be returned promptly with interest at our passbook savings rate and without deduction, and all withdrawal authorizations will be canceled unless we receive approval of the Massachusetts Commissioner of Banks and Federal Deposit Insurance Corporation to extend the time for completing the offering. If regulatory approval of an extension of the time period has been granted, we will notify all subscribers of the extension and of the duration of any extension that has been granted, and subscribers will have the right to modify or rescind their orders. If we do not receive an affirmative response from a subscriber to modify their order, the subscriber’s order will be rescinded and all funds received will be promptly returned with interest and without deduction, or withdrawal authorizations will be canceled.

Persons in Nonqualified States. We will make reasonable efforts to comply with the securities laws of all states in the United States in which persons entitled to subscribe for stock under the plan of conversion reside. However, we are not required to offer stock in the subscription offering to any person who resides in a foreign country or who resides in a state of the United States in which (1) only a small number of persons otherwise eligible to subscribe for shares of common stock reside; (2) the granting of subscription rights or the offer or sale of shares to such person would require that we or our officers or directors register as a broker, dealer, salesman or selling agent under the securities laws of the state, or register or otherwise qualify the subscription rights or common stock for sale or qualify as a foreign corporation or file a consent to service of process; or (3) we determine that compliance with that state’s securities laws would be impracticable for reasons of cost or otherwise.

Restrictions on Transfer of Subscription Rights and Shares. Subscription rights are nontransferable. You may not transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of your subscription rights issued under the plan of conversion or the shares of common stock to be issued upon exercise of your subscription rights. Your subscription rights may be exercised only by you and only for your own account. If you exercise your subscription rights, you will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding regarding

84

the sale or transfer of such shares. Federal and state regulations also prohibit any person from offering, or making an announcement of an offer or intent to make an offer, to purchase such subscription rights or shares of common stock before the completion of the offering.

If you sell or otherwise transfer your rights to subscribe for common stock in the subscription offering or subscribe for common stock on behalf of another person, you may forfeit those rights and face possible further sanctions and penalties imposed by the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation or another agency of the U.S. Government. We will pursue any and all legal and equitable remedies if we become aware of the transfer of subscription rights and will not honor orders known by us to involve the transfer of such rights.

Community Offering

To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, we may offer shares in a community offering to the following persons in the following order of priority:

• First priority to natural persons who are residents of the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston; and

• Second priority to other persons to whom we deliver a prospectus.

We will consider persons to be residents of the above listed municipalities if they occupy a dwelling in the municipality and have established an ongoing physical presence in the municipality that is not merely transitory in nature. We may utilize depositor or loan records or other evidence provided to us to make a determination as to whether a person is a resident of such municipalities. In all cases, the determination of residence status will be made by us in our sole discretion.

Stock sold in the direct community offering will be offered and sold in a manner to achieve a wide distribution of the stock. Each person may purchase up to $200,000 of common stock, subject to the overall maximum purchase limitations. Allocation of shares if an oversubscription occurs in this category of the offering will give preference to natural persons residing in the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston, such that each such person may receive 100 shares, and thereafter, on a pro rata basis to such persons based on the amount of their respective subscriptions or other reasonable basis until all available shares have been allocated. If shares remain after filling all subscriptions of persons living in the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston and an oversubscription occurs among other persons in this category of the offering, the allocation process to cover orders for such other persons shall be the same as described for natural persons residing in the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston.

The direct community offering, if any, may commence concurrently with or subsequent to the commencement of the subscription offering and shall be for a period of not more than 45 days unless extended by Wellesley Bancorp, with the approval of the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. If we receive regulatory approval for an extension, all subscribers will be notified of the extension and of the duration of any extension that has been granted, and will have the right to confirm, increase, decrease or rescind their orders. If we do not receive an affirmative response from a subscriber to confirm, increase or decrease their order, the subscriber’s order will be rescinded and all funds received will be promptly returned with interest. We may terminate the direct community offering at any time after we have received orders for at least the minimum number of shares available for purchase in the offering.

The opportunity to subscribe for shares of common stock in the community offering is subject to our right in our sole discretion to accept or reject orders, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

Syndicated Offering

The plan of conversion provides that, if necessary, all shares of common stock not purchased in the subscription offering and community offering may be offered for sale to the general public in a syndicated offering to be managed by Sandler O’Neill + Partners, L.P., acting as our agent. In such capacity, Sandler O’Neill + Partners, L.P. may form a syndicate of other brokers-dealers who are member firms of the Financial Industry Regulatory Authority (“FINRA”). Neither Sandler O’Neill + Partners, L.P. nor any registered broker-dealer will have any obligation to take or purchase any shares of the common stock in the syndicated offering; however, Sandler O’Neill + Partners, L.P. has agreed to use its best efforts in the sale of shares in any syndicated offering. The syndicated offering would terminate no later than 45 days after the expiration of the subscription offering, unless extended by us, with approval of the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. See “—Community Offering” above for a discussion of rights of subscribers if an extension is granted.

85

Common stock sold in the syndicated offering also will be sold at the $10.00 per share purchase price. Purchasers in the syndicated offering are eligible to purchase up to $200,000 of common stock (which equals 20,000 shares). We may begin the syndicated offering at any time following the commencement of the subscription offering.

The opportunity to subscribe for shares of common stock in the syndicated offering is subject to our right in our sole discretion to accept or reject orders, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

The syndicated offering will be conducted in accordance with certain Securities and Exchange Commission rules applicable to best efforts offerings. Under these rules, Sandler O’Neill + Partners, L.P. or the other broker-dealers participating in the syndicated offering generally will accept payment for shares of common stock to be purchased in the syndicated offering on the settlement date through the services of the Depository Trust Company on a delivery versus payment basis. Normal customer ticketing will be used for orders placed through Sandler O’Neill + Partners, L.P. or other broker-dealers participating in the syndicated offering. Order forms may also be used to purchase shares of common stock in the syndicated offering. Investors in the syndicated offering electing to use stock order forms would follow the same procedures applicable to purchasing shares in the subscription and community offering. See “—Procedure for Purchasing Shares in the Subscription and Community Offering.” If Sandler O’Neill + Partners, L.P. or other participating broker-dealers collect funds from investors in the syndicated offering, such funds will be deposited in a segregated account at Wellesley Bank. We will pay interest at our passbook savings rate, which is subject to change at any time and is currently 0.25% per annum, from the date funds are processed until completion of the offering, at which time an investor will be issued a check for interest earned. The closing of the syndicated offering is subject to conditions set forth in an agency agreement among Wellesley Bancorp and Wellesley Bank on the one hand, and Sandler O’Neill + Partners, L.P., on the other hand. If and when all the conditions for the closing are met, funds for common stock sold in the syndicated offering, less fees and commissions payable, will be delivered promptly to us.

If for any reason we cannot affect a syndicated community offering of shares of common stock not purchased in the subscription and community offerings, or in the event that there are a significant number of shares remaining unsold after such offerings, we will try to make other arrangements for the sale of unsubscribed shares, if possible. The Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation and the Financial Industry Regulatory Authority must approve any such arrangements. If other purchase arrangements cannot be made, we may: terminate the stock offering and promptly return all funds; promptly return all funds, set a new offering range and give all subscribers the opportunity to place a new order for shares of Wellesley Bancorp common stock; or take such other actions as may be permitted by the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation, FINRA and the Securities and Exchange Commission.

Limitations on Purchases of Shares

In addition to the purchase limitations described above under “—Subscription Offering and Subscription Rights,” “—Community Offering” and “Syndicated Offering,” the plan of conversion provides for the following purchase limitations:

• Except for our tax-qualified employee benefit plans, no individual may purchase in the aggregate more than $200,000 of the common stock, or 20,000 shares, sold in the offerings, subject to increase or decrease as described below. In addition, except for our tax-qualified employee benefit plans, no person, either alone or together with associates of or persons acting in concert with such person, may purchase more than $350,000 of the common stock, or 35,000 shares sold in the offerings, subject to increase or decrease as described below.

• Our tax-qualified employee benefit plans are entitled to purchase up to 10.0% of the shares sold in the conversion and contributed to the charitable foundation. As a tax-qualified employee benefit plan, our employee stock ownership plan intends to purchase 8.0% of the shares sold in the conversion and contributed to the charitable foundation.

• Each subscriber must subscribe for a minimum of 25 shares.

• Our directors and executive officers, together with their associates, may purchase in the aggregate up to 30% of the common stock sold in the offering.

We may, in our sole discretion, increase or decrease the individual or aggregate purchase limitation to up to 5% of the shares of common stock sold in the offering or down to no less than 1/10 of 1.0% of the shares offered in the offering. We do not intend to increase or decrease the maximum purchase limitation unless market conditions warrant. If we decide to increase the purchase limitations, persons who subscribed for the maximum number of shares of common stock will be given the opportunity to increase their subscriptions accordingly, subject to the rights and preferences of any person who has priority subscription rights. We, in our discretion, also may give other large subscribers the right to increase their subscriptions.

86

If we increase the maximum purchase limitation to 5% of the shares of common stock sold in the offering, we may further increase the maximum purchase limitation to 9.99%, provided that orders for common stock exceeding 5% of the shares of common stock sold in the offering may not exceed in the aggregate 10% of the total shares of common stock sold in the offering.

The plan of conversion defines “acting in concert” to mean knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not by an express agreement or understanding; or a combination or pooling of voting or other interests in the securities of an issuer for a common purpose under any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. In general, a person who acts in concert with another party will also be deemed to be acting in concert with any person who is also acting in concert with that other party. We may presume that certain persons are acting in concert based upon, among other things, joint account relationships or the fact that persons share a common address (whether or not related by blood or marriage) or may have filed joint Schedules 13D or 13G with the Securities and Exchange Commission with respect to other companies. For purposes of the plan of conversion, our directors are not deemed to be acting in concert solely by reason of their board membership.

The plan of conversion defines “associate,” with respect to a particular person, to mean:

• a corporation or organization, other than Wellesley Bancorp or Wellesley Bank or a majority-owned subsidiary of Wellesley Bancorp or Wellesley Bank, of which a person is a senior officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities of such corporation or organization;

• a trust or other estate in which a person has a substantial beneficial interest or as to which a person serves as a trustee or a fiduciary; and

• any relative or spouse of the person or any relative of the spouse who has the same home as such person or who is a director or senior officer of Wellesley Bancorp, Wellesley Bank or any of their subsidiaries.

For example, a corporation of which a person serves as an officer would be an associate of that person and, therefore, all shares purchased by the corporation would be included with the number of shares that the person could purchase individually under the aggregate purchase limitation described above. We have the right in our sole discretion to reject any order submitted by a person whose representations we believe to be false or who we otherwise believe, either alone or acting in concert with others, is violating or circumventing, or intends to violate or circumvent, the terms and conditions of the plan of conversion. Directors and officers are not treated as associates of each other solely by virtue of holding such positions. We have the sole discretion to determine whether prospective purchasers are “associates” or “acting in concert.”

Marketing Arrangements

In its role as financial advisor, Sandler O’Neill + Partners, L.P. will assist us in the offering as follows:

• consulting with us as to the financial and securities market implications of the plan of conversion and reorganization;

• reviewing with our Board of Directors the financial impact of the offering on us, based upon the independent appraiser’s appraisal of the common stock;

• reviewing all offering documents, including the prospectus, stock order forms and related offering materials (it being understood that we are responsible for the preparation and filing of such documents);

• assisting in the design and implementation of a marketing strategy for the offering;

• assisting management in scheduling and preparing for meetings with potential investors and other broker-dealers in connection with the offering; and

• providing such other general advice and assistance we may request to promote the successful completion of the offering.

For its services as marketing agent, Sandler O’Neill + Partners, L.P. will receive a success fee of $270,000. In the event that common stock is sold in a syndicated offering, we will pay a selling concession which will not exceed 5% of the actual purchase price of each security sold in the syndicated offering, which shall be allocated to dealers (including Sandler O’Neill + Partners, L.P.) in accordance with the actual number of shares of common stock sold by such dealers. Regardless of whether the offering is consummated, or if Sandler O’Neill + Partners, L.P.’s engagement is terminated for certain specified reasons, Sandler O’Neill + Partners, L.P. is entitled to be reimbursed for its reasonable out-of-pocket expenses up to a maximum of $75,000 if no syndicated offering is held and $100,000 if a syndicated offering is held. Sandler O’Neill + Partners, L.P. will also receive a fee of $12,000 for its services as records management agent in connection with the conversion offering and is entitled to be reimbursed for its reasonable out-of-pocket expenses up to a maximum of $30,000 if no syndicated offering is held and $40,000 if a syndicated offering is held.

We will indemnify Sandler O’Neill + Partners, L.P. against liabilities and expenses, including legal fees, incurred in connection with certain claims or litigation arising out of or based upon untrue statements or omissions contained in the offering materials for the common stock, including liabilities under the Securities Act of 1933, as amended.

87

Wellesley Bancorp will offer the common stock in the subscription offering and community offering by the distribution of this prospectus and through activities conducted at the Conversion Center. The Conversion Center is expected to operate during normal business hours throughout the subscription offering and community offering. It is expected that at any particular time one or more Sandler O’Neill + Partners, L.P. employees will be working at the Conversion Center. Employees of Sandler O’Neill + Partners, L.P. will be responsible for responding to questions regarding the conversion and the offering and processing stock orders. Sales of common stock will be made by registered representatives affiliated with Sandler O’Neill + Partners, L.P. or by the selected dealers managed by Sandler O’Neill + Partners, L.P.

Some of our directors and executive officers may participate in the solicitation of offers to purchase common stock. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other regular employees of Wellesley Bank may assist in the offering, but only ministerial capacities, and may provide clerical work in effecting a sales transaction. No offers or sales may be made by tellers or at the teller counters. No sales activity will be conducted in a Wellesley Bank banking office. Investment-related questions of prospective purchasers will be directed to executive officers or registered representatives of Sandler O’Neill + Partners, L.P. Our other employees have been instructed not to solicit offers to purchase shares of common stock or provide advice regarding the purchase of common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, as amended, and sales of common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock. None of our officers, directors or employees will be compensated, directly or indirectly, in connection with their participation in the offering.

In addition, we have engaged Sandler O’Neill + Partners, L.P. to act as our records agent in connection with the conversion and offering. In its role as records agent, Sandler O’Neill + Partners, L.P. will assist us in the offering as follows: (1) consolidation of deposit accounts; (2) design and preparation of order forms; (3) organization and supervision of the Conversion Center; (4) depositor special meeting services; and (5) subscription services.

Sandler O’Neill + Partners, L.P. did not prepare any report or opinion constituting a recommendation or advice to us or to persons who subscribe for common stock, nor have they prepared an opinion as to the fairness to us of the purchase price or the terms of the common stock to be sold in the conversion and offering. Sandler O’Neill + Partners, L.P. does not express any opinion as to the prices at which common stock to be issued may trade.

Description of Sales Activities

Wellesley Bank’s officers and employees may participate in the offering in clerical capacities, providing administrative support in effecting sales transactions or, when permitted by state securities laws, answering questions of a mechanical nature relating to the proper execution of the order form. Wellesley Bank’s officers may answer questions regarding our business when permitted by state securities laws. Other questions of prospective purchasers, including questions as to the advisability or nature of the investment, will be directed to registered representatives. Wellesley Bank’s officers and employees have been instructed not to solicit offers to purchase common stock or provide advice regarding the purchase of common stock.

None of Wellesley Bank’s personnel participating in the offering is registered or licensed as a broker or dealer or an agent of a broker or dealer. Wellesley Bank’s personnel will assist in the above-described sales activities under an exemption from registration as a broker or dealer provided by Rule 3a4-l promulgated under the Securities Exchange Act of 1934. Rule 3a4-l generally provides that an “associated person of an issuer” of securities will not be deemed a broker solely by reason of participation in the sale of securities of the issuer if the associated person meets certain conditions. These conditions include, but are not limited to, that the associated person participating in the sale of an issuer’s securities not be compensated in connection with the offering at the time of participation, that the person not be associated with a broker or dealer and that the person observe certain limitations on his or her participation in the sale of securities. For purposes of this exemption, “associated person of an issuer” is defined to include any person who is a director, officer or employee of the issuer or a company that controls, is controlled by or is under common control with the issuer.

Procedure for Purchasing Shares in the Subscription and Community Offerings

Use of Order Forms. To purchase shares in the subscription offering, a properly completed and executed order form must be received (not postmarked) by us in our Conversion Center by __:00 p.m., Eastern time, on [Expiration Date]. Your order form must be accompanied by full payment for all of the shares subscribed for or include appropriate authorization in the space provided on the order form for withdrawal of full payment from a deposit account with Wellesley Bank. To purchase shares in the community offering, you must deliver a properly completed and executed order form to us, accompanied by the required payment for each share subscribed for, before the community offering terminates, which may be on, or at any time after, the end of the subscription offering. If you are ordering shares in the subscription offering, by signing the order form you are representing that

88

you are purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms will be final.

However, signing the stock order form will not cause you to waive your rights under the Securities Act of 1933.

To ensure that your stock purchase eligibility and priority are properly identified, you must list all accounts on the order form, giving all names in each account and the account number. We will strive to identify your ownership in all accounts, but cannot guarantee we will identify all accounts in which you have an ownership interest. Failure to list all of your accounts may result in fewer shares being allocated to you than if all of your accounts were listed.

We need not accept order forms that are received after the expiration of the subscription offering or community offering, as the case may be, or that are executed defectively or that are received without full payment or without appropriate withdrawal instructions. We are not required to notify purchasers of incomplete or improperly executed order forms. In addition, we are not obligated to accept orders submitted on photocopied or facsimiled stock order forms. We have the right to waive or permit the correction of incomplete or improperly executed order forms, but do not represent that we will do so. Under the plan of conversion, our interpretation of the terms and conditions of the plan of conversion and of the order form will be final. Once received, an executed order form may not be modified, amended or rescinded without our consent unless the offering has not been completed by [Extension Date].

We will not accept order forms where the order form is not executed. By executing and returning the order form, you will be certifying that you received this prospectus and acknowledging that the common stock is not a deposit account and is not insured or guaranteed by the federal government. You also will be acknowledging that you received disclosure concerning the risks involved in this offering. The order form could be used as support to show that you understand the nature of this investment. You may submit your stock order form and payment by mail using the stock order reply envelope provided, by bringing your stock order form to our Conversion Center, or by overnight delivery to the indicated address on the order form. Our Conversion Center is located at             ,             , Massachusetts. Stock order forms may be not be delivered to Wellesley Bank’s offices.

To ensure that each purchaser in the subscription and community offering receives a prospectus at least 48 hours before the end of the subscription and community offering, as required by Rule 15c2-8 under the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any later than five days before that date or hand delivered any later than two days before that date. Execution of the order form will confirm receipt or delivery under Rule 15c2-8. Order forms will be distributed only when preceded or accompanied by a prospectus.

Payment for Shares. Payment for subscriptions may be made by check, bank draft or money order, or by authorization of withdrawal from deposit accounts maintained with Wellesley Bank. Funds received before the completion of the offering will be maintained in a segregated account at Wellesley Bank. All checks, bank drafts and money orders must be made payable to the Wellesley Bancorp segregated account in compliance with Securities and Exchange Commission Rule 15c2-4. However, we will not maintain more than one escrow account. All subscriptions received will bear interest at Wellesley Bank’s passbook savings rate, which is subject to change at any time and is currently 0.25% per annum. Subscriber’s funds will be transmitted to the segregated account no later than noon of the next business day where they will be invested in investments that are permissible under Securities and Exchange Commission Rule 15c2-4. Appropriate means by which withdrawals may be authorized are provided on the order form. No wire transfers or third party checks will be accepted. Interest will be paid on payments made by check, bank draft or money order at our lowest tier money market passbook savings rate from the date payment is received at the Conversion Center until the completion or termination of the offering. Payment in cash will not be accepted unless the cash is converted into a bank check or money order. If payment is made by authorization of withdrawal from deposit accounts, the funds authorized to be withdrawn from a deposit account will continue to accrue interest at the contractual rates until completion or termination of the offering, but a hold will be placed on the funds, making them unavailable to the depositor until completion or termination of the offering. When the offering is completed, the funds received in the offering will be used to purchase the shares of common stock ordered. The shares of common stock issued in the offering cannot and will not be insured by the Federal Deposit Insurance Corporation or any other government agency or the Share Insurance Fund. If the offering is not consummated for any reason, all funds submitted will be promptly refunded with interest as described above.

If a subscriber authorizes us to withdraw the amount of the purchase price from his or her deposit account, we will do so as of the completion of the offering, though the account must contain the full amount necessary for payment at the time the subscription order is received. We will waive any applicable penalties for early withdrawal from certificate accounts. If the remaining balance in a certificate account is reduced below the applicable minimum balance requirement at the time funds are actually transferred under the authorization, the certificate will be canceled at the time of the withdrawal, without penalty, and the remaining balance will earn interest at our passbook savings rate.

89

Regulations prohibit Wellesley Bank from lending funds or extending credit to any persons to purchase shares of common stock in the offering.

The employee stock ownership plan will not be required to pay for the shares subscribed for at the time it subscribes, but rather may pay for shares of common stock subscribed for upon the completion of the offering; provided that there is in force from the time of its subscription until the completion of the offering a loan commitment from an unrelated financial institution or from us to lend to the employee stock ownership plan, at that time, the aggregate purchase price of the shares for which it subscribed.

We may, in our sole discretion, permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for such shares of common stock for which they subscribe in the community offering at any time before the 48 hours before the completion of the offering. This payment may be made by wire transfer.

Using IRA Funds to Purchase Shares. Our individual retirement accounts (“IRAs”) do not permit investment in common stock. A depositor interested in using his or her IRA funds to purchase common stock must do so through a self-directed IRA. Since we do not offer those accounts, we will allow a depositor to make a trustee-to-trustee transfer of the IRA funds to a trustee offering a self-directed IRA program with the agreement that the funds will be used to purchase our common stock in the offering. There will be no early withdrawal or Internal Revenue Service interest penalties for such transfers. The new trustee would hold the common stock in a self-directed account in the same manner as we now hold the depositor’s IRA funds. An annual administrative fee may be payable to the new trustee. You may use funds currently in an independent self-directed IRA to purchase stock by having your trustee complete and return the subscription form together with a check made payable to Wellesley Bancorp before the expiration of the subscription offering. Depositors interested in using funds in an IRA with us to purchase common stock should contact the Conversion Center as soon as possible preferably at least two weeks prior to the offering deadline so that the necessary forms may be forwarded for execution and returned before the subscription offering ends. In addition, federal laws and regulations require that officers, directors and 10% stockholders who use self-directed IRA funds to purchase shares of common stock in the subscription offering, make purchases for the exclusive benefit of IRAs.

How We Determined the Offering Range and the $10.00 Per Share Purchase Price

Federal and state regulations require that the aggregate purchase price of the securities sold in connection with the offering be based upon our estimated pro forma value, as determined by an independent appraisal. We have retained Feldman Financial, Inc. which is experienced in the evaluation and appraisal of business entities, to prepare the independent appraisal. Feldman Financial will receive fees totaling $35,000 for its appraisal services, plus $7,500 for each appraisal valuation update other than the required final valuation update at closing, and a maximum of $2,500 for reimbursement of out-of-pocket expenses. We have agreed to indemnify Feldman Financial and its employees and affiliates for certain costs and expenses, including reasonable legal fees arising out of, related to, or based upon the offering and due to any misstatement or untrue statement or intentional omission by Wellesley Bank.

Feldman Financial prepared the appraisal taking into account the pro forma impact of the offering. For its analysis, Feldman Financial undertook substantial investigations to learn about our business and operations. We supplied financial information, including annual financial statements, information on the composition of assets and liabilities, and other financial schedules. In addition to this information, Feldman Financial reviewed our conversion application as filed with the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation and our registration statement as filed with the Securities and Exchange Commission. Furthermore, Feldman Financial visited our facilities and had discussions with our management. Feldman Financial did not perform a detailed individual analysis of the separate components of our assets and liabilities. We did not impose any limitations on Feldman Financial in connection with its appraisal.

In connection with its appraisal, Feldman Financial reviewed the following factors, among others:

• our present and projected operating results and financial condition;

• the economic and demographic conditions of our primary market area;

• pertinent historical financial and other information relating to Wellesley Bank;

• a comparative evaluation of our operating and financial statistics with those of other thrift institutions;

• the proposed price per share;

• the aggregate size of the offering of common stock;

• the impact of the conversion on our capital position and earnings potential; and

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

90

Feldman Financial’s analysis utilized three selected valuation procedures, the price/tangible book method, the price/core earnings method, and the price/assets method, all of which are described in its report. Feldman Financial’s appraisal report is filed as an exhibit to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.” Feldman Financial placed the greatest emphasis on the price/core earnings and price/tangible book methods in estimating pro forma market value. Feldman Financial compared the pro forma price/tangible book and price/core earnings ratios for Wellesley Bancorp to the same ratios for a peer group of comparable companies. In selecting a peer group from all publicly-traded, fully-converted thrift companies, Feldman Financial applied the following selection criteria: thrift institutions based in the New England and Mid-Atlantic regions of the U.S., with assets between $150 million and $650 million, tangible equity-to-assets ratios of greater than 6.0% and positive core earnings. For purposes of Feldman Financial’s appraisal report, core earnings are generally defined as reported earnings adjusted for nonrecurring gains and losses from the sale or write-down of assets or liabilities on a tax-effected basis. The peer group included companies with:

• average assets of $434.5 million;

• average nonperforming assets of 1.7% of total assets;

• average net loans of 67.2% of total assets;

• average equity of 12.4% of total assets; and

• average core earnings of 0.3% of average assets.

On the basis of the analysis in its report, Feldman Financial has advised us that, in its opinion, as of August 23, 2011, our estimated pro forma market value, including shares contributed to the Wellesley Bank Charitable Foundation, was within the valuation range of $21.8 million and $29.5 million, with a midpoint of $25.7 million.

The following table presents a summary of selected pricing ratios for Wellesley Bancorp, for the peer group companies and for all publicly traded thrifts. Compared to the peer group’s average price-to-tangible book ratio of 83.1%, Wellesley Bancorp’s pro forma price-to-tangible book ratio of 65.8% at the maximum of the offering range indicated a discount of 20.8%.

	Price to Core Earnings Multiple			Price to Book Value Ratio (1)			Price to Tangible Book Value Ratio (1)
Wellesley Bancorp (pro forma):
Minimum		10.6	x		56.8	%		56.8	%
Midpoint		12.7			61.7			61.7
Maximum		14.9			65.8			65.8
Maximum, as adjusted		17.2			69.9			69.9
Peer Group:
BCSB Bancorp, Inc.		43.3	x		76.9	%		77.0	%
Central Bancorp, Inc.		N/M			80.5			85.6
Chicopee Bancorp, Inc.		N/M			90.8			90.8
CMS Bancorp, Inc.		N/M			68.4			68.4
Elmira Savings Bank, FSB		9.5			113.8			113.8
Hampden Bancorp, Inc.		N/M			86.5			86.5
Mayflower Bancorp, Inc.		14.4			76.9			76.9
Newport Bancorp, Inc.		22.6			87.3			87.3
OBA Financial Services, Inc.		N/M			78.9			78.9
WVS Financial Corp.		15.3			65.6			65.6
Average		21.0			78.9			83.1
Median		15.3			78.1			82.2
All publicly-traded thrifts:
Average		17.6	x		72.7	%		81.7	%
Median		15.6			73.4			77.5

N/M—Not meaningful.

(1) Ratios are based on book value as of June 30, 2011 (except for Mayflower Bancorp, Inc. which is as of July 31, 2011) and share prices as of August 23, 2011.

The pro forma information presented under “Pro Forma Data” reflects an estimated expense for the equity incentive plan that may be adopted by Wellesley Bancorp and the resulting effect on the pro forma price-to-earnings multiples for Wellesley Bancorp.

91

Our board of directors reviewed Feldman Financial’s appraisal report, including the methodology and the assumptions used by Feldman Financial, and determined that the valuation range was reasonable and adequate. Assuming that the shares are sold at $10.00 per share in the conversion, the estimated number of shares would be between 2,182,800 at the minimum of the valuation range and 2,953,200 at the maximum of the valuation range, with a midpoint of 2,568,000, which amount includes shares contributed to the charitable foundation. The purchase price of $10.00 per share was determined by us, taking into account, among other factors, offering the common stock in a manner that will achieve the widest distribution of the stock and desired liquidity in the common stock after the offering.

Since the outcome of the offering relates in large measure to market conditions at the time of sale, it is not possible for us to determine the exact number of shares that we will issue at this time. The offering range may be amended, with the approval of the Massachusetts Commissioner of Banks and Federal Deposit Insurance Corporation, if necessitated by developments following the date of the appraisal in, among other things, market conditions, our financial condition or operating results, regulatory guidelines or national or local economic conditions.

If, upon completion of the subscription offering, at least the minimum number of shares are subscribed for, Feldman Financial, after taking into account factors similar to those involved in its prior appraisal, will determine its estimate of our pro forma market value as of the close of the subscription offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, Feldman Financial determines that our pro forma market value has increased, we may sell up to 3,174,000 shares without any further notice to you.

No shares will be sold unless Feldman Financial confirms that, to the best of its knowledge and judgment, nothing of a material nature has occurred that would cause it to conclude that the actual total purchase price of the shares on an aggregate basis was materially incompatible with its appraisal. If, however, the facts do not justify that statement, we may either: terminate the stock offering and promptly return all funds without deduction; set a new offering range, notify all subscribers and give them the opportunity to place a new order for shares of Wellesley Bancorp common stock; or take such other actions as may be permitted by the Massachusetts Commissioner of Banks and Federal Deposit Insurance Corporation. If the offering is terminated all subscriptions will be cancelled and subscription funds will be returned promptly with interest and without deduction, and holds on funds authorized for withdrawal from deposit accounts will be released or reduced. If Feldman Financial establishes a new valuation range, it must be approved by the Massachusetts Commissioner of Banks and Federal Deposit Insurance Corporation.

In formulating its appraisal, Feldman Financial relied upon the truthfulness, accuracy and completeness of all documents we furnished to it. Feldman Financial also considered financial and other information from regulatory agencies, other financial institutions, and other public sources, as appropriate. While Feldman Financial believes this information to be reliable, Feldman Financial does not guarantee the accuracy or completeness of the information and did not independently verify the consolidated financial statements and other data provided by us nor independently value our assets or liabilities. The appraisal is not intended to be, and must not be interpreted as, a recommendation as to the advisability of purchasing shares of common stock. Moreover, because the appraisal must be based on many factors that change periodically, there is no assurance that purchasers of shares in the offering will be able to sell shares after the offering at prices at or above the purchase price.

Copies of the appraisal report of Feldman Financial, including any amendments to the report, and the detailed memorandum of the appraiser setting forth the method and assumptions for such appraisal are available for inspection at our main office and the other locations specified under “Where You Can Find More Information.”

Delivery of Certificates

Certificates representing the common stock sold in the offering will be mailed by our transfer agent to the persons whose subscriptions or orders are filled at the addresses of such persons appearing on the stock order form as soon as practicable following completion of the offering. We will hold certificates returned as undeliverable until claimed by the persons legally entitled to the certificates or otherwise disposed of in accordance with applicable law. Until certificates for common stock are available and delivered to subscribers, subscribers may not be able to sell their shares, even though trading of the common stock may have commenced.

Restrictions on Transfer of Shares After the Conversion Applicable to Officers and Directors

Common stock purchased in the offering will be freely transferable, except for shares purchased by our directors and executive officers.

Shares of common stock purchased by our directors and officers may not be sold for a period of one year following the offering, except upon the death or substantial disability, as determined by the Massachusetts Commissioner of Banks and the

92

Federal Deposit Insurance Corporation, of the stockholder or upon the written approval of the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. Shares purchased by these persons in the open market after the offering will be free of this restriction. Shares of common stock issued to directors and officers will bear a legend giving appropriate notice of the restriction and, in addition, we will give appropriate instructions to our transfer agent with respect to the restriction on transfers. Any shares issued to directors and officers as a stock dividend, stock split or otherwise with respect to restricted common stock will be similarly restricted.

Persons affiliated with us, including our directors and executive officers, received subscription rights based only on their deposits with Wellesley Bank as account holders. Any purchases made by persons affiliated with us for the explicit purpose of meeting the minimum of the offering must be made for investment purposes only, and not with a view towards redistribution. Furthermore, as set forth above, applicable banking regulations restrict sales of common stock purchased in the offering by directors and executive officers for a period of one year following the offering.

Purchases of outstanding shares of our common stock by directors, officers, or any person who becomes an officer or director after adoption of the plan of conversion, and their associates, during the three-year period following the offering may be made only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation. This restriction does not apply, however, to negotiated transactions involving more than 1% of our outstanding common stock or to the purchase of stock under stock benefit plans.

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, for the registration of the common stock to be issued in the offering and contributed to the charitable foundation. This registration does not cover the resale of the shares. Shares of common stock purchased by persons who are not affiliates of us may be resold without registration. Shares purchased by an affiliate of us will have resale restrictions under Rule 144 of the Securities Act. If we meet the current public information requirements of Rule 144, each affiliate of ours who complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of certain other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of our outstanding shares or the average weekly volume of trading in the shares during the preceding four calendar weeks. We may make future provision to permit affiliates to have their shares registered for sale under the Securities Act under certain circumstances.

Interpretation and Amendment

To the extent permitted by law, all interpretations by us of the plan of conversion will be final; however, such interpretations have no binding effect on the Massachusetts Commissioner of Banks or Federal Deposit Insurance Corporation. The plan of conversion provides that, if deemed necessary or desirable, we may substantively amend the plan of conversion as a result of comments from regulatory authorities or otherwise.

The Wellesley Bank Charitable Foundation

In furtherance of our commitment to our local community, we intend to establish a new charitable foundation, Wellesley Bank Charitable Foundation, in connection with the conversion. The foundation will be established as a nonstock corporation and will be funded with an initial contribution in an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with shares of Wellesley Bancorp common stock and 12.5% of which will be funded with cash (193,200 shares and $276,000 in cash at the maximum of the offering range). We believe that the contribution to the foundation will enhance the long-term value of our community banking franchise by further enhancing our visibility and reputation in our local community. We believe that the conversion presents us with a unique opportunity to provide a substantial and continuing benefit to our community and to receive the associated tax benefits.

Purpose of the Charitable Foundation

The purpose of the Wellesley Bank Charitable Foundation is to provide grants and donations to support nonprofit and community groups and projects that serve the communities in which Wellesley Bank maintains a banking office. The Wellesley Bank Charitable Foundation will be dedicated to community activities and the promotion of charitable causes and is able to support such activities in manners that would not otherwise be available to us. We believe the Wellesley Bank Charitable Foundation will enable us to assist the communities within our market area in areas beyond community development and lending, which we continue to emphasize, and has enhanced our activities under the Community Reinvestment Act.

93

We further believe that a contribution of Wellesley Bancorp’s common stock in addition to cash to the foundation will allow our community to share in our potential growth and success long after the conversion. The Wellesley Bank Charitable Foundation will accomplish that goal by providing stronger ties between Wellesley Bank and the communities in which Wellesley Bank has a banking office.

Structure of the Charitable Foundation

The Wellesley Bank Charitable Foundation will be incorporated under Massachusetts law as a nonstock, nonprofit corporation. Initially, the Wellesley Bank Charitable Foundation’s board of directors will be comprised of individuals that are directors or officers of Wellesley Bancorp or Wellesley Bank and we will select one additional person to serve on the foundation’s board of directors who will not be one of our officers or directors and who will have experience with local charitable organizations and grant making. The articles of organization of the Wellesley Bank Charitable Foundation will provide that the corporation is organized exclusively for charitable purposes as set forth in Section 501(c)(3) of the Internal Revenue Code. The Wellesley Bank Charitable Foundation’s articles of organization will further provide that no part of the net earnings of the charitable foundation will inure to the benefit of, or be distributable to, its directors, officers or members.

The board of directors of the Wellesley Bank Charitable Foundation will be responsible for establishing its grant and donation policies, consistent with the purposes for which it was established. As directors of a nonprofit corporation, directors of the Wellesley Bank Charitable Foundation will at all times be bound by their fiduciary duty to advance the foundation’s charitable goals, to protect its assets and to act in a manner consistent with the charitable purposes for which the foundation is established. The directors of the Wellesley Bank Charitable Foundation also will be responsible for directing the activities of the foundation, including the management and voting of the shares of common stock of Wellesley Bancorp held by the foundation. However, as required by bank regulatory authorities, all shares of common stock held by the Wellesley Bank Charitable Foundation will be voted in the same ratio as all other shares of the common stock on all proposals considered by stockholders of Wellesley Bancorp.

The Wellesley Bank Charitable Foundation’s place of business will be located at our administrative offices. The board of directors of the Wellesley Bank Charitable Foundation will appoint such officers and employees as may be necessary to manage its operations. To the extent applicable, we will comply with the affiliates restrictions set forth in Sections 23A and 23B of the Federal Reserve Act, Regulation W thereunder and other regulations governing transactions between Wellesley Bank and the foundation.

Initially working capital will be provided to the foundation in the form of the cash contribution from the offering proceeds. Additional capital for the foundation will come from:

• any dividends that may be paid on Wellesley Bancorp’s shares of common stock in the future;

• within the limits of applicable federal and state laws, loans collateralized by the shares of common stock; or

• the proceeds of the sale of any of the shares of common stock in the open market from time to time.

As a private foundation under Section 501(c)(3) of the Internal Revenue Code, Wellesley Bank Charitable Foundation will be required to distribute annually in grants or donations a minimum of 5.0% of the average fair market value of its net investment assets. Legislation has been introduced that, if enacted, could have the impact of increasing the foundation’s required annual distribution in grants or donations.

Tax Considerations

We believe that an organization created for the above purposes should qualify as a Section 501(c)(3) exempt organization under the Internal Revenue Code and should be classified as a private foundation. The foundation will submit a timely request to the Internal Revenue Service to be recognized as a tax exempt organization. As long as the foundation files its application for tax-exempt status within 27 months after the last day of the month in which it was organized, and provided the Internal Revenue Service approves the application, its effective date as a Section 501(c)(3) tax-exempt organization will be the date of its organization.

Under state corporate law and banking law, Wellesley Bancorp and Wellesley Bank may make charitable contributions. We believe that the stock offering presents a unique opportunity to establish and fund a foundation given the substantial amount of additional capital being raised. In making such a determination, we considered the dilutive impact to our stockholders of the contribution of shares of common stock to the Foundation. See “Capitalization,” “Regulatory Capital Compliance,” and “Comparison of Independent Valuation and Pro Forma Information With and Without the Charitable Foundation.”

94

We are permitted under the Internal Revenue Code to deduct for charitable purposes only an amount equal to 10% of our annual taxable income in any one year, but may carry the excess contribution over the five-year period following the contribution to the Wellesley Bank Charitable Foundation. We estimate that if stock is sold at the adjusted maximum of the offering range, substantially all of the contribution should be deductible for federal tax purposes over the six-year period (i.e., the year in which the contribution is made and the succeeding five-year period). However, we do not have any assurance that the Internal Revenue Service will grant tax-exempt status to the Wellesley Bank Charitable Foundation. In such event, our contribution to the Wellesley Bank Charitable Foundation would be expensed without a tax benefit, resulting in a reduction in earnings in the year in which the Internal Revenue Service makes such a determination. Furthermore, even if the contribution is deductible, we may not have sufficient earnings to be able to use the deduction in full. Any such decision to continue to make additional contributions to the Wellesley Bank Charitable Foundation in the future would be based on an assessment of, among other factors, our financial condition at that time, the interests of our stockholders and depositors, and the financial condition and operations of the Wellesley Bank Charitable Foundation.

As a private foundation, earnings and gains, if any, from the sale of common stock or other assets are exempt from federal and state income taxation. However, investment income, such as interest, dividends and capital gains, is generally taxed at a rate of 2%. The Wellesley Bank Charitable Foundation will be required to file an annual return with the Internal Revenue Service within four and one-half months after the close of its fiscal year. The Wellesley Bank Charitable Foundation will be required to make its annual return available for public inspection. The annual return for a private foundation includes, among other things, an itemized list of all grants made or approved, showing the amount of each grant, the recipient, any relationship between a grant recipient and the foundation’s managers and a concise statement of the purpose of each grant.

Establishment of the Wellesley Bank Charitable Foundation may be subject to conditions to be agreed to by the Wellesley Bank Charitable Foundation as a condition to receiving the Federal Deposit Insurance Corporation’s nonobjection of the conversion and the Massachusetts Commissioner of Bank’s approval of the conversion, including but not limited to:

• the foundation must be dedicated to charitable purposes within the communities in which Wellesley Bank maintains its headquarters or a branch office;

• the foundation must vote its shares in the same ratio as all other holders of shares;

• the Massachusetts Division of Banks and the Federal Deposit Insurance Corporation can examine the foundation;

• the foundation must comply with all supervisory directives or regulatory bulletins imposed by the Massachusetts Division of Banks and the Federal Deposit Insurance Corporation;

• the foundation will operate according to written policies adopted by its board of directors, including a business plan and a conflict of interest policy;

• the foundation will provide annual reports to the Massachusetts Division of Banks and the Federal Deposit Insurance Corporation describing the grants made and the grant recipients; and

• the foundation will not engage in self-dealing and will comply with all laws necessary to maintain its tax-exempt status under the Internal Revenue Code.

95

Restrictions on the Acquisition of Wellesley Bancorp

General

Certain provisions in the articles of incorporation and bylaws of Wellesley Bancorp may have antitakeover effects. In addition, regulatory restrictions may make it more difficult for persons or companies to acquire control of us.

Articles of Incorporation and Bylaws of Wellesley Bancorp

Although our board of directors is not aware of any effort that might be made to obtain control of us after the offering, the board of directors believed it appropriate to adopt certain provisions permitted by federal and state regulations that may have the effect of deterring a future takeover attempt that is not approved by our board of directors. The following description of these provisions is only a summary and does not provide all of the information contained in our articles of incorporation and bylaws. See “Where You Can Find More Information” as to where to obtain a copy of these documents.

Limitation on Voting Rights. Our articles of incorporation provide that in no event will any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns in excess of 10% of the then-outstanding shares of common stock, be entitled, or permitted to any vote in respect of the shares held in excess of the limit. This limitation does not apply to any director or officer acting solely in their capacities as directors and officers, or any employee benefit plans of Wellesley Bancorp or any subsidiary or a trustee of a plan.

Board of Directors.

Classified Board. Our board of directors is divided into three classes as nearly as equal in number as possible. The stockholders elect one class of directors each year for a term of three years. The classified board makes it more difficult and time consuming for a stockholder group to fully use its voting power to gain control of the board of directors without the consent of the incumbent board of directors of Wellesley Bancorp.

Filling of Vacancies; Removal. Our bylaws provide that any vacancy occurring in the board of directors, including a vacancy created by an increase in the number of directors, may be filled only by a vote of a majority of the directors then in office. A person elected to fill a vacancy on the board of directors will serve for the remainder of the full term of the class of directors in which the vacancy occurred and until his or her successor shall have been elected and qualified. Our bylaws provide that a director may be removed from the board of directors before the expiration of his or her term only for cause and only upon the vote of a majority of the shares entitled to vote in the election of directors. These provisions make it more difficult for stockholders to remove directors and replace them with their own nominees.

Qualification. Our bylaws provide that to be eligible to serve on the board of directors a person must not: (1) be under indictment for, or ever have been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) be a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) have been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency. These provisions contained in our bylaws may prevent stockholders from nominating themselves or persons of their choosing for election to the board of directors.

Elimination of Cumulative Voting. Our articles of incorporation provide that no shares will be entitled to cumulative voting. The elimination of cumulative voting makes it more difficult for a stockholder group to elect a director nominee.

Special Meetings of Stockholder. Our stockholders must act only through an annual or special meeting. Special meetings of stockholders may only be called by the Chairman, the President, by two-thirds of the total number of directors or by the Secretary upon the written request of the holders of a majority of all the shares entitled to vote at a meeting. The limitations on the calling of special meetings of stockholders may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Amendment of Articles of Incorporation. Our articles of incorporation provide that certain amendments to our articles of incorporation relating to a change in control of us must be approved by at least 75% of the outstanding shares entitled to vote.

96

Amendment of Bylaws. Our articles of incorporation provide that our bylaws may not be adopted, repealed, altered, amended or rescinded by stockholders except by the affirmative vote of the holders of at least 75% of the voting stock.

Advance Notice Provisions for Stockholder Nominations and Proposals. Our bylaws establish an advance notice procedure for stockholders to nominate directors or bring other business before an annual meeting of stockholders. A person may not be nominated for election as a director unless that person is nominated by or at the direction of our board of directors or by a stockholder who has given appropriate notice to us before the meeting. Similarly, a stockholder may not bring business before an annual meeting unless the stockholder has given us appropriate notice of the stockholder’s intention to bring that business before the meeting. Our Secretary must receive notice of the nomination or proposal not less than 90 days before the date of the annual meeting; provided, however, that if less than 100 days’ notice of prior public disclosure of the date of the meeting is given or made to the stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder who desires to raise new business must provide us with certain information concerning the nature of the new business, the stockholder, the stockholder’s ownership of Wellesley Bancorp and the stockholder’s interest in the business matter. Similarly, a stockholder wishing to nominate any person for election as a director must provide us with certain information concerning the nominee and the proposing stockholder.

Advance notice of nominations or proposed business by stockholders gives our board of directors time to consider the qualifications of the proposed nominees, the merits of the proposals and, to the extent deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about those matters.

Authorized but Unissued Shares of Capital Stock. Following the offering, we will have authorized but unissued shares of common and preferred stock. Our articles of incorporation authorize the board of directors to establish one or more series of preferred stock and, for any series of preferred stock, to determine the terms and rights of the series, including voting rights, dividend rights, conversion and redemption rates, and liquidation preferences. Such shares of common and preferred stock could be issued by the board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

Regulatory Restrictions

Maryland Corporate Law and Business Combinations with Interested Stockholders. Under Maryland law, “business combinations” between Wellesley Bancorp and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, statutory share exchange or, in circumstances specified in the statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications involving interested stockholders and their affiliates or issuance or reclassification of equity securities. Maryland law defines an interested stockholder as: (1) any person who beneficially owns 10% or more of the voting power of Wellesley Bancorp’s voting stock after the date on which Wellesley Bancorp had 100 or more beneficial owners of its stock; or (2) an affiliate or associate of Wellesley Bancorp at any time after the date on which Wellesley Bancorp had 100 or more beneficial owners of its stock who, within the two-year period before the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of Wellesley Bancorp. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.

After the five-year prohibition, any business combination between Wellesley Bancorp and an interested stockholder generally must be recommended by the board of directors of Wellesley Bancorp and approved by the affirmative vote of at least: (1) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of Wellesley Bancorp and (2) two-thirds of the votes entitled to be cast by holders of voting stock of Wellesley Bancorp other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These super-majority vote requirements do not apply if Wellesley Bancorp’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

Change in Bank Control Act. Federal law provides that no person, acting directly or indirectly or through or in concert with one or more other persons, may acquire control of a bank holding company unless the Federal Reserve Board has been given 60 days prior written notice. For this purpose, the term “control” means the acquisition of the ownership, control or holding of the power to vote 25% or more of any class of a bank holding company’s voting stock, and the term “person” includes an individual,

97

corporation, partnership, and various other entities. In addition, a person is presumed to acquire control if the person acquires the ownership, control or holding of the power to vote of 10% or more of any class of the holding company’s voting stock if specified factors are present, such as having a class of securities registered under Section 12 of the Securities Exchange Act of 1934, which will be the case with Wellesley Bancorp

Accordingly, the filing of a notice with the Federal Reserve Board would be required before any person could acquire 10% or more of the common stock of Wellesley Bancorp, unless the individual files a rebuttal of control that is accepted by the Federal Reserve Board. The statute and underlying regulations authorize the Federal Reserve Board to disapprove a proposed acquisition on certain specified grounds.

Bank Holding Company Act. Federal law provides that no company may acquire control of a bank directly or indirectly without the prior approval of the Federal Reserve Board. Any company that acquires control of a bank becomes a “bank holding company” subject to registration, examination and regulation by the Federal Reserve Board. Pursuant to federal regulations, the term “company” is defined to include banks, corporations, partnerships, associations, and certain trusts and other entities, and “control” of a bank is deemed to exist if a company has voting control, directly or indirectly of at least 25% of any class of a bank’s voting stock, and may be found to exist if a company controls in any manner the election of a majority of the directors of the bank or has the power to exercise a controlling influence over the management or policies of the bank. In addition, a bank holding company must obtain Federal Reserve Board approval prior to acquiring voting control of more than 5% of any class of voting stock of a bank or another bank holding company. An acquisition of control of a bank that requires the prior approval of the Federal Reserve Board under the Bank Holding Company Act is not subject to the notice requirements of the Change in Bank Control Act.

Accordingly, the prior approval of the Federal Reserve Board under the Bank Holding Company Act would be required:

• before any bank holding company could acquire 5% or more of the common stock of Wellesley Bancorp; and

• before any other company could acquire 25% or more of the common stock of Wellesley Bancorp

Restrictions applicable to the operations of bank holding companies may also deter companies from seeking to obtain control of Wellesley Bancorp. See “Regulation and Supervision.”

Massachusetts Banking Law. Under Massachusetts banking laws, a company owning or controlling two or more banking institutions, including a savings bank, is regulated as a bank holding company. Each Massachusetts bank holding company: (i) must obtain the approval of the Massachusetts Board of Bank Incorporation before engaging in certain transactions, such as the acquisition of more than 5% of the voting stock of another banking institution; (ii) must register, and file reports, with the Massachusetts Division of Banks; and (iii) is subject to examination by the Massachusetts Division of Banks. Wellesley Bancorp would become a Massachusetts bank holding company if it acquires a second banking institution and holds and operates it separately from Wellesley Bank.

In addition, for a period of three years following completion of a conversion to stock form, no person may directly or indirectly offer to acquire or acquire beneficial ownership of more than 10% of any class of equity security of a converting mutual savings bank without prior written approval of the Massachusetts Commissioner of Banks.

Description of Wellesley Bancorp Capital Stock

The common stock of Wellesley Bancorp will represent nonwithdrawable capital, will not be an account of any type, and will not be insured by the Federal Deposit Insurance Corporation or any other government agency or the Share Insurance Fund.

General

Wellesley Bancorp is authorized to issue fourteen million (14,000,000) shares of common stock having a par value of $.01 per share and one million (1,000,000) shares of preferred stock having a par value of $.01 per share. Each share of Wellesley Bancorp’s common stock will have the same relative rights as, and will be identical in all respects with, each other share of common stock. Upon payment of the purchase price for the common stock, as required by the plan of conversion, all stock will be duly authorized, fully paid and nonassessable. Wellesley Bancorp will not issue any shares of preferred stock in the conversion.

98

Common Stock

Dividends. Wellesley Bancorp cannot pay dividends on its common stock if, after giving effect to the distribution, it would be unable to pay its indebtedness as the indebtedness comes due in the usual course of business or its total assets exceed the sum of its liabilities and the amount needed, if Wellesley Bancorp were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have a preference upon dissolution. The holders of common stock of Wellesley Bancorp will be entitled to receive and share equally in dividends as may be declared by the board of directors of Wellesley Bancorp out of funds legally available for dividends. If Wellesley Bancorp issues preferred stock, the holders of the preferred stock may have a priority over the holders of the common stock with respect to dividends. See “Our Dividend Policy” and “Regulation and Supervision.”

Voting Rights. After the conversion, the holders of common stock of Wellesley Bancorp will possess exclusive voting rights in Wellesley Bancorp. They will elect Wellesley Bancorp’s board of directors and act on other matters as are required to be presented to them under Maryland law or as are otherwise presented to them by the board of directors. Except as discussed under “Restrictions on the Acquisition of Wellesley Bancorp—Articles of Incorporation and Bylaws of Wellesley Bancorp—Limitations on Voting Rights,” each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. If Wellesley Bancorp issues preferred stock, holders of Wellesley Bancorp preferred stock may also possess voting rights.

Liquidation. If there is any liquidation, dissolution or winding up of Wellesley Bank, Wellesley Bancorp, as the sole holder of Wellesley Bank’s capital stock, would be entitled to receive all of Wellesley Bank’s assets available for distribution after payment or provision for payment of all debts and liabilities of Wellesley Bank, including all deposit accounts and accrued interest. Upon liquidation, dissolution or winding up of Wellesley Bancorp, the holders of its common stock would be entitled to receive all of the assets of Wellesley Bancorp available for distribution after payment or provision for payment of all its debts and liabilities. If Wellesley Bancorp issues preferred stock, the preferred stock holders may have a priority over the holders of the common stock upon liquidation or dissolution.

Preemptive Rights; Redemption. Holders of the common stock of Wellesley Bancorp will not be entitled to preemptive rights with respect to any shares that may be issued. The common stock cannot be redeemed.

Preferred Stock

Wellesley Bancorp will not issue any preferred stock in the conversion and it has no current plans to issue any preferred stock after the conversion. Preferred stock may be issued with designations, powers, preferences and rights as the board of directors may from time to time determine. The board of directors can, without stockholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be [            ].

Registration Requirements

We have registered our common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934, as amended, and will not deregister our common stock for a period of at least three years following the offering. As a result of registration, the proxy and tender offer rules, insider trading reporting and restrictions, annual and periodic reporting and other requirements of that statute will apply.

Legal and Tax Opinions

The legality of our common stock has been passed upon for us by Kilpatrick Townsend & Stockton LLP, Washington, D.C. The federal tax consequences of the conversion have been opined upon by Kilpatrick Townsend & Stockton LLP. Kilpatrick Townsend & Stockton LLP has consented to the references to its opinions in this prospectus. Certain legal matters will be passed upon for Sandler O’Neill + Partners, L.P. by Nutter, McClennen & Fish, LLP.

99

Experts

The consolidated financial statements of Wellesley Bank as of December 31, 2010 and 2009, and for the years then ended, included in this prospectus and in the registration statement have been audited by Wolf & Company, P.C., an independent registered public accounting firm, as stated in its report appearing herein and elsewhere in the registration statement (which report expresses an unqualified opinion).

Feldman Financial Advisors, Inc. has consented to the summary in this prospectus of its report to us setting forth its opinion as to our estimated pro forma market value and to the use of its name and statements with respect to it appearing in this prospectus.

Where You Can Find More Information

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, that registers the common stock offered in the stock offering, including the shares to be issued to the charitable foundation. This prospectus forms a part of the registration statement. The registration statement, including the exhibits, contains additional relevant information about us and our common stock. The rules and regulations of the Securities and Exchange Commission allow us to omit certain information included in the registration statement from this prospectus. You may read and copy the registration statement at the Securities and Exchange Commission’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the Securities and Exchange Commission’s public reference rooms. The registration statement also is available to the public from commercial document retrieval services and at the Internet World Wide Website maintained by the Securities and Exchange Commission at http://www.sec.gov.

Wellesley Bank has filed an application for approval of the plan of conversion with the Federal Deposit Insurance Corporation and the Massachusetts Division of Banks. This prospectus omits certain information contained in the application. The application may be inspected, without charge, at the offices of the Massachusetts Commissioner of Banks, 1000 Washington Street, 10^th Floor, Boston, Massachusetts and at the offices of the Regional Director of the Federal Deposit Insurance Corporation, 15 Braintree Hill Office Park, Braintree, Massachusetts.

A copy of the plan of conversion and Wellesley Bancorp’s articles of incorporation and bylaws are available without charge from Wellesley Bank.

The appraisal report of Feldman Financial Advisors, Inc. has been filed as an exhibit to our registration statement and to our application to the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks. Portions of the appraisal report were filed electronically with the Securities and Exchange Commission and are available on its website as described above. The entire appraisal report is available at the public reference room of the Securities and Exchange Commission and the offices of the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks as described above.

100

Index to Consolidated Financial Statements

of Wellesley Bank and Subsidiaries

	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of June 30, 2011 (unaudited), December 31, 2010 and 2009		F-2
Consolidated Statements of Income for the Six Months Ended June  30, 2011 and 2010 (unaudited) and the Years Ended December 31, 2010 and 2009		F-3
Consolidated Statements of Changes in Surplus for the Six Months Ended June  30, 2011 (unaudited) and the Years Ended December 31, 2010 and 2009		F-4
Consolidated Statements of Cash Flows for the Six Months Ended June  30, 2011 and 2010 (unaudited) and the Years Ended December 31, 2010 and 2009		F-5
Notes to the Consolidated Financial Statements		F-7

****

All schedules are omitted as the required information either is not applicable or is included in the financial statements or related notes. Separate financial statements for Wellesley Bancorp have not been included in this prospectus because Wellesley Bancorp, which has engaged only in organizational activities to date, has no significant assets, contingent or other liabilities, revenues or expenses.

101

Report of Independent Registered Public Accounting Firm

To the Audit Committee of Wellesley Bank:

We have audited the accompanying consolidated balance sheets of Wellesley Bank and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income, changes in surplus and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wellesley Bank and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Wolf & Company, P.C.

Boston, Massachusetts

September 8, 2011

F-1

Wellesley Bank and Subsidiaries

Consolidated Balance Sheets

	June 30,			December 31,
	2011			2010			2009
	(Unaudited)
				(In thousands)
Assets
Cash and due from banks	$	3,877		$	3,780		$	3,049
Short-term investments		14,760			14,617			6,321
Total cash and cash equivalents		18,637			18,397			9,370
Certificates of deposit		1,691			3,433			12,910
Securities available for sale, at fair value		28,506			25,565			28,188
Federal Home Loan Bank of Boston stock, at cost		1,930			1,930			1,930
Loans		208,615			206,807			186,430
Less allowance for loan losses		(3,229	)		(2,690	)		(2,060	)
Loans, net		205,386			204,117			184,370
Bank-owned life insurance		4,135			4,062			3,911
Premises and equipment, net		795			786			772
Accrued interest receivable		827			865			846
Net deferred tax asset		1,286			1,168			780
Prepaid FDIC assessment		582			767			1,134
Other assets		999			912			1,618
Total assets	$	264,774		$	262,002		$	245,829
Liabilities and Surplus
Deposits:
Noninterest-bearing	$	27,021		$	26,512		$	21,987
Interest-bearing		201,354			195,628			173,638
Total deposits		228,375			222,140			195,625
Short-term borrowings		6,423			5,804			6,270
Long-term debt		7,500			12,500			24,500
Accrued expenses and other liabilities		1,031			1,150			1,131
Total liabilities		243,329			241,594			227,526
Commitments and contingencies (Notes 7 and 14)
Surplus		21,057			20,099			17,946
Accumulated other comprehensive income		388			309			357
Total surplus		21,445			20,408			18,303
Total liabilities and surplus	$	264,774		$	262,002		$	245,829

See accompanying notes to consolidated financial statements.

F-2

Wellesley Bank and Subsidiaries

Consolidated Statements of Income

	Six Months Ended June 30,				Years Ended December 31,
	2011		2010		2010		2009
	(Unaudited)
			(In thousands)
Interest and dividend income:
Interest and fees on loans	$	6,015	$	5,902	$	12,176	$	11,916
Debt securities:
Taxable		285		455		841		1,134
Tax-exempt		109		81		166		152
Interest on short-term investments and certificates of deposit		38		88		154		180
Dividends on FHLB stock		3		—		—		—
Total interest and dividend income		6,450		6,526		13,337		13,382
Interest expense:
Deposits		1,125		1,242		2,450		4,169
Short-term borrowings		40		40		88		97
Long-term debt		262		505		841		1,287
Total interest expense		1,427		1,787		3,379		5,553
Net interest income		5,023		4,739		9,958		7,829
Provision for loan losses		600		500		1,100		300
Net interest income, after provision for loan losses		4,423		4,239		8,858		7,529
Noninterest income:
Customer service fees		78		79		167		139
Gain (loss) on sale of securities		—		—		82		(131	)
Income on bank-owned life insurance		73		75		151		145
Wealth management fees		52		28		71		43
Miscellaneous		26		29		81		62
Total noninterest income		229		211		552		258
Noninterest expenses:
Salaries and employee benefits		1,886		1,714		3,495		3,672
Occupancy and equipment		403		359		743		682
Data processing		189		183		371		319
FDIC insurance		185		127		275		510
Contributions		14		9		83		12
Foreclosed assets, net		—		—		52		—
Other general and administrative		476		457		980		750
Total noninterest expenses		3,153		2,849		5,999		5,945
Income before income taxes		1,499		1,601		3,411		1,842
Provision for income taxes		541		589		1,258		697
Net income	$	958	$	1,012	$	2,153	$	1,145

See accompanying notes to consolidated financial statements.

F-3

Wellesley Bank and Subsidiaries

Consolidated Statements of Changes in Surplus

	Surplus		Accumulated Other Comprehensive Income			Total Surplus
			(In thousands)
Balance at December 31, 2008	$	16,801	$	157		$	16,958
Comprehensive income:
Net income		1,145		—			1,145
Net unrealized gain on securities available for sale, net of reclassification adjustment and tax effects		—		200			200
Total comprehensive income							1,345
Balance at December 31, 2009		17,946		357			18,303
Comprehensive income:
Net income		2,153		—			2,153
Net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects		—		(48	)		(48	)
Total comprehensive income							2,105
Balance at December 31, 2010		20,099		309			20,408
Comprehensive income:
Net income (unaudited)		958		—			958
Net unrealized gain on securities available for sale, net of tax effects (unaudited)		—		79			79
Total comprehensive income (unaudited)							1,037
Balance at June 30, 2011 (unaudited)	$	21,057	$	388		$	21,445

See accompanying notes to consolidated financial statements.

F-4

Wellesley Bank and Subsidiaries

Consolidated Statements of Cash Flows

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
				(In thousands)
Cash flows from operating activities:
Net income	$	958		$	1,012		$	2,153		$	1,145
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Provision for loan losses		600			500			1,100			300
Provision for losses on foreclosed assets		—			—			60			—
Depreciation and amortization		102			85			173			186
Gain on sale of fixed assets		—			—			(11	)		—
(Gain) loss on sale of securities		—			—			(82	)		131
Gain on sale of foreclosed assets		—			—			(6	)		—
Net amortization of securities		75			41			206			65
Accretion of net deferred loan fees		(179	)		(155	)		(391	)		(296	)
Income on bank-owned life insurance		(73	)		(75	)		(151	)		(145	)
Deferred income tax provision (benefit)		(164	)		(205	)		(361	)		702
Net change in:
Accrued interest receivable		38			(42	)		(19	)		153
Other assets		(87	)		110			707			(119	)
Prepaid FDIC assessment		185			127			367			(1,134	)
Accrued expenses and other liabilities		(119	)		807			19			(1,772	)
Net cash provided (used) by operating activities		1,336			2,205			3,764			(784	)
Cash flows from investing activities:
Activity in certificates of deposit:
Maturities		1,742			5,148			9,477			—
Purchases		—			—			—			(10,800	)
Activity in securities available for sale:
Maturities, prepayments and calls		2,938			3,742			8,984			13,179
Purchases		(5,829	)		(1,369	)		(10,075	)		(11,840	)
Sales		—			—			3,515			203
Loan principal payments (originations), net		(1,690	)		(13,252	)		(20,857	)		10,266
Net proceeds from sales of foreclosed assets		—			—			346			—
Additions to premises and equipment		(111	)		(19	)		(243	)		(122	)
Proceeds from sale of fixed assets		—			—			67			—
Net cash provided (used) by investing activities		(2,950	)		(5,750	)		(8,786	)		886
(continued)

See accompanying notes to consolidated financial statements.

F-5

Wellesley Bank and Subsidiaries

Consolidated Statements of Cash Flows (Concluded)

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
				(In thousands)
Cash flows from financing activities:
Net increase in deposits		6,235			15,013			26,515			7,820
Proceeds from long-term debt		—			—			2,000			1,000
Repayments of long-term debt		(5,000	)		(8,000	)		(14,000	)		(6,500	)
Increase (decrease) in short-term borrowings		619			1,099			(466	)		1,876
Net cash provided by financing activities		1,854			8,112			14,049			4,196
Net change in cash and cash equivalents		240			4,567			9,027			4,298
Cash and cash equivalents at beginning period		18,397			9,370			9,370			5,072
Cash and cash equivalents at end of period	$	18,637		$	13,937		$	18,397		$	9,370
Supplementary information:
Interest paid	$	1,433		$	1,792		$	3,431		$	5,577
Income taxes paid		799			153			947			789
Transfer of loans to foreclosed real estate		—			400			400			—

See accompanying notes to consolidated financial statements.

F-6

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements

Six Months Ended June 30, 2011 and 2010 (Unaudited) and

Years Ended December 31, 2010 and 2009

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The consolidated financial statements include the accounts of Wellesley Bank (the “Bank”) and its wholly-owned subsidiaries; Wellesley Securities Corporation, which engages in the business of buying, selling and dealing in securities exclusively on its own behalf; Wellesley Investment Partners, LLC, formed for the purpose of providing investment management services for individuals, not-for-profit entities and businesses; and Central Linden, LLC, formed for the purpose of holding, managing and selling foreclosed real estate. All significant intercompany balances and transactions have been eliminated in consolidation. See Note 17 – Subsequent Events – Conversion and Stock Offering.

Business and operating segments

The Bank provides a variety of financial services to individuals and small businesses in Wellesley, Massachusetts and surrounding communities. Its primary deposit products are checking, savings and term certificate accounts and its primary lending products are residential and commercial real estate loans, commercial loans and consumer loans.

Management evaluates the Bank’s performance and allocates resources based on a single segment concept.

Use of estimates

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 and the valuation of deferred tax assets.

Cash equivalents

Cash equivalents include amounts due from banks and short-term investments with original maturities of three months or less.

Fair value hierarchy

The Bank groups its assets generally measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.

Level 1 – Valuation is based on quoted market prices in active exchange markets for identical assets. Valuations are obtained from readily available pricing sources.

Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Valuations are obtained from readily available pricing sources.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Certificates of deposit

Certificates of deposit are carried at cost, which approximates fair value.

Securities available for sale

Securities classified as available for sale are reflected at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income.

Purchase premiums and discounts are amortized to earnings by the straight-line method over the estimated lives of the securities, which does not differ materially from the interest method. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

F-7

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Securities available for sale (concluded)

Each reporting period, the Bank evaluates all securities with a fair value below amortized cost to determine whether other-than-temporary impairment (“OTTI”) exists.

For debt securities, OTTI is required to be recognized if (1) the Bank intends to sell the security; (2) it is “more likely than not” that the Bank will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. For all impaired debt securities that the Bank intends to sell, or more likely than not will be required to sell, the full amount of the depreciation is recognized as OTTI through earnings. Credit-related OTTI for all other impaired debt securities is recognized through earnings. Non-credit related OTTI for such debt securities is recognized in other comprehensive income, net of applicable taxes.

Federal Home Loan Bank stock

The Bank, as a member of the Federal Home Loan Bank (“FHLB”) of Boston, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Bank reviews for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of June 30, 2011 (unaudited) and December 31, 2010 and 2009, no impairment has been recognized.

Loans

The loan portfolio consists of real estate, commercial and other loans to the Bank’s customers in Wellesley, Massachusetts and surrounding communities. The ability of the Bank’s debtors to honor their contracts is dependent upon the economy in general and the real estate and construction economic sectors.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred loan origination fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

Interest is not accrued on loans which are identified as impaired or loans which are ninety days or more past due. Past due status is based on the contractual terms of the loan. Interest income previously accrued on such loans is reversed against current period interest income. Interest income on non-accrual loans is recognized only to the extent of interest payments received and is first applied to the outstanding principal balance when collectibility of principal is in doubt. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured through sustained payment performance for at least six months.

Allowance for loan losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

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

General component

The general component is based on the following loan segments: residential real estate, commercial real estate, construction, commercial, home equity and other consumer. Management considers a rolling average of historical losses for each segment based on a time frame appropriate to capture relevant loss data for each loan segment, which generally ranges from 3-10 years. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; trends in

F-8

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Allowance for loan losses (continued)

General component (concluded)

volume, concentrations and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no significant changes to the Bank’s policies or methodology pertaining to the general component of the allowance during 2011, 2010 or 2009.

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

Residential real estate – The Bank generally does not originate loans with a loan-to-value ratio greater than 80 percent and generally does not originate subprime loans. All loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower.

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

Construction loans – Loans in this segment primarily include speculative residential and commercial real estate development loans for which payment is derived from sale of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

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

Home equity lines of credit – Loans in this segment are collateralized by one-to-four family residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Other consumer loans – Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower.

Allocated component

The allocated component relates to loans that are classified as impaired. 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 or, if the loan is collateral dependent, by the fair value of the collateral, less estimated costs to sell. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. Large groups of smaller-balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify performing individual consumer loans (residential, home equity lines of credit, personal and other consumer secured loans) for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

F-9

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Allowance for loan losses (concluded)

Allocated component (concluded)

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

Unallocated component

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio.

Foreclosed assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations, changes in the valuation allowance and any direct write-downs are included in net expenses from foreclosed assets.

Premises and equipment

Land is carried at cost. Buildings, leasehold improvements and equipment are stated at cost, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured.

Bank-owned life insurance

Bank-owned life insurance policies are reflected on the consolidated balance sheets at cash surrender value. Changes in cash surrender value are reflected in non-interest income on the consolidated statements of income.

Transfers of financial assets

Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets.

Effective January 1, 2010, the Bank adopted accounting guidance pertaining to transfers of financial assets. During the normal course of business, the Bank may transfer a portion of a financial asset, for example, a participation loan or the government-guaranteed portion of a loan. To be eligible for sales treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder can have the right to pledge or exchange the entire loan.

Advertising costs

Advertising costs are expensed as incurred.

Pension plan

It is the Bank’s policy to fund pension plan costs in the year of accrual.

F-10

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes

Deferred tax assets and liabilities relate to temporary differences between the book and tax bases of certain assets and liabilities, and are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted accordingly through the provision for income taxes. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Bank does not have any uncertain tax positions at June 30, 2011 (unaudited) and December 31, 2010 which require accrual or disclosure. The Bank records interest and penalties as part of income tax expense. No interest or penalties were recorded for the six months ended June 30, 2011 and 2010 (unaudited) or for the years ended December 31, 2010 and 2009.

Comprehensive income (loss)

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the surplus section of the consolidated balance sheets, such items, along with net income, are components of comprehensive income.

The components of other comprehensive income (loss) and related tax effects are as follows:

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
				(In thousands)
Unrealized holding gains on securities available for sale	$	125		$	200		$	7		$	173
Reclassification adjustment for losses (gains) realized in income		—			—			(82	)		131
Net unrealized gains (losses)		125			200			(75	)		304
Tax effects		(46	)		(78	)		27			(104	)
Net-of-tax amount	$	79		$	122		$	(48	)	$	200

The components of accumulated other comprehensive income and related tax effects are as follows:

	June 30, 2011			December 31,
				2010			2009
	(Unaudited)
				(In thousands)
Net unrealized holding gains on securities available for sale	$	640		$	515		$	590
Tax effect		(252	)		(206	)		(233	)
Net-of-tax amount	$	388		$	309		$	357

Recent accounting pronouncements

In July 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-20, Receivables (Topic 310), Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. This ASU requires an entity to provide disclosures that facilitate a financial statement user’s evaluation of (1) the nature of credit risk inherent in the entity’s loan portfolio, (2) how that risk is analyzed and assessed in arriving at the allowance for loan and lease losses, and (3) the changes and reasons for those changes in the allowance for loan and lease losses. For public entities, the disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The Bank has provided the disclosures required in Note 6.

F-11

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)

Recent accounting pronouncements (concluded)

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310), A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This ASU provides additional guidance and clarification for determining whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring. For public entities, this guidance is effective for interim and annual reporting periods beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. Management does not expect this guidance to have a material effect on the Bank’s consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This ASU clarifies and expands the disclosures pertaining to unobservable inputs used in Level 3 fair value measurements. The guidance also requires, for public companies, disclosure of the level within the fair value hierarchy for assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Management does not expect this guidance to have a material effect on the Bank’s consolidated financial statements.

In June 2011, the FASB issued ASU 2011-5, Comprehensive Income (Topic 220), Presentation of Comprehensive Income. This ASU provides an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in surplus. For public entities, this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted.

2. RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS

The Bank is required to maintain average balances on hand or with the Federal Reserve Bank. The reserve balance amounted to $3,212,000, $3,067,000 and $2,331,000 at June 30, 2011 (unaudited) and December 31, 2010 and 2009, respectively.

3. SHORT-TERM INVESTMENTS

Short-term investments are comprised of the following:

	June 30, 2011		December 31,
			2010		2009
	(Unaudited)
			(In thousands)
Federal Reserve Bank deposits	$	13,183	$	11,977	$	4,968
Federal Home Loan Bank deposits		—		26		1,087
Money market accounts		1,577		2,614		266
	$	14,760	$	14,617	$	6,321

4. CERTIFICATES OF DEPOSIT

A summary of certificates of deposit, by maturity, is as follows:

	June 30, 2011					December 31, 2010					December 31, 2009
			Weighted					Weighted					Weighted
			Average					Average					Average
	Amount		Rate			Amount		Rate			Amount		Rate
	(Unaudited)
						(Dollars in thousands)
Within 1 year	$	1,691		2.05	%	$	3,433		1.97	%	$	9,477		1.43	%
Over 1 year to 3 years		—		—			—		—			3,433		1.99
	$	1,691		2.05	%	$	3,433		1.97	%	$	12,910		1.56	%

F-12

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

5. SECURITIES AVAILABLE FOR SALE

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

	June 30, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
			(Unaudited)
			(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	12,257	$	214	$	(30	)	$	12,441
Government-sponsored enterprises		4,222		208		(31	)		4,399
SBA asset-backed securities		2,557		64		(25	)		2,596
State and municipal bonds		8,031		229		(14	)		8,246
Government-sponsored enterprise obligations		393		20		—			413
Corporate bonds		406		11		(6	)		411
	$	27,866	$	746	$	(106	)	$	28,506
	December 31, 2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
			(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	11,418	$	223	$	(27	)	$	11,614
Government-sponsored enterprises		4,503		192		(24	)		4,671
SBA asset-backed securities		2,700		64		(53	)		2,711
State and municipal bonds		5,606		120		(13	)		5,713
Government-sponsored enterprise obligations		422		21		—			443
Corporate bonds		401		12		—			413
	$	25,050	$	632	$	(117	)	$	25,565
	December 31, 2009
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
			(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	10,162	$	168	$	(35	)	$	10,295
Government-sponsored enterprises		7,884		267		(4	)		8,147
SBA asset-backed securities		960		54		—			1,014
State and municipal bonds		4,450		121		—			4,571
Government-sponsored enterprise obligations		3,148		22		(16	)		3,154
Corporate bonds		994		24		(11	)		1,007
	$	27,598	$	656	$	(66	)	$	28,188

At June 30, 2011 (unaudited) and December 31, 2010 and 2009, government-sponsored enterprises consist of the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.

F-13

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SECURITIES AVAILABLE FOR SALE (continued)

The amortized cost and fair value of debt securities by contractual maturity at June 30, 2011 (unaudited) and December 31, 2010 are as follows. Expected maturities may differ from contractual maturities because the issuer, in certain instances, has the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2011				December 31, 2010
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Unaudited)
			(In thousands)
Within 1 year	$	300	$	301	$	599	$	602
After 1 year to 5 years		2,650		2,755		2,122		2,157
After 5 years to 10 years		1,800		1,851		1,449		1,513
After 10 years		4,080		4,163		2,259		2,297
		8,830		9,070		6,429		6,569
Mortgage- and asset-backed securities		19,036		19,436		18,621		18,996
	$	27,866	$	28,506	$	25,050	$	25,565

There were no sales of securities for the six months ended June 30, 2011 or 2010 (unaudited). For the years ended December 31, 2010 and 2009, proceeds from sales of securities amounted to $3,515,000 and $203,000, respectively. Gross realized gains amounted to $82,000 and $0, respectively, and gross realized losses amounted to $0 and $131,000, respectively.

At June 30, 2011 (unaudited) and December 31, 2010 and 2009, the Bank has pledged certain debt securities with an amortized cost of $7,950,000, $9,042,000 and $10,892,000 respectively, and a fair value of $8,233,000, $9,356,000 and $11,155,000, respectively, as collateral for repurchase agreements. (See Note 9.)

Information pertaining to securities 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				Over Twelve Months
	Gross				Gross
	Unrealized		Fair		Unrealized		Fair
	Losses		Value		Losses		Value
			(In thousands)
June 30, 2011 (Unaudited)
Residential mortgage-backed securities:
Government National Mortgage Association	$	22	$	2,784	$	8	$	74
Government-sponsored enterprises		31		461		—		—
SBA asset-backed securities		25		1,716		—		—
State and municipal bonds		14		1,576		—		—
Corporate bonds		6		299		—		—
	$	98	$	6,836	$	8	$	74
December 31, 2010
Residential mortgage-backed securities:
Government National Mortgage Association	$	20	$	2,732	$	7	$	96
Government-sponsored enterprises		24		483		—		—
SBA asset-backed securities		53		1,777		—		—
State and municipal bonds		13		1,080		—		—
	$	110	$	6,072	$	7	$	96

F-14

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

SECURITIES AVAILABLE FOR SALE (concluded)

	Less Than Twelve Months				Over Twelve Months
	Gross				Gross
	Unrealized		Fair		Unrealized		Fair
	Losses		Value		Losses		Value
			(In thousands)
December 31, 2009
Residential mortgage-backed securities:
Government National Mortgage Association	$	31	$	3,028	$	4	$	1,560
Government-sponsored enterprises		4		435		—		—
Government-sponsored enterprise obligations		15		2,134		1		293
Corporate bonds		—		—		11		481
	$	50	$	5,597	$	16	$	2,334

At June 30, 2011 (unaudited) and December 31, 2010, various debt securities have unrealized losses with aggregate depreciation of 1.5% and 1.9%, respectively, from their aggregate amortized cost basis. These unrealized losses relate principally to the effect of rising interest rates on the fair value of debt securities and not to an increase in credit risk of the issuers. As the Bank does not intend to sell the securities and it is more likely than not that the Bank will not be required to sell the securities before recovery of their amortized cost, which may be maturity, the Bank does not consider these securities to be other-than-temporarily impaired at June 30, 2011 or December 31, 2010.

6. LOANS

A summary of the balances of loans is as follows:

	June 30,			December 31,
	2011			2010			2009
	(Unaudited)
				(In thousands)
Real estate loans:
Residential—fixed	$	15,134		$	18,993		$	20,110
Residential—variable		53,195			53,897			53,333
Commercial		65,720			53,907			49,911
Construction		36,746			40,770			31,223
		170,795			167,567			154,577
Commercial loans:
Secured		14,736			14,413			13,585
Unsecured		472			492			295
		15,208			14,905			13,880
Consumer loans:
Home equity lines of credit		22,554			24,198			17,805
Other		429			503			539
		22,983			24,701			18,344
Total loans		208,986			207,173			186,801
Less:
Allowance for loan losses		(3,229	)		(2,690	)		(2,060	)
Net deferred origination fees		(371	)		(366	)		(371	)
Loans, net	$	205,386		$	204,117		$	184,370

F-15

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

LOANS (continued)

The Bank 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 Bank’s accompanying consolidated balance sheets. The Bank 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 Bank continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments (net of servicing fees) to participating lenders and disburses required escrow funds to relevant parties. At June 30, 2011 (unaudited) and December 31, 2010 and 2009, the Bank was servicing loans for participants aggregating $9,479,000, $9,316,000 and $11,539,000, respectively.

The Bank has pledged certain residential and commercial real estate loans to secure FHLB advances and available lines of credit. (See Note 10.)

An analysis of the allowance for loan losses follows:

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
				(In thousands)
Balance at beginning of period	$	2,690		$	2,060		$	2,060		$	2,047
Provision for loan losses		600			500			1,100			300
Loans charged off		(61	)		(100	)		(470	)		(289	)
Recoveries of loans previously charged off		—			—			—			2
Balance at end of period	$	3,229		$	2,460		$	2,690		$	2,060

Further information pertaining to allocation of the allowance for loan losses to various loan segments, at or for the period ended June 30, 2011 (unaudited) and at December 31, 2010, follows:

	Residential			Commercial							Home		Other
	Real Estate			Real Estate		Construction			Commercial		Equity		Consumer		Unallocated		Total
									(In thousands)
Six Months Ended June 30, 2011 (Unaudited)
Allowance at December 31, 2010	$	319		$	356	$	1,258		$	384	$	84	$	16	$	273	$	2,690
Provision for loan losses		242			666		(434	)		57		29		—		40		600
Loans charged off		(61	)		—		—			—		—		—		—		(61	)
Recoveries of loans previously charged off		—			—		—			—		—		—		—		—
Allowance at June 30, 2011	$	500		$	1,022	$	824		$	441	$	113	$	16	$	313	$	3,229
June 30, 2011 (Unaudited)
Allowance related to loans individually evaluated for impairment	$	132		$	261	$	—		$	48	$	—	$	—	$	—	$	441
Allowance related to loans collectively evaluated for impairment		368			761		824			393		113		16		313		2,788
Total allowance	$	500		$	1,022	$	824		$	441	$	113	$	16	$	313	$	3,229
Impaired loan balances individually evaluated	$	1,773		$	1,426	$	—		$	125	$	—	$	—	$	—	$	3,324
Loan balances collectively evaluated for impairment		66,556			64,294		36,746			15,083		22,554		429		—		205,662
Total loans	$	68,329		$	65,720	$	36,746		$	15,208	$	22,554	$	429	$	—	$	208,986

F-16

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

LOANS (continued)

	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Home Equity		Other Consumer		Unallocated		Total
	(In thousands)
December 31, 2010
Allowance related to loans individually evaluated for impairment	$	56	$	188	$	—	$	112	$	—	$	—	$	—	$	356
Allowance related to loans collectively evaluated for impairment		263		168		1,258		272		84		16		273		2,334
Total allowance	$	319	$	356	$	1,258	$	384	$	84	$	16	$	273	$	2,690
Impaired loan balances individually evaluated	$	1,876	$	376	$	—	$	225	$	—	$	—	$	—	$	2,477
Loan balances collectively evaluated for impairment		71,014		53,531		40,770		14,680		24,198		503		—		204,696
Total loans	$	72,890	$	53,907	$	40,770	$	14,905	$	24,198	$	503	$	—	$	207,173

The following is a summary of past due and non-accrual loans at June 30, 2011 (unaudited) and December 31, 2010 and 2009:

	30-59 Days Past Due		60-89 Days Past Due		Past Due 90 Days or More		Total Past Due		Past Due 90 Days or More and Still Accruing		Non-accrual Loans
	(In thousands)
June 30, 2011 (Unaudited)
Residential real estate	$	1,292	$	—	$	533	$	1,825	$	—	$	1,893
Commercial real estate		1,210		—		1,069		2,279		—		1,425
Construction		—		—		—		—		—		—
Commercial		—		—		—		—		—		125
Consumer:
Home equity lines of credit		57		14		19		90		—		19
Other		—		—		—		—		—		—
Total	$	2,559	$	14	$	1,621	$	4,194	$	—	$	3,462
December 31, 2010
Residential real estate	$	394	$	902	$	2,008	$	3,304	$	—	$	2,008
Commercial real estate		1,176		—		—		1,176		—		—
Construction		—		—		—		—		—		—
Commercial		90		—		—		90		—		—
Consumer:
Home equity lines of credit		879		19		—		898		—		—
Other		—		—		—		—		—		—
Total	$	2,539	$	921	$	2,008	$	5,468	$	—	$	2,008
December 31, 2009
Residential real estate	$	1,896	$	576	$	705	$	3,177	$	—	$	705
Commercial real estate		605		—		—		605		—		—
Construction		—		1,098		—		1,098		—		—
Commercial		165		—		—		165		—		—
Consumer:
Home equity lines of credit		4		—		—		4		—		—
Other		22		—		—		22		—		—
Total	$	2,692	$	1,674	$	705	$	5,071	$	—	$	705

F-17

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

LOANS (continued)

The following is a summary of impaired loans at June 30, 2011 (unaudited) and December 31, 2010:

	June 30, 2011						December 31, 2010
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Impaired loans without a valuation allowance:
Residential real estate	$	1,115	$	1,115	$	—	$	1,313	$	1,313	$	—
Commercial real estate		227		227		—		—		—		—
Total		1,342		1,342		—		1,313		1,313		—
Impaired loans with a valuation allowance:
Residential real estate		658		860		132		563		703		56
Commercial real estate		1,199		1,199		261		376		376		188
Commercial		125		125		48		225		225		112
Total		1,982		2,184		441		1,164		1,304		356
Total impaired loans	$	3,324	$	3,526	$	441	$	2,477	$	2,617	$	356

The following is a summary of impaired loans in the aggregate at December 31, 2009:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Impaired loans without a valuation allowance	$	1,960	$	1,960	$	—
Impaired loans with a valuation allowance		1,803		1,803		273
Total impaired loans	$	3,763	$	3,763	$	273

Further information pertaining to impaired loans follows:

	Six Months Ended June 30,				Years Ended December 31,
	2011		2010		2010		2009
	(Unaudited)
	(In thousands)
Average investment in impaired loans	$	3,277	$	3,530	$	3,198	$	2,056
Interest income recognized on impaired loans	$	48	$	48	$	52	$	55
Interest income recognized on a cash basis on impaired loans	$	44	$	3	$	3	$	33

No additional funds are committed to be advanced in connection with impaired loans.

Credit Quality Information

The Bank utilizes an internal loan rating system for commercial real estate, construction and commercial loans as follows:

Loans rated 1 – 3B: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 4: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

F-18

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

LOANS (concluded)

Credit Quality Information (concluded)

Loans rated 5: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Bank will sustain some loss if the weakness is not corrected.

Loans rated 6: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 7: Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted.

Category 8: Loans in this category only include commercial loans under $25,000 with no other outstandings or relationships with the Bank. They are not rated in accordance with regulatory guidelines.

Category 9: Loans in this category include loans which otherwise require rating but which have not been rated, or loans for which the Bank’s loan policy does not require rating.

Category 10: Loans in this category include credit commitments/relationships that cannot be rated due to a lack of financial information or inaccurate financial information. If, within 60 days of the assignment of a 10 rating, information is still not available to allow a standard rating, the credit will be rated 5.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on all commercial real estate, construction and commercial loans. During each calendar year, the Bank engages an independent third-party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process.

The following table presents the Bank’s loans by risk rating:

	June 30, 2011								December 31, 2010
	Commercial Real Estate		Construction		Commercial		Total		Commercial Real Estate		Construction		Commercial		Total
			(Unaudited)
	(In thousands)
Loans rated 1 - 3B	$	61,069	$	31,833	$	14,417	$	107,319	$	49,198	$	35,858	$	13,259	$	98,315
Loans rated 4		3,189		4,913		652		8,754		3,222		3,000		1,404		7,626
Loans rated 5		1,108		—		—		1,108		1,487		1,912		225		3,624
Loans rated 6		354		—		125		479		—		—		—		—
Loans rated 7		—		—		—		—		—		—		—		—
Categories 8 - 9		—		—		14		14		—		—		17		17
Category 10		—		—		—		—		—		—		—		—
Total	$	65,720	$	36,746	$	15,208	$	117,674	$	53,907	$	40,770	$	14,905	$	109,582

F-19

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

7. PREMISES AND EQUIPMENT

A summary of the cost and accumulated depreciation and amortization of premises and equipment is as follows:

	June 30, 2011			December 31,						Estimated Useful Life
				2010			2009
	(Unaudited)
	(In thousands)
Premises:
Land	$	50		$	50		$	50			—
Buildings		677			677			677			35-40 years
Leasehold improvements		264			224			224			5-10 years
Equipment		1,175			1,133			1,245			3-5 years
Renovations in process		29			—			—
		2,195			2,084			2,196
Less accumulated depreciation and amortization		(1,400	)		(1,298	)		(1,424	)
Premises and equipment, net	$	795		$	786		$	772

Total depreciation and amortization expense for the six months ended June 30, 2011 and 2010 (unaudited) and for the years ended December 31, 2010 and 2009 amounted to $102,000, $85,000, $173,000 and $186,000, respectively.

Renovations in process relate to the 47 Church Street office. At June 30, 2011, outstanding commitments pertaining to the renovations amounted to $110,000.

Pursuant to terms of noncancelable lease agreements in effect at June 30, 2011 (unaudited) and December 31, 2010, pertaining to premises, future minimum rent commitments are as follows:

	June 30, 2011			December 31, 2010
	(Unaudited)
	(In thousands)
2011	$	165		$	325
2012		139			139
2013		102			—
2014		104			—
2015		106			—
2016		108			—
Thereafter		137			—
	$	861	(1)	$	464

(1) On August 16, 2011, the Bank entered into a lease agreement for a new branch facility. The lease commencement date is November 1, 2011 for a period of ten years with minimum rent commitments aggregating $1,343,000. The lease contains two-five year options to extend. These amounts are not included above.

The leases contain options to extend for up to fifteen years. The cost of such rentals is not included above. Total rent expense amounted to $163,000, $151,000, $304,000 and $302,000 for the six months ended June 30, 2011 and 2010 (unaudited) and for the years ended December 31, 2010 and 2009, respectively.

F-20

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

8. DEPOSITS

A summary of deposit balances, by type, is as follows:

	June 30, 2011		December 31,
			2010		2009
	(Unaudited)
	(In thousands)
Demand	$	27,021	$	26,512	$	21,987
NOW		15,591		14,914		12,508
Money market		46,129		42,563		34,493
Regular and other savings		24,916		23,642		15,786
Total non-certificate accounts		113,657		107,631		84,774
Term certificates of $100,000 and greater		73,357		72,348		67,990
Term certificates less than $100,000		41,361		42,161		42,861
Total term certificates		114,718		114,509		110,851
Total deposits	$	228,375	$	222,140	$	195,625

A summary of term certificates by maturity is as follows:

	June 30, 2011					December 31, 2010					December 31, 2009
	Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate
	(Unaudited)
	(Dollars in thousands)
Within 1 year	$	72,580		1.46	%	$	82,624		1.55	%	$	75,567		2.07	%
Over 1 year to 2 years		25,452		1.37			20,765		1.59			28,599		2.23
Over 2 years to 3 years		6,830		2.44			5,631		2.54			2,309		2.85
Over 3 years to 4 years		9,856		2.48			5,489		2.47			4,376		1.73
	$	114,718		1.59	%	$	114,509		1.65	%	$	110,851		2.12	%

9. SHORT-TERM BORROWINGS

Short-term borrowings consist of securities sold under agreements to repurchase, which are classified as secured borrowings. Securities sold under agreements to repurchase mature within one to four days from the transaction date and are reflected at the amount of cash received in connection with the transaction. At June 30, 2011 (unaudited) and December 31, 2010 and 2009, the weighted average rates were 1.14%, 1.24% and 1.74%, respectively. The Bank has pledged certain debt securities in connection with the agreements and may be required to provide additional collateral based on the fair value of the underlying securities. (See Note 5.)

F-21

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

10. LONG-TERM DEBT

Long-term debt consists of fixed-rate Federal Home Loan Bank (“FHLB”) advances, as follows:

	Amount						Weighted Average Rate
	June 30, 2011		December 31,				June 30, 2011			December 31,
			2010		2009					2010			2009
	(Unaudited)						(Unaudited)
	(In thousands)
Maturity:
2010	$	—	$	—	$	14,000		—	%		—	%		4.59	%
2011		—		5,000		5,000		—			5.52			5.52
2012		2,000		2,000		2,000		5.51			5.51			5.51
2014 *		5,500		5,500		3,500		2.97			2.97			3.32
	$	7,500	$	12,500	$	24,500		3.65	%		4.40	%		4.71	%

* Includes an advance of $3,500,000 with a rate of $3.32% which became callable on a quarterly basis in March 2011.

Borrowings available under an available FHLB variable-rate line of credit amounted to $1,338,000 as of June 30, 2011 (unaudited) and December 31, 2010 and 2009. No advances were outstanding under the line of credit at June 30, 2011 (unaudited) or at December 31, 2010 and 2009. All borrowings from the FHLB are secured by a blanket lien on qualified collateral, defined principally as 75% of the carrying value of first mortgage loans on owner-occupied residential property. (See Note 6.)

At June 30, 2011 (unaudited) and December 31, 2010, the Bank has pledged commercial real estate loans of $22,866,000 and $15,122,000, respectively, to access the Federal Reserve Bank discount window. No advances were outstanding at June 30, 2011 (unaudited) or at December 31, 2010.

11. INCOME TAXES

Allocation of the federal and state income taxes between current and deferred portions is as follows:

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
	(In thousands)
Current tax provision (benefit):
Federal	$	535		$	597		$	1,231		$	(9	)
State		170			197			388			4
		705			794			1,619			(5	)
Deferred tax provision (benefit):
Federal		(125	)		(151	)		(246	)		502
State		(39	)		(54	)		(87	)		164
Change in valuation reserve		—			—			(28	)		36
		(164	)		(205	)		(361	)		702
Total tax provision	$	541		$	589		$	1,258		$	697

F-22

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

INCOME TAXES (continued)

The reasons for the differences between the statutory federal income tax rate and the effective tax rates are summarized as follows:

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010			2009
	(Unaudited)
Statutory tax rate		34.0	%		34.0	%		34.0	%		34.0	%
Increase (decrease) resulting from:
State taxes, net of federal tax benefit		5.8			5.9			5.8			6.0
Tax exempt increase in surrender value of bank-owned life insurance		(1.6	)		(1.6	)		(1.5	)		(2.7	)
Tax exempt bond income		(2.0	)		(1.4	)		(1.3	)		(2.3	)
Change in valuation reserve		—			—			(0.8	)		2.0
Other, net		(0.1	)		(0.1	)		0.7			0.8
Effective tax rates		36.1	%		36.8	%		36.9	%		37.8	%

The components of the net deferred tax asset are as follows:

	June 30,			December 31,
	2011			2010			2009
	(Unaudited)
	(In thousands)
Deferred tax asset:
Federal	$	1,245		$	1,122		$	855
State		360			324			233
Valuation reserve		(8	)		(8	)		(36	)
		1,597			1,438			1,052
Deferred tax liability:
Federal		(252	)		(218	)		(215	)
State		(59	)		(52	)		(57	)
		(311	)		(270	)		(272	)
Net deferred tax asset	$	1,286		$	1,168		$	780

The tax effects of each item that gives rise to deferred taxes are as follows:

	June 30,			December 31,
	2011			2010			2009
	(Unaudited)
	(In thousands)
Allowance for loan losses	$	1,290		$	1,170		$	824
Deferred loan fees		148			146			148
Net unrealized gains on securities available for sale		(252	)		(206	)		(233	)
Employee benefit plans		128			63			42
Depreciation and amortization		(57	)		(65	)		(39	)
Capital loss carryover		8			8			36
Alternative minimum tax credit		—			—			17
Other		29			60			21
Total		1,294			1,176			816
Valuation allowance		(8	)		(8	)		(36	)
Net deferred tax asset	$	1,286		$	1,168		$	780

F-23

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

INCOME TAXES (concluded)

At June 30, 2011 (unaudited) and December 31, 2010, the Bank has a capital loss carryover of approximately $23,000, which expires on December 31, 2014.

At June 30, 2011 (unaudited) and December 31, 2010 and 2009, the Bank has a valuation allowance of $8,000, $8,000 and $36,000, respectively, related to the capital loss carryover. The change in the valuation allowance is due to utilization of a portion of the capital loss carryover.

The federal income tax reserve for loan losses at the Bank’s base year amounted to $820,000. If any portion of the reserve is used for purposes other than to absorb loan losses for which established, approximately 150% of the amount actually used (limited to the amount of the reserve) would be subject to taxation in the year in which used. As the Bank intends to use the reserve only to absorb loan losses, a deferred income tax liability of $328,000 has not been provided.

The Bank’s tax returns are subject to review and examination by federal and state taxing authorities. The Bank is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2007 through 2010. The years open to examination by state taxing authorities vary by jurisdiction; no years prior to 2007 are open.

12. MINIMUM REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of June 30, 2011, December 31, 2010 and 2009, that the Bank met all capital adequacy requirements to which it is subject.

F-24

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

MINIMUM REGULATORY CAPITAL REQUIREMENTS (concluded)

As of June 30, 2011 (unaudited) and December 31, 2010, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, it must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since the notification that management believes have changed the Bank’s category. The Bank’s actual capital amounts and ratios as of June 30, 2011 (unaudited), December 31, 2010 and 2009 are also presented in the tables.

	Actual					Minimum Capital Requirements					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
June 30, 2011 (Unaudited):
Total Capital to Risk- Weighted Assets	$	23,475		12.1	%	$	15,475		8.0	%	$	19,344		10.0	%
Tier 1 Capital to Risk- Weighted Assets		21,057		10.9			7,738		4.0			11,607		6.0
Tier 1 Capital to Average Assets		21,057		8.0			7,940		3.0			13,234		5.0
December 31, 2010:
Total Capital to Risk- Weighted Assets		22,463		11.9			15,106		8.0			18,882		10.0
Tier 1 Capital to Risk- Weighted Assets		20,099		10.6			7,553		4.0			11,329		6.0
Tier 1 Capital to Average Assets		20,099		7.7			7,790		3.0			12,984		5.0
December 31, 2009:
Total Capital to Risk- Weighted Assets		20,006		11.9			13,500		8.0			16,875		10.0
Tier 1 Capital to Risk- Weighted Assets		17,946		10.6			6,750		4.0			10,125		6.0
Tier 1 Capital to Average Assets		17,946		7.0			7,693		3.0			12,821		5.0

13. EMPLOYEE BENEFIT PLANS

Defined benefit plan

The Bank provides defined pension benefits for eligible employees through membership in the Co-operative Banks Employees Retirement Association (“CBERA”) and participation in its Defined Benefit Plan (Plan C) of the CBERA Retirement Program (the “Plan”). The Plan is a multi-employer plan whereby the contributions by each bank are not restricted to provide benefits to the employees of the contributing bank. Each full-time employee who is at least 21 years of age, and has completed one year of service in which they worked 1,000 hours, becomes a participant in the Plan one month after the date of eligibility. Participants become fully vested when credited with six years of service measured from the date of hire. Total Plan expense for the six months ended June 30, 2011 and 2010 (unaudited) and the years ended December 31, 2010 and 2009 amounted to $194,000, $165,000, $358,000 and $253,000, respectively. Contributions to the Plan amounted to $189,000, $178,000, $371,000 and $222,000, respectively.

On August 17, 2011, the Bank’s Board of Directors voted to freeze Plan benefits as of November 1, 2011. As of such date, the Bank will have the choice of fully funding the pension liability or continuing to make annual contributions in an amount not less than 1/7 of the total unfunded amount as agreed to by the Bank and CBERA. The Plan administrator has estimated that the Bank’s unfunded liability as of November 1, 2011 will approximate $620,000. Plan C’s funded status will continue to change with Plan asset values and changes in assumptions used to determine projected pension obligations.

401(k) Plan

The Bank has a 401(k) plan which provides for voluntary contributions by participating employees of up to 75% of their compensation, subject to IRS limitations. The Bank matches the employee’s voluntary contribution at a level of 150% of the employee’s contributions up to the first 7% of the employee’s compensation. Total plan expense for the six months ended June 30, 2011 and 2010 (unaudited) and the years ended December 31, 2010 and 2009 amounted to $121,000, $97,000, $208,000 and $203,000, respectively.

F-25

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

EMPLOYEE BENEFIT PLANS (concluded)

Supplemental retirement agreements

The Bank has entered into supplemental retirement agreements with certain former and current officers, which provide for payments upon attaining the retirement age specified in the agreements. The present value of these future payments is accrued over the remaining service terms and at June 30, 2011 (unaudited) and December 31, 2010 and 2009, amounted to $129,000, $98,000 and $52,000, respectively. Supplemental retirement benefits generally vest as they are accrued, however a termination of employment subsequent to a change in control of the Bank will result in the vesting of all benefits that would have accrued to the officer’s normal retirement date. Total supplemental retirement expense for the six months ended June 30, 2011 and 2010 (unaudited) and the years ended December 31, 2010 and 2009 amounted to $32,000, $12,000, $45,000 and $471,000, respectively.

Endorsement split-dollar life insurance arrangements

The Bank is the sole owner of life insurance policies pertaining to certain of the Bank’s executives. The Bank has entered into agreements with these executives whereby the Bank has agreed to maintain a life insurance policy in effect during the executives’ retirement, which will pay to the executives’ estates or beneficiaries a portion of the death benefit that the Bank will receive as beneficiary of such policies. Total split-dollar insurance expense for the six months ended June 30, 2011 and 2010 (unaudited) and the years ended December 31, 2010 and 2009 amounted to $4,000, $3,000, $50,000 and $33,000, respectively.

Incentive compensation program

The Bank has established an incentive compensation program whereby 5% of the Bank’s consolidated income, before income taxes and incentive compensation expense, is allocated for distribution to eligible employees. Total incentive compensation expense for the six months ended June 30, 2011 and 2010 (unaudited) and the years ended December 31, 2010 and 2009 amounted to $150,000, $124,000, $304,000, and $442,000, respectively.

14. OTHER COMMITMENTS AND CONTINGENCIES

Credit-related financial instruments

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit which involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated balance sheets. At June 30, 2011 (unaudited) and December 31, 2010 and 2009, the following financial instruments were outstanding whose contract amounts represent credit risk.

	June 30, 2011		December 31,
			2010		2009
	(Unaudited)
	(In thousands)
Commitments to grant loans	$	4,045	$	10,530	$	4,407
Unadvanced home equity lines of credit		15,336		14,259		16,465
Unadvanced commercial lines of credit		6,689		9,083		8,064
Unadvanced funds on construction loans		19,197		13,781		13,657
Standby letters of credit		406		447		374

Commitments to grant loans are agreements to lend to a customer as long as 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. The commitments for home equity and commercial lines of credit may expire without being drawn upon, therefore, the total commitment amounts do not necessarily represent future cash requirements. Home equity and certain commercial lines of credit are generally collateralized by real estate or business assets. Commitments to grant loans and unadvanced funds on construction loans are also secured by real estate.

F-26

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

OTHER COMMITMENTS AND CONTINGENCIES (concluded)

Credit-related financial instruments (concluded)

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. All letters of credit have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank collateralizes those commitments for which collateral is deemed necessary.

Employment agreements

The Bank has entered into employment agreements with certain executives for periods up to three years. The agreements generally provide for specified minimum levels of annual compensation and benefits. In addition, the agreements provide for specified lump sum payments and the continuation of benefits upon certain events of termination, as defined, including a change in control of the Bank.

Contingencies

Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the consolidated financial position of the Bank.

15. LOANS TO RELATED PARTIES

Information pertaining to loans to directors, executive officers and their associates (exclusive of loans to any such person which in the aggregate do not exceed $60,000) is as follows:

	Six Months Ended June 30,
				Years Ended December 31,
	2011			2010			2009
	(Unaudited)
	(In thousands)
Balance at beginning of period	$	2,749		$	2,271		$	1,256
Principal additions		326			617			1,403
Principal payments		(59	)		(139	)		(388	)
Balance at end of period	$	3,016		$	2,749		$	2,271

Such loans are made in the ordinary course of business at the Bank’s normal credit terms, except for certain loans which were granted with an interest rate discount of 0.50% under the Bank’s Mortgage Discount Program. This program applies only to fixed– or adjustable–rate mortgage loans that are held in the portfolio of the Bank. The program is offered to all full– and part-time employees of the Bank and to all members of its Board of Directors.

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

Determination of fair value

The Bank uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument 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 Bank’s various financial instruments. 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 instrument.

F-27

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Determination of fair value (concluded)

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

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

Securities available for sale: Fair value measurements are obtained from a third-party pricing service and are not adjusted by management. The securities measured at fair value in Level 1 are based on quoted market prices in an active exchange market. Securities measured at fair value in Level 2 are based on pricing models that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

FHLB stock: The carrying value of FHLB stock is deemed to approximate fair value, based on the redemption provisions of the FHLB of Boston.

Loans, net: 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 impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Deposits: The fair values disclosed for non-certificate deposit accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate 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.

Short-term borrowings: The carrying amount of short-term borrowings approximates fair value, based on the short-term nature of the liabilities.

Long-term debt: The fair values of long-term debt are 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.

Off-balance sheet instruments: Fair values for off-balance-sheet lending commitments 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 values of these instruments are considered immaterial.

Assets measured at fair value on a recurring basis

Assets measured at fair value on a recurring basis at June 30, 2011 (unaudited) and December 31, 2010 and 2009 are summarized below. There are no liabilities measured at fair value on a recurring basis at June 30, 2011 (unaudited) or at December 31, 2010 and 2009.

	June 30, 2011 (Unaudited)
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	—	$	12,441	$	—	$	12,441
Government-sponsored enterprises		—		4,399		—		4,399
SBA asset-backed securities		—		2,596		—		2,596
State and municipal bonds		—		8,246		—		8,246
Government-sponsored enterprise obligations		—		413		—		413
Corporate bonds		—		411		—		411
Total assets	$	—	$	28,506	$	—	$	28,506

F-28

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Assets measured at fair value on a recurring basis (concluded)

	December 31, 2010
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	—	$	11,614	$	—	$	11,614
Government-sponsored enterprises		—		4,671		—		4,671
SBA asset-backed securities		—		2,711		—		2,711
State and municipal bonds		—		5,713		—		5,713
Government-sponsored enterprise obligations		—		443		—		443
Corporate bonds		—		413		—		413
Total assets	$	—	$	25,565	$	—	$	25,565

	December 31, 2009
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Residential mortgage-backed securities:
Government National Mortgage Association	$	—	$	10,295	$	—	$	10,295
Government-sponsored enterprises		—		8,147		—		8,147
SBA asset-backed securities		—		1,014		—		1,014
State and municipal bonds		—		4,571		—		4,571
Government-sponsored enterprise obligations		—		3,154		—		3,154
Corporate bonds		—		1,007		—		1,007
Total assets	$	—	$	28,188	$	—	$	28,188

Assets measured at fair value on a non-recurring basis

The Bank may also be required, from time to time, to measure certain other financial assets on a non-recurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets as of June 30, 2011 (unaudited) and December 31, 2010 and 2009.

	June 30, 2011 (unaudited)						Six Months Ended June 30, 2011 (unaudited)
	Level 1		Level 2		Level 3		Total Losses
	(In thousands)
Impaired loans	$	—	$	—	$	1,541	$	145
	December 31, 2010						Year Ended December 31, 2010
	Level 1		Level 2		Level 3		Total Losses
	(In thousands)
Impaired loans	$	—	$	—	$	808	$	497
	December 31, 2009						Year Ended December 31, 2009
	Level 1		Level 2		Level 3		Total Losses
	(In thousands)
Impaired loans	$	—	$	—	$	1,530	$	273

F-29

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

FAIR VALUE OF FINANCIAL INSTRUMENTS (concluded)

Assets measured at fair value on a non-recurring basis (concluded)

Losses applicable to certain impaired loans are estimated using the appraised value of the underlying collateral considering discounting factors and adjusted for selling costs. The loss is not recorded directly as an adjustment to current earnings, but rather as a component in determining the overall adequacy of the allowance for loan losses. Adjustments to the estimated fair value of impaired loans may result in increases or decreases to the provision for loan losses.

There are no liabilities measured at fair value on a non-recurring basis at June 30, 2011 (unaudited) or at December 31, 2010 and 2009.

Summary of fair values of financial instruments

The estimated fair values, and related carrying or notional amounts of the Bank’s financial instruments are outlined in the table below. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Bank.

	June 30, 2011				December 31, 2010				December 31, 2009
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Unaudited)
	(In thousands)
Financial assets:
Cash and cash equivalents	$	18,637	$	18,637	$	18,397	$	18,397	$	9,370	$	9,370
Certificates of deposit		1,691		1,691		3,433		3,433		12,910		12,910
Securities available for sale		28,506		28,506		25,565		25,565		28,188		28,188
FHLB stock		1,930		1,930		1,930		1,930		1,930		1,930
Loans, net		205,386		201,317		204,117		203,366		184,370		186,602
Accrued interest receivable		827		827		865		865		846		846
Financial liabilities:
Deposits		228,375		228,970		222,140		222,814		195,625		196,323
Short-term borrowings		6,423		6,423		5,804		5,804		6,270		6,270
Long-term debt		7,500		7,872		12,500		12,988		24,500		25,350
Accrued interest payable		29		29		47		47		99		99

17. SUBSEQUENT EVENTS – CONVERSION AND STOCK OFFERING

On July 20, 2011, the Board of Directors of the Bank adopted a Plan of Conversion (the “Plan”) whereby the Bank will convert to a Maryland-chartered stock Corporation (the “Holding Company”), and offer Holding Company stock on a priority basis to qualifying depositors, tax-qualified employee plans, and employees, officers and directors of Wellesley Bank with any remaining shares to be offered to the public in a direct community offering and possibly in a syndicated community offering (the “Conversion”).

As part of the Conversion, Wellesley Bank will establish a liquidation account in an amount equal to the net worth of Wellesley Bank as of the date of the latest consolidated balance sheet appearing in the final prospectus distributed in connection with the Conversion. The liquidation account will be maintained for the benefit of eligible account holders and supplemental eligible account holders who maintain their accounts at Wellesley Bank after the Conversion. The liquidation account will be reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. In the event of a complete liquidation, each eligible account holder will be entitled to receive balances for accounts then held.

Subsequent to the Conversion, the Holding Company may not declare or pay dividends on, and may not repurchase, any of its shares of common stock if the effect thereof would cause stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements, or if such declaration, payment or repurchase would otherwise violate regulatory requirements.

F-30

Wellesley Bank and Subsidiaries

Notes to Consolidated Financial Statements (Concluded)

SUBSEQUENT EVENTS – CONVERSION AND STOCK OFFERING (concluded)

Conversion costs are deferred and reduce the proceeds from the shares sold in the Conversion. If the Conversion is not completed, all costs will be expensed. As of June 30, 2011(unaudited), Conversion costs amounting to $41,000 have been incurred and are included in other assets in the accompanying consolidated balance sheet.

In connection with the Conversion, the Holding Company intends to implement an employee stock ownership plan and other benefit and salary continuation plans for directors, officers and employees.

Also in connection with the Conversion, the Holding Company intends to establish a charitable foundation (the “Foundation”) and contribute to the Foundation an amount equal to 8% of the gross offering proceeds, 87.5% of which will be funded with authorized but unissued common stock and 12.5% of which will be funded with cash.

F-31

You should rely only on the information contained in this prospectus. Neither Wellesley Bancorp nor Wellesley Bank has authorized anyone to provide you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered by this prospectus to any person or in any jurisdiction in which an offer or solicitation is not authorized or in which the person making an offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make an offer or solicitation in those jurisdictions. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of common stock.

(Proposed Holding Company for

Wellesley Bank)

2,760,000 Shares

(Anticipated Maximum, Subject to Increase)

COMMON STOCK

PROSPECTUS

SANDLER O’NEILL + PARTNERS, L.P.

                    , 2011

Until                     , 2011, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

THE FOLLOWING PAGES CONSTITUTE THE 401(K) PROSPECTUS SUPPLEMENT

OF WELLESLEY BANCORP, INC. SUCH PROSPECTUS SUPPLEMENT WILL “WRAP AROUND”

THE PROSPECTUS OF WELLESLEY BANCORP, INC.

PARTICIPATION INTERESTS IN

WELLESLEY BANK EMPLOYEE 401(k) PLAN

AND

OFFERING OF 511,500 SHARES OF

WELLESLEY BANCORP, INC.

COMMON STOCK ($.01 PAR VALUE)

This prospectus supplement relates to the offer and sale to participants in the Wellesley Bank Employee 401(k) Plan (the “401(k) Plan”), of shares of common stock of Wellesley Bancorp, Inc. (“Wellesley Bancorp”) in connection with the initial public offering of Wellesley Bancorp, Inc.

401(k) Plan participants may direct the 401(k) Plan trustee to use a portion of their account balances to subscribe for and purchase shares of Wellesley Bancorp common stock through the Wellesley Bancorp Stock Fund. Based upon the value of the 401(k) Plan assets as of June 30, 2011, the Wellesley Bancorp Stock Fund trustee may purchase up to 511,500 shares of Wellesley Bancorp common stock at a purchase price of $10.00 per share. This prospectus supplement relates to the election of 401(k) Plan participants to direct the 401(k) Plan trustee to invest a portion of their 401(k) Plan account balances in Wellesley Bancorp common stock.

The Wellesley Bancorp, Inc. prospectus dated [date], which is attached to this prospectus supplement, includes detailed information regarding the offering of shares of Wellesley Bancorp common stock and the financial condition, results of operations and business of Wellesley Bank (“Wellesley Bank”). This prospectus supplement provides information regarding the 401(k) Plan. You should read this prospectus supplement together with the prospectus and keep both for future reference.

Please refer to “Risk Factors” beginning on page          of the prospectus.

Neither the Securities and Exchange Commission, the Massachusetts Commissioner of Banks,

the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, nor any

other state or federal agency or any state securities commission, has approved or disapproved these securities.

Any representation to the contrary is a criminal offense.

These securities are not deposits or accounts and are not insured or

guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This prospectus supplement may be used only in connection with offers and sales by Wellesley Bancorp of participation interests or shares of common stock under the 401(k) Plan in the offering. No one may use this prospectus supplement to re-offer or resell interests or shares of common stock acquired through the 401(k) Plan.

You should rely only on the information contained in this prospectus supplement and the attached prospectus. Neither Wellesley Bancorp, Wellesley Bank nor the 401(k) Plan has authorized anyone to provide you with different information.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the prospectus nor any sale of common stock shall under any circumstances imply that there has been no change in the affairs of Wellesley Bank or the 401(k) Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this Prospectus Supplement is [date].

TABLE OF CONTENTS

	Page
THE OFFERING		1
Securities Offered		1
Election to Purchase Wellesley Bancorp, Inc. Common Stock in the Stock Offering		1
Value of Participation Interests		2
Method of Directing Your Investment Election		2
Time for Directing Your Investment Election		2
Irrevocability of Your Investment Election		2
Purchase Price of Wellesley Bancorp, Inc. Common Stock		2
Nature of a Participant’s Interest in Wellesley Bancorp, Inc. Common Stock		2
Voting and Tender Rights of Wellesley Bancorp, Inc. Common Stock		3
Future Direction to Purchase Common Stock		3
DESCRIPTION OF THE 401(k) PLAN		3
Introduction		3
Eligibility and Participation		4
Contributions Under the 401(k) Plan		4
Limitations on Contributions		4
401(k) Plan Investments		6
Benefits Under the 401(k) Plan		7
Withdrawals and Distributions from the 401(k) Plan		7
ADMINISTRATION OF THE 401(k) PLAN		8
Trustees		8
Reports to 401(k) Plan Participants		8
Plan Administrator		8
Amendment and Termination		8
Merger, Consolidation or Transfer		8
Federal Income Tax Consequences		8
Restrictions on Resale		10
SEC Reporting and Short-Swing Profit Liability		10
Financial Information Regarding Plan Assets		11
LEGAL OPINION		11

i

THE OFFERING

Securities Offered

The securities offered in connection with this prospectus supplement are participation interests in the 401(k) Plan. At a purchase price of $10.00 per share, the 401(k) Plan trustee may subscribe for up to 511,500 Wellesley Bancorp, Inc. common stock in the stock offering (the “Stock Offering”). The interests offered by means of this prospectus supplement are conditioned on the close of the Stock Offering. Certain subscription rights and purchase limitations also govern your investment in the Wellesley Bancorp Stock Fund in connection with the Stock Offering. See “The Conversion and Stock Offering – Subscription Offering and Subscription Rights” and “– Limitations on Purchases of Shares” in the prospectus attached to this prospectus supplement for further discussion of these subscription rights and purchase limitations.

This prospectus supplement contains information regarding the 401(k) Plan. The attached prospectus contains information regarding the Stock Offering and the financial condition, results of operations and business of Wellesley Bank and its affiliates. The address of the principal executive office of Wellesley Bank is 40 Central Street, Wellesley, MA 02482. The telephone number of Wellesley Bank is (781) 235-2550.

Election to Purchase Wellesley Bancorp, Inc. Common Stock in the Stock Offering

In connection with the Stock Offering, you may direct the 401(k) Plan trustee to liquidate up to 100% of your account balance and use the funds to subscribe for Wellesley Bancorp common stock offered for sale in the Stock Offering. If there is not enough Wellesley Bancorp common stock available in the Stock Offering to fill all subscriptions, the common stock will be apportioned and the 401(k) Plan trustee may not be able to purchase all of the common stock you requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are not invested in Wellesley Bancorp Stock Fund) will be reinvested in accordance with the investment elections that you have in place for your elective deferrals.

All plan participants are eligible to direct the 401(k) Plan trustee to use their 401(k) Plan assets to invest in the Stock Offering. However, participant investment directions are subject to subscription rights and purchase priorities. See “Summary – Persons Who May Order Stock in the Offering” in the attached prospectus. Subscription requests for common stock will be filled in the following order of priority: (1) persons with $50 or more on deposit at Wellesley Bank as of the close of business on April 30, 2010; (2) persons with $50 or more on deposit at Wellesley Bank as of the close of business on June 30, 2011; and (3) employees and directors who do not have a higher priority right. If you fall into one of the above subscription offering categories, you have subscription rights to purchase shares of Wellesley Bancorp common stock in the Stock Offering and you may use your account balance in the 401(k) Plan to subscribe for shares of Wellesley Bancorp common stock. To the extent shares of common stock remain available after filling offers in the subscription offering, shares will be available in a community offering.

The limitations on the total amount of Wellesley Bancorp common stock that you may purchase in the Stock Offering, as described in the prospectus (see “The Conversion and Stock Offering – Limitations on Purchases of Shares”), will be calculated based on the aggregate amount that you subscribed for: (a) through your 401(k) Plan account and (b) through your sources of funds outside of the 401(k) Plan. Whether you place an order through the 401(k) Plan, outside the 401(k) Plan, or both, the number of shares of Wellesley Bancorp common stock, if any, that you receive will be determined based on the total number of subscriptions, your purchase priority and the allocation priorities described in the

1

prospectus. If, as a result of the calculation, you are allocated insufficient shares to fill all of your orders, available shares will be allocated between orders on a pro rata basis.

Value of Participation Interests

As of June 30, 2011, the market value of the 401(k) Plan assets equaled approximately $5,115,000. The plan administrator has distributed quarterly statements to each participant reflecting the value of his or her beneficial interest in the 401(k) Plan as of June 30, 2011. The value of the 401(k) Plan assets represents past contributions made to the 401(k) Plan on your behalf, plus or minus earnings or losses on the contributions, less previous withdrawals.

Method of Directing Your Investment Election

Included with this prospectus supplement is a blue investment form (“Investment Election Form”). If you wish to direct the 401(k) Plan trustee to liquidate a portion of your current investments and use the funds to subscribe for shares in the Stock Offering you must complete, sign and submit this form to Eloise C. Thibault. If you do not wish to invest in the Wellesley Bancorp Stock Fund at this time, you do not need to take any action. The minimum investment in the Wellesley Bancorp Stock Fund during the Stock Offering is $250.00 and the maximum individual investment is $200,000.

Time for Directing Your Investment Election

If you wish to participate in the Stock Offering using your 401(k) Plan funds, you must submit your Investment Election Form to Eloise C. Thibault by 12:00 noon on [date]. If you have any questions regarding the Wellesley Bancorp Stock Fund, you can call Eloise C. Thibault at (781)  235-2550.

Irrevocability of Your Investment Election

Once you have submitted your Investment Election Form, you cannot change your election to subscribe for shares of common stock through the 401(k) Plan in the Stock Offering.

Purchase Price of Wellesley Bancorp, Inc. Common Stock

The 401(k) Plan trustee will use the funds transferred to the Wellesley Bancorp Stock Fund to purchase shares of Wellesley Bancorp common stock in the Stock Offering. The 401(k) Plan trustee will pay the same price for shares of Wellesley Bancorp common stock as all other persons who purchase shares of Wellesley Bancorp common stock in the Stock Offering. If there is not enough common stock available in the Stock Offering to fill all subscriptions, the common stock will be apportioned and the trustee may not be able to purchase all of the common stock you requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are not invested in Wellesley Bancorp common stock) will be reinvested in accordance with the investment elections you have in place for your elective deferrals.

Nature of a Participant’s Interest in Wellesley Bancorp, Inc. Common Stock

The 401(k) Plan trustee will hold Wellesley Bancorp common stock in the name of the 401(k) Plan. The 401(k) Plan trustee will credit shares of Wellesley Bancorp common stock acquired at your direction to your account under the 401(k) Plan. Your interest in the Wellesley Bancorp Stock Fund will be credited in units. Immediately after the close of the Stock Offering each unit will equal one share of Wellesley Bancorp common stock. Once the Wellesley Bancorp Stock Fund begins to have open market

2

purchases each unit will consist of a portion of cash and common stock. For liquidity purposes, the Wellesley Bancorp Stock Fund will be 3-5% in cash.

Voting and Tender Rights of Wellesley Bancorp, Inc. Common Stock

The 401(k) Plan trustee will exercise voting and tender rights attributable to all Wellesley Bancorp common stock held in the Wellesley Bancorp Stock Fund, as directed by participants with interests in the Wellesley Bancorp Stock Fund. With respect to each matter as to which holders of Wellesley Bancorp common stock have a right to vote, you will have voting instruction rights that reflect your proportionate interest in the Wellesley Bancorp Stock Fund. The number of shares of Wellesley Bancorp common stock held in the Wellesley Bancorp Stock Fund voted for and against each matter will be proportionate to the number of voting instruction rights exercised. If there is a tender offer for Wellesley Bancorp common stock, the 401(k) Plan allots each participant a number of tender instruction rights reflecting each participant’s proportionate interest in the Wellesley Bancorp Stock Fund. The percentage of shares of Wellesley Bancorp common stock held in the Wellesley Bancorp Stock Fund that will be tendered will be the same as the percentage of the total number of tender instruction rights exercised in favor of the tender offer. The remaining shares of Wellesley Bancorp common stock held in the Wellesley Bancorp Stock Fund will not be tendered. The 401(k) Plan provides that participants will exercise their voting instruction rights and tender instruction rights on a confidential basis.

Future Direction to Purchase Common Stock

You will be able to invest in the Wellesley Bancorp Stock Fund after the stock offering by accessing your account via the internet and directing the trustee to invest your future contributions or your account balance in the 401(k) Plan into the Wellesley Bancorp Stock Fund. After the stock offering, to the extent that shares of common stock are available, Pentegra Trust Company will acquire Wellesley Bancorp common stock at your election in open market transactions at the prevailing market price. Special restrictions may apply to transfers directed to and from the Wellesley Bancorp Stock Fund by the participants who are subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, relating to the purchase and sale of securities by officers, directors and principal shareholders of Wellesley Bancorp. In addition, if you are an officer of Wellesley Bancorp that is restricted by the Federal Deposit Insurance Corporation from selling shares acquired in the stock offering for one year, the shares you purchased in the stock offering will not be tradable for one year. However, any stock units that you held in the Wellesley Bancorp Stock Fund before the stock offering are not subject to this one-year trading restriction and therefore may be sold.

DESCRIPTION OF THE 401(k) PLAN

Introduction

Wellesley Bank adopted the amended and restated 401(k) Plan effective [date]. Wellesley Bank intends for the 401(k) Plan to comply, in form and in operation, with all applicable provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Wellesley Bank may amend the 401(k) Plan from time to time in the future to ensure continued compliance with these laws. Wellesley Bank may also amend the 401(k) Plan from time to time in the future to add, modify, or eliminate certain features of the plan, as it sees fit. Federal law provides you with various rights and protections as a participant in the 401(k) Plan, which is governed by ERISA. However, the Pension Benefit Guaranty Corporation does not guarantee your benefits under the 401(k) Plan.

3

Reference to Full Text of the Plan. The following portions of this prospectus supplement summarize the material provisions of the 401(k) Plan. Wellesley Bank qualifies this summary in its entirety by reference to the full text of the 401(k) Plan. You may obtain copies of the 401(k) Plan document, including any amendments to the plan and a summary plan description, by contacting Eloise C. Thibault at (781) 235-2550. You should carefully read the 401(k) Plan documents to understand your rights and obligations under the 401(k) Plan.

Eligibility and Participation

Wellesley Bank employees must attain age 21 in order to be eligible to participate in the 401(k) Plan. As of June 30, 2011, 32 of the 32 eligible employees of Wellesley Bank participated in the 401(k) Plan.

Contributions Under the 401(k) Plan

Employee Pre-Tax Contributions. You may defer a percentage of your eligible compensation into the 401(k) Plan after you satisfy the Plan’s eligibility requirements. For pre-tax contributions being made to the Plan, the percentage you defer is subject to an annual limit of the lesser of 75% of eligible compensation or $16,500 (2011 IRS limit) in a calendar year. For purposes of the Plan, “eligible compensation” is defined as taxable compensation reportable by Wellesley Bank on your Form W-2, excluding reimbursement or other expense allowances, fringe benefits, moving expenses, deferred compensation and welfare benefits and including salary reduction contributions made to Bank-sponsored cafeteria, qualified transportation fringe, simplified employee pension, 401(k), 457(b) or 403(b) plans. In addition to pre-tax salary deferrals, you may make “catch up” contributions if you are currently age 50 or will be 50 before the end of the calendar year. You are always 100% vested in your elective deferrals.

Wellesley Bank Matching Contributions. The 401(k) Plan currently provides that Wellesley Bank will make matching contributions on behalf of each eligible participant with respect to each eligible participant’s elective deferrals. If you elect to defer funds into the 401(k) Plan, Wellesley Bank currently matches 150% of the first 7% of compensation you defer into the 401(k) Plan. Wellesley Bank makes matching contributions only to those participants who actively defer a percentage of their compensation into the 401(k) Plan.

Rollover Contributions. Wellesley Bank allows employees who receive a distribution from a previous employer’s tax-qualified employee benefit plan to deposit that distribution into a Rollover Contribution account under the 401(k) Plan, provided the rollover contribution satisfies IRS requirements. For additional information on Rollover Contributions see the Summary Plan Description for the 401(k) Plan.

Limitations on Contributions

Limitation on Employee Salary Deferrals. By law, your total deferrals under the 401(k) Plan, together with similar plans, may not exceed $16,500 for 2011. Eligible employees who are age 50 and over may also make additional “catch-up” contributions to the plan, up to a maximum of $5,500 for 2011. The Internal Revenue Service periodically increases these limitations. An eligible participant who exceeds these limitations must include any excess deferrals in gross income for federal income tax purposes in the year of deferral. In addition, the participant must pay federal income taxes on any excess deferrals when distributed by the 401(k) Plan to the participant, unless the plan distributes the excess deferrals and any related income no later than the first April 15th following the close of the taxable year in which the participant made the excess deferrals. Any income on excess deferrals distributed before

4

such date is treated, for federal income tax purposes, as earned and received by the participant in the taxable year of the distribution.

Limitation on Annual Additions and Benefits. As required by the Internal Revenue Code, the 401(k) Plan provides that the total amount of contributions and forfeitures (annual additions) credited to a participant during any year under all defined contribution plans of Wellesley Bank (including the 401(k) Plan and the proposed Wellesley Bank Employee Stock Ownership Plan) may not exceed the lesser of 100% of the participant’s annual compensation or $49,000 for 2011.

Limitation on Plan Contributions for Highly Compensated Employees. Special provisions of the Internal Revenue Code limit the amount of pre-tax and matching contributions that may be made to the 401(k) Plan in any year on behalf of highly compensated employees, in relation to the amount of pre-tax and matching contributions made by or on behalf of all other employees eligible to participate in the 401(k) Plan. If pre-tax and matching contributions exceed these limitations, the plan must adjust the contribution levels for highly compensated employees.

In general, a highly compensated employee includes any employee who (1) was a 5% owner of the sponsoring employer at any time during the year or the preceding year, or (2) had compensation for the preceding year in excess of $110,000 and, if the sponsoring employer so elects, was in the top 20% of employees by compensation for that year. The preceding dollar amount applies for 2011 and may be adjusted periodically by the Internal Revenue Service.

Top-Heavy Plan Requirements. If the 401(k) Plan is a “Top-Heavy Plan” for any calendar year, Wellesley Bank may be required to make certain minimum contributions to the 401(k) Plan on behalf of non-key employees. In general, the 401(k) Plan will be treated as a Top-Heavy Plan for any calendar year if, as of the last day of the preceding calendar year, the aggregate balance of the accounts of “Key Employees” exceeds 60% of the aggregate balance of the accounts of all employees under the plan. A Key Employee is generally any employee who, at any time during the calendar year or any of the four preceding years, is:

(1) an officer of Wellesley Bank whose annual compensation exceeds $160,000;

(2) a 5% owner of the employer, meaning an employee who owns more than 5% of the outstanding stock of Wellesley Bancorp, or who owns stock that possesses more than 5% of the total combined voting power of all stock of Wellesley Bancorp; or

(3) a 1% owner of the employer, meaning an employee who owns more than 1% of the outstanding stock of Wellesley Bancorp, or who owns stock that possesses more than 1% of the total combined voting power of all stock of Wellesley Bancorp, and whose annual compensation exceeds $150,000.

The foregoing dollar amounts are for 2011.

5

401(k) Plan Investments

[Fund returns and description (other than the Stock Fund) to be added]

Effective [date], the 401(k) Plan offers the following investment choices:

	Annual Rates of Return as of December 31,
Fund Name	2010	2009	2008

Wellesley Bancorp Stock Fund. In connection with the Stock Offering, Wellesley Bank has added the Wellesley Bancorp Stock Fund as an additional choice to the investment alternatives described above. The Wellesley Bancorp Stock Fund invests primarily in the common stock of Wellesley Bancorp. Participants in the 401(k) Plan may direct the 401(k) Plan trustee to invest a portion of their 401(k) Plan account balances in the Wellesley Bancorp Stock Fund during the Stock Offering.

The Wellesley Bancorp Stock Fund consists of investments in the common stock of Wellesley Bancorp made on the closing date of the Stock Offering. Your investment in the Wellesley Bancorp Stock Fund will be recorded using the unitized accounting method. If cash dividends are paid on Wellesley Bancorp common stock, the trustee will, to the extent practicable, use the dividends held in the Wellesley Bancorp Stock Fund to purchase shares of the common stock. Pending investment in the common stock, assets held in the Wellesley Bancorp Stock Fund will be placed in the short-term investment component of the Wellesley Bancorp Stock Fund. The Wellesley Bancorp Stock Fund will maintain a 3-5% cash ratio target following the Stock Offering.

As of the date of this prospectus supplement, no shares of Wellesley Bancorp common stock have been issued or are outstanding, and there is no established market for Wellesley Bancorp common stock. Accordingly, there is no record of the historical performance of the Wellesley Bancorp Stock Fund. Performance of the Wellesley Bancorp Stock Fund depends on a number of factors, including the financial condition and profitability of Wellesley Bank and general stock market conditions. See “Risk Factors” in the attached prospectus.

Once you have submitted your Investment Election Form, you may not change your investment directions in the Stock Offering.

6

Benefits Under the 401(k) Plan

Vesting. All participants are 100% vested in their contributions and any earnings thereon. This means you have a non-forfeitable right to these funds and any earnings on the funds at all times. Participants fully vest in matching contributions after six years of service.

Withdrawals and Distributions from the 401(k) Plan

Withdrawals Before Termination of Employment. While in active service, participants may take loans from the 401(k) Plan (subject to the restrictions set forth in the 401(k) Plan and the Wellesley Bank loan policy). A participant may also take hardship withdrawals, provided the participant has a hardship event as defined by the Internal Revenue Service regulations and subject to approval by the Plan Administrator. If a participant reaches age 59 ¹/2, the Participant may elect to withdraw all or a portion of his or her 401(k) Plan account balance while still employed by Wellesley Bank.

Distribution Upon Retirement, Death or Disability. If a participant’s accounts are $1,000 or less upon termination of employment, payment will be in the form of a lump sum as of a valuation date as soon thereafter as administratively possible. If a participant’s accounts exceed $1,000 upon termination of employment, and the participant does not elect to have his/her distribution paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated by the Plan Administrator.

Distribution Upon Termination for Any Other Reason. If a participant’s accounts are $1,000 or less upon termination of employment, payment will be in the form of a lump sum as of a valuation date as soon thereafter as administratively possible. If a participant’s accounts exceed $1,000 upon termination of employment, and the participant does not elect to have his/her distribution paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated by the Plan Administrator.

Nonalienation of Benefits. Except with respect to federal income tax withholding, and as provided for under a qualified domestic relations order, benefits payable under the 401(k) Plan will not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any rights to benefits payable under the 401(k) Plan will be void.

Applicable federal tax law requires the 401(k) Plan to impose substantial restrictions on your right to withdraw amounts held under the 401(k) Plan before your termination of employment with Wellesley Bank. Federal law may also impose an excise tax on withdrawals from the 401(k) Plan before you attain 59 ¹/2 years of age, regardless of whether the withdrawal occurs during your employment with Wellesley Bank or after termination of employment.

7

ADMINISTRATION OF THE 401(k) PLAN

Trustees

The board of directors of Wellesley Bank has appointed Reliance Trust Company to serve as trustee for the 401(k) Plan for all assets except those assets held in the new Stock Fund. Pentegra Trust Company will serve as the Stock Fund trustee. The Plan trustee receives, holds and invests the contributions to the 401(k) Plan in trust and distributes them to participants and beneficiaries in accordance with the terms of the 401(k) Plan and the directions of the Plan Administrator. The trustee is responsible for the investment of the trust assets, as directed by the Plan Administrator and the participants.

Reports to 401(k) Plan Participants

The Plan Administrator furnishes participants quarterly statements that show the balance in their accounts as of the statement date, contributions made to their accounts during that period and any additional adjustments required to reflect earnings or losses.

Plan Administrator

Wellesley Bank acts as Plan Administrator for the 401(k) Plan. The Plan Administrator handles the following administrative functions: interpreting the provisions of the plan, prescribing procedures for filing applications for benefits, preparing and distributing information explaining the plan, maintaining plan records, books of account and all other data necessary for the proper administration of the plan, preparing and filing all returns and reports required by the U.S. Department of Labor and the IRS and making all required disclosures to participants, beneficiaries and others under ERISA.

Amendment and Termination

Wellesley Bank expects to continue the 401(k) Plan indefinitely. Nevertheless, Wellesley Bank may terminate the 401(k) Plan at any time. If Wellesley Bank terminates the 401(k) Plan in whole or in part, all affected participants become fully vested in their accounts, regardless of other provisions of the 401(k) Plan. Wellesley Bank reserves the right to make, from time to time, changes which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries. Wellesley Bank may amend the plan, however, as necessary or desirable, in order to comply with ERISA or the Internal Revenue Code.

Merger, Consolidation or Transfer

If the 401(k) Plan merges or consolidates with another plan or transfers the trust assets to another plan, and either the 401(k) Plan or the other plan is subsequently terminated, the 401(k) Plan requires that you receive a benefit immediately after the merger, consolidation or transfer that would equal or exceed the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer, if the 401(k) Plan had terminated at that time.

Federal Income Tax Consequences

The following briefly summarizes the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences of the 401(k) Plan. Statutory provisions change, as do their interpretation, and their application may vary in individual circumstances. Finally, applicable state and local income tax

8

laws may have different tax consequences than the federal income tax laws. 401(k) Plan participants should consult a tax advisor with respect to any transaction involving the 401(k) Plan, including any distribution from the 401(k) Plan.

As a “tax-qualified retirement plan,” the Internal Revenue Code affords the 401(k) Plan certain tax advantages, including the following:

(1) the sponsoring employer may take an immediate tax deduction for the amount contributed to the plan each year;

(2) participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3) earnings of the plan are tax-deferred, thereby permitting the tax-deferred accumulation of income and gains on investments.

Wellesley Bank administers the 401(k) Plan to comply in operation with the requirements of the Internal Revenue Code as of the applicable effective date of any change in the law. If Wellesley Bank should receive an adverse determination letter from the Internal Revenue Service regarding the 401(k) Plan’s tax exempt status, all participants would generally recognize income equal to their vested interests in the 401(k) Plan, the participants would not be permitted to transfer amounts distributed from the 401(k) Plan to an Individual Retirement Account or to another qualified retirement plan, and Wellesley Bank would be denied certain tax deductions taken in connection with the 401(k) Plan.

Lump Sum Distribution. A distribution from the 401(k) Plan to a participant or the beneficiary of a participant qualifies as a lump sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59 ¹/2; and consists of the balance credited to the participant under this plan and all other profit sharing plans, if any, maintained by Wellesley Bank. The portion of any lump sum distribution included in taxable income for federal income tax purposes consists of the entire amount of the lump sum distribution, less the amount of after-tax contributions, if any, made to any other profit-sharing plans maintained by Wellesley Bank, if the distribution includes those amounts.

Wellesley Bancorp Common Stock Included in Lump Sum Distribution. If a lump sum distribution includes Wellesley Bancorp common stock, the distribution generally is taxed in the manner described above. The total taxable amount is reduced, however, by the amount of any net unrealized appreciation on Wellesley Bancorp common stock; that is, the excess of the value of Wellesley Bancorp common stock at the time of the distribution over the cost or other basis of the securities to the trust. The tax basis of Wellesley Bancorp common stock, for purposes of computing gain or loss on a subsequent sale, equals the value of Wellesley Bancorp common stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of Wellesley Bancorp common stock, to the extent of the net unrealized appreciation at the time of distribution, is long-term capital gain, regardless of how long you hold the Wellesley Bancorp common stock, or the “holding period.” Any gain on a subsequent sale or other taxable disposition of Wellesley Bancorp common stock that exceeds the amount of net unrealized appreciation upon distribution is considered long-term capital gain, regardless of the holding period. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed under IRS regulations.

9

We have provided you with a brief description of the material federal income tax aspects of the 401(k) Plan that are generally applicable under the Internal Revenue Code. We do not intend this description to be a complete or definitive description of the federal income tax consequences of participating in or receiving distributions from the 401(k) Plan. Accordingly, you should consult a tax advisor concerning the federal, state and local tax consequences of participating in and receiving distributions from the 401(k) Plan.

Restrictions on Resale

Any “affiliate” of Wellesley Bancorp under Rules 144 and 405 of the Securities Act of 1933, as amended, who receives a distribution of common stock under the 401(k) Plan, may re-offer or resell such shares only under a registration statement filed under the Securities Act of 1933, as amended, assuming the availability of a registration statement, or under Rule 144 or some other exemption from these registration requirements. An “affiliate” of Wellesley Bancorp is someone who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, Wellesley Bancorp. Generally, a director, principal officer or major shareholder of a corporation is deemed to be an “affiliate” of that corporation.

Any person who may be an “affiliate” of Wellesley Bancorp may wish to consult with counsel before transferring any common stock they own. In addition, participants should consult with counsel regarding the applicability to them of Section 16 of the Securities Exchange Act of 1934, as amended, which may restrict the sale of Wellesley Bancorp common stock acquired under the 401(k) Plan or other sales of Wellesley Bancorp common stock.

Persons who are not deemed to be “affiliates” of Wellesley Bancorp at the time of resale may resell freely any shares of Wellesley Bancorp common stock distributed to them under the 401(k) Plan, either publicly or privately, without regard to the registration and prospectus delivery requirements of the Securities Act of 1933, as amended, or compliance with the restrictions and conditions contained in the exemptions available under federal law. A person deemed an “affiliate” of Wellesley Bancorp at the time of a proposed resale may publicly resell common stock only under a “re-offer” prospectus or in accordance with the restrictions and conditions contained in Rule 144 of the Securities Act of 1933, as amended, or some other exemption from registration, and may not use this prospectus supplement or the accompanying prospectus in connection with any such resale. In general, Rule 144 restricts the amount of common stock which an affiliate may publicly resell in any three-month period to the greater of one percent of Wellesley Bancorp common stock then outstanding or the average weekly trading volume reported on the Nasdaq Capital Market during the four calendar weeks before the sale. Affiliates may sell only through brokers without solicitation and only at a time when Wellesley Bancorp is current in filing all required reports under the Securities Exchange Act of 1934, as amended.

SEC Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability requirements on officers, directors and persons who beneficially own more than 10% of public companies such as Wellesley Bancorp. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the filing of reports of beneficial ownership. Within ten days of becoming a person required to file reports under Section 16(a), such person must file a Form 3 reporting initial beneficial ownership with the Securities and Exchange Commission (“SEC”). Such persons must also report periodically certain changes in beneficial ownership involving the allocation or reallocation of assets held in their 401(k) Plan accounts, either on a Form 4 within two business days after a transaction, or annually on a Form 5 within 45 days after the close of a company’s fiscal year.

10

In addition to the reporting requirements described above, Section 16(b) of the Securities Exchange Act of 1934, as amended, provides for the recovery by Wellesley Bancorp of profits realized from the purchase and sale or sale and purchase of its common stock within any six-month period by any officer, director or person who beneficially owns more than 10% of the common stock.

The SEC has adopted rules that exempt many transactions involving the 401(k) Plan from the “short-swing” profit recovery provisions of Section 16(b). The exemptions generally involve restrictions upon the timing of elections to buy or sell employer securities for the accounts of any officer, director or person who beneficially owns more than 10% of the common stock of a company.

Except for distributions of the common stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons who are subject to Section 16(b) may be required, under limited circumstances involving the purchase of common stock within six months of the distribution, to hold the shares of common stock distributed from the 401(k) Plan for six months after the distribution date.

Financial Information Regarding Plan Assets

Financial information representing the net assets available for 401(k) Plan benefits at December 31, 2010, is available upon written request to Eloise C. Thibault at Wellesley Bank.

LEGAL OPINION

The validity of the issuance of the common stock of Wellesley Bancorp will be passed upon by Kilpatrick Townsend & Stockton LLP, Washington, DC. Kilpatrick Townsend & Stockton LLP is acting as special counsel for Wellesley Bancorp in connection with the Stock Offering.

11

WELLESLEY BANK EMPLOYEE 401(k) PLAN

INVESTMENT FORM

Name of Plan Participant:                                                                                                                                                                                                                 

Social Security Number:                                                                                                                                                                                                                    

1. Instructions. In connection with the stock offering, you may direct up to 100% of your current 401(k) Plan account balance into the Wellesley Bancorp Fund (the “Employer Stock Fund”). The percentage of your 401(k) Plan account (up to 100%) transferred into the Employer Stock Fund will be used to purchase shares of Wellesley Bancorp stock in the stock offering.

To direct a transfer of the funds credited to your 401(k) Plan account to the Employer Stock Fund, you must complete, sign and submit this form to Eloise C. Thibault by 12:00 noon on [date]. Current Wellesley Bank employees should return their forms through inter-office mail. Former Wellesley Bank employees should return their forms using the business reply envelope that has been provided. A representative for the Plan Administrator will retain a copy of this form and return a copy to you. If you need any assistance in completing this form, please contact Eloise C. Thibault at (781) 235-2550. If you do not complete and return this form to Eloise C. Thibault by 12:00 noon on [date], the funds credited to your account under the 401(k) Plan will continue to be invested in accordance with your prior investment directions, or in accordance with the terms of the Plan if no investment directions have been provided.

2. Investment Directions. I hereby authorize the Plan Administrator to direct the Trustee to invest the following percentages (in multiples of not less than 1%) of my 401(k) Plan account balance in the Employer Stock Fund:

Fund Name
[Funds to be included]	%

I understand that my election to transfer funds to the Employer Stock Fund to purchase shares of Wellesley Bancorp stock in the stock offering is irrevocable. I understand that the funds transferred to the Employer Stock Fund will be divisible by $10.00, the per share price for the common stock.

3. Purchaser Information. The ability of a 401(k) Plan participant to purchase Wellesley Bancorp stock in the stock offering is based upon the participant’s subscription rights in the stock offering. Please indicate your status (check one):

¨ Check here if you had $50.00 or more on deposit with Wellesley Bank as of April 30, 2010.

¨ Check here if you had $50.00 or more on deposit with Wellesley Bank as of close of business on June 30, 2011.

¨ Check here if you are not eligible for either category noted above, but you are an employee or director of Wellesley Bank.

i

4. Acknowledgment of Participant. I understand that this Investment Form shall be subject to all of the terms and conditions of the 401(k) Plan. I acknowledge that I have received a copy of the Prospectus and the Prospectus Supplement. I acknowledge further that my investment election on this form is irrevocable.

Signature of Participant Date

Acknowledgment of Receipt by Administrator. This Investment Form was received by the Plan Administrator and will become effective on the date noted below.

By:
	Date

THE PARTICIPATION INTERESTS REPRESENTED BY THE COMMON STOCK OFFERED HEREBY ARE NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY WELLESLEY BANCORP OR WELLESLEY BANK. THE COMMON STOCK IS SUBJECT TO AN INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL INVESTED.

PLEASE COMPLETE AND RETURN TO ELOISE C. THIBAULT

AT WELLESLEY BANK BY 12:00 P.M. ON [DATE].

ii

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth our anticipated expenses of the offering:

Securities and Exchange Commission filing fee (1)	$	4,296
Massachusetts filing fee		5,000
Financial Industry Regulatory Authority, Inc. filing fee (1)		4,200
NASDAQ market listing fee		50,000
EDGAR, printing, postage and mailing		120,000
Legal fees and expenses		425,000
Accounting fees and expenses		125,000
Appraiser’s fees and expenses		45,000
Securities marketing firm fees and expenses (including legal fees)		345,000
Conversion agent fees and expenses		42,000
Business plan fees and expenses		40,000
Transfer agent and registrar fees and expenses		15,000
Certificate printing		5,000
Miscellaneous		4,504
TOTAL	$	1,230,000

(1) Estimated expenses.

Item 14. Indemnification of Directors and Officers.

The Articles of Incorporation of Wellesley Bancorp, Inc. provide as follows:

NINTH: The Corporation shall indemnify (A) its directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the general laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures required, and (B) other employees and agents to such extent as shall be authorized by the Board of Directors or the Corporation’s Bylaws and be permitted by law. The foregoing rights of indemnification shall not be exclusive of any rights to which those seeking indemnification may be entitled. The Board of Directors may take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such Bylaws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the Articles of Incorporation of the Corporation shall limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

Item 15. Recent Sales of Unregistered Securities.

None.

II-1

Item 16. Exhibits and Financial Statement Schedules.

The exhibits filed as a part of this Registration Statement are as follows:

(a) List of Exhibits

Exhibit	Description
1.1	Engagement Letters between Wellesley Bank and Sandler O’Neill & Partners, L.P.
1.2	Draft Agency Agreement*
2.1	Plan of Conversion
3.1	Articles of Incorporation of Wellesley Bancorp, Inc.
3.2	Bylaws of Wellesley Bancorp, Inc.
4.1	Specimen Common Stock Certificate of Wellesley Bancorp, Inc.
5.1	Form of Opinion of Kilpatrick Townsend & Stockton LLP re: Legality of Shares
8.1	Form of Opinion of Kilpatrick Townsend & Stockton LLP re: Federal Tax Matters
10.1	Employment Agreement between Wellesley Bank and Thomas J. Fontaine+
10.2	Form of Employment Agreement between Wellesley Bancorp, Inc., Wellesley Bank and Thomas J. Fontaine+
10.3	Amended and Restated Executive Salary Continuation Agreement between Wellesley Bank and Thomas J. Fontaine+
10.4	Form of Wellesley Bank Supplemental Executive Retirement Plan+
10.5	Form of Wellesley Bank Employee Severance Compensation Plan+
23.1	Consent of Kilpatrick Townsend & Stockton LLP (included in Exhibits 5.1 and 8.1 filed herewith)
23.2	Consent of Wolf & Company, P.C.
23.3	Consent of Feldman Financial Advisors, Inc.
24.1	Powers of Attorney (included on signature page)
99.1	Appraisal Report of Feldman Financial Advisors, Inc.
99.2	Draft Marketing Materials*
99.3	Form of Subscription Order Form and Instructions*

* To be filed by amendment.

+ Management contract or compensation plan or arrangement.

(b) Financial Statement Schedules

All schedules have been omitted as not applicable or not required under the rules of Regulation S-X.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume

II-2

and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(5) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

II-3

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Wellesley, Commonwealth of Massachusetts, on September 9, 2011.

WELLESLEY BANCORP, INC.
By:	/s/ Thomas J. Fontaine
	Thomas J. Fontaine President, Chief Executive Officer and Chairman of the Board

POWER OF ATTORNEY

We, the undersigned directors and officers of Wellesley Bancorp, Inc. (the “Company”) hereby severally constitute and appoint Thomas J. Fontaine and Gary P. Culyer with full power of substitution, our true and lawful attorneys-in-fact and agents, to do any and all things in our names in the capacities indicated below which said Thomas J. Fontaine and Gary P. Culyer may deem necessary or advisable to enable Wellesley Bancorp, Inc. to comply with the Securities Act of 1933, as amended, and any rules regulations and requirements of the Securities and Exchange Commission, in connection with the registration statement on Form S-1 of Wellesley Bancorp, Inc., including specifically but not limited to, power and authority to sign for us in our names in the capacities indicated below, the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that said Thomas J. Fontaine and Gary P. Culyer shall lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Title	Date
/s/ Thomas J. Fontaine	President, Chief Executive Officer and	September 9, 2011
Thomas J. Fontaine	Chairman of the Board
	(principal executive officer)
/s/ Gary P. Culyer	Chief Financial Officer and	September 9, 2011
Gary P. Culyer	Treasurer
	(principal financial and accounting officer)
/s/ Nancy Marden Goodall	Director	September 9, 2011
Nancy Marden Goodall
/s/ C. Joseph Grignaffini	Director	September 9, 2011
C. Joseph Grignaffini
/s/ Hugh J. Kelley	Director	September 9, 2011
Hugh J. Kelley

/s/ Theodore F. Parker	Director	September 9, 2011
Theodore F. Parker
/s/ Leslie B. Shea	Director	September 9, 2011
Leslie B. Shea
/s/ Edwin G. Silver	Director	September 9, 2011
Edwin G. Silver
/s/ Robert L. Skolnick	Director	September 9, 2011
Robert L. Skolnick
/s/ Tina L. Wang	Director	September 9, 2011
Tina L. Wang

EX-1.1

Exhibit 1.1

June 13, 2011

Board of Directors

Wellesley Bank

40 Central Street

Wellesley, MA 02482

Attention:	Mr. Thomas J. Fontaine
	Chairman, President & Chief Executive Officer

Dear Mr. Fontaine:

Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) is pleased to act as records management agent to Wellesley Bank (the “Bank”) in connection with the Bank’s proposed conversion from mutual to stock form (the “Conversion”). This letter is to confirm the terms and conditions of our engagement.

SERVICES AND FEES

In our role as Records Agent, we anticipate that our services will include the services outlined below, each as may be necessary and as the Company may reasonably request;

I. Consolidation of Accounts

II. Design and Preparation of Stock Order Forms

III. Organization and Supervision of the Conversion Center

IV. Depositor Special Meeting Services

V. Subscription Services

Each of these services is further described in Appendix A to this agreement.

For its services hereunder, the Bank agrees to pay Sandler O’Neill a fee of $12,000. This fee is based upon the requirements of current regulations and the Plan of Conversion as currently

Wellesley Bank June 13, 2011 Page 2

contemplated. Any unusual or additional items or duplication of service required as a result of a material change in the regulations or the Plan of Conversion, or a material delay or other similar events necessitating a new or additional record date or dates may result in extra charges which will be covered in a separate agreement if and when they occur.

All fees under this agreement shall be payable in cash, as follows: (a) $6,000 payable upon execution of this agreement by the Bank, which shall be non-refundable; and (b) the balance upon the completion of the Offering, or if the Offering is terminated for any reason following the mailing of offering materials to the Bank’s depositors, upon termination of the Offering.

COSTS AND EXPENSES

In addition to any fees that may be payable to Sandler O’Neill hereunder, the Bank agrees to reimburse Sandler O’Neill, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with its engagement hereunder regardless of whether the Conversion is consummated, including, without limitation, travel, lodging, food, telephone, postage and other similar expenses up to a maximum of $30,000; provided, however, that Sandler O’Neill shall document such expenses to the reasonable satisfaction of the Bank. In the event that a resolicitation of subscribers is required, this expense cap shall be increased by $10,000. The provisions of this paragraph are not intended to apply to or in any way impair the indemnification provisions of this agreement. It is understood that all expenses associated with the operation of the Conversion Center will be borne by the Bank.

RELIANCE ON INFORMATION PROVIDED

The Bank will provide Sandler O’Neill with such information as Sandler O’Neill may reasonably require to carry out its duties. The Bank recognizes and confirms that Sandler O’Neill (a) will use and rely on such information in performing the services contemplated by this agreement without having independently verified the same, and (b) does not assume responsibility for the accuracy or completeness of the information. The Bank will also inform Sandler O’Neill within a reasonable period of time of any changes in the Plan which require changes in Sandler O’Neill’s services. If a substantial expense results from any such change, the parties shall negotiate an equitable adjustment in the fee.

LIMITATIONS

Sandler O’Neill, as Conversion Agent hereunder, (a) shall have no duties or obligations other than those specifically set forth herein; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any order form or any stock certificates or the shares represented thereby, and will not be required to and will make no

Wellesley Bank June 13, 2011 Page 3

representations as to the validity, value or genuineness of the offer; (c) shall not be liable to any person, firm or corporation including the Bank by reason of any error of judgment or for any act done by it in good faith, or for any mistake of law or fact in connection with this agreement and the performance hereof unless caused by or arising out of its own willful misconduct, bad faith or gross negligence; (d) will not be obliged to take any legal action hereunder which might in its judgment involve any expense or liability, unless it shall have been furnished with reasonable indemnity satisfactory to it; and (e) may rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telex, telegram, or other document or security delivered to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties.

Anything in this agreement to the contrary notwithstanding, in no event shall Sandler O’Neill be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Sandler O’Neill has been advised of the likelihood of such loss or damage and regardless of form of action.

INDEMNIFICATION

The Bank agrees to indemnify and hold Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees, agents and controlling persons (Sandler O’Neill and each such person being an “Indemnified Party”) harmless from and against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable federal or state law, or otherwise, related to or arising out of the engagement of Sandler O’Neill pursuant to, and the performance by Sandler O’Neill of the services contemplated by this letter, and will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred, including expenses incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party. The Bank will not be liable under the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court of competent jurisdiction to have resulted primarily from Sandler O’Neill’s willful misconduct, bad faith or gross negligence.

MISCELLANEOUS

The following addresses shall be sufficient for written notices to each other:

If to  you:	Wellesley Bank
	40 Central Street
	Wellesley, MA 02482
	Attention: Mr. Thomas J. Fontaine

Wellesley Bank June 13, 2011 Page 4

If to us:        Sandler O’Neill & Partners, L.P.

 919 Third Avenue, 6th Floor

 New York, New York 10022

 Attention: General Counsel

The Agreement and appendix hereto constitute the entire Agreement between the parties with respect to the subject matter hereof and can be altered only by written consent signed by the parties. This Agreement is governed by the laws of the State of New York.

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Sandler O’Neill the duplicate copy of this letter enclosed herewith.

Very truly yours,
SANDLER O’NEILL & PARTNERS, L.P.
By:	Sandler O’Neill & Partners Corp.,
	the sole general partner

By:	/s/ Derek Szot
	Derek Szot Authorized Signatory

Accepted and agreed to as of

the date first above written:

WELLESLEY BANK
By:	/s/ Thomas J. Fontaine
	Thomas J. Fontaine Chairman, President & Chief Executive Officer

APPENDIX A

RECORDS AGENT SERVICES

I. Consolidation of Accounts

1. Consolidate files in accordance with regulatory guidelines and create central file.

2. Our EDP format will be provided to your data processing people.

3. Prepare account holder data for mailing of information statement for depositor vote.

II. Order Form Preparation

1. Assist in designing stock order forms for ordering stock.

2. Prepare account holder data for stock order forms.

III. Organization and Supervision of Conversion Center

1. Advising on the physical organization and materials requirements of the Conversion Center

2. Assist in the training of all Bank personnel and temporary employees who will be staffing the Conversion Center.

3. Establish reporting procedures.

4. On-site supervision of the Conversion Center during the offering period.

IV. Depositor Special Meeting Services

1. Assist the Bank in developing and implementing a campaign to inform depositors of their eligibility to vote at the Special Meeting.

2. Act as or support inspector of election, it being understood that Sandler O’Neill will not act as inspector of election in the case of a contested vote.

3. Ballot tabulation.

4. If required, delete voting record date accounts closed prior to special meeting.

5. Produce final report of vote.

V. Subscription Services

1. Produce list of depositors by state (Blue Sky report).

2. Production of subscription rights and research books.

3. Stock order form processing.

4. Acknowledgment letter to confirm receipt of stock order.

5. Daily reports and analysis.

6. Proration calculation and share allocation in the event of an oversubscription.

7. Produce charter shareholder list.

8. Interface with Transfer Agent for Stock Certificate issuance.

9. Refund and interest calculations.

10. Confirmation letter to confirm purchase of stock.

11. Notification of full/partial rejection of orders.

12. Production of I099/Debit tape.

A-1

June 13, 2011

Board of Directors

Wellesley Bank

40 Central Street

Wellesley, MA 02482

Attention:     Mr. Thomas J. Fontaine

    Chairman, President & Chief Executive Officer

Ladies and Gentlemen:

We understand that the Board of Directors of Wellesley Bank (the “Bank”) is considering the adoption of a Plan of Conversion (the “Plan”) pursuant to which the Bank will be converted from mutual to stock form (the “Conversion”), and shares of the common stock of the proposed new holding company for the Bank (the “Holding Company,” and together with the Bank, the “Company”) will be offered and sold to the Bank’s eligible account holders in a Subscription Offering and, under certain circumstances, to members of the Bank’s community in a direct Community Offering and to the general public in a Syndicated Offering (collectively, the “Offering”). Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) is pleased to assist the Company with the Offering. This letter is to confirm the terms and conditions of our engagement.

OFFERING SERVICES

Sandler O’Neill will act as exclusive marketing agent for the Company in the Offering. We will work with the Company and its management, counsel, accountants and other advisors on the Offering and anticipate that our services will include the following, each as may be necessary and as the Company may reasonably request:

1. Consulting as to the financial and securities market implications of the Plan and any related corporate documents;

2. Reviewing with the Board the financial impact of the Offering on the Company, based upon the independent appraiser’s appraisal of the Common Stock;

3. Reviewing all offering documents, including the Prospectus, stock order forms and related offering materials (it being understood that preparation and filing of such documents will be the responsibility of the Company and its counsel);

Board of Directors Wellesley Bank June 13, 2011 Page 2

4. Assisting in the design and implementation of a marketing strategy for the Offering;

5. Assisting management in scheduling and preparing for meetings with potential investors in connection with the Offering; and

6. Providing such other general advice and assistance as may be requested to promote the successful completion of the Offering.

SUBSCRlPTION AND COMMUNITY OFFERING FEES

If the Offering is consummated, the Company agrees to pay Sandler O’Neill for its services in the Subscription Offering and Community Offering a fee of $270,000.

If(a) Sandler O’Neill’s engagement hereunder is terminated for any of the reasons provided for under the second paragraph of the section of this letter captioned “Definitive Agreement,” or (b) the Offering is terminated by the Company, no fee shall be payable by the Company to Sandler O’Neill hereunder; provided, however, the Company shall reimburse Sandler O’Neill for its reasonable out-of-pocket expenses (including legal fees) incurred in connection with its engagement hereunder and for any fees and expenses incurred by Sandler O’Neill on behalf of the Company pursuant to the second paragraph under the section captioned “Costs and Expenses” below.

All fees and expense reimbursements payable to Sandler O’Neill hereunder shall be payable in cash at the time of the closing of the Offering, or upon the termination of Sandler O’Neill’s engagement hereunder or termination of the Offering, as the case may be. In recognition of the long lead times involved in the stock offering process, the Company agrees to make an advance payment to Sandler O’Neill in the amount of $25,000, payable upon execution of this letter, which shall be credited against any fees or reimbursement of expenses payable hereunder. In the event that the advance payment exceeds the amount due in payment of fees and reimbursement of expenses hereunder, the excess shall be refunded to the Company.

SYNDICATED OFFERING

In addition to the Subscription and Community Offering Fees set forth above, if any shares of Common Stock remain available after the expiration of the Subscription Offering and Community Offering, at the request of the Company and subject to the continued satisfaction of the conditions set forth in the second paragraph under the caption “Definitive Agreement” below, Sandler O’Neill will seek to form a syndicate of registered dealers to assist in the sale of such Common Stock in a Syndicated Offering on a best efforts basis, subject to the terms and conditions to be set forth in a selected dealers agreement. With respect to any shares of the Common Stock sold by Sandler

Board of Directors Wellesley Bank June 13, 2011 Page 3

O’Neill or any other NASD member firm under any selected dealers agreements in a Syndicated Offering, the Company agrees to pay the sales commission payable to the selected dealer under such agreement, which shall not exceed 5% of the purchase price per share for each share sold under such agreements. Sandler O’Neill will endeavor to distribute the Common Stock among dealers in a fashion that best meets the distribution objectives of the Company and the requirements of the Plan, which may result in limiting the allocation of stock to certain selected dealers. It is understood that in no event shall Sandler O’Neill be obligated to act as a selected dealer or to take or purchase any shares of the Common Stock in the Offering.

COSTS AND EXPENSES

In addition to any fees that may be payable to Sandler O’Neill hereunder and the expenses to be borne by the Company pursuant to the following paragraph, the Company agrees to reimburse Sandler O’Neill, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with its engagement hereunder, regardless of whether the Offering is consummated, including, without limitation, legal fees and expenses, travel, postage, syndication and document production expenses, up to a maximum of $75,000 if no Syndicated Offering is held and a maximum of $100,000 if a Syndicated Offering is held; provided, however, that shall Sandler O’Neill shall document such expenses to the reasonable satisfaction of the Company. The provisions of this paragraph are not intended to apply to or in any way impair the indemnification provisions of this letter.

As is customary, the Company will bear all other expenses incurred in connection with the Offering, including, without limitation, (i) the cost of obtaining all securities and bank regulatory approvals, including any required FINRA filing fees; (ii) the cost of printing and distributing the offering materials; (iii) the costs of blue sky qualification (including fees and expenses of blue sky counsel) of the shares in the various states; (iv) listing fees; and (v) all fees and disbursements of the Company’s counsel, accountants, conversion agent and other advisors. In the event Sandler O’Neill incurs any such fees and expenses on behalf of the Company, the Company will reimburse Sandler O’Neill for such fees and expenses whether or not the Offering is consummated.

DUE DILIGENCE REVIEW

Sandler O’Neill’s obligation to perform the services contemplated by this letter shall be subject to the satisfactory completion of such investigation and inquiries relating to the Company and its directors, officers, agents and employees as Sandler O’Neill and its counsel in their sole discretion may deem appropriate under the circumstances. In this regard, the Company agrees that, at its expense, it will make available to Sandler O’Neill all information that Sandler O’Neill requests, and will allow Sandler O’Neill the opportunity to discuss with the Company’s management the financial

Board of Directors Wellesley Bank June 13, 2011 Page 4

condition, business and operations of the Company. The Company acknowledges that Sandler O’Neill will rely upon the accuracy and completeness of all information received from the Company and its directors, trustees, officers, employees, agents, independent accountants and counsel.

BLUE SKY MATTERS

Sandler O’Neill and the Company agree that the Company’s counsel shall serve as counsel with respect to blue sky matters in connection with the Offering. The Company will cause such counsel to prepare a Blue Sky Memorandum related to the Offering, including Sandler O’Neill’s participation therein, and shall furnish Sandler O’Neill a copy thereof addressed to Sandler O’Neill or upon which such counsel shall state Sandler O’Neill may rely.

CONFIDENTIALITY

Except as contemplated in connection with the performance of its services under this agreement, as authorized by the Company or as required by law, regulation or legal process, Sandler O’Neill agrees that it will treat as confidential all material, non-public information relating to the Company obtained in connection with its engagement hereunder (the “Confidential Information”); provided, however, that Sandler O’Neill may disclose such information to its agents and advisors who are assisting or advising Sandler O’Neill in performing its services hereunder and who have agreed to be bound by the terms and conditions of this paragraph. As used in this paragraph, the term “Confidential Information” shall not include information which (a) is or becomes generally available to the public other than as a result of a disclosure by Sandler O’Neill, (b) was available to Sandler O’Neill on a non-confidential basis prior to its disclosure to Sandler O’Neill by the Company, or (c) becomes available to Sandler O’Neill on a non-confidential basis form a person other than the Company who is not otherwise known to Sandler O’Neill to be bound not to disclose such information pursuant to a contractual, legal or fiduciary obligation.

The Company hereby acknowledges and agrees that the financial models and presentations used by Sandler O’Neill in performing its services hereunder have been developed by and are proprietary to Sandler O’Neill and are protected under applicable copyright laws. The Company agrees that it will not reproduce or distribute all or any portion of such models or presentations without the prior written consent of Sandler O’Neill.

INDEMNIFICATION

Since Sandler O’Neill will be acting on behalf of the Bank and the Holding Company in connection with the Offering, the Bank and the Holding Company agree to indemnify and hold Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees, agents

Board of Directors Wellesley Bank June 13, 2011 Page 5

and controlling persons within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934 (Sandler O’Neill and each such person being an “Indemnified Party”) harmless from and against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable federal or state law, or otherwise, related to or arising out of the Offering or the engagement of Sandler O’Neill pursuant to, or the performance by Sandler O’Neill of the services contemplated by, this letter, and will reimburse any Indemnified Party for all expenses (including reasonable legal fees and expenses) as they are incurred, including expenses incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Patty is a party; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense (i) arises out of or is based upon any untrue statement of a material fact or the omission of a material fact required to be stated therein or necessary to make not misleading any statements contained in any final prospectus, or any amendment or supplement thereto, made in reliance on and in conformity with written information furnished to the Company by Sandler O’Neill expressly for use therein, or (ii) is primarily attributable to the gross negligence, willful misconduct or bad faith of Sandler O’Neill. If the foregoing indemnification is unavailable for any reason, the Company agrees to contribute to such losses, claims, damages, liabilities and expenses in the proportion that its financial interest in the Offerings bears to that of Sandler O’Neill.

The Company agrees to notify Sandler O’Neill promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to any transaction contemplated by this agreement.

DEFINITIVE AGREEMENT

Sandler O’Neill and the Company agree that (a) except as set forth in clause (b), the foregoing represents the general intention of the Company and Sandler O’Neill with respect to the services to be provided by Sandler O’Neill in connection with the Offering, which will serve as a basis for Sandler O’Neill commencing activities, and (b) the only legal and binding obligations of the Company and Sandler O’Neill with respect to the Offering shall be (1) the Company’s obligation to reimburse costs and expenses pursuant to the section captioned “Costs and Expenses,” (2) those set forth under the captions “Confidentiality” and “Indemnification,” and (3) as set forth in a duly negotiated and executed definitive Agency Agreement to be entered into prior to the commencement of the Offering relating to the services of Sandler O’Neill in connection with the Offering. Such Agency Agreement shall be in form and content satisfactory to Sandler O’Neill and the Company and their respective counsel and shall contain standard indemnification and contribution provisions consistent herewith.

Board of Directors Wellesley Bank June 13, 2011 Page 6

Sandler O’Neill’s execution of such Agency Agreement shall also be subject to (i) Sandler O’Neill’s satisfaction with its investigation of the Company’s business, financial condition and results of operations, (ii) preparation of offering materials that are satisfactory to Sandler O’Neill, (iii) compliance with all relevant legal and regulatory requirements to the reasonable satisfaction of Sandler O’Neill, (iv) agreement that the price established by the independent appraiser is reasonable, and (v) market conditions at the time of the proposed offering. Sandler O’Neill may terminate this agreement if such Agency Agreement is not entered into prior to June 30, 2012.

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and can be altered only by written consent signed by the parties. This Agreement shall be construed and enforced in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof.

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Sandler O’Neill the duplicate copy of this letter enclosed herewith.

Very truly yours,
SANDLER O’NEILL & PARTNERS, L.P.
By:	Sandler O’Neill & Partners Corp.,
	the sole general partner

By:	/s/ Derek Szot
	Derek Szot Authorized Signatory

Accepted and agreed to as of

the date first above written:

WELLESLEY BANK
By:	/s/ Thomas J. Fontaine
	Thomas J. Fontaine Chairman, President & Chief Executive Officer

EX-2.1

Exhibit 2.1

WELLESLEY BANK

PLAN OF CONVERSION

DATED JULY 20, 2011

WELLESLEY BANK

PLAN OF CONVERSION

ARTICLE I.

INTRODUCTION—BUSINESS PURPOSE

This Plan of Conversion (the “Plan”) provides for the conversion of Wellesley Bank, a Massachusetts mutual co-operative bank (the “Bank”), into a Massachusetts stock co-operative bank (the “Conversion”). The purpose of the Conversion is to provide the Bank and its stock holding company resulting from the Conversion with greater operating flexibility and capital resources to respond to changing regulatory and market conditions, and to facilitate corporate transactions, including mergers and acquisitions. Capitalized terms used but not defined in this Article I shall have the respective meanings set forth in Article II hereof.

The Board of Directors of the Bank currently contemplates that, following the Conversion, all of the capital stock of the Bank will be held by a business corporation (the “Stock Holding Company”) and that the Stock Holding Company will issue and sell its capital stock (the “Conversion Stock”) upon the terms and conditions set forth herein to Eligible Account Holders, Supplemental Eligible Account Holders, the Tax-Qualified Employee Plans established by the Bank or the Stock Holding Company, and Employees, Officers, directors and Shareholders of the Bank, according to the respective priorities set forth in the Plan. Any shares not subscribed for by the foregoing classes of Persons may be offered for sale to certain members of the public directly by the Stock Holding Company through a Community Offering and/or a Syndicated Community Offering or through an underwritten firm commitment public offering, or through a combination thereof. The Plan provides for the issuance by the Bank of 100% of its newly outstanding common stock to the Stock Holding Company in exchange for the portion of the net proceeds of the Offering that is not permitted to be retained by the Stock Holding Company. Upon the Conversion, Eligible Account Holders and Supplemental Eligible Account Holders will be granted interests in the liquidation account to be established by the Bank pursuant to Section 9.7 hereof.

The Conversion is intended to enable the Bank to compete and expand more effectively in the financial services marketplace. The Conversion is intended to provide an additional source of capital not now available to the Bank to further the expansion of the activities of the Stock Holding Company and the Bank. The business purpose of the Conversion is to provide the Bank with additional equity capital which will enable it to increase its reserves and net worth to support future lending and operational growth, branching activities and the acquisition of other financial institutions or financial service companies or their assets, and to increase its ability to render services to the communities it serves. The Conversion will not result in a change in the interest rate, maturity or existing insurance coverage of deposits at the Bank. No change in the offices or staff of the Bank is expected as part of the Conversion. In addition, after the Conversion, the Stock Holding Company would have the ability to issue additional shares of Conversion Stock to raise additional capital or in connection with mergers or acquisitions, although no additional capital issuance and no specific mergers or acquisitions are planned at the

2

present time. In addition, stock ownership by Officers and other Employees of the Stock Holding Company and the Bank has proven to be an effective performance incentive and a means of attracting and retaining qualified personnel. Finally, the Board of Directors of the Bank and senior management also believe that the Conversion will be beneficial to the communities within the Bank’s primary market area. The Conversion will provide local customers and other residents with an opportunity to become equity owners of the Stock Holding Company, and thereby participate in the possible stock price appreciation and cash dividends, which is consistent with the objective of being a locally-owned financial institution servicing local financial needs. The Board of Directors of the Bank and management believe that, through expanded local stock ownership, current customers and non-customers who purchase Conversion Stock will seek to enhance the financial success of the Bank through consolidation of their banking business and increased referrals to the Bank.

In furtherance of the Bank’s commitment to its community, the Bank intends to cause to be formed a charitable foundation (the “Foundation”) as part of the Conversion. The Foundation is intended to complement the Bank’s community reinvestment activities in a manner that will allow the Bank’s local communities to share in the growth and profitability of the Stock Holding Company and the Bank over the long term. Consistent with the Bank’s goal, the Plan provides for the Stock Holding Company to donate to the Foundation a number of shares of authorized but unissued Conversion Stock in an amount up to 8.0% of the number of shares actually sold in the Conversion.

The Plan is subject to the approval of various regulatory agencies. The Plan must also be approved by the affirmative vote of two-thirds of the Bank’s Shareholders present and voting at a regular or special meeting of such Shareholders and, if required by the FDIC, upon the affirmative vote of a majority of all Shareholders of the Bank. By approving the Plan, the Shareholders will also be approving all steps necessary or incidental to effect the Conversion.

The Bank, as chartered in the stock form, will succeed to all of the presently existing rights, interests, duties and obligations of the Bank, as chartered in the mutual form, to the extent provided by law. The deposit accounts and loan accounts of the Bank’s customers will not be affected by the Conversion. Upon Conversion, each deposit account holder of the Bank will continue to hold exactly the same deposit account as the holder held immediately before the Conversion. All deposit accounts in the Bank following the Conversion will continue to be insured up to the legal maximum by the Federal Deposit Insurance Corporation and the Share Insurance Fund of the Co-operative Central Bank in the same manner as such deposit accounts were insured immediately before the Conversion. There will be no change in the Bank’s loans. The Conversion will not result in any reduction of the Bank’s reserves or net worth.

3

ARTICLE II.

DEFINITIONS

As used in the Plan, the terms set forth below have the following meanings:

2.1. ACTING IN CONCERT. The term “ACTING IN CONCERT” means: (a) knowing participation in a joint activity or interdependent conscious parallel action towards a common goal, whether or not pursuant to an express agreement; or (b) Persons seeking to combine or pool their voting or other interests (such as subscription rights) in the securities of an issuer for a common purpose, pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. When Persons act together for such purpose, their group is deemed to have acquired their stock. The determination of whether a group is Acting in Concert shall be made solely by the Board of Directors of the Bank or the Board of Directors of the Stock Holding Company, as applicable, or their respective Officers as delegated by such Boards and may be based on any evidence upon which such Board or such delegatee chooses to rely, including, without limitation, joint account relationships or the fact that such Persons have filed joint Schedules 13D with the SEC with respect to other companies. Persons living at the same address, whether or not related, will be deemed to be Acting in Concert unless otherwise determined by the Board or such delegatee. Directors of the Bank and directors of the Stock Holding Company shall not be deemed to be Acting in Concert solely as a result of their membership on any such board or boards.

2.2. AFFILIATE. An “AFFILIATE” of, or a Person “AFFILIATED” with, a specified Person, is a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Person specified.

2.3. APPLICATION. The application, including a copy of the Plan, submitted by the Bank to the Commissioner for approval of the Conversion.

2.4. ASSOCIATE. The term “ASSOCIATE,” when used to indicate a relationship with any Person, means: (i) any corporation or organization (other than the Bank, the Stock Holding Company or a majority-owned subsidiary of any thereof) of which such Person is an Officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities; (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; (iii) any relative or spouse of such Person or any relative of such spouse, who has the same home as such Person or who is a director or Officer of the Bank or the Stock Holding Company; and (iv) any Person Acting in Concert with any of the Persons or entities specified in clauses (i) through (iii) above; provided, however, that (i) any Tax-Qualified Employee Plan shall not be deemed to be an Associate of any director or Officer of the Bank for the purposes of Section 8.4 hereof, and (ii) any Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be deemed to be an Associate of any director or Officer of the Stock Holding Company or the Bank for any other purpose to the extent provided in the Plan. When used to refer to a Person other than a director or Officer of the Bank or the Stock Holding Company, the Stock Holding Company or the Bank, as applicable, may determine in its sole discretion the Persons that are Associates of other Persons.

4

Directors of the Bank and directors of the Stock Holding Company shall not be deemed to be Associates solely as a result of their membership on such board or boards.

2.5. BANK. Wellesley Bank, a Massachusetts co-operative bank.

2.6. COMMISSIONER. The Commissioner of Banks of the Commonwealth of Massachusetts.

2.7. COMMUNITY OFFERING. A Direct Community Offering and/or a Syndicated Community Offering.

2.8. CONVERSION. The conversion of the Bank from mutual form to stock form pursuant to the Plan, and all steps incident or necessary thereto, including, as applicable, (i) the issuance of Conversion Stock by the Stock Holding Company in the Offering as provided herein, and (ii) the issuance to the Stock Holding Company of the Bank’s common stock to be outstanding upon consummation of the Conversion in exchange for a portion of the net proceeds received by the Stock Holding Company from the sale of the Conversion Stock.

2.9. CONVERSION STOCK. The common stock, par value $0.01 per share, authorized to be issued from time to time by the Stock Holding Company.

2.10. DEPOSIT ACCOUNT. Any withdrawable deposit account offered by the Bank, including, without limitation, savings accounts, NOW account deposits, certificates of deposit, demand deposits, Keogh Plans, SEPs and IRA accounts for which the Bank acts as custodian or trustee, and such other types of deposit accounts as may then have been authorized by Massachusetts or federal law and regulations, but not including repurchase agreements, savings bank life insurance policies or certain escrow accounts.

2.11. DIRECT COMMUNITY OFFERING. The offering for sale directly by the Stock Holding Company of Conversion Stock (i) to the Local Community, as provided in Section 7.6 of the Plan, with preference given to natural persons residing in the Local Community, and then (ii) to the public at large. The Direct Community Offering may be conducted simultaneously with the Subscription Offering.

2.12. DIVISION. The Division of Banks of the Commonwealth of Massachusetts.

2.13. ELIGIBLE ACCOUNT HOLDER. Any Person holding a Qualifying Deposit on the Eligibility Record Date.

2.14. ELIGIBILITY RECORD DATE. April 30, 2010, the date for determining who qualifies as an Eligible Account Holder.

2.15. EMPLOYEE. The term “EMPLOYEE” does not include a director or Officer.

2.16. EMPLOYEE PLAN. Any Tax-Qualified Employee Plan or Non-Tax-Qualified Employee Plan.

5

2.17. ESOP. The employee stock ownership plan to be established by the Bank or the Stock Holding Company.

2.18. ESTIMATED VALUATION RANGE. The dollar range of the proposed Offering, as determined by the Independent Appraiser before the Offering and as it may be amended from time to time thereafter. The Estimated Valuation Range may vary within 15% above or 15% below the midpoint of such range, with a possible adjustment by up to 15% above the Range Maximum.

2.19. EXCHANGE ACT. The Securities Exchange Act of 1934, as amended.

2.20. FDIC. The Federal Deposit Insurance Corporation.

2.21. FOUNDATION. A charitable foundation established and funded by the Stock Holding Company immediately following the Conversion as contemplated by Article IV hereof. The Foundation will qualify as an exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

2.22. GROUP MAXIMUM PURCHASE LIMIT. The limitation on the purchase of shares of Conversion Stock established by Section 8.3, as such limit may be increased pursuant to said Section 8.3.

2.23. INDEPENDENT APPRAISER. The appraiser retained by the Bank to prepare an appraisal of the pro forma market value of the Conversion Stock.

2.24. INDEPENDENT VALUATION. The estimated pro forma market value of the Conversion Stock as determined by the Independent Appraiser.

2.25. INDIVIDUAL MAXIMUM PURCHASE LIMIT. The limitation on the purchase of shares of Conversion Stock established by Section 8.2, as such limit may be increased pursuant to said Section 8.2.

2.26. INFORMATION STATEMENT. The information statement required to be sent to the Shareholders in connection with the Special Meeting.

2.27. LIQUIDATION ACCOUNT. The liquidation account established pursuant to Section 9.7 of the Plan.

2.28. LOCAL COMMUNITY. The Massachusetts municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston.

2.29. MARKETING AGENT. The broker-dealer responsible for organizing and managing the Conversion and sale of the Conversion Stock.

2.30. MARKET MAKER. A broker-dealer (i.e., any Person who engages directly or indirectly as agent, broker, or principal in the business of offering, buying, selling or otherwise

6

dealing or trading in securities issued by another Person) who, with respect to a particular security, (i) regularly publishes bona fide competitive bid and offer quotations on request, and (ii) is ready, willing and able to effect transactions in reasonable quantities at the dealer’s quoted prices with other brokers or dealers.

2.31. NON-TAX-QUALIFIED EMPLOYEE PLAN. Any defined benefit plan or defined contribution plan which is not qualified under Section 401 of the Internal Revenue Code of 1986, as amended.

2.32. OFFERING. The Subscription Offering, the Direct Community Offering and the Syndicated Community Offering.

2.33. OFFICER. The Chairman of the Board, the President, any officer of the level of vice president or above, the Clerk and the Treasurer of the Bank, or the Stock Holding Company, as the case may be.

2.34. PERSON. An individual, corporation, partnership, association, joint-stock company, trust (including Individual Retirement Accounts, SEPs and Keogh Accounts), unincorporated organization, government entity or political subdivision thereof or any other entity.

2.35. PLAN. This Plan of Conversion, as it exists on the date hereof and as it may hereafter be amended in accordance with its terms.

2.36. QUALIFYING DEPOSIT. The aggregate balances of all Deposit Accounts of an Eligible Account Holder as of the close of business on the Eligibility Record Date or of a Supplemental Eligible Account Holder as of the close of business on the Supplemental Eligibility Record Date, as the case may be, provided that such aggregate balance is not less than $50.

2.37. RANGE MAXIMUM. The valuation which is 15% above the midpoint of the Estimated Valuation Range, as defined in Section 2.19.

2.38. RANGE MINIMUM. The valuation which is 15% below the midpoint of the Estimated Valuation Range, as defined in Section 2.19.

2.39. REGULATIONS. The regulations of the Division regarding the conversion of a co-operative bank from mutual to stock form.

2.40. SEC. The Securities and Exchange Commission.

2.41. SHAREHOLDER. A depositor or holder of any shares or accounts in the Bank, also referred to as a “member.”

2.42. SPECIAL MEETING. The Special Meeting of Shareholders called for the purpose of voting on the Plan.

7

2.43. STOCK HOLDING COMPANY. The stock-form holding company that will own 100% of the capital stock of the Bank upon consummation of the Conversion.

2.44. SUBSCRIPTION OFFERING. The offering of Conversion Stock for subscription by Persons holding subscription rights pursuant to the Plan.

2.45. SUBSCRIPTION PRICE. The price per share, determined as provided in Section 5.2 of the Plan, at which the Conversion Stock will be sold in the Offering.

2.46. SUBSIDIARY. A company that is controlled by another company, either directly or indirectly through one or more subsidiaries.

2.47. SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER. Any Person (other than Officers or directors, as applicable, of the Bank, or their respective Associates) holding a Qualifying Deposit on the Supplemental Eligibility Record Date.

2.48. SUPPLEMENTAL ELIGIBILITY RECORD DATE. June 30, 2011, the date for determining who qualifies as a Supplemental Eligible Account Holder.

2.49. SYNDICATED COMMUNITY OFFERING. At the discretion of the Stock Holding Company, the offering of Conversion Stock following or contemporaneously with the Direct Community Offering through a syndicate of broker-dealers.

2.50. TAX-QUALIFIED EMPLOYEE PLAN. Any defined benefit plan or defined contribution plan (including the ESOP, any stock bonus plan, profit-sharing plan, 401(k) plan or other plan) of the Bank, the Stock Holding Company or any of their respective Affiliates, which, with its related trusts, meets the requirements to be qualified under Section 401 of the Internal Revenue Code of 1986, as amended.

ARTICLE III.

GENERAL PROCEDURE FOR CONVERSION

3.1. PRECONDITIONS TO CONVERSION. The Conversion is expressly conditioned upon prior occurrence of the following:

3.1.1 Approval of the Plan by the affirmative vote of two-thirds of the Shareholders present and voting at a regular or special meeting of such Shareholders and, if required by the FDIC, upon the affirmative vote of a majority of all Shareholders of the Bank.

3.1.2 Approval by the Commissioner of the Application, and approval by such other state and federal regulatory authorities as may be required to effect consummation of the Conversion.

3.2. SUBMISSION OF PLAN TO COMMISSIONER. The Bank, the Plan will be submitted to the Commissioner as part of the Application, together with a copy of the proposed Information Statement and all other material required by the Regulations, for approval by the

8

Commissioner. The Bank must also receive either private letter rulings from the Internal Revenue Service or an opinion of its counsel as to the federal income tax consequences of the Conversion, substantially to the effect that the Conversion will not result in any adverse federal income tax consequence to the Bank, the Stock Holding Company, Eligible Account Holders or Supplemental Eligible Account Holders. Upon a determination by the Commissioner that the Application is complete, the Bank will publish and post public announcements and notices of the Application as required by the Commissioner and the Regulations.

3.3. SPECIAL MEETING OF SHAREHOLDERS TO APPROVE THE PLAN. Following approval of the Plan by the Commissioner, the Special Meeting shall be scheduled in accordance with the Bank’s Bylaws, and the Plan (as revised in response to comments received from the Commissioner) and any additional information required pursuant to the Regulations, will be submitted to the Shareholders for their consideration and approval at the Special Meeting. The Bank will mail to each Shareholder a copy of the Information Statement not less than seven (7) days before the Special Meeting. Following approval of the Plan by the Shareholders, the Bank intends to take such steps as may be appropriate pursuant to applicable laws and regulations to convert the Bank to a Massachusetts co-operative bank in the stock form and to otherwise effect the Conversion.

3.4. THE STOCK HOLDING COMPANY. The Board of Directors of the Bank will take all necessary steps to form the Stock Holding Company and to complete the Offering, including the timely filing of all necessary applications to appropriate regulatory authorities and the filing of a registration statement to register the sale of the Conversion Stock with the SEC.

3.5. BANK CHARTER AND BYLAWS. In connection with the Conversion, the Bank shall take appropriate steps to cause the Charter and Bylaws of the Bank to be modified and restated.

3.6. CONVERSION PROCEDURES. The Conversion will be effected in any manner selected by the Board of Directors of the Bank which is consistent with the purposes of this Plan and applicable laws and regulations. The choice of which method to use to effect the Conversion will be made by the Board of Directors of the Bank immediately prior to the consummation of the Conversion. Approval of the Plan by the Board of Directors and Shareholders of the Bank shall also constitute (i) approval of the formation of the Stock Holding Company as set forth herein and (ii) approval of any other of the transactions that are necessary to implement the Plan.

3.7. OFFER AND SALE OF CONVERSION STOCK.

3.7.1 If the Shareholders approve the Plan, and upon receipt of all required regulatory approvals, the Conversion Stock will be offered for sale in a Subscription Offering simultaneously to Eligible Account Holders, Supplemental Eligible Account Holders, any Tax-Qualified Employee Plan, and directors, Officers and Employees in the manner set forth in Article VII hereof. The Subscription Offering period will run for no less than twenty (20) but no more than forty-five (45) days from the date of distribution of the Subscription Offering materials, unless extended by the Stock Holding Company with the approval of the Commissioner. If feasible, any Conversion Stock remaining may then be sold to the general

9

public through a Direct Community Offering as provided in Article VII hereof, which may be held either subsequent to or concurrently with the Subscription Offering.

3.7.2 If feasible, shares of Conversion Stock remaining unsold after completion of the Subscription Offering and a Direct Community Offering may, in the sole discretion of the Stock Holding Company, be sold in a Syndicated Community offering (which may commence following or contemporaneously with the Direct Community Offering). If for any reason a Syndicated Community Offering cannot be effected, the Stock Holding Company will use its best efforts to obtain other purchasers in order to meet the Range Minimum, subject to the approval of the Commissioner. The sale of all shares of Conversion Stock to be sold pursuant to this Plan must be completed within forty-five (45) days after the last day of the Subscription Offering period, subject to the extension of such forty-five (45) day period by the Stock Holding Company with the approval of the Commissioner. The Stock Holding Company may seek one or more extensions of such forty-five (45) day period if necessary to complete the sale of shares of Conversion Stock. If all available shares of Conversion Stock are sold in the Subscription Offering and any Direct Community Offering, there will be no Syndicated Community Offering and the Conversion will be consummated upon completion of the Subscription Offering or the Direct Community Offering, as the case may be.

ARTICLE IV.

ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION

4.1. ESTABLISHMENT OF THE FOUNDATION. As part of the Conversion, the Stock Holding Company intends to establish the Foundation which will qualify as an exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and to donate to the Foundation a number of shares of its authorized but unissued Conversion Stock in an amount up to 8.0% of the number of shares actually sold in the Conversion. A portion of the value of this donation may be in cash, rather than Conversion Stock.

4.2. PURPOSES OF THE FOUNDATION; CHARITABLE CONTRIBUTIONS. The Foundation is being formed in connection with the Conversion in order to complement the Bank’s existing community reinvestment activities and to share with the Bank’s community a part of the Bank’s financial success as a locally headquartered, community minded, financial services institution. The funding of the Foundation with Conversion Stock accomplishes this goal as it enables the community to share in the growth and profitability of the Stock Holding Company and the Bank over the long term. The Foundation will be dedicated to the promotion of charitable purposes in the communities in which the Bank has its headquarters or a branch office.

The contribution to the Foundation as part of the Conversion is subject to the receipt of approval of the Division and the FDIC and approval of Shareholders. The Conversion is not conditioned upon the contribution to the Foundation. The Conversion may proceed and be completed whether or not Conversion Stock is contributed to the Foundation.

10

4.3. BOARD OF DIRECTORS OF THE FOUNDATION. The board of directors of the Foundation will initially consist of a majority of individuals who are directors of the Bank. The board of directors of the Foundation will be responsible for establishing the policies of the Foundation with respect to grants or donations, consistent with the stated purposes of the Foundation.

ARTICLE V.

SHARES TO BE OFFERED

5.1. CONVERSION STOCK. The Conversion Stock to be issued in the Conversion shall be fully paid and nonassessable. The total number of shares of Conversion Stock authorized under the Stock Holding Company’s Charter will exceed the number of shares of Conversion Stock to be issued in the Conversion. CONVERSION STOCK WILL NOT BE COVERED BY DEPOSIT INSURANCE.

5.2. INDEPENDENT VALUATION, PURCHASE PRICE AND NUMBER OF SHARES.

5.2.1 INDEPENDENT VALUATION. An Independent Appraiser shall be employed by the Bank to provide it with an Independent Valuation as required by the Regulations, which value shall be included in the prospectus (as described in Section 6.1 of this Plan) filed with the Commissioner and the SEC. The directors of the Bank shall thoroughly review and analyze the methodology and fairness of the Independent Valuation. The Independent Valuation will be made by a written report to the Bank, contain the factors upon which the Independent Valuation was made and conform to procedures adopted by the Commissioner. The Independent Valuation provided by the Independent Appraiser to the Bank before the commencement of the Subscription Offering will contain an Estimated Valuation Range of aggregate prices for the Conversion Stock to be sold in the Offering, which range shall be based on the anticipated pro forma market value of the Conversion Stock. Such Estimated Valuation Range will establish a midpoint and will vary within 15% above (the “RANGE MAXIMUM”) to 15% below (the “RANGE MINIMUM”) such midpoint. The Independent Appraiser shall also present to the Bank at the close of the Subscription Offering an updated valuation of the pro forma market value of the Conversion Stock.

5.2.2 SUBSCRIPTION PRICE. All shares sold in the Conversion will be sold at a uniform price per share (the “SUBSCRIPTION PRICE”), which is expected to be determined before the commencement of the Offering. If there is a Syndicated Community Offering, the price per share at which the Conversion Stock is sold in such Syndicated Community Offering shall be equal to the per share purchase price of the shares sold in the Subscription Offering and the Direct Community Offering. The aggregate value for all shares of Conversion Stock issued in the Conversion valued for such purpose at the Subscription Price will be equal to the estimated consolidated pro forma market value of the Conversion Stock, as determined for such purpose by the Independent Appraiser.

11

5.2.3 NUMBER OF SHARES. The total number of shares (and a range thereof) of Conversion Stock to be issued and offered for sale will be determined by the Stock Holding Company immediately before the commencement of the Subscription Offering based on the Independent Valuation, the Estimated Valuation Range and the Subscription Price. The Independent Valuation, and such number of shares, shall be subject to adjustment thereafter if necessitated by market or financial conditions, with the approval of the Commissioner. In particular, the total number of shares may be increased by up to 15% above the Range Maximum if the Independent Valuation is increased subsequent to the commencement of the Subscription Offering to reflect changes in market and financial conditions and the resulting aggregate purchase price is not more than 15% above the Range Maximum.

5.2.4 INCREASE OR DECREASE IN NUMBER OF SHARES. The number of shares of Conversion Stock to be sold in the Offering may be increased or decreased by the Stock Holding Company, subject to the following provisions. In the event that the aggregate purchase price of the number of shares of Conversion Stock ordered is below the minimum of the Estimated Valuation Range, or materially above the Range Maximum, resolicitation of purchasers may be required, provided, however, that a resolicitation will not be required if the number of shares increases by up to 15% above the Range Maximum. Any such resolicitation shall be effected in such manner and within such time as the Stock Holding Company shall establish, with the approval of the Commissioner.

5.2.5 CONFIRMATION OF VALUATION. Notwithstanding the foregoing, no sale of Conversion Stock may be consummated unless, before such consummation, the Independent Appraiser confirms to the Bank and to the Commissioner that, to the best knowledge of the Independent Appraiser, nothing of a material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the aggregate value of all shares of Conversion Stock ordered, at the Subscription Price, is incompatible with its estimate of the aggregate consolidated pro forma market value of the Conversion Stock. An increase in the aggregate value of the Conversion Stock by up to 15% above the Range Maximum would not be deemed to be material. If such confirmation is not received, the Bank may cancel the Conversion, resolicit and extend the Conversion and establish a new Subscription Price and/or Estimated Valuation Range, or hold a new Conversion or take such other action as the Commissioner may permit. The estimated pro forma market value of the Conversion Stock shall be determined for such purpose by an Independent Appraiser on the basis of such appropriate factors as are not inconsistent with the Regulations and will be confirmed upon completion of the Conversion. In any case, the total number of shares of Conversion Stock to be issued in the Conversion will be determined by the Bank as follows: (a) the estimated aggregate pro forma market value of the Conversion Stock, immediately after Conversion as determined by the Independent Appraiser, expressed in terms of a specific aggregate dollar amount rather than as a range, shall be divided by (b) the Subscription Price.

12

ARTICLE VI.

SUBSCRIPTION RIGHTS AND ORDERS FOR COMMON STOCK

6.1. DISTRIBUTION OF PROSPECTUS. The Conversion shall be conducted in compliance with the Regulations and applicable SEC regulations. As soon as practicable after the prospectus prepared by the Bank and the Stock Holding Company has been declared effective by the Commissioner and the SEC, copies of the prospectus and order forms will be distributed to all Eligible Account Holders, Supplemental Eligible Account Holders, any Tax-Qualified Employee Plan and Employees, Officers and directors at their last known addresses appearing on the records of the Bank for the purpose of subscribing for shares of Conversion Stock in the Subscription Offering and will be made available (if and when a Community Offering is held) for use by Persons in the Community Offering.

6.2. ORDER FORMS. Each order form will be preceded or accompanied by the prospectus describing the Stock Holding Company, the Bank, the Conversion Stock and the Offerings. Each order form will contain, among other things, the following:

6.2.1 A specified date by which all order forms must be received by the Stock Holding Company, which date shall be not less than twenty (20) nor more than forty-five (45) days following the date on which the order forms are mailed by the Stock Holding Company, and which date will constitute the expiration of the Subscription Offering, unless extended;

6.2.2 The Subscription Price per share for shares of Conversion Stock to be sold in the Offering;

6.2.3 A description of the minimum and maximum number of shares of Conversion Stock that may be subscribed for pursuant to the exercise of subscription rights or otherwise purchased in the offering;

6.2.4 Instructions as to how the recipient of the order form is to indicate thereon the number of shares of Conversion Stock for which such Person elects to subscribe and the available alternative methods of payment therefor;

6.2.5 An acknowledgment that the recipient of the order form has received a copy of the prospectus before execution of the order form;

6.2.6 A statement indicating the consequences of failing to properly complete and return the order form, including a statement to the effect that all subscription rights are nontransferable, will be void at the end of the Subscription Offering, and can only be exercised by delivering to the Stock Holding Company within the Subscription Offering period such properly completed and executed order form, together with a check or money order in the full amount of the purchase price as specified in the order form for the shares of Conversion Stock for which the recipient elects to subscribe in the Subscription Offering (or by authorizing on the order form that the Bank withdraw said amount from a Deposit Account at the Bank maintained by such Person, but only if the Bank elects to permit such withdrawals from the type of such Deposit Account); and

13

6.2.7 A statement to the effect that the executed order form, once received by the Stock Holding Company, may not be modified or amended by the subscriber without the consent of the Stock Holding Company. Notwithstanding the above, the Stock Holding Company reserves the right in its sole discretion to accept or reject orders received on photocopied or faxed order forms.

Notwithstanding the above, the Stock Holding Company reserves the right in its sole discretion to accept or reject orders received on photocopied or faxed order forms.

6.3. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT. In the event order forms (a) are not delivered for any reason or are returned undelivered to the Stock Holding Company by the United States Postal Service, (b) are not received back by the Stock Holding Company or are received by the Bank after the expiration date specified thereon, (c) are defectively filled out or executed, (d) are not accompanied by the full required payment for the shares of Conversion Stock subscribed for (including cases in which Deposit Accounts from which withdrawals are authorized are insufficient to cover the amount of the required payment), or (e) are not mailed pursuant to a “NO MAIL” order placed in effect by the account holder, the subscription rights of the Person to whom such rights have been granted will lapse as though such Person failed to return the contemplated order form within the time period specified thereon; provided, however, that the Stock Holding Company may, but will not be required to, waive any immaterial irregularity on any order form or require the submission of corrected order forms or the remittance of full payment for subscribed shares by such date as the Stock Holding Company may specify, and all interpretations by the Bank and the Stock Holding Company, as applicable, of terms and conditions of this Plan and of the order forms will be final.

6.4. PAYMENT FOR STOCK.

6.4.1 All payments for Conversion Stock subscribed for or ordered in the Conversion must be delivered in full to the Stock Holding Company, together with a properly completed and executed order form, except in the case of the Syndicated Community Offering, on or before the expiration date specified on the order form, unless such date is extended by the Bank and the Stock Holding Company; provided, however, that if any Employee Plan subscribes for shares during the Subscription Offering, such plans will not be required to pay for the shares at the time they subscribe but rather may pay for such shares of Conversion Stock subscribed for by such plans at the Subscription Price upon consummation of the Conversion, provided, however, that, in the case of the ESOP there is in force from the time of its subscription until the consummation of the Conversion, a loan commitment to lend to the ESOP, at such time, the aggregated Subscription Price of the shares for which it subscribed. The Stock Holding Company or the Bank may make scheduled discretionary contributions to an Employee Plan provided such contributions from the Bank, if any, do not cause the Bank to fail to meet its regulatory capital requirement. Payment for Conversion Stock may also be made by a participant in an Employee Plan (including the Bank’s 401(k) plan) causing funds held for such participant’s benefit by an Employee Plan to be paid over for such purchase to the extent that such plan allows participants

14

or any related trust established for the benefit of such participants to direct that some or all of their individual accounts or sub-accounts be invested in Conversion Stock.

6.4.2 Payment for Conversion Stock shall be made either by check, bank draft or money order, or if a purchaser has a Deposit Account in the Bank (and if the Bank has elected to permit such withdrawals from the type of Deposit Account maintained by such Person), such purchaser may pay for the shares subscribed for by authorizing the Bank to make a withdrawal from the purchaser’s Deposit Account at the Bank in an amount equal to the aggregate purchase price of such shares. No wire transfers will be accepted. Any authorized withdrawal, whether from a savings, passbook or certificate account, shall be without penalty as to premature withdrawal. If the authorized withdrawal is from a certificate account, and the remaining balance does not meet the applicable minimum balance requirements, the certificate shall be canceled at the time of withdrawal, without penalty, and the remaining balance will earn interest at the passbook savings rate. Funds for which a withdrawal is authorized will remain in the purchaser’s Deposit Account but may not be used by the purchaser pending consummation of the Conversion or expiration of the 45-day period (or such longer period as may be approved by the Commissioner) following termination of the Subscription Offering, whichever occurs first. After consummation of the Conversion, the withdrawal will be given effect only to the extent necessary to satisfy the subscription (to the extent it can be filled) at the Subscription Price. Interest submitted will continue to be earned on any amounts authorized for withdrawal until such withdrawal is given effect. Interest on checks and money orders will be paid by the Bank at the Bank’s passbook savings rate. Such interest will be paid from the date payment is received by the Bank until consummation or termination of the Conversion. If for any reason the Conversion is not consummated, all payments made by subscribers in the Conversion will be refunded to them with interest. In case of amounts authorized for withdrawal from Deposit Accounts, refunds will be made by canceling the authorization for withdrawal.

ARTICLE VII.

STOCK PURCHASE PRIORITIES

7.1. PRIORITIES FOR OFFERING. All purchase priorities established by this Article VII shall be subject to the purchase limitations set forth in, and shall be subject to adjustment as provided in, Article VIII of this Plan. In addition to the priorities set forth in this Article VII, the Bank may establish other priorities for the purchase of Conversion Stock, subject to the approval of the Commissioner. The priorities for the purchase of shares in the Conversion are set forth in the following Sections.

7.2. CERTAIN DETERMINATIONS. All interpretations or determinations of whether prospective purchasers are “RESIDENTS,” “ASSOCIATES,” or “ACTING IN CONCERT” and any other interpretations of any and all other provisions of the Plan shall be made by and at the sole discretion of the Bank and the Stock Holding Company, as applicable, and may be based on whatever evidence the Bank or the Stock Holding Company may choose to use in making any such determination.

15

7.3. MINIMUM PURCHASE; NO FRACTIONAL SHARES. The minimum purchase by any Person shall be 25 shares (to the extent that shares of Conversion Stock are available for purchase), provided, however, that the aggregate purchase price for any minimum share purchase shall not exceed $500. No fractional shares will be allocated or issued.

7.4. OVERVIEW OF PRIORITIES. In descending order of priority, the opportunity to purchase Conversion Stock shall be given in the Subscription Offering to: (1) Eligible Account Holders; (2) Supplemental Eligible Account Holders; (3) Tax-Qualified Employee Plans; and (4) Employees, Officers and directors of the Bank. Any shares of Conversion Stock that are not subscribed for in the Subscription Offering at the discretion of the Stock Holding Company may be offered for sale in a Direct Community Offering and/or a Syndicated Community Offering on terms and conditions and procedures satisfactory to the Stock Holding Company.

7.5. PRIORITIES FOR SUBSCRIPTION OFFERING.

7.5.1 FIRST PRIORITY: ELIGIBLE ACCOUNT HOLDERS. Upon approval of the Plan by the Shareholders and the receipt of permission from the Commissioner and SEC to offer the Conversion Stock for sale, each Eligible Account Holder shall receive, without payment therefor, nontransferable subscription rights on a first priority basis to subscribe for a number of shares of Conversion Stock equal to the greatest of (x) a number determined by dividing the Individual Maximum Purchase Limit (as such term is defined in Section 8.2) by the per share Subscription Price, (y) one-tenth of one percent (.10%) of the shares offered in the Conversion, or (z) 15 times the product (rounded down to the nearest whole number) obtained by multiplying (1) the total number of shares of Conversion Stock to be offered in the Conversion by (2) a fraction, of which the numerator is the Qualifying Deposit of the Eligible Account Holder and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders. If there are insufficient shares available to satisfy all subscriptions of Eligible Account Holders, shares will be allocated to Eligible Account Holders so as to permit each such subscribing Eligible Account Holder to purchase a number of shares of Conversion Stock sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares subscribed for. Thereafter, unallocated shares of Conversion Stock will be allocated pro rata to remaining subscribing Eligible Account Holders whose subscriptions remain unfilled in the same proportion that each such subscriber’s Qualifying Deposit bears to the total amount of Qualifying Deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. Subscription rights to purchase Conversion Stock received by directors and Officers of the Bank (and their Associates) based on their increased deposits in the Bank in the one year preceding the Eligibility Record Date shall be subordinated to the subscription rights of other Eligible Account Holders. To ensure proper allocation of stock, each Eligible Account Holder must list on his or her subscription order form all Deposit Accounts in which he or she had an ownership interest as of the Eligibility Record Date.

7.5.2 SECOND PRIORITY: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. To the extent there are shares remaining after satisfaction of subscriptions by Eligible Account Holders, each Supplemental Eligible Account Holder shall receive non-transferable subscription rights to subscribe for a number of shares of Conversion Stock equal to the greatest of (x) a number determined by dividing the Individual Maximum Purchase Limit by the per share

16

Subscription Price, (y) one-tenth of one percent (.10%) of the shares offered in the Conversion, or (z) 15 times the product (rounded down to the nearest whole number) obtained by multiplying (1) the total number of shares of Conversion Stock to be offered in the Conversion by (2) a fraction, of which the numerator is the Qualifying Deposit of the Supplemental Eligible Account Holder and the denominator is the total amount of Qualifying Deposits of all Supplemental Eligible Account Holders. In the event Supplemental Eligible Account Holders subscribe for a number of shares of Conversion Stock which, when added to the shares subscribed for by Eligible Account Holders, exceeds available shares, the available shares of Conversion Stock will be allocated among subscribing Supplemental Eligible Account Holders so as to permit each subscribing Supplemental Eligible Account Holder to purchase a number of shares of Conversion Stock sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares subscribed for. Thereafter, unallocated shares will be allocated to each subscribing Supplemental Eligible Account Holder whose subscription remains unfilled in the same proportion that such subscriber’s Qualifying Deposit on the Supplemental Eligibility Record Date bears to the total amount of Qualifying Deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unfilled.

7.5.3 THIRD PRIORITY: TAX-QUALIFIED EMPLOYEE PLANS. To the extent there are shares remaining after satisfaction of subscriptions by Eligible Account Holders and Supplemental Eligible Account Holders, the Tax-Qualified Employee Plans shall be given the opportunity to purchase in the aggregate up to 10% of the Conversion Stock issued in the Conversion. In the event that the total number of shares of the Conversion Stock offered in the Conversion is increased to an amount greater than the Range Maximum, the Tax-Qualified Employee Plans shall have a priority right to purchase any such shares exceeding the Range Maximum (up to the aggregate of 10% of Conversion Stock to be issued in the Conversion). If the Tax-Qualified Employee Plans are not able to fill their orders in the Offering, then the Tax-Qualified Employee Plans may purchase shares in the open market following consummation of the Conversion.

7.5.4 FOURTH PRIORITY: EMPLOYEES, OFFICERS AND DIRECTORS. To the extent there are shares remaining after satisfaction of subscriptions by Eligible Account Holders, Supplemental Eligible Account Holders, and any Tax-Qualified Employee Plans, each Employee, Officer and director of the Bank who is not an Eligible Account Holder or a Supplemental Eligible Account Holder shall receive non-transferable subscription rights to subscribe for shares of Conversion Stock offered in the Conversion in an amount equal to the Individual Maximum Purchase Limit; provided, however, that the aggregate number of shares of Conversion Stock that may be purchased by Employees, Officers and directors in the Conversion shall be limited to 30% of the total number of shares of Conversion Stock issued in the Conversion (including shares purchased by Employees, Officers and directors under this Section 7.5.4 and under the preceding priority categories, but not including shares purchased by the ESOP). In the event that Employees, Officers and directors subscribe under this Section 7.5.4 for more shares of Conversion Stock than are available for purchase by them, the shares of Conversion Stock available for purchase will be allocated by the Stock Holding Company among such subscribing Persons on an equitable basis, such as by giving weight to the order size, period of service, compensation and position of the individual subscriber.

17

7.6. PRIORITIES FOR DIRECT COMMUNITY OFFERING.

7.6.1 Any shares of Conversion Stock not subscribed for in the Subscription Offering may be offered for sale in a Direct Community Offering. This will involve an offering of all unsubscribed shares of Conversion Stock directly to the general public. The Direct Community Offering, if any, shall be for a period of not more than forty-five (45) days unless extended by the Stock Holding Company, and shall commence concurrently with, during or promptly after the Subscription Offering. The Stock Holding Company may use a broker, dealer or investment banking firm or firms on a best efforts basis to sell the unsubscribed shares in the Subscription and Direct Community Offering. The Stock Holding Company may pay a commission or other fee to such entity or entities as to the shares sold by such entity or entities in the Subscription and Direct Community Offering and may also reimburse such entity or entities for reasonable expenses incurred in connection with the sale. The Conversion Stock will be offered and sold in the Direct Community Offering, in accordance with the Regulations, so as to achieve the widest distribution of the Conversion Stock. In making the Direct Community Offering, the Stock Holding Company will give preference to natural persons residing in the Local Community. Orders accepted in the Direct Community Offering shall be filled up to a maximum not to exceed 2% of the Conversion Stock offered in the Conversion, and thereafter remaining shares shall be allocated on an equal number of shares basis per order until all orders have been filled. No Person may subscribe for or purchase more than the Individual Maximum Purchase Limit of Conversion Stock in the Direct Community Offering. The Stock Holding Company, in its sole discretion, may reject subscriptions, in whole or in part, received from any Person under this Section 7.6.

7.6.2 In the event of an oversubscription for shares in the Direct Community Offering, available shares will be allocated (to the extent shares remain available) first to cover orders of natural Persons residing in the Local Community, so that each such Person may receive 100 shares, and thereafter, on a pro rata basis to such Persons based on the amount of their respective subscriptions or on such other reasonable basis as may be determined by the Stock Holding Company. If oversubscription does not occur among natural Persons residing in the Local Community, the allocation process to cover orders of other Person subscribing for shares in the Direct Community Offering shall be as described above for natural Persons.

7.6.3 The terms “RESIDENT,” “RESIDENCE,” “RESIDE,” or “RESIDING” as used herein with respect to any Person shall mean any Person who occupies a dwelling within the Local Community, has an intent to remain within the Local Community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the Local Community together with an indication that such presence within the Local Community is not merely transitory in nature. To the extent the Person is a corporation or other business entity, the principal place of business or headquarters must be in the Local Community. The Bank may use deposit or loan records or such other evidence provided to it to determine whether a Person is a resident. In all cases, however, such a determination shall be in the sole discretion of the Bank or the Stock Holding Company.

18

7.7. PRIORITIES FOR SYNDICATED COMMUNITY OFFERING.

7.7.1 Any shares of Conversion Stock not sold in the Subscription Offering or in the Direct Community Offering, if any, may be offered for sale to the general public by a selling group of broker-dealers in a Syndicated Community Offering, subject to terms, conditions and procedures as may be determined by the Stock Holding Company in a manner that is intended to achieve the widest distribution of the Conversion Stock subject to the rights of the Stock Holding Company to accept or reject in whole or in part all orders in the Syndicated Community Offering. No Person may purchase in the Syndicated Community Offering more than the Individual Maximum Purchase Limit of Conversion Stock. It is expected that the Syndicated Community Offering will commence as soon as practicable after termination of the Direct Community Offering, if any. The Syndicated Community Offering shall be completed within 45 days after the termination of the Subscription Offering, unless such period is extended as provided herein. The commission in the Syndicated Community Offering shall be determined by a marketing agreement between the Stock Holding Company and the Marketing Agent. Such agreement shall be filed with the Division and the SEC.

7.7.2 If for any reason a Syndicated Community Offering of unsubscribed shares of Conversion Stock cannot be effected or is not deemed to be advisable, and any shares remain unsold after the Subscription Offering and the Community Offering, if any, the Stock Holding Company may seek to make other arrangements for the sale of the remaining shares in order to meet the Range Minimum, including an underwritten public offering. Such other arrangements will be subject to the approval of the Commissioner and to compliance with applicable state and federal securities laws.

ARTICLE VIII.

ADDITIONAL LIMITATIONS ON PURCHASES

8.1. GENERAL. Purchases of Conversion Stock in the Conversion will be subject to the purchase limitations set forth in this Article VIII.

8.2. INDIVIDUAL MAXIMUM PURCHASE LIMIT. This Section 8.2 sets forth the “INDIVIDUAL MAXIMUM PURCHASE LIMIT.” No Person (or Persons exercising subscription rights through a single qualifying deposit account held jointly) may purchase in the Offering (including the Subscription Offering, the Direct Community Offering and the Syndicated Community Offering) more than $200,000 of Conversion Stock, except that: (i) the Stock Holding Company may, in its sole discretion and without further notice to or solicitation of subscribers or other prospective purchasers, (x) increase such Individual Maximum Purchase Limit to up to 5% of the number of shares of Conversion Stock offered in the Conversion or (y) decrease such Individual Maximum Purchase Limit to no less than one-tenth of one percent (.10%) of the number of shares of Conversion Stock offered in the Conversion; and (ii) Tax-Qualified Employee Plans may purchase up to 10% of the shares issued in the Conversion. If the Stock Holding Company increases the Individual Maximum Purchase Limit (as permitted by this Section 8.2), subscribers in the Subscription Offering who ordered the previously-effective maximum amount will be, and certain other large subscribers in the sole discretion of the Stock

19

Holding Company may be, given the opportunity to increase their subscriptions up to the then applicable limit. Requests to purchase additional shares of Conversion Stock under this provision will be determined by the Stock Holding Company, in its sole discretion.

8.3. GROUP MAXIMUM PURCHASE LIMIT. This Section 8.3 sets forth the “GROUP MAXIMUM PURCHASE LIMIT.” No Person and his or her Associates or group of Persons Acting in Concert, may purchase in the offering (including the Subscription Offering, the Direct Community Offering and the Syndicated Community Offering) more than $350,000 worth of Conversion Stock offered in the Conversion, except that: (i) the Stock Holding Company may, in its sole discretion and without further notice to or solicitation of subscribers or other prospective purchasers, (x) increase such Group Maximum Purchase Limit to up to 5% of the number of shares of Conversion Stock offered in the Conversion or (y) decrease such Group Maximum Purchase Limit to no less than one-tenth of one percent (.10%) of the number of shares of Conversion Stock offered in the Conversion; and (ii) Tax-Qualified Employee Plans may purchase up to 10% of the shares issued in the Conversion. Notwithstanding the foregoing, in the event that the Stock Holding Company increases the Individual Maximum Purchase Limit (as permitted by Section 8.2) to a number that is in excess of the Group Maximum Purchase Limit established by this Section 8.3, the Group Maximum Purchase Limit shall automatically be increased so as to be equal to the Individual Maximum Purchase Limit, as adjusted.

8.4. PURCHASES BY OFFICERS AND DIRECTORS. The aggregate number of shares of Conversion Stock to be purchased in the offering by Officers and directors of the Bank (and their Associates) shall not exceed 30% of the total number of shares of Conversion Stock issued in the Conversion.

8.5. SPECIAL RULE FOR TAX-QUALIFIED EMPLOYEE PLANS. Shares of Conversion Stock purchased by any individual participant (“PLAN PARTICIPANT”) in a Tax-Qualified Employee Plan using funds therein pursuant to the exercise of subscription rights granted to such Participant in his individual capacity as an Eligible Account Holder or Supplemental Eligible Account Holder shall not be deemed to be purchases by a Tax-Qualified Employee Plan for purposes of calculating the maximum amount of Conversion Stock that Tax-Qualified Employee Plans may purchase pursuant to this Plan, if the individual Plan Participant controls or directs the investment authority with respect to such account or subaccount.

8.6. ILLEGAL PURCHASES. Notwithstanding any other provision of the Plan, no Person shall be entitled to purchase any Conversion Stock to the extent such purchase would be illegal under any federal law or state law or regulation or would violate regulations or policies of the National Association of Securities Dealers, Inc., particularly those regarding free riding and withholding. The Stock Holding Company and/or its agents may ask for an acceptable legal opinion from any purchaser as to the legality of such purchase and may refuse to honor any purchase order if such opinion is not timely furnished.

8.7. REJECTION OF ORDERS. The Stock Holding Company has the right in its sole discretion to reject any order submitted by a Person whose representations the Stock Holding Company believes to be false or who it otherwise believes, either alone or Acting in Concert

20

with others, is violating, circumventing, or intends to violate, evade or circumvent the terms and conditions of the Plan.

8.8. SUBSCRIBERS IN NON-QUALIFIED STATES OR IN FOREIGN COUNTRIES. The Stock Holding Company, in its sole discretion, may make reasonable efforts to comply with the securities laws of any state in the United States in which its depositors reside, and will only offer and sell the Conversion Stock in states in which the offers and sales comply with such states’ securities laws. However, no Person will be offered or allowed to purchase any Conversion Stock under the Plan if he or she resides in a foreign country or in a state of the United States with respect to which any of the following apply: (i) the offer or sale of shares of Conversion Stock to such Persons would require the Stock Holding Company or its Employees to register, under the securities laws of such state or foreign country, as a broker or dealer or to register or otherwise qualify its securities for sale in such state or foreign country; or (ii) such registration or qualification would be impracticable for reasons of cost or otherwise.

8.9. NO OFFER TO TRANSFER SHARES. Before the consummation of the Conversion, no Person shall offer to transfer, or enter into any agreement or understanding to transfer the legal or beneficial ownership of any subscription rights or shares of Conversion Stock, except pursuant to the Plan. The following shall not constitute impermissible transfers under this Plan. Any Person having subscription rights in his or her individual capacity as an Eligible Account Holder or Supplemental Eligible Account Holder may exercise such subscription rights by causing a tax-qualified plan to make such purchase using funds allocated to such Person in such tax-qualified plan if such individual plan participant controls or directs the investment authority with respect to such account or subaccount. A tax-qualified plan that maintains an Eligible Deposit Account in the Bank as trustee for or for the benefit of a Person who controls or directs the investment authority with respect to such account or subaccount (“BENEFICIARY”) may, in exercising its subscription rights, direct that the Conversion Stock be issued in the name of such individual Beneficiary in his or her individual capacity.

8.10. CONFIRMATION BY PURCHASERS. Each Person ordering Conversion Stock in the Conversion will be deemed to confirm that such purchase does not conflict with the purchase limitations in the Plan. All questions concerning whether any Persons are Associates or a Group Acting in Concert or whether any purchase conflicts with the purchase limitations in the Plan or otherwise violates any provision of the Plan shall be determined by the Stock Holding Company in its sole discretion. Such determination shall be conclusive, final and binding on all Persons and the Stock Holding Company may take any remedial action, including without limitation rejecting the purchase or referring the matter to the Commissioner for action, as in its sole discretion the Stock Holding Company may deem appropriate.

ARTICLE IX.

POST OFFERING MATTERS

9.1. STOCK PURCHASES AFTER THE CONVERSION. For a period of three years after the proposed Conversion, no Officer or director of the Stock Holding Company or the Bank, or his or her Associates, may purchase, without the prior written approval of the

21

Commissioner, any Conversion Stock, except from a broker-dealer registered with the SEC, provided that the foregoing shall not apply to (x) negotiated transactions involving more than 1% of the outstanding Conversion Stock, or (y) purchases of stock made by and held by or otherwise made pursuant to any Tax-Qualified or Non-Tax-Qualified Employee Plan of the Bank or the Stock Holding Company even if such stock is attributable to Officers, directors or their Associates.

9.2. RESALES OF STOCK BY MANAGEMENT PERSONS. Conversion Stock purchased in the Conversion by Officers and directors of the Bank or the Stock Holding Company may not be resold for a period of at least one year following the date of purchase, except in the case of death or substantial disability, as determined by the Commissioner, of such person, or upon the written approval of the Commissioner.

9.3. STOCK CERTIFICATES. Each stock certificate shall bear a legend giving appropriate notice of the restrictions set forth in Section 9.2. Appropriate instructions shall be issued to the Stock Holding Company’s transfer agent with respect to applicable restrictions on transfers of such stock. Any shares of stock issued as a stock dividend, stock split or otherwise with respect to such restricted stock, shall be subject to the same restrictions as apply to the restricted stock.

9.4. RESTRICTION ON FINANCING STOCK PURCHASES. The Stock Holding Company will not offer or sell any of the Conversion Stock proposed to be issued to any Person whose purchase would be financed by funds loaned, directly or indirectly, to the Person by the Stock Holding Company, the Bank or any of their Affiliates.

9.5. STOCK BENEFIT PLANS. The Board of Directors of the Bank and/or the Board of Directors of the Stock Holding Company are permitted under the Regulations, and may decide, to adopt one or more stock benefit plans for the benefit of the Employees, Officers and directors of the Bank and Stock Holding Company, including an ESOP, an employer stock fund option in a 401(k) plan, stock award plans and stock option plans, which will be authorized to purchase Conversion Stock and grant options for Conversion Stock. However, only the Tax-Qualified Employee Plans will be permitted to purchase Conversion Stock in the Conversion subject to the purchase priorities set forth in the Plan. Pursuant to the Regulations, the Stock Holding Company may authorize the ESOP and any other Tax-Qualified Employee Plans to purchase in the aggregate up to 10% of the Conversion Stock to be issued. The Bank or the Stock Holding Company may make scheduled discretionary contributions to one or more Tax-Qualified Employee Plans to purchase Conversion Stock or to purchase issued and outstanding shares of Conversion Stock or authorized but unissued shares of Conversion Stock subsequent to the completion of the Conversion, provided, however, that such contributions do not cause the Bank to fail to meet any of its regulatory capital requirements.

9.6. MARKET FOR CONVERSION STOCK. If at the close of the Conversion the Stock Holding Company has more than 300 stockholders of any class of stock, the Stock Holding Company shall use its best efforts to:

22

9.6.1 Encourage and assist a Market Maker to establish and maintain a market for that class of stock;

9.6.2 List that class of stock on a national or regional securities exchange, or on the Nasdaq system; and

9.6.3 Register the Conversion Stock with the SEC pursuant to the Exchange Act, and undertake not to deregister such Conversion Stock for a period of three years thereafter.

9.7. LIQUIDATION ACCOUNT.

9.7.1 The Bank shall, at the time of the Conversion, establish a Liquidation Account in an amount equal to the net worth of the Bank as of the date of the latest consolidated statement of financial condition contained in the final Prospectus distributed in connection with the Conversion. The function of the Liquidation Account is to establish a priority on liquidation and, except as otherwise provided in this Section 9.7, the existence of the Liquidation Account shall not operate to restrict the use or application of any of the net worth accounts of the Bank or the Stock Holding Company. The Liquidation Account will be maintained by the Bank for the benefit of the Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain Deposit Accounts with the Bank following the Conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder shall, with respect to each Deposit Account, hold a related inchoate interest in a portion of the Liquidation Account balance, in relation to each Deposit Account balance at the Eligibility Record Date or Supplemental Eligibility Record Date, as the case may be, or to such balance as it may be subsequently reduced, as hereinafter provided. The initial Liquidation Account balance shall not be increased, and shall be subject to downward adjustment to the extent of any downward adjustment of any subaccount balance of any Eligible Account Holder or Supplemental Eligible Account Holder in accordance with 209 CMR 33.05(12).

9.7.2 In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors (including those to depositors to the extent of their Deposit Accounts) each Eligible Account Holder and Supplemental Eligible Account Holder shall be entitled to receive a liquidating distribution from the Liquidation Account, in the amount of the then-adjusted subaccount balances for his or her deposit accounts then held, before any liquidating distribution may be made to any holder of the Bank’s capital stock. No merger, consolidation, reorganization, or purchase of bulk assets with assumption of deposit accounts and other liabilities, or similar transactions with an FDIC-insured institution, in which the Bank is not the surviving institution, shall be deemed to be a complete liquidation for this purpose. In such transactions, the Liquidation Account shall be assumed by the surviving institution.

9.7.3 The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and/or Supplemental Eligible Account Holder shall be determined by multiplying the opening balance in the Liquidation Account by a fraction, the numerator of which is the amount of such Eligible Account Holder’s or Supplemental Eligible Account Holder’s Qualifying Deposit and the denominator of which is the total amount of all Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible Account Holders in the Bank. For Deposit

23

Accounts in existence on both dates, separate subaccounts shall be determined on the basis of the Qualifying Deposits in such Deposit Accounts on such record dates. Such initial subaccount balance shall not be increased by additional Deposits, but shall be subject to downward adjustment as described below.

9.7.4 If, at the close of business on the last day of any period for which the Stock Holding Company has prepared audited financial statements subsequent to the effective date of the Conversion, the deposit balance in the Deposit Account of an Eligible Account Holder or Supplemental Eligible Account Holder is less than the lesser of: (i) the balance in the Deposit Account at the close of business on the last day of any period for which the Stock Holding Company has prepared audited financial statements subsequent to the Eligibility Record Date or Supplemental Eligibility Record Date; or (ii) the amount in such Deposit Account as of the Eligibility Record Date or Supplemental Eligibility Record Date, then the subaccount balance for such Deposit Account shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in the balance of such Deposit Account. In the event of such downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any subsequent increase in the deposit balance of the related Deposit Account. If any such Deposit Account is closed, the related subaccount shall be reduced to zero. For purposes of this Section 9.7, a time account shall be deemed to be closed upon its maturity date regardless of any renewal thereof. A distribution of each subaccount balance may be made only in the event of a complete liquidation of the Bank subsequent to the Conversion and only out of funds available for such purpose after payment of all creditors.

9.7.5 The Bank shall not be required to set aside funds for the purpose of establishing the Liquidation Account, and the creation and maintenance of the Liquidation Account shall not operate to restrict the use or application of any of the net worth accounts of the Bank, except that the Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its net worth to be reduced below the amount required for the Liquidation Account.

9.8. PAYMENT OF DIVIDENDS. The Stock Holding Company may not declare or pay a cash dividend on the Conversion Stock if the effect thereof would cause its regulatory capital to be reduced below the amount required to maintain the Liquidation Account and under FDIC rules and regulations. Otherwise, the Stock Holding Company may declare dividends in accordance with applicable laws and regulations.

9.9. REPURCHASE OF STOCK. The Stock Holding Company has no present intention of repurchasing any of the Conversion Stock. However, based upon facts and circumstances following the Conversion and subject to applicable regulatory and accounting requirements, the Board of Directors of the Stock Holding Company may determine to repurchase stock in the future. Such facts and circumstances may include but not be limited to: (i) market and economic factors such as the price at which the Conversion Stock is trading in the market, the volume of trading, the attractiveness of other investment alternatives in terms of the rate of return and risk involved in the investment, the ability to increase the book value and/or earnings per share of the remaining outstanding shares, and the opportunity to improve the Stock Holding Company’s return on equity; (ii) the avoidance of dilution to stockholders by not having

24

to issue additional shares to cover the exercise of stock options or the purchase of shares by the ESOP in the event the ESOP is unable to acquire shares in the Subscription Offering, or to fund the any stock plans adopted after the consummation of the Conversion; and (iii) any other circumstances in which repurchases would be in the best interests of the Stock Holding Company and its stockholders.

9.10. CONVERSION EXPENSES. The Regulations require that the expenses of the Conversion must be reasonable. The Bank will use its best efforts to assure that the expenses incurred by the Bank and the Stock Holding Company in effecting the Conversion will be reasonable.

9.11. PUBLIC INSPECTION OF CONVERSION APPLICATION. The Bank and the Stock Holding Company will maintain a copy of the Application in the main banking office of the Bank and such copy will be available for public inspection.

9.12. ENFORCEMENT OF TERMS AND CONDITIONS. Each of the Bank and the Stock Holding Company shall have the right to take all such action as it, in its sole discretion, may deem necessary, appropriate or advisable in order to monitor and enforce the terms, conditions, limitations and restrictions contained in the Plan and the terms, conditions and representations contained in the Order Forms, including, but not limited to, the right to require any subscriber or purchaser to provide evidence, in a form satisfactory to the Bank and the Stock Holding Company, of such Person’s eligibility to subscribe for or purchase shares of the Conversion Stock under the terms of the Plan and the absolute right (subject only to any necessary regulatory approvals or concurrence) to reject, limit or revoke acceptance of any subscription or order and to delay, terminate or refuse to consummate any sale of Conversion Stock that it believes might violate, or is designed to, or is any part of a plan to, evade or circumvent such terms, conditions, limitations, restrictions and representations. Any such action shall be final, conclusive and binding on all Persons, and the Stock Holding Company, the Bank and their Board of Directors, Board of Directors, Officers, Employees and agents shall be free from any liability to any Person on account of any such action.

9.13. VOTING RIGHTS FOLLOWING CONVERSION. Following the Conversion, the holders of the capital stock of the Stock Holding Company shall have exclusive voting rights in the Stock Holding Company.

ARTICLE X.

MISCELLANEOUS

10.1. INTERPRETATION OF PLAN. All interpretations of the Plan and application of its provisions to particular circumstances by the Bank and the Stock Holding Company shall be final, subject to the authority of the Commissioner. When a reference is made in this Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to the Plan unless otherwise indicated. The recitals hereto constitute an integral part of the Plan. References to Sections include subsections, which are part of the related Section (e.g., a section numbered “Section 5.5.1” would be part of “Section 5.5” and references to “Section 5.5” would also refer

25

to material contained in the subsection described as “Section 5.5.1”). The table of contents and headings contained in the Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of the Plan. Whenever the words “include,” “includes” or “including” are used in the Plan, they shall be deemed to be followed by the words “without limitation.”

10.2. AMENDMENT OR TERMINATION OF THE PLAN. If deemed necessary or desirable, the terms of the Plan may be substantively amended by the Board of Directors of the Bank as a result of comments from regulatory authorities or otherwise at any time prior to approval of the Plan by the Commissioner and at any time thereafter with the concurrence of the Commissioner. If amendments to the Plan are made after the Special Meeting, no further approval of the Shareholders will be necessary unless otherwise required by the Commissioner. The Plan may be terminated by the Board of Directors in its sole discretion, at any time prior to the Special Meeting and at any time thereafter with the concurrence of the Commissioner. The Plan will terminate if the sale of all shares of Conversion Stock is not completed within twenty four (24) months from the date of approval of the Plan by the Board of Directors.

26

EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION

OF

WELLESLEY BANCORP, INC.

FIRST: The undersigned, Sean P. Kehoe, whose address is 607 14^th Street, NW, Suite 900, Washington, DC 20005, being at least eighteen years of age, acting as incorporator, does hereby form a corporation under the General Laws of the State of Maryland.

SECOND: The name of the Corporation (hereinafter the “Corporation”) is:

WELLESLEY BANCORP, INC.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Laws of the State of Maryland.

FOURTH: The present address of the principal office of the Corporation in the State of Maryland is 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202.

FIFTH: The name and address of the resident agent of the Corporation is CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.

SIXTH:

A. The total number of shares of stock of all classes of stock which the Corporation has authority to issue is fifteen million (15,000,000) shares, having an aggregate par value of one hundred fifty thousand dollars ($150,000), of which fourteen million (14,000,000) are to be shares of common stock with a par value of one cent ($0.01) per share, and one million (1,000,000) are to be shares of preferred stock with a par value of one cent ($0.01) per share.

B. A description of each class of stock of the Corporation, including any voting powers, designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations and restrictions thereof, is as follows:

1. Common Stock. Subject to all of the rights of the preferred stock as expressly provided in these Articles of Incorporation, by law or by the Board of Directors in a resolution(s) pursuant to this Article SIXTH, the common stock of the Corporation shall possess all such rights and privileges as are afforded to capital stock by Maryland law in the absence of any express grant of rights or privileges in the Corporation’s Articles of Incorporation, including but not limited to, the following:

a. Holders of the common stock shall be entitled to one (1) vote per share on each matter submitted to a vote at a meeting of stockholders; provided, however, that there shall not be any cumulative voting of the common stock.

1

b. Dividends may be declared and paid or set aside for payment upon the common stock out of any assets or funds of the Corporation legally available therefor.

c. Upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, its net assets shall be distributed ratably to holders of the common stock.

2. Preferred Stock. The Board of Directors is expressly authorized to classify and reclassify any unissued shares of preferred stock, and to divide and classify shares of any class into one or more series of such class, by determining, fixing or altering from time to time before issuance any one or more of the following:

a. The distinctive designation of such class or series and the number of shares to constitute such class or series; provided however, that unless otherwise prohibited by the terms of such or any other class or series, the number of shares of any class or series may be decreased by the Board of Directors in connection with any classification or reclassification of unissued shares and the number of shares of such class or series may be increased by the Board of Directors in connection with any such classification or reclassification, and any shares of any class or series which have been redeemed, purchased, otherwise acquired, or converted into shares of common stock or any other class or series shall remain part of the authorized preferred stock and be subject to classification and reclassification as provided in this Paragraph B.2.

b. Whether or not and, if so, the rates, amounts and times at which, and the conditions under which, dividends shall be payable on shares of such class or series, whether any such dividends shall rank senior or junior to or on a parity with the dividends payable on any other class or series of stock, and the status of any such dividends as cumulative, cumulative to a limited extent or non-cumulative, and as participating or non-participating.

c. Whether or not shares of such class or series shall have voting rights, in addition to any voting rights provided by law and, if so, the terms of such voting rights.

d. Whether or not shares of such class or series shall have conversion or exchange privileges and, if so, the terms and conditions thereof, including provision for adjustment of the conversion or exchange rate in such events or at such times as the Board of Directors shall determine.

e. Whether or not shares of such class or series shall be subject to redemption and, if so, the terms and conditions of such redemption, including the date(s) upon or after which they shall be redeemable and the

2

amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; and whether or not there shall be any sinking fund or purchase account in respect thereof, and if so, the terms thereof.

f. The rights of the holders of shares of such class or series upon the liquidation, dissolution, or winding up of the affairs of, or upon any distribution of the assets of, the Corporation, which rights may vary depending upon whether such liquidation, dissolution, or winding up is voluntary or involuntary and, if voluntary, may vary at different dates, and whether such rights shall rank senior or junior to or on a parity with such rights of any other class or series of stock.

g. Whether or not there shall be any limitations applicable, while shares of such class or series are outstanding, upon the payment of dividends or making of distributions on, or the acquisition of, or the use of monies for the purchase or redemption of, any capital stock of the Corporation, or upon any other action of the Corporation, including action under this Paragraph B.2, and, if so, the terms and conditions thereof.

h. Any other preferences, rights, restrictions, including restrictions on transferability, and qualifications of shares of such class or series, not inconsistent with law and the Articles of Incorporation of the Corporation.

C. 1. Notwithstanding any other provision of these Articles of Incorporation, in no event shall any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns shares of common stock in excess of the Limit (as hereinafter defined), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit. The number of votes which may be cast by any record owner by virtue of the provisions hereof in respect of common stock beneficially owned by such person beneficially owning shares in excess of the Limit shall be a number equal to the total number of votes which a single record owner of all common stock beneficially owned by such person would be entitled to cast (subject to the provisions of this Article SIXTH), multiplied by a fraction, the numerator of which is the number of shares of such class or series which are both beneficially owned by such person and owned of record by such record owner and the denominator of which is the total number of shares of common stock beneficially owned by such person owning shares in excess of the Limit. The provisions of this Section C of Article SIXTH shall not be applicable, and any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns shares of common stock in excess of the Limit shall have full voting rights with respect to all shares owned of record, if, before the beneficial owner of such shares acquired beneficial ownership of shares in excess of the Limit, the beneficial owner’s ownership of shares in excess of the Limit shall have been approved by a majority of the Unaffiliated Directors (as defined below).

3

2. The following definitions shall apply to this Section C of Article SIXTH:

a. “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date of filing of these Articles of Incorporation.

b. “Beneficial ownership” shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or provision thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of these Articles of Incorporation; provided, however, that a person shall, in any event, also be deemed the “beneficial owner” of any common stock:

(1) which such person or any of its Affiliates beneficially owns, directly or indirectly; or

(2) which such person or any of its Affiliates has: (a) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of an agreement, contract or other arrangement with the Corporation to effect any transaction which is described in any one or more of Paragraphs 1 through 5 of Section A of Article NINTH), or upon the exercise of conversion rights, exchange rights, warrants or options or otherwise, or (b) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of stockholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such Affiliate is otherwise deemed the beneficial owner); or

(3) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation; and provided further, however, that: (a) no Director or Officer of the Corporation (or any Affiliate of any such Director or Officer) shall, solely by reason of any or all of such Directors or Officers acting

4

in their capacities as such, be deemed, for any purposes hereof, to beneficially own any common stock beneficially owned by any other such Director or Officer (or any Affiliate thereof); and (b) neither any employee stock ownership or similar plan of the Corporation or any subsidiary of the Corporation, nor any trustee with respect thereto or any Affiliate of such trustee (solely by reason of such capacity of such trustee), shall be deemed, for any purposes hereof, to beneficially own any common stock held under any such plan. For purposes only of computing the percentage of beneficial ownership of common stock of a person, the outstanding common stock shall include shares deemed owned by such person through application of this Subparagraph C.2.b but shall not include any other shares of common stock which may be issuable by the Corporation pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding common stock shall include only shares of common stock then outstanding and shall not include any shares of common stock which may be issuable by the Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.

c. The “Limit” shall mean 10% of the then-outstanding shares of common stock.

d. A “person” shall include an individual, a firm, a group acting in concert, a corporation, a partnership, an association, a joint venture, a pool, a joint stock company, a trust, an unincorporated organization or similar company, a limited liability company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities or any other entity.

e. “Unaffiliated Director” means any member of the Board of Directors who is unaffiliated with the person beneficially owning shares in excess of the Limit (the “10% Beneficial Owner”) and was a member of the Board of Directors prior to the time that the 10% Beneficial Owner” became a 10% Beneficial Owner, and any Director who is thereafter chosen to fill any vacancy of the Board of Directors or who is elected and who, in either event, is unaffiliated with the 10% Beneficial Owner and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of the Unaffiliated Directors then on the Board of Directors.

3. The Board of Directors shall have the power to construe and apply the provisions of this Section C and to make all determinations necessary or desirable to implement such provisions, including but not limited to matters with respect to: (a) the number of shares of common stock beneficially owned by any person; (b) whether a person is an Affiliate of another;

5

(c) whether a person has an agreement, arrangement or understanding with another as to the matters referred to in the definition of beneficial ownership; (d) the application of any other definition or operative provision of this Section C to the given facts; or (e) any other matter relating to the applicability or effect of this Section C.

4. The Board of Directors shall have the right to demand that any person who is reasonably believed to beneficially own shares of common stock in excess of the Limit (or holds of record common stock beneficially owned by any person in excess of the Limit) supply the Corporation with complete information as to: (a) the record owner(s) of all shares beneficially owned by such person who is reasonably believed to own shares in excess of the Limit; and (b) any other factual matter relating to the applicability or effect of this Section C as may reasonably be requested of such person.

5. Except as otherwise provided by law or expressly provided in this Section C, the presence, in person or by proxy, of the holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if required, to the provisions of this Section C) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote shall constitute a quorum at all meetings of the stockholders, and every reference in these Articles of Incorporation to a majority or other proportion of capital stock (or the holders thereof) for purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.

6. Any constructions, applications or determinations made by the Board of Directors pursuant to this Section C in good faith and on the basis of such information and assistance as was then reasonably available for such purpose shall be conclusive and binding upon the Corporation and its stockholders.

7. In the event any provision (or portion thereof) of this Section C shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Section C shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of the Corporation and its stockholders that each such remaining provision (or portion thereof) of this Section C remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, including stockholders owning an amount of stock over the Limit, notwithstanding any such finding.

SEVENTH:

A. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors, except as these Articles of Incorporation or Maryland law otherwise provides; provided however, that any limitations on the Board of Director’s management or direction of the affairs of the Corporation shall reserve the Directors’ full power to discharge their fiduciary duties.

6

B. The Directors shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years thereafter with each Director to hold office for the term of office of his or her respective class and until his or her successor shall have been elected and qualified. At each annual meeting of stockholders following such initial classification and election, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election with each Director to hold office for the term of office of his or her respective class and until his or her successor shall have been duly elected and qualified.

C. The names of the initial directors who will serve until their successors are duly elected and qualified are as follows:

First Class—Term Expiring 2012

C. Joseph Grignaffini

Hugh J. Kelley

Tina L. Wang

Second Class—Term Expiring 2013

Theodore F. Parker

Leslie B. Shea

Robert L. Skolnick

Third Class—Term Expiring 2014

Thomas J. Fontaine

Nancy Marden Goodall

Edwin G. Silver

D. Any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the shares of stock entitled to vote in the election of directors.

EIGHTH:

The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Corporation, the directors and the stockholders:

A. The Board of Directors is hereby empowered to authorize the issuance from time to time of shares of its stock of any class and securities convertible into shares of its stock of any class for such consideration as determined by the Board of Directors in accordance with the Maryland General Corporation Law (the “MGCL”), and without any action by the stockholders.

7

B. The Corporation, if authorized by the Board of Directors, may acquire shares of the Corporation’s capital stock.

C. No holder of any stock or any other securities of the Corporation, whether now or hereafter authorized, shall have any preemptive right to subscribe for or purchase any stock or any other securities of the Corporation other than such, if any, as the Board of Directors, in its sole discretion, may determine and at such price(s) and upon such other terms as the Board of Directors, in its sole discretion, may fix; and any stock or other securities which the Board of Directors may determine to offer for subscription may, as the Board of Directors in its sole discretion shall determine, be offered to the holders of any class, series or type of stock or other securities at the time outstanding to the exclusion of the holders of any or all other classes, series or types of stock or other securities at the time outstanding.

D. The Board of Directors shall have the power to create and to issue, whether or not in connection with the issuance and sale of any shares of stock or other securities of the Corporation, rights or options entitling the holders thereof to purchase from the Corporation any shares of its capital stock of any class(es), on such terms and conditions and in such form as the Board of Directors shall set forth in a resolution.

E. The Board of Directors shall have the power, subject to any limitations or restrictions imposed by law, to classify or reclassify any unissued shares of stock whether now or hereafter authorized, by fixing or altering in any one or more respects before issuance of such shares the voting powers, designations, preferences and relative, participating, optional or other special rights of such shares and the qualifications, limitations or restrictions of such preferences and/or rights.

F. The Board of Directors of the Corporation is expressly authorized to adopt, repeal, alter, amend and rescind the Bylaws of the Corporation by the affirmative vote of a majority of the directors then in office without the further approval of the stockholders. Notwithstanding any other provision of these Articles of Incorporation or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law), the Bylaws shall not be adopted, repealed, altered, amended or rescinded by the stockholders of the Corporation except by the affirmative vote of the holders of at least 75% of the Voting Stock (after giving effect to the provisions of Article SIXTH), voting together as a single class.

G. The Board of Directors shall have the power to declare and authorize the payment of stock dividends payable in stock of one class of the Corporation’s capital stock to holders of stock of another class(es) of the Corporation’s capital stock.

H. The Board of Directors shall have authority to exercise without a vote of stockholders all powers of the Corporation, whether conferred by law or by these Articles of Incorporation, to purchase, lease or otherwise acquire the business assets or franchises in whole or in part of other corporations or unincorporated business entities.

8

I. The Board of Directors shall have the power to borrow or raise money, from time to time and without limit, and upon any terms, for any corporate purposes, and, subject to the MGCL, to authorize the creation, issuance, assumption or guaranty of bonds, notes or other evidences of indebtedness for monies so borrowed, to include therein such provisions as to redeemability, convertibility or otherwise as the Board of Directors, in its sole discretion, may determine and to secure the payment of principal, interest or sinking fund in respect thereof by mortgage upon, or the pledge of, or the conveyance or assignment in trust of, the whole or any part of the properties, assets and goodwill of the Corporation then owed or thereafter acquired.

J. An officer or director of the Corporation, as such, shall not be liable to the Corporation or its stockholders for money damages, except (A) to the extent that it is proved that the person actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received; or (B) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person’s action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding; or (C) to the extent otherwise provided by the MGCL. If the MGCL is amended to further eliminate or limit the personal liability of officers and directors, then the liability of officers and directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the MGCL, as so amended.

Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such repeal or modification.

K. The Board of Directors may, in connection with the exercise of its business judgment involving any actual or proposed transaction which would or may involve a change in control of the Corporation (whether by purchases of shares of stock or any other securities of the Corporation in the open market or otherwise, tender offer, merger, consolidation, dissolution, liquidation, sale of all or substantially all of the assets of the Corporation or proxy solicitation (other than on behalf of the Board of Directors or otherwise)), in determining what is in the best interests of the Corporation and its stockholders and in making any recommendation to its stockholders, give due consideration to all relevant factors, including, but not limited to the following: (1) the economic effect, both immediate and long-term, upon the Corporation’s stockholders, including stockholders, if any, choosing not to participate in the transaction; (2) effects, including any social and economic effects, on the employees, suppliers, creditors, depositors and customers of, and others dealing with, the Corporation and its subsidiaries and on the communities in which the Corporation and its subsidiaries operate or are located; (3) whether the proposal is acceptable based on the historical and current operating results or financial condition of the Corporation; (4) whether a more favorable price could be obtained for the Corporation’s stock or other securities in the future; (5) the reputation and business practices of the offeror and its management and affiliates as they would affect the employees; (6) the future value of the stock or any other securities of the Corporation; and (7) any antitrust or other legal and regulatory issues that are raised by the proposal. If the Board of Directors determines that any actual or proposed transaction which would or may involve a change in control of the Corporation should be rejected, it may take any lawful action to accomplish its purpose,

9

including, but not limited to, any and all of the following: advising stockholders not to accept the proposal; instituting litigation against the party making the proposal; filing complaints with governmental and regulatory authorities; acquiring the stock or any of the securities of the Corporation; selling or otherwise issuing authorized but unissued stock, other securities or treasury stock or granting options with respect thereto; selling any of the assets of the Corporation; acquiring a company to create an antitrust or other regulatory problem for the party making the proposal; and obtaining a more favorable offer from another individual or entity.

L. Notwithstanding any provision of the MGCL requiring stockholder authorization of an action by a greater proportion than a majority of the total number of shares of all classes of capital stock or of the total number of shares of any class of capital stock, such action shall be valid and effective if authorized by the affirmative vote of the holders of a majority of the total number of shares of all classes outstanding and entitled to vote thereon, except as otherwise provided in these Articles.

M. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Directors, pursuant to a resolution approved by a majority of the directors then in office, shall determine that such rights apply with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.

NINTH: The Corporation shall indemnify (A) its directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the general laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures required, and (B) other employees and agents to such extent as shall be authorized by the Board of Directors or the Corporation’s Bylaws and be permitted by law. The foregoing rights of indemnification shall not be exclusive of any rights to which those seeking indemnification may be entitled. The Board of Directors may take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such Bylaws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the Articles of Incorporation of the Corporation shall limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

TENTH: The Corporation reserves the right to amend or repeal any provision contained in these Articles in the manner prescribed by the MGCL, including any amendment altering the terms or contract rights, as expressly set forth in these Articles, of any of the Corporation’s outstanding stock by classification, reclassification or otherwise, and no stockholder approval shall be required if the approval of stockholders is not required for the proposed amendment or repeal by the MGCL, and all rights conferred upon stockholders are granted subject to this reservation. The Board of Directors, pursuant to a resolution approved by a majority of the directors then in office, and without action by the stockholders, may amend these Articles to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Corporation has authority to issue. Notwithstanding any other

10

provision of these Articles or any provision of law that might otherwise permit a lesser vote or no vote, any amendment of Section C of Article SIXTH, Sections B and D of Article SEVENTH, Sections F and J of Article EIGHTH and this Article TENTH of the Corporation’s Articles of Incorporation shall require the affirmative vote of 75% of the issued and outstanding shares of capital stock entitled to vote.

[Signature pages follow]

11

IN WITNESS WHEREOF, I have signed these articles and acknowledge the same to be my act.

SIGNATURE OF INCORPORATOR:

/s/ Sean P. Kehoe

Name: Sean P. Kehoe

12

CONSENT OF RESIDENT AGENT

The undersigned hereby agrees to my designation as resident agent in the State of Maryland for this corporation.

CSC-LAWYERS INCORPORATING SERVICE COMPANY

/s/ Nancy Grueninger

Name: Nancy Grueninger

Title: Authorized Representative

13

EX-3.2

Exhibit 3.2

BYLAWS

OF

WELLESLEY BANCORP, INC.

ARTICLE I—STOCKHOLDERS

Section 1. ANNUAL MEETING

The annual meeting of the stockholders of Wellesley Bancorp, Inc. (the “Corporation”) shall be held each year at such date and time as the Board of Directors shall, in their discretion, fix. The business to be transacted at the annual meeting shall include the election of directors and any other business properly brought before the meeting in accordance with these Bylaws.

Section 2. SPECIAL MEETINGS

A special meeting of the stockholders may be called at any time for any purpose(s) by the Chairman of the Board, the President, or by two-thirds of the total number of Directors which the Corporation would have if there were no vacancies on the Board of Directors. By virtue of the Corporation’s election made hereby to be governed by Section 3-805 of the Maryland General Corporation Law, a special meeting of the stockholders shall be called by the Secretary of the Corporation upon the written request of the holders of at least a majority of all shares outstanding and entitled to vote on the business to be transacted at such meeting. Notwithstanding the previous sentence, the Secretary of the Corporation shall not be obligated to call a special meeting of the stockholders requested by stockholders for the purpose of taking any action that is non-binding or advisory in nature. Business transacted at any special meeting shall be confined to the purpose(s) stated in the notice of such meeting.

Section 3. PLACE OF MEETING

The Board of Directors may designate any place, either within or outside the State of Maryland, as the place of meeting for any annual or special meeting of stockholders.

Section 4. NOTICE OF MEETING; WAIVER OF NOTICE

Not less than ten (10) days nor more than ninety (90) days before the date of every stockholders meeting, the Secretary shall give to each stockholder entitled to vote at or to notice of such meeting, written notice stating the place, date and time of the meeting and, in the case of a special meeting, the purpose(s) for which the meeting is called, either by mail to his or her address as it appears on the records of the Corporation or by presenting it to him or her personally or by leaving it at his or her residence or usual place of business. Notwithstanding the

1

foregoing provisions, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be equivalent to notice. Attendance of a person entitled to notice at a meeting, in person or by proxy, shall constitute a waiver of notice of such meeting, except when such person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided however, that if the date of the adjourned meeting is more than one hundred twenty (120) days after the record date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity herewith.

Section 5. QUORUM

At any meeting of stockholders, the presence of a quorum for all purposes shall be determined as provided in the Articles of Incorporation unless or except to the extent that the presence of a larger number may be required by law.

If a quorum fails to attend any meeting, the Chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are represented in person or by proxy may adjourn the meeting to any place, date and time without further notice to a date not more than one hundred twenty (120) days after the original record date. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting originally called. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of stockholders to leave less than a quorum.

Section 6. CONDUCT OF BUSINESS

(a) The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting and the conduct of discussion. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.

(b) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 6(b). For business to be properly brought before an annual meeting by a stockholder, the business must relate to a proper subject matter for stockholder action and the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered or mailed to and received at the principal executive office of the Corporation not less than ninety (90) days prior to the date of the annual meeting; provided, however, that in the event that less than one hundred (100) days’ notice or prior public disclosure of the date of the meeting

2

is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the tenth (10^th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder’s notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation’s capital stock that are beneficially owned by such stockholder, (iv) a statement disclosing (A) whether such stockholder is acting with or on behalf of any other person and (B) if applicable, the identity of such person, and (v) any material interest of such stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 6(b). The Chairman of the Board or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 6(b) and, if he or she should so determine, he or she shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted.

At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting in accordance with Article I, Section 2.

(c) Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as Directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Section 6(c). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered or mailed to and received at the principal executive office of the Corporation not less than ninety (90) days prior to the date of the meeting; provided, however, that in the event that less than one hundred (100) days’ notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10^th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder’s notice shall set forth (i) as to each person whom such stockholder proposes to nominate for election or re-election as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); and (ii) as to the stockholder giving the notice (A) the name and address, as they appear on the Corporation’s books, of such stockholder, (B) the class and number of shares of the Corporation’s capital stock that are beneficially owned by such stockholder, and (C) a statement disclosing (1) whether such stockholder or any nominee thereof is acting with or on behalf of any other person and (2) if applicable, the identity of such person.

3

(d) The various requirements set forth in subsections (b) and (c) of this Section 6 shall apply to all shareholder proposals and nominations, without regard to whether such proposals or nominations are required to be included in the Corporation’s proxy statement or form of proxy.

Section 7. VOTING

All elections shall be determined by a plurality of the votes cast, and, except as otherwise required by law or the Articles of Incorporation, all other matters shall be determined by a majority of the votes cast.

Section 8. PROXIES

At all meetings of stockholders, a stockholder may vote the shares owned of record by him or her either in person or by proxy executed in writing by the stockholder or by his or her duly authorized attorney-in-fact. Any facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. A proxy is revocable by a stockholder at any time without condition or qualification unless the proxy states that it is irrevocable and the proxy is coupled with an interest. A proxy may be made irrevocable for as long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy or another general interest in the Corporation or its assets or liabilities.

Section 9. CONTROL SHARE ACQUISITION ACT

Notwithstanding any other provision of the Articles of Incorporation or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (or any successor statute) shall not apply to any acquisition by any person of shares of stock of the Corporation. This Section 9 may be repealed at any time, in whole or in part, by a majority vote of the Corporation’s Board of Directors, whether before or after an acquisition of Control Shares (as such term is defined in Section 3-701(d) of the Maryland General Corporation Law, or any successor provision) and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent Control Share Acquisition (as such term is defined in Section 3-701(e) of the Maryland General Corporation Law, or any successor provision).

4

ARTICLE II—DIRECTORS

Section 1. GENERAL POWERS

The business and affairs of the Corporation shall be managed by its Board of Directors. The Board of Directors may exercise all the powers of the Corporation, except those conferred on or reserved to the stockholders by statute or by the Articles of Incorporation or the Bylaws. The Board may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation as they may deem proper, and which are not inconsistent with these Bylaws and with the Maryland General Corporation Law.

The Board of Directors shall annually elect a Chairman of the Board from among its members. The Chairman of the Board shall serve in a general oversight capacity and shall preside at all meetings of the Corporation’s Board of Directors. The Chairman of the Board shall perform all duties and have all powers which are commonly included in the office of the Chairman of the Board or which are delegated to him by the Board of Directors.

Section 2. NUMBER

The number of directors of the Corporation shall, by virtue of the Corporation’s election made hereby to be governed by Section 3-804(b) of the Maryland General Corporation Law, be fixed from time to time exclusively by vote of the Board of Directors; provided, however, that such number of directors shall never be less than the minimum number of directors required by the Maryland General Corporation Law.

Section 3. VACANCIES AND NEWLY CREATED DIRECTORSHIPS

By virtue of the Corporation’s election made hereby to be governed by Section 3-804(c) of the Maryland General Corporation Law, any vacancies in the Board of Directors resulting from an increase in the size of the Board of Directors or the death, resignation or removal of a director may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualifies. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

Section 4. REGULAR MEETINGS

Regular meetings of the Board of Directors shall be held at such dates, such times and such places, either within or outside the State of Maryland, as shall have been designated by the Board of Directors and publicized among all Directors.

5

Section 5. SPECIAL MEETINGS

Special meetings of the Board of Directors may be called by the Chairman of the Board, by the Chief Executive Officer, or by two-thirds of the members of the Board of Directors in writing. The person(s) authorized to call special meetings of the Board of Directors may fix any place, either within or outside the State of Maryland, as the place for holding the special meeting of the Board of Directors called by them.

Section 6. NOTICE

A notice of a regular meeting shall not be required. The Secretary shall give notice to each director of the date, time and place of each special meeting of the Board of Directors. Notice is given to a director when it is delivered personally to him or her, left at his or her residence or usual place of business, or sent by telephone, facsimile, electronic mail, or similar means of transmission at least twenty four (24) hours before the time of the meeting, or in the alternative, when it is mailed to his or her address as it appears on the records of the Corporation, at least seventy two (72) hours before the time of the meeting. Any director may waive notice of any meeting either before or after the holding thereof by written waiver filed with the records of the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

Section 7. TELEPHONIC MEETINGS

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting.

Section 8. QUORUM

At any meeting of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business, but if less than such quorum is present at a meeting, a majority of the directors present may adjourn the meeting without further notice or waiver thereof.

Section 9. MANNER OF ACTING

The vote of the majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by the Articles of Incorporation.

6

Section 10. RESIGNATION

A director may resign at any time by giving written notice to the Board, the President or the Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such officer, and the acceptance of the resignation shall not be necessary to make it effective.

Section 11. COMPENSATION

By resolution of the Board of Directors, a fixed sum and expenses, if any, for attendance at each regular or special meeting of the Board of Directors or of committees thereof, and other compensation for their services as such or on such committees, may be paid to directors, as compensation for such attendance at meetings and other services as a director may render to the Corporation.

Section 12. COMMITTEES

The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for these committees and any others provided for herein, elect a director(s) to serve as the member(s), designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that any such committee shall have no power or authority with reference to (i) declaring dividends or distributions on stock, (ii) issuing stock other than as authorized by the Board of Directors, (iii) recommending to the stockholders any action which requires stockholder approval, (iv) amending the Bylaws and (v) approving a merger or share exchange which does not require stockholder approval. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member(s) of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings. The quorum requirements for each such committee shall be a majority of the members of such committee. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing(s) are filed with the minutes of the proceedings of such committee.

7

Section 13. QUALIFICATION AND INTEGRITY OF DIRECTORS.

A person is not qualified to serve as director if he or she: (1) is under indictment for, or has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, or (2) is a person against who a banking agency has issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) has been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency.

No person shall be elected or appointed to serve as a director after the Annual Meeting following his or her reaching the age of seventy-five (75), provided however, that this disqualification shall not apply to any director serving in such capacity on September 7, 2011.

ARTICLE III—OFFICERS

Section 1. EXECUTIVE AND OTHER OFFICERS

The officers of the Corporation shall be a President, a Secretary and a Treasurer. The Board of Directors may designate who shall serve as Chief Executive Officer, having general supervision of the business and affairs of the Corporation, and as Chief Operating Officer, having supervision of the operations of the Corporation; in the absence of a designation the President shall serve as Chief Executive Officer and Chief Operating Officer. The Board of Directors may appoint such other officers as it may deem proper. A person may hold more than one office in the Corporation but may not serve concurrently as both President and Vice President of the Corporation.

Section 2. POWERS AND DUTIES

All officers chosen by the Board of Directors shall have such powers and duties as generally pertain to their respective offices. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or any committee thereof.

Section 3. COMPENSATION

The Board of Directors shall have power to fix the salaries and other compensation and remuneration, of whatever kind, of all officers of the Corporation. It may authorize any committee or officer, upon whom the power of appointing subordinate officers may have been conferred, to fix the salaries, compensation and remuneration of such subordinate officers.

8

Section 4. ELECTION, TENURE AND REMOVAL OF OFFICERS

The Board of Directors shall elect the officers. The Board of Directors may from time to time authorize any committee or officer to appoint subordinate officers. An officer serves for one year or until his or her successor is elected and qualified. If the Board of Directors in its judgment finds that the best interests of the Corporation will be served, it may remove any officer or agent of the Corporation. The removal of an officer or agent does not prejudice any of his or her contract rights. The Board of Directors (or any committee or officer authorized by the Board of Directors) may fill a vacancy which occurs in any office for the unexpired portion of the term of that office.

ARTICLE IV—STOCK

Section 1. CERTIFICATES FOR STOCK

Each stockholder shall be entitled to certificates which represent and certify the shares of stock he or she holds in the Corporation. Each stock certificate shall include on its face the name of the Corporation, the name of the stockholder and the class of stock and number of shares represented by the certificate and be in such form, not inconsistent with law or with the Articles of Incorporation, as shall be approved by the Board of Directors or any officer(s) designated for such purpose by resolution of the Board of Directors. Each stock certificate shall be signed by the President or the Chairman of the Board, and countersigned by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer. Each certificate shall be sealed with the actual corporate seal or a facsimile of it or in any other form and the signatures on each certificate may be either manual or facsimile signatures. A certificate is valid and may be issued whether or not an officer who signed it is still an officer of the Corporation when it is issued.

Notwithstanding anything to the contrary herein, the Board of Directors may provide by resolution that some or all of the shares of any or all classes or series of the Corporation’s capital stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation.

Section 2. TRANSFERS

The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issuance, transfer and registration of certificates of stock or uncertificated shares of stock, and may appoint transfer agents and registrars thereof. The duties of transfer agent and registrar may be combined.

Section 3. RECORD DATE AND CLOSING OF TRANSFER BOOKS

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than ninety (90) nor less than ten (10) days before the date of such meeting, nor more than ninety (90)

9

days prior to any other action. The transfer books may not be closed for a period longer than twenty (20) days. In the case of a meeting of stockholders, the closing of the transfer books shall be at least ten (10) days before the date of the meeting.

Section 4. STOCK LEDGER

The Corporation shall maintain a stock ledger which contains the name and address of each stockholder and the number of shares of stock of each class registered in the name of each stockholder. The stock ledger may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. The original or a duplicate of the stock ledger shall be kept at the offices of a transfer agent for the particular class of stock, within or outside the State of Maryland, or, if none, at the principal office or the principal executive offices of the Corporation in the State of Maryland.

Section 5. CERTIFICATION OF BENEFICIAL OWNERS

The Board of Directors may adopt by resolution a procedure by which a stockholder of the Corporation may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder.

Section 6. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES

The Board of Directors of the Corporation may determine the conditions for issuing a new stock certificate or uncertificated shares in place of a stock certificate that is purportedly alleged to have been lost, stolen or destroyed, or the Board of Directors may delegate such power to any officer(s) of the Corporation. In its discretion, the Board of Directors or such officer(s) may refuse to issue such new certificate or uncertificated shares except upon the order of a court having jurisdiction in the premises.

ARTICLE V—FINANCE

Section 1. CHECKS, DRAFTS, ETC.

All checks, drafts and orders for the payment of money, notes and other evidences of indebtedness, issued in the name of the Corporation shall be signed by one (1) or more officers, employees, or agents of the Corporation in such manner as shall from time to time be determined by resolution of the Board of Directors.

Section 2. FISCAL YEAR

The fiscal year of the Corporation shall commence on the first day of January and end on the last day of December in each year.

10

ARTICLE VI—MISCELLANEOUS PROVISIONS

Section 1. CORPORATE SEAL

The Board of Directors shall provide a suitable seal, bearing the name of the Corporation, which shall be in the charge of the Secretary. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

Section 2. VOTING UPON SHARES IN OTHER CORPORATIONS

Stock of other corporations or associations, registered in the name of the Corporation, may be voted by the Chief Executive Officer, the President, a Vice President or a proxy appointed by any of them. The Board of Directors, however, may by resolution appoint some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified copy of such resolution.

Section 3. MAIL

Any notice or other document which is required by these Bylaws to be mailed shall be deposited in the United States mail, postage prepaid.

Adopted September 7, 2011

11

EX-4.1

Exhibit 4.1

COMMON STOCK	COMMON STOCK
CERTIFICATE NO.	SEE REVERSE FOR CERTAIN DEFINITIONS
	CUSIP

WELLESLEY BANCORP, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND

THIS CERTIFIES THAT

S P E C I M E N

is the owner of:

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE, OF

WELLESLEY BANCORP, INC.

The shares represented by this certificate are transferable only on the stock transfer books of Wellesley Bancorp, Inc. (the “Corporation”) by the holder of record hereof, or by his duly authorized attorney or legal representative, upon the surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Articles of Incorporation of the Corporation and any amendments thereto (copies of which are on file with the Corporate Secretary of the Corporation), to all of which provisions the holder by acceptance hereof, assents.

This certificate is not valid unless countersigned and registered by the Corporation’s Transfer Agent and Registrar. The shares represented by this certificate are not of an insurable type and are not insured by the Federal Deposit Insurance Corporation or any other government agency.

IN WITNESS THEREOF, Wellesley Bancorp, Inc. has caused this certificate to be executed by the facsimile signatures of its duly authorized officers and has caused a facsimile of its corporate seal to be hereunto affixed.

Dated:		[SEAL]
	President and Chief Executive Officer		Corporate Secretary

Wellesley Bancorp, Inc.

The shares represented by this certificate are subject to a limitation contained in the Articles of Incorporation to the effect that in no event shall any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who beneficially owns in excess of 10% of the outstanding shares of common stock (the “Limit”) be entitled or permitted to any vote in respect of shares held in excess of the Limit.

The Board of Directors of the Corporation is authorized by resolution(s), from time to time adopted, to provide for the issuance of serial preferred stock in series and to fix and state the voting powers, designations, preferences and relative, participating, optional, or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The Corporation will furnish to any shareholder upon request and without charge a full description of each class of stock and any series thereof.

The shares represented by this certificate may not be cumulatively voted on any matter.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	- as tenants in common	UNIF GIFTS MIN ACT -	custodian for              under Uniform
			Gifts to Minors Act
			(State)
TEN ENT	- as tenants by the entireties
JT TEN	- as joint tenants with right of survivorship and not as tenants in common	UNIF TRF MIN ACT -	custodian (until age        )
			under Uniform Transfers to Minors Act
			(State)

Additional abbreviations may also be used though not in the above list.

For value received,                      hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFICATION NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee

                                                                               shares of the common stock represented by this certificate, and do hereby irrevocably constitute and appoint                                                                                                                           , attorney, to transfer the said stock on the books of the Corporation with full power of substitution in the premises.

DATED
	NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE GUARANTEED:
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15

EX-5.1

Exhibit 5.1

Suite 900 607 14th St., NW

Washington DC 20005-2018

t 202 508 5800 f 202 508 5858

                 , 2011 direct dial 202 508 5881 direct fax 202 585 0051 skehoe@kilpatricktownsend.com

Board of Directors

Wellesley Bancorp, Inc.

40 Central Street

Wellesley, Massachusetts 02482

Re: Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as special counsel for Wellesley Bancorp, Inc., a Maryland corporation (the “Company”), in connection with the Registration Statement on Form S-1 (the “Registration Statement”) initially filed by the Company on September 9, 2011 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Act”), and the regulations promulgated thereunder.

Pursuant to a Plan of Conversion adopted by the Board of Directors of Wellesley Bank (the “Bank”), the Registration Statement relates to: (i) the proposed issuance and sale by the Company of up to 3,174,000 shares (the “Offering Shares”) of common stock, $0.01 par value per share, of the Company (the “Common Stock”) in a subscription offering, a community offering and a syndicated community offering (the “Offerings”) and (ii) the proposed issuance and contribution of 222,180 shares of Common Stock (the “Foundation Shares”) to the Wellesley Bank Charitable Foundation, a charitable foundation (the “Foundation”).

In the preparation of this opinion, we have examined originals or copies identified to our satisfaction of: (i) the Company’s articles of incorporation; (ii) the Company’s bylaws; (iii) the Registration Statement, including the prospectus contained therein and the exhibits thereto; (iv) certain resolutions of the Board of Directors of the Company relating to the issuance of the Common Stock being registered under the Registration Statement; (v) the Plan of Conversion; (vi) the trust agreement for the Bank’s employee stock ownership plan (the “ESOP”) and the form of loan agreement between the Company and the ESOP; and (vii) the form of stock certificate approved by the Board of Directors of the Company to represent shares of the Common Stock. We have also examined originals or copies of such documents, corporate records, certificates of public officials and other instruments, and have conducted such other investigations of law and fact, as we have deemed necessary or advisable for purposes of our opinion.

ATLANTA   AUGUSTA   CHARLOTTE   DENVER  DUBAI   NEW YORK   OAKLAND   PALO   ALTO   RALEIGH   SAN DIEGO   SAN FRANCISCO   SEATTLE   STOCKHOLM   TAIPEI   TOKYO   WALNUT   CREEK   WASHINGTON, DC   WINSTON-SALEM

Board of Directors

Wellesley Bancorp, Inc.

                 , 2011

Page 2

In our examination, we have relied on the genuineness of all signatures, the authenticity of all documents and instruments submitted to us as originals, and the conformity to the originals of all documents and instruments submitted to us as certified or conformed copies. In addition, we have relied on the accuracy and completeness of all records, documents, instruments and materials made available to us by the Company.

Our opinion is limited to the matters set forth herein, and we express no opinion other than as expressly set forth herein. In rendering the opinions set forth below, we do not express any opinion concerning law other than the laws of the State of Maryland.

For purposes of this opinion, we have assumed that, prior to the issuance of any shares of Common Stock, (i) the Registration Statement, as finally amended, will have become effective under the Act and (ii) the conversion of the Bank will have become effective.

Based upon and subject to the foregoing, it is our opinion that, upon the due adoption by the Board of Directors of the Company (or authorized committee thereof) of a resolution fixing the number of Offering Shares to be sold in the Offerings and the number of Foundation Shares to be contributed to the Foundation, such Offering Shares, when issued and sold in the manner described in the Registration Statement, and such Foundation Shares, when issued and contributed to the Foundation in the manner described in the Registration Statement, will, in each case, be validly issued, fully paid and nonassessable.

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the heading “Legal and Tax Opinions” in the prospectus which is part of the Registration Statement, as such may be amended or supplemented, or incorporated by reference in any Registration Statement covering additional shares of Common Stock to be issued or sold under the Plan of Conversion that is filed pursuant to Rule 462(b) under the Act. In giving such consent, we do not hereby admit that we are experts or are otherwise within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Securities and Exchange Commission thereunder.

	Very truly yours,
	KILPATRICK TOWNSEND & STOCKTON LLP
By:
	Sean P. Kehoe, a Partner

EX-8.1

Exhibit 8.1

	Suite 900 607 14th St., NW Washington DC 20005-2018 t 202 508 5800 f 202 508 5858
, 2011	direct dial 202 508 5881 direct fax 202 585 0051 skehoe@kilpatricktownsend.com

Board of Directors

Wellesley Bancorp, Inc.

Wellesley Bank

40 Central Street

Wellesley, Massachusetts 02482

Re: Federal Income Tax Opinion Relating to the Conversion of Wellesley Bank from a Massachusetts-Chartered Mutual Co-operative Bank to a Massachusetts-Chartered Stock Co-operative Bank

Ladies and Gentlemen:

You have asked for our opinion regarding the material federal income tax consequences of the proposed conversion of Wellesley Bank from a Massachusetts-chartered mutual co-operative bank to a Massachusetts-chartered stock co-operative bank (the “Converted Bank”) and the acquisition of the Converted Bank’s capital stock by Wellesley Bancorp, Inc., a Maryland corporation, pursuant to a plan of conversion initially adopted by the Board of Directors of Wellesley Bank on July 20, 2011 (the “Plan of Conversion”). All capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan of Conversion.

In connection with the opinions expressed below, we have examined and relied upon originals, or copies certified or otherwise identified to our satisfaction, of the Plan of Conversion and of such corporate records of the parties to the conversion as we have deemed appropriate. We have also relied upon, without independent verification, the representations of Wellesley Bank and Wellesley Bancorp, Inc. contained in their letter to us dated as of the date hereof. We have assumed that such representations are true and that the parties to the conversion will act in accordance with the Plan of Conversion. In addition, we have made such investigations of law as we have deemed appropriate to form a basis for the opinions expressed below.

We have assumed that the conversion contemplated by the Plan of Conversion will be consummated in accordance therewith and as described in the prospectus included as part of the Registration Statement on Form S-1 filed by Wellesley Bancorp, Inc.

ATLANTA AUGUSTA CHARLOTTE DENVER DUBAI NEW YORK OAKLAND PALO ALTO RALEIGH SAN DIEGO SAN FRANCISCO SEATTLE STOCKHOLM TAIPEI TOKYO WALNUT CREEK WASHINGTON, DC WINSTON-SALEM

Board of Directors

Wellesley Bancorp, Inc.

Wellesley Bank

                , 2011

Page 2

In issuing the opinions set forth below, we have referred solely to existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations and similar guidance issued by the Internal Revenue Service (the “IRS”) under the Code. Changes in the tax laws could affect the continued validity of the opinions expressed below. Furthermore, there can be no assurance that the opinions expressed herein would be adopted by the IRS or a court of law. We assume no obligation to revise or supplement this opinion should the present federal income tax laws be changed by any legislation, judicial decisions or otherwise.

Based on and subject to the foregoing, it is our opinion that, for federal income tax purposes, under current law:

1. The conversion of Wellesley Bank from the mutual to the stock form of organization will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code (see Rev. Rul. 80-105, 1980-1 C.B. 78), and no gain or loss will be recognized by account holders and no gain or loss will be recognized by Wellesley Bank by reason of such conversion.

2. No gain or loss will be recognized by Wellesley Bancorp, Inc. upon the sale of shares of common stock in the Offering (Section 1032(a) of the Code).

3. No gain or loss will be recognized by account holders of Wellesley Bank upon the issuance to them of accounts in the Converted Bank immediately after the conversion, in the same dollar amounts and on the same terms and conditions as their accounts at Wellesley Bank plus interests in the liquidation account in the Converted Bank (Section 354(a) of the Code).

4. It is more likely than not that the fair market value of the non-transferable subscription rights to purchase shares of common stock of Wellesley Bancorp, Inc. to be issued to Eligible Account Holders and Supplemental Eligible Account Holders is zero (the “Subscription Rights”), and, accordingly, that no income will be realized by Eligible Account Holders and Supplemental Eligible Account Holders upon the issuance to them of Subscription Rights (Section 356(a) of the Code) or upon the exercise of the Subscription Rights (Rev. Rul. 56-572, 1956-2 C.B. 182).

5. It is more likely than not that the tax basis to the holders of shares of common stock purchased in the Offering pursuant to the exercise of Subscription Rights will be the amount paid therefor, and that the holding period for such shares of common stock will begin on the date of completion of the Offering (Section 1223(5) of the Code).

Board of Directors

Wellesley Bancorp, Inc.

Wellesley Bank

                , 2011

Page 2

6. The holding period for shares of common stock purchased in the Community Offering or Syndicated Community Offering will begin on the day after the date of the purchase (Rev. Rul. 70-598, 1970-2 C.B. 168).

The opinions set forth in 4 and 5 above are based on the position that the Subscription Rights do not have any market value at the time of distribution or at the time they are exercised. Whether subscription rights have a market value for federal income tax purposes is a question of fact, depending upon all relevant facts and circumstances. The IRS will not issue rulings on whether subscription rights have a market value. We are unaware of any instance in which the IRS has taken the position that nontransferable subscription rights issued by a converting financial institution have a market value. The subscription rights will be granted at no cost to the recipients, will be nontransferable and of short duration, and will afford the recipients the right only to purchase Wellesley Bancorp, Inc. common stock at a price equal to its estimated fair market value, which will be the same price as the purchase price for the unsubscribed shares of common stock. We believe that it is more likely than not (i.e., that there is a more than a 50% likelihood) that the Subscription Rights have no market value for federal income tax purposes.

Except as set forth above, we express no opinion to any party as to the tax consequences, whether federal, state, local or foreign, of the conversion or of any transaction related thereto or contemplated by the Plan of Conversion. This opinion may not be referred to in any document without our express written consent. We consent to the filing of this opinion as an exhibit to the Application for Conversion filed with the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation and as an exhibit to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission, all filed in connection with the conversion, and to reference to our firm and to this opinion in the prospectus included in both the Registration Statement on Form S-1 and the Application for Conversion under the headings “The Conversion and Stock Offering—Material Income Tax Consequences” and “Legal and Tax Opinions.” In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours, KILPATRICK TOWNSEND & STOCKTON LLP
By:
	Sean P. Kehoe, a Partner

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into this 16th day of May, 2007 (the “Effective Date”), by and between Wellesley Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the “Employer”) and Thomas J. Fontaine, a resident of the Commonwealth of Massachusetts (the “Employee”).

RECITALS:

The Employer employs the Employee, respectively as the President as of the Effective Date of this Agreement. The Employer and the Employee desire to enter into this Employment Agreement on the terms and conditions set forth herein.

In consideration of the above premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

1. Definitions. Whenever used in this Agreement, the following terms and their variant forms shall have the meaning set forth below:

1.1 “Agreement” shall mean this Agreement and any exhibits incorporated herein together with any amendments hereto made in the manner described in this Agreement.

1.2 “Affiliate” shall mean any business entity which controls Employer or is controlled by or is under common control with Employer.

1.3 “Area” shall mean the geographic area within a fifty (50) mile radius of any office or branch of the Bank. It is the express intent of the parties that the Area as defined herein is in the area where the Employee performs services on behalf of the Employer under this Agreement as of the Effective Date.

1.4 “Average Annual Compensation” shall mean the average (mean) W-2 compensation for the highest three (3) years of W-2 compensation.

1.5 “Average Monthly Compensation” shall mean the Average Annual Compensation divided by twelve (12).

1.6 “Bank” shall mean Wellesley Bank or its successor(s).

1.7 “Business of the Employer” shall mean the business conducted by the Employer, which is the business of banking, including the solicitation of time and demand deposits and the making of residential, consumer, commercial and corporate loans.

1.8 “Cause” shall mean:

    1.8.1 With respect to termination by the Employer:

(a) A material breach of the terms of this Agreement by the Employee, including, without limitation, failure by the Employee to perform the Employee’s duties and responsibilities in the manner and to the extent required under this Agreement, which breach remains uncured after the expiration of thirty (30) days following the delivery of written notice of such breach to the Employee by the Employer;

(b) Conduct by the Employee that (i) constitutes fraud, dishonesty, gross malfeasance of duty or conduct grossly inappropriate to the Employee’s office; (ii) the willful violation of any banking law, rule, or banking regulation (other than a traffic violation or similar offense); (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. The Employee shall have been provided with an opportunity to be heard in person by the Board of Directors of Wellesley Bank (with the assistance of counsel, if desired) and, in the event of any such hearing, the decision of the Employer is confirmed by a vote of the membership of the Board of Directors of Wellesley Bank as provided in Section 3.2.1 ;

(c) Conduct resulting in the conviction of the Employee of a felony; or

(d) Conduct by the Employee that results in the permanent removal of the Employee from his position as an officer or employee of Wellesley Bank pursuant to a written order by any regulatory agency with authority or jurisdiction over the Employer.

    1.8.2 With respect to termination by the Employee:

(a) a material diminution in the powers, responsibilities, duties or total compensation of the Employee hereunder by the Employer, which condition remains uncured after the expiration of thirty (30) days following the delivery of written notice of such condition to the Employer by the Employee;

(b) the failure of the Board of Directors of Wellesley Bank to maintain the Employee’s appointment to the office of its President; the failure of the Board of Directors of the Bank to maintain the Employee’s appointment to the office of President, or the office of Chief Executive Officer if so elected after the Effective Date of this Agreement; or the failure of the shareholders of Wellesley Bank to elect Employee as a director of Wellesley Bank;

(c) the Employee’s subsequent termination upon a “Change in Control”; or

2

(d) a material breach of the terms of this Agreement by the Employer, which breach remains uncured after the expiration of thirty (30) days following the delivery of written notice of such breach to the Employer by the Employee.

1.9 “Change in Control” means a change of ownership or control of the Bank as defined in Treasury Regulation Section 1.409A-3(g)(5) or any subsequently applicable Treasury Regulation.

1.10 “Confidential Information” means data and information relating to the Business of the Employer (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Employee or of which the Employee became aware as a consequence of or through the Employee’s relationship to the Employer and which has value to the Employer and is not generally known to its competitors. Without limiting the foregoing, Confidential Information shall include:

(a) all items of information that could be classified as a trade secret pursuant to Massachusetts law;

(b) the names, addresses and banking requirements of the customers of the Employer and the nature and amount of business done with such customers;

(c) the names and addresses of employees and other business contacts of the Employer;

(d) the particular names, methods and procedures utilized by the Employee and the Employer in the conduct and advertising of their business;

( e) application, operating system, communication and other computer software and derivatives thereof, including, without limitation, sources and object codes, flow charts, coding sheets, routines, sub-routing and related documentation and manuals of the Employee and the Employer; and

(f) marketing techniques, purchasing information, pncmg policies, loan policies, quoting procedures, financial information, customer data and other materials or information relating to the Employer’s manner of doing business.

Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Employer (except where such public disclosure has been made by the Employee without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

1.11 “Employer Information” means Confidential Information and Trade Secrets.

1.12 “Permanent Disability” shall mean the Employee: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental

3

impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Employer. Upon the request of the Plan Administrator, the Employee must submit proof to the Plan Administrator of Social Security Administration’s or the provider’s determination.

1.13 “Term” shall mean that period of time commencing on the Effective Date and running until (a) the close of business on the last business day immediately preceding the third (3rd) anniversary.

1.14 “Trade Secrets” means information, without regard to form, including, but not limited to, technical or non-technical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which (a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

2. Duties.

2.1 The Employee is employed as the President of Wellesley Bank, subject to the direction of the Chief Executive Officer and the Board of Directors of the Bank, respectively, or their designee(s). The Employee shall perform and discharge well and faithfully the authority, duties and responsibilities which may be assigned to the Employee from time to time by the Board of Directors of the Employer in connection with the conduct of the Business of the Employer; provided, however, that, in making its assignments, the Board of Directors of the Employer shall assign only such authority, duties and responsibilities assigned to the Employee from time to time as are, in the aggregate, consistent with the duties and responsibilities as would be customarily assigned to a person occupying the positions held by the Employee pursuant to the terms of this Agreement, including, but not limited to, those set forth on Exhibit A attached hereto.

2.2 In addition to the duties and responsibilities specifically assigned to the Employee pursuant to Section 2.1 hereof, the Employee shall:

(a) devote substantially all of the Employee’s time, energy and skill during regular business hours to the performance of the duties of the Employee’s employment (reasonable vacations and reasonable absences due to illness excepted) and faithfully and industriously perform such duties;

4

(b) diligently follow and implement all management policies and decisions communicated to the Employee by the Chief Executive Officer and the Board of Directors of the Bank which are consistent with this Agreement; and

(c) timely prepare and forward to the Board of Directors of the Bank all reports and accounting as may be requested of the Employee.

2.3 The Employee shall devote the Employee’s entire business time, attention and energies to the Business of the Employer and shall not during the term of this Agreement be engaged (whether or not during normal business hours) in any other business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; but this shall not be construed as preventing the Employee from

(a) investing the Employee’s personal assets in businesses which (subject to clause (b) below) are not in competition with the Business of the Employer and which will not require any services on the part of the Employee in their operation or affairs and in which the Employee’s participation is solely that of an investor,

(b) purchasing securities or other interests in any entity provided that such purchase shall not result in the Employee’s collectively owning beneficially at any time five percent (5%) or more of the equity securities of any business in competition with the Business of the Employer; and

(c) participating in, or serving on the boards of, charitable, educational, civic, industry, and professional organizations or affairs, and attending conferences, preparing or publishing papers or books, or teaching, so long as such activities do not conflict with the performance of the Employee’s duties at the Bank.

Notwithstanding anything to the contrary in this Section 2.3, the Employee may serve on the boards of directors of Wellesley Bank and its subsidiaries.

3. Term and Termination.

3.1 Term. This Agreement shall remain in effect for the Term. While this Agreement remains in effect, it shall automatically renew each day after the Effective Date such that the Term remains a three (3) year term from day-to-day thereafter unless any party gives written notice to the others of its or his intent that the automatic renewals shall cease.

3.2 Termination. During the Term, the employment of the Employee under this Agreement may be terminated only as follows:

    3.2.1 By the Employer:

(a) For Cause, following approval of such action by at least seventy- five (75%) of the membership of the Board of Directors of the Bank and only after providing Employee with at least thirty (30) days’ written notice, in which

5

event the Employer shall have no further obligation to the Employee except for the payment of any amounts earned and unpaid as of the effective date of termination and accrued through operation of the Executive Salary Continuation Agreement between Employer and Employee; or

(b) Without Cause at any time, provided that the Employer shall give the Employee sixty (60) days’ prior written notice of its intent to terminate, in which event the Employer shall be required to meet its obligations to the Employee under Section 3.3 below.

    3.2.2 By the Employee:

(a) For Cause, with no prior notice except as provided in Section 1.8.2, in which event the Employer shall be required to meet its obligations to the Employee under Section 3.3 below; or

(b) Without Cause, provided that the Employee shall give the Employer sixty (60) days’ prior written notice of the Employee’s intent to terminate, in which event the Employer shall have no further obligation to the Employee except for payment of any amounts earned and unpaid as of the effective date of the termination and accrued through operation of the Executive Salary Continuation Agreement between Employer and Employee.

    3.2.3 By the Employee within the period commencing three (3) months prior to and ending twelve (12) months after a Change in Control of the Employer (the “Election Period”), provided that the Employee shall give thirty (30) days’ written notice prior to the end of the Election Period to the Employer of the Employee’s intention to terminate this Agreement, in which event the Employer shall be required to meet its obligations to the Employee under Section 3.3 below.

    3.2.4 At any time upon mutual, written agreement of the parties, in which event the Employer shall have no further obligation to the Employee except for the payment of any amounts earned and unpaid as of the effective date of the termination including amounts accrued and unpaid under the Executive Salary Continuation Agreement between Employer and Employee.

    3.2.5 Notwithstanding anything in this Agreement to the contrary, the Term shall expire automatically upon the Employee’s death or Permanent Disability, in which event the Employer shall have no further obligation to the Employee except for the payment of any amounts earned and unpaid as of the effective date of termination and amounts accrued and unpaid under the Executive Salary Continuation Agreement between Employer and Employee, if the reason for termination is the Employee’s Permanent Disability, the Employer shall pay to the Employee as liquidated damages an amount equal to Average Monthly Compensation for each full month following such termination until the later of the month prior to the month for which the Employee’s long-term disability benefits become payable or six (6) full months commencing with the month following the month in which the date of termination occurs.

6

3.3 Termination Payments. In the event the Employee’s employment is terminated under this Agreement prior to the expiration of the Term pursuant Section 3.2.1(b), Section 3.2.2(a) or Section 3.2.3, the Employer shall pay to the Employee as severance pay a lump sum amount equal to the product of (a) Average Monthly Compensation multiplied by (b) the number of months (including partial months) from the effective date of the termination through the then un-expired portion of the Term or, if greater, twelve. In addition, from the effective date of the termination through the then un-expired portion of the Term (or, if greater, for a period of twelve months following the effective date of the termination (the “Severance Period”), the Employer shall pay an amount equal to what would be the Employee’s cost of COBRA health continuation coverage for the Employee and eligible dependents for the greater of the Severance Period or the period during which the Employee and those eligible dependents are entitled to COBRA health continuation coverage from the Employer.

Notwithstanding any other provision of this Agreement to the contrary, if the aggregate of the payments provided for in this Agreement and the other payments and benefits which the Employee has the right to receive from the Employer (the “Total Payments”) would constitute a “parachute payment,” as defined in Section 280G(b)(2) of the Internal Revenue Code, as amended (the “Code”), the Employee shall receive the Total Payments unless the (a) after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee and the amount of any excise taxes payable by the Employee under Section 4999 of the Code that would be payable by the Employee (the “Excise Taxes”)) if the Employee were to receive the Total Payments has a lesser aggregate value than (b) the after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee) if the Employee were to receive the Total Payments reduced to the largest amount as would result in no portion of the Total Payments being subject to Excise Taxes (the “Reduced Payments”), in which case the Employee shall be entitled only to the Reduced Payments. If the Employee is to receive the Reduced Payments, the Employee shall be entitled to determine which of the Total Payments, and the relative portions of each, are to be reduced.

4. Compensation. The Employee shall receive the following salary and benefits during the Term:

4.1 Base Salary. The Employee shall be compensated at a base rate of One Hundred Fifty-Thousand, Sixty-Four Dollars ($150,064.00) per year, which may be increased from time to time in accordance with the immediately succeeding sentence (“Base Salary”). The Employee’s salary shall be reviewed by the Board of Directors of the Bank annually, and the Employee shall be entitled to receive annually an increase in such amount, if any, as may be determined by the Board of Directors of the Bank based upon the performance of the Employer and its compliance with regulatory standards. Such salary shall be payable in accordance with the Employer’s normal payroll practices.

7

4.2 Incentive Compensation.

(a) The Employee shall be eligible for an incentive bonus at the discretion of the Board of Directors subjectively based on the Bank’s performance. Such Incentive Compensation shall be awarded in November of each year.

(b) The Employee shall be eligible to receive a holiday bonus to be paid in December of each year. Such bonus shall be equal to one week’s pay.

(c) The Employee may receive an annual bonus in August of each year, to be approved annually by the Audit Committee of the Board, subject to the Employer’s profitability. The award of said annual bonus is discretionary but shall be a fixed amount of Ten Thousand and 00/100th Dollars ($10,000.00).

4.3 Benefits. The Employee shall be entitled to such benefits as may be available from time to time for senior executives of the Employer similarly situated to the Employee. All such benefits shall be awarded and administered in accordance with the Employer’s standard policies and practices. Such benefits may include, by way of example only, profit sharing plans, retirement or investment funds, dental, health and life insurance benefits and such other benefits as the Employer deems appropriate. In addition, after retirement of the Employee at the end of the term of this Agreement, the Employer will pay premiums for individual medical insurance coverage, consistent with coverage offered to single salaried employees, for the Employee’s spouse until she shall be eligible for Medicare benefits.

4.4 Deferred Compensation and Split Dollar Program. The Employee shall be entitled to participate in the Split Dollar Insurance Program of the Employer in existence at the Effective Date hereof, and in future deferred compensation or split dollar programs proposed by the Governance Committee and approved by the Board of Directors of the Bank.

4.5 Automobile. On the Effective Date the Employer shall make available to the Employee, a bank owned vehicle for unrestricted business and personal use as well as expenses related to maintenance, fuel and upkeep of said vehicle. On the date of the Employee’s retirement or termination other than by the Employer for Cause pursuant to Section 1.8.1, the Employer shall transfer the title and ownership of the vehicle in use to the Employee and shall make federal and state withholding tax deposits for the quarter on behalf of the Employee in amounts calculated as the Tax Gross-up pursuant to this Section. The Tax Gross-up shall be calculated by first determining the fair value of the vehicle at the date of transfer. This fair value will be divided by the Tax % and the fair value will then be subtracted for the result to determine the Tax Gross-up to be deposited. The Tax % will be the result of subtracting the sum of the Employee’s marginal tax rates for federal and state income taxes, employee Medicare tax, and, if applicable, employee Social Security tax from 100.0%.

8

4.6 Business Expenses. The Employer shall reimburse the Employee for reasonable business (including travel) expenses incurred by the Employee in performance of the Employee’s duties hereunder; provided, however, that the Employee shall, as a condition of reimbursement, submit verification of the nature and amount of such expenses in accordance with reimbursement policies from time to time adopted by the Employer and in sufficient detail to comply with rules and regulations promulgated by the Internal Revenue Service.

4.7 Professional Associations. The Employee shall be entitled to attend such courses, conferences and seminars of his selection at the Employer’s expense, including the cost of spouse accompanied travel when deemed appropriate by the Board, provided that the Employer shall only be required to cover reasonable expenses associated with the Employee’s attendance at such courses, conferences and seminars that are incurred consistent with the Employer’s budget operating plan and policies then in effect.

4.8 Worksite Location. The Employee shall maintain an office in the Employer’s executive offices. The Employee shall be present at such office on a reasonable basis.

4.9 Vacation. On a non-cumulative basis the Employee shall be entitled to a minimum of four (4) weeks of vacation annually, during which the Employee’s compensation shall be paid in full.

4.10 Withholding. The Employer may deduct from each payment of compensation hereunder all amounts required to be deducted and withheld in accordance with applicable federal and state income tax, FICA and other withholding requirements.

5. Employer Information.

5.1 Ownership of Information. All Employer Information received or developed by the Employee while employed by the Employer will remain the sole and exclusive property of the Employer.

5.2 Obligations of the Employee. The Employee agrees (a) to hold Employer Information in strictest confidence, and (b) not to use, duplicate, reproduce, distribute, disclose or otherwise disseminate Employer Information or any physical embodiments thereof and may in no event take any action causing or fail to take any action necessary in order to prevent any Employer Information from losing its character or ceasing to qualify as Confidential Information or a Trade Secret. In the event that the Employee is required by law to disclose any Employer Information, the Employee will not make such disclosure unless (and then only to the extent that) the Employee has been advised by independent legal counsel that such disclosure is required by law and then only after prior written notice is given to the Employer when the Employee becomes aware that such disclosure has been requested and is required by law. This Section 5 shall survive for a period of twelve (12) months following termination of this Agreement with respect to Confidential Information, and shall survive termination of this Agreement for so long as is permitted by the then-current Trade Secret statute as defined in M.G.L. Ch. 266, § 30(4).

9

5.3 Delivery upon Request or Termination. Upon request by the Employer, and in any event upon termination of the Employee’s employment with the Employer, the Employee will promptly deliver to the Employer all property belonging to the Bank, including without limitation all Employer Information then in the Employee’s possession or control.

6. Non-Competition. The Employee agrees that during his employment by the Employer hereunder and, in the event of his termination other than by the Employer without Cause pursuant to Section 3.2.l(b), by the Employee for Cause pursuant to Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for a period of twelve (12) months thereafter, the Employee will not (except on behalf of or with the prior written consent of the Employer), within the Area, either directly or indirectly, on his own behalf or in the service or on behalf of others, as an executive employee or in any other capacity which involves duties and responsibilities similar to those undertaken for the Employer, engage in any business which is the same as or essentially the same as the Business of the Employer.

7. Non-Solicitation of Customers. The Employee agrees that during the Employee’s employment by the Employer hereunder and, in the event of Employee’s termination other than by the Employer without Cause pursuant to Section 3.2.1(b), by the Employee for Cause pursuant to Section 3.2.2(a), or by Employee pursuant to Section 3.2.3, for a period of twelve (12) months thereafter, the Employee will not (except on behalf of or with the prior written consent of Employer), on Employee’s own behalf or in the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or appropriate, directly or by assisting others, any business from any of the Bank’s customers, including actively sought prospective customers, with whom Employee has or had material contact during the last two years of Employee’s employment, for purposes of providing products or services that are competitive with those provided by the Bank.

8. Non-Solicitation of Employees. The Employee agrees that during the Employee’s employment by the Employer hereunder and, in the event of the Employee’s termination other than by the Employer without Cause pursuant to Section 3.2.1 (b), by the Employee for Cause pursuant to Section 3.2.3(a), or by the Employee pursuant to Section 3.2.3, for a period of twelve (12) months thereafter, the Employee will not on the Employee’s own behalf or in the service or on behalf of others, solicit, recruit or hire away or attempt to solicit, recruit or hire away, directly or by assisting others, any employee of the Bank or its Affiliates, whether or not such employee is a full-time employee or a temporary employee of the Bank or its Affiliates and whether or not such employment is pursuant to written agreement and whether or not such employment is for a determined period or is at will.

9. Remedies. The Employee agrees that the covenants contained in Sections 5 through 8 hereof are of the essence of this Agreement; that each of the covenants is reasonable and necessary to protect the business, interests and properties of the Employer; and that irreparable loss and damage will be suffered by the Employer should he breach any of the covenants. Therefore, the Employee agrees and consents that, in addition to all the remedies provided by law or in equity, the Employer shall be entitled to a temporary

10

restraining order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of the covenants. The Employer and the Employee agree that all remedies available to the Employer or the Employee, as applicable, shall be cumulative. In addition, in the event the Employee fails to comply with any of the covenants contained in Section 5 hereof and such failure shall not be cured to the reasonable satisfaction of the Employer within thirty (30) days after receipt of written notice thereof from the Employer, the Employer shall thereupon be relieved of liability for all obligations then remaining under Section 3.3 hereof.

10. Severability. The parties agree that each of the provisions included in this Agreement is separate, distinct and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any Agreement provision shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision shall be redrawn to make the provision consistent with and valid and enforceable under the law or public policy.

11. No Set-Off by the Employee. The existence of any claim, demand, action or cause of action by the Employee against the Bank, or any Affiliate of the Bank, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employer of any of its rights hereunder.

12. Notice. All notices and other communications required or permitted under this Agreement shall be in writing and, if mailed by prepaid first-class mail or certified mail, return receipt requested, shall be deemed to have been received on the earlier of the date shown on the receipt or three (3) business days after the postmarked date thereof. In addition, notices hereunder may be delivered by hand, facsimile transmission or overnight courier, in which event the notice shall be deemed effective when delivered or transmitted. All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses:

(a) If to the Employer at:

Wellesley Bank

Attention: Edwin G. Silver

40 Central Street

Wellesley, MA 02482

(b) If to the Employee at:

Thomas J. Fontaine

11 Shelley Road

Wellesley, MA 02481

13. Assignment. Neither party hereto may assign or delegate this Agreement or any of its rights and obligations hereunder without the written consent of the other party hereto; provided, however, that this Agreement shall be assumed by and shall be binding upon any successor to the Employer.

11

14. Waiver. A waiver by the Employer of any breach of this Agreement by the Employee shall not be effective unless in writing, and no waiver shall operate or be construed as a waiver of the same or another breach on a subsequent occasion.

15. Arbitration. Except for any claim for injunctive relief, any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Employer and the Employee agree that they will seek to enforce any arbitration award in the Superior Court of Norfolk County. The decision of the arbitration panel shall be final and binding upon the parties and judgment upon the award rendered by the arbitration panel may be entered by any court having jurisdiction. The Employer and the Employee agree to share equally the fees and expenses associated with the arbitration proceedings. Employee must initial here: TJF

16. Attorneys’ Fees. With respect to arbitration of disputes and if litigation ensues between the parties concerning the enforcement of an arbitration award, each party shall pay its own fees, costs and expenses; provided, however, the Employer shall advance to the Employee reasonable fees, costs and expenses incurred by the Employee in preparing for and in initiating or defending against any proceeding or suit brought to enforce rights or obligations set forth in this Agreement. Such advances shall be made within thirty (30) days after receiving copies of invoices presented by the Employee for such fees, costs and expenses. The Employee shall have the obligation to reimburse the Employer within sixty (60) days following the final disposition of the matter (including appeals) to the full extent of the aggregate advances unless the panel of arbitrators or court, as the case may be, has ruled in favor of the Employee on the merits of the substantive issues in dispute.

17. Applicable Law. This Agreement shall be construed and enforced under and in accordance with the laws of the Commonwealth of Massachusetts. The parties agree that the Superior Court of Norfolk County, Massachusetts, shall have jurisdiction of any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy. The parties consent to the jurisdiction of such courts.

18. Interpretation. Words importing any gender include all genders. Words importing the singular form shall include the plural, and vice versa. The terms “herein,” “hereunder,” “hereby, “hereto, “hereof and any similar terms refer to this Agreement. Any captions, titles or headings preceding the text of any article, section or subsection herein are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction or effect.

19. Entire Agreement. This Agreement embodies the entire and final agreement of the parties on the subject matter stated in the Agreement. No amendment or modification of this Agreement shall be valid or binding upon the Employer or the Employee unless made in writing and signed by both parties. All prior understandings and agreements relating to the subject matter of this Agreement are hereby expressly terminated;

12

provided, however, that this Agreement shall not alter, limit or otherwise impair the Employee’s rights under his existing defined contribution index retirement plan implemented by (Bank Name), the Employee’s personal disability policy or under any tax-qualified retirement plan in which the Employee is or may become a participant.

20. Rights of Third Parties. Nothing herein expressed is intended to or shall be construed to confer upon or give to any person, firm or other entity, other than the parties hereto and their permitted assigns, any rights or remedies under or by reason of this Agreement.

21. Survival. The obligations of the Employer pursuant to Sections 3.2.5 and 3.3 and the obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 shall survive the termination of the employment of the Employee hereunder for the period designated under each of those respective sections.

IN WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement in accordance with the provisions hereof.

EMPLOYER: Wellesley Bank, by Bank Representative:

Clerk            

Theodore F. Parker,

Date: 16 May 2007

ATTEST:

Date: 16 May 2007

EMPLOYEE: Thomas J. Fontaine

Date: 16 May 2007

ATTEST:

Date: 16 May 2007

13

Exhibit A

Duties of the Employee

Foster a corporate culture that promotes ethical practices, encourages individual integrity, fulfills social responsibility, and is conducive to attracting, retaining and motivating a diverse group of top-quality employees at all levels.

Work with the Chief Executive Officer and the Board of Directors of the Employer to develop a long-term strategy for the Employer.

Use best efforts to achieve the Employer’s financial and operating goals and objectives.

Direct and participate the lending efforts of the Employer and promote success therein.

Perform such duties as are required by federal and Massachusetts laws and regulations and by the policy of the Employer.

Report to the Chief Executive Officer of the Employer and perform such legal and ethical duties as delegated.

Serve on the Board of Directors of Wellesley Securities Corporation and the Employer.

Assist with strategic planning and goal development and assist in any merger and acquisition activities as directed by the Chief Executive Officer and the Board of Directors.

Identify traditional; and non-traditional opportunities on behalf of the Employer.

Maintain relations with other banks and peers.

Participate in local civic, professional, educational, and charitable organizations to promote the success of the bank and its community based image.

14

EX-10.2

Exhibit 10.2

FORM OF

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of [DATE], by and among WELLESLEY BANCORP, INC., (the “Corporation”), WELLESLEY BANK, a wholly-owned subsidiary of the Corporation (the “Bank”), and THOMAS J. FONTAINE (the “Executive”). The Corporation and the Bank are sometimes referred to in this Agreement individually and together as the “Employer,” or “Employers.”

WHEREAS, the Executive serves in position of substantial responsibility with the Corporation and the Bank;

WHEREAS, the Executive and the Bank previously entered into an employment agreement as of May 16, 2007;

WHEREAS, the Executive and the Bank wish to make certain changes to the existing agreement and the Executive and the Corporation wish to enter into an employment agreement to set forth the terms of the Executive’s continued employment in these positions;

WHEREAS, the Executive is willing and desires to serve in these positions with the Corporation and the Bank.

NOW, THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Employer hereby employs the Executive to serve as President and Chief Executive Officer of each of the Corporation and the Bank according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Duties. As President and Chief Executive Officer, the Executive shall perform all duties and have all powers associated with these positions, as set forth in any job description provided to the Executive by the Bank and the Corporation and as set forth on Exhibit A to this Agreement. The duties and responsibilities assigned to the Executives by the boards of directors shall be consistent with the duties and responsibilities as would be customarily assigned to a person occupying the positions held by the Executive pursuant to the terms of this Agreement. The Executive shall serve under the directions of the boards of directors. The Executive shall report directly to the boards of directors. The Executive shall serve the Employers faithfully, diligently, competently, and to the best of the Executive’s ability. The Executive shall exclusively devote full working time, energy, and attention to the business of the Employers and to the promotion of the interests of the Employers throughout the term of this Agreement. Without the prior written consent of the board of directors of each of the Corporation and the Bank, during the term of this Agreement the Executive shall not render services to or for any person, firm, corporation, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and regardless of whether it is paid directly or indirectly to the Executive. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The period of Executive’s employment under this Agreement shall be deemed to have commenced as of the date first above written and shall continue for a period of thirty-six (36) full calendar months thereafter. Commencing on the date of the execution of this Agreement, the term of this Agreement shall be extended for one day each day until such time as the boards of directors or the Executive elects not to extend the term of the Agreement by giving proper written notice to the other party, in which case the term of this Agreement shall be fixed and shall end on the third anniversary of the date of such written notice.

(b) During the period of Executive’s employment hereunder, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, Executive shall devote substantially all his business time, attention, skill, and efforts to the faithful performance of his duties hereunder, including activities and services related to the organization, operation and management of the Holding Company and its direct or indirect subsidiaries (“Subsidiaries”) and participation in community, professional and civic organizations; provided, however, that, with the approval of the Board, as evidenced by a resolution of such Board, from time to time, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, companies or organizations, which, in such Board’s judgment, will not present any conflict of interest with the Holding Company or its Subsidiaries, or materially affect the performance of Executive’s duties pursuant to this Agreement.

(c) Notwithstanding anything herein contained to the contrary, Executive’s employment with the Holding Company may be terminated by the Holding Company or Executive during the term of this Agreement, subject to the terms and conditions of this Agreement. However, Executive shall not perform, in any respect, directly or indirectly, during the pendency of his temporary or permanent suspension or termination from the Institution, duties and responsibilities formerly performed at the Institution as part of his duties and responsibilities as President and Chief Executive Officer of the Holding Company.

1.4 Service on the Boards of Directors. The Executive serves as a member of the board of directors each of the Corporation and the Bank. The board of directors of each of the Corporation and the Bank shall undertake every lawful effort to ensure that the Executive continues throughout the term of his employment to be elected or reelected as a director of the Corporation and the Bank. Notwithstanding anything in this Agreement to the contrary, unless otherwise agreed to by the parties, the Executive shall be deemed to have resigned as a director of each of the Corporation and the Bank effective immediately after termination of the Executive’s employment under Article 3 of this Agreement, regardless of whether the Executive submits a formal, written resignation as director.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary. In consideration of the Executive’s performance of the obligations under this Agreement, the Employer shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $[AMOUNT], payable according to the regular payroll practices of the Employer. The Executive’s salary shall be subject to annual review. The Executive’s salary, as the same may be modified from time to time, is referred to in this Agreement as the “Base Salary.” All compensation under this Agreement shall be subject to customary income tax withholding and such other employment taxes as are imposed by law.

2

2.2 Incentive Compensation.

(a) The Executive shall be eligible for an incentive bonus at the discretion of the Board of Directors of the Bank, subjectively based on the Bank’s performance. Such incentive compensation shall be awarded in November of each year.

(b) The Executive shall be eligible to receive a holiday bonus to be paid in December of each year. Such bonus shall be equal to one week’s pay.

(c) The Executive may receive an annual bonus in August of each year, to be approved annually by the Audit Committee of the board of Directors of the Bank, subject to the Employer’s profitability. The award of said bonus is discretionary but shall be a fixed about of Ten Thousand Dollars ($10,000.00).

2.3 Benefit Plans and Perquisites. For as long as the Executive is employed by the Employer, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including stock-based compensation, incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any the plans or benefits, and (y) to receive any and all fringe and other benefits provided from time to time, including the specific items described in (a)-(f) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Employers and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Employer’s policies and procedures.

(b) Automobile. The Employer shall provide the Executive with, and the Executive shall have the primary use of, an automobile owned or leased by the Employer. The Employer shall pay (or reimburse the Executive) for all expenses of insurance, registration, operation and maintenance of the automobile. The Executive shall comply with reasonable reporting and expense limitations on the use of such automobile, as the Employer may establish from time to time, and the Employer shall annually include on the Executive’s Form W-2 any amount attributable to the Executive’s personal use of such automobile. In addition, on the date of the Executive’s retirement or termination other than for Cause, the Employer shall transfer the title and ownership of the vehicle in use to the Executive and shall make federal and state withholding tax deposits for the quarter on behalf of the Executive in amounts calculated as the “Tax Gross-Up” pursuant to this Section 2.2(b). The Tax Gross-Up shall be calculated by first determining the fair value of the vehicle at the date of transfer. This fair value will be divided by the “Tax %” and the fair value will then be subtracted for the result to determine the Tax Gross-Up to be deposited. The Tax % will be the result of subtracting the sum of the Executive’s marginal tax rates for federal and state income taxes, employee Medicare tax, and, if applicable, employee Social Security tax from 100.0%

(c) Deferred Compensation and Split Dollar Program. The Executive shall be entitled to participate in the Split Dollar Insurance Program of the Bank in existence at the Effective Date hereof, and in future deferred compensation or split dollar programs proposed by the Governance Committee and approved by the boards of directors.

3

(d) Professional Associations. The Executive shall be entitled to attend such courses, conferences and seminars of his selection at the Employer’s expense, including the cost of spouse accompanied travel when deemed appropriate by the boards of directors, provided that the Employer shall only be required to cover reasonable expense associated with the Executive’s attendance at such courses, conferences and seminars that are incurred consistent with the Employer’s budget operating plan and policies then in effect.

(e) Facilities. The Employer will furnish the Executive with the working facilities and staff customary for executive officers with comparable titles and duties of the Executive as set forth in Sections 1.1 and 1.2 of this Agreement and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Corporation, or at such other site or sites customary for such offices.

2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual vacation in accordance with policies established from time to time by the Employer. In addition to paid vacations (of no less than four (4) weeks on a non-cumulative basis) and other leave, the boards of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the boards of directors may determine.

2.4 Insurance. The Employer shall maintain or cause to be maintained liability insurance covering the Executive throughout the term of this Agreement.

ARTICLE 3

EMPLOYMENT TERMINATION

3.1 Termination Because of Death.

(a) Death. The Executive’s employment and this Agreement shall terminate automatically at the Executive’s death. If the Executive dies in active service to the Employer, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the date his death occurred.

(b) Disability. By delivery of written notice thirty (30) days in advance to the Executive, the Employer may terminate the Executive’s employment and this Agreement if the Executive is disabled and the Executive shall receive any sums due to him as Base Salary and reimbursement of expenses through the date of his termination. The Employer shall also pay to the Executive an amount equal to Average Monthly Compensation (as defined for purposes of Section 4.1 of this Agreement) for each full month following such termination until the later of the month prior to the month for which the Executive’s long-term disability benefits become payable or six (6) months commencing with the month following the month in which the date of termination occurs. For purposes of this Agreement, the Executive shall be considered disabled if: (i) he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) he is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not les than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer. Medical determination of a disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Employer. Upon the request of the Employer, the Executive must submit proof of the Social Security Administration’s or the provider’s determination. The Executive shall not be considered disabled,

4

however, if the Executive returns to work on a full-time basis within thirty (30) days after the Employer gives notice of termination due to disability. If the Executive is terminated by either of the Corporation or the Bank because of disability, the Executive’s employment with the other shall also terminate at the same time. During the period of incapacity leading up to the termination of the Executive’s employment under this provision, the Employer shall continue to pay the full Base Salary at the rate then in effect and all perquisites and other benefits (other than bonus) until the Executive becomes eligible for benefits under any disability plan or insurance program maintained by the Employer, provided that the amount of the payments by the Employer to the Executive under this Section 3.1(b) shall be reduced by the sum of the amounts, if any, payable to the Executive for the same period under any disability benefit or pension plan covering the Executive.

3.2 Involuntary Termination with Cause. The Employer may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses to which the Executive is entitled when termination becomes effective. If the Executive is terminated for Cause by either of the Corporation or the Bank, the Executive shall be deemed also to have been terminated for Cause by the other. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if and only if it is adopted by the affirmative vote of 75% of the directors of the Corporation then in office or a majority of the directors of the Bank then in office, in either case excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of personal dishonesty in performing Executive’s duties on behalf of the Employers;

(2) a willful misconduct that in the judgment of the boards of directors will likely cause economic damage to the Employers or their affiliates or injury to the business reputation of the Employers or their affiliates;

(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors if such failure is not cured within thirty (30) days of such notice;

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Company or the Association or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order;

(6) a material breach by the Executive of any provision of this Agreement.

5

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Company.

3.3 Voluntary Termination by the Executive Without Good Reason. If the Executive terminates employment without Good Reason, the Executive shall receive the Base Salary and expense reimbursement to which the Executive is entitled through the date on which termination becomes effective. The Executive must provide the Employers with sixty (60) days notice of termination under this provision.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least sixty (60) days in advance, the Employer may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Employer as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s written consent:

(1) a material diminution of the Executive’s Base Salary;

(2) a material diminution of the Executive’s authority, duties, or responsibilities;

(3) a change in the Executive’s reporting responsibilities so that the Executive reports to an officer or employee instead of reporting directly to the board of directors or the failure re-elected the Executive to the board of directors;

(4) any other action or inaction that constitutes a material breach by the Employer under this Agreement.

(y) the Executive must give notice to the Employer of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Employer shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Executive shall receive a lump sum payment, within ten (10) business days of his termination, equal to the product of his (i)

6

Average Monthly Compensation multiplied by (ii) the number of months (including partial months) from the effective date of his termination through the then unexpired term of the Agreement or, if greater, twelve (12). In addition, from the effective date of the termination through the then un-expired portion of the term of the Agreement (or, if greater, for a period of twelve months following the effective date of the termination (the “Severance Period”), the Employer shall pay an amount equal to what would be the Executive’s cost of COBRA health continuation coverage for the Executive and eligible dependents for the greater of the Severance Period or the period during which the Executive and those eligible dependents are entitled to COBRA health continuation coverage from the Employer. However, the Employer and the Executive acknowledge and agree that the compensation and benefits under this Section 4.1 shall not be payable if compensation and benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement. For purposes of this Section 4.1, the terms “Average Monthly Compensation” means the highest amount of the Executive’s compensation reported in Box 5 on Form W-2 for three years divided by 12.

(b) If when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the payment, to the extent or amount necessary, will be made to the Executive without interest on the first business day of the seventh (7^th) month after the month in which the Executive’s employment terminates. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and (i) thereafter during the term of the Agreement, the Executive’s employment terminates involuntarily but without Cause or (ii) if the Executive voluntarily terminates employment with Good Reason or (iii) the Executive voluntarily terminates employment for any reason, upon thirty (30) days notice, within the period commencing ninety (90) days prior to the Change in Control and ending twelve (12) months following the Change in Control, the Executive shall receive a lump sum payment, within ten (10) business days of his termination, equal to the product of his (i) Average Monthly Compensation multiplied by (ii) the number of months (including partial months) from the effective date of his termination through the then unexpired term of the Agreement or, if greater, twelve (12). In addition, from the effective date of the termination through the then un-expired portion of the term of the Agreement (or, if greater, for a period of twelve months following the effective date of the termination (the “Severance Period”), the Employer shall pay an amount equal to what would be the Executive’s cost of COBRA health continuation coverage for the Executive and eligible dependents for the greater of the Severance Period or the period during which the Executive and those eligible dependents are entitled to COBRA health continuation coverage from the Employer. However, the Employer and the Executive acknowledge and agree that the compensation and benefits under this Section 5.1 shall not be payable if compensation and benefits are payable or shall have been paid to the Executive under Article 4 of this Agreement. For purposes of this Section 5.1, the terms “Average Monthly Compensation” means the highest amount of the Executive’s compensation reported in Box 5 on Form W-2 for three years divided by 12. If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition, the Employer shall provide the Executive and his dependents with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

7

5.2 Change in Control Defined. For purposes of this Agreement “Change in Control” means a change in control as defined in Section 409A of the Code and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including:

(a) Change in ownership: a change in ownership of the Corporation occurs on the date any one person or group accumulates ownership of Corporation stock constituting more than 50% of the total fair market value or total voting power of Corporation stock,

(b) Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Corporation’s board of directors, or

(c) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the Corporation’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of the Corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

5.3 Potential Limitation of Benefits Under Certain Circumstances. Notwithstanding any other provisions of this Agreement, in the event that (x) the aggregate payments or benefits to be made or afforded to the Executive under this Agreement or otherwise, which are deemed to be parachute payments as defined in Section 280G of the Code or any successor thereof, (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code; and (y) if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to three (3) times the Executive’s “base amount,” as determined in accordance with Section 280G of the Code and the Non-Triggering Amount less the product of the marginal rate of any applicable state and federal income tax and the Non-Triggering Amount would be greater than the aggregate value of the Termination Benefits (without such reduction) minus (1) the amount of tax required to be paid by the Executive thereon by Section 4999 of the Code and further minus (2) the product of the Termination Benefits and the marginal rate of any applicable state and federal income tax, then the Termination Benefits shall be reduced to the Non-Triggering Amount. The allocation of the reduction required hereby among the Termination Benefits shall be determined by the Executive. The Corporation’s independent public accountants or another independent firm will determine the value of any reduction in the payments and benefits; the Employer will pay for the accountants’ opinion. If the Employer and/or the Executive do not agree with the accountants’ opinion, the Employer will pay to the Executive the maximum amount of payments and benefits pursuant to Section 5 of this Agreement or otherwise, as selected by the Executive, that the opinion indicates have a high probability of not causing any of the payments and benefits to be non-deductible and subject to the excise tax imposed under Section 4999 of the Code. Nothing contained in this Agreement shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination of employment other than pursuant to Section 5 hereof, or a reduction in the payments and benefits specified, below zero.

ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm,

8

or corporation any confidential information of any nature concerning the Employer or its business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the Employer’s and the Employer’s affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Massachusetts. This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Employer upon request of the Employer, upon termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Employer or prepared by the Executive in connection with the Executive’s services hereunder and to immediately delete all electronically stored data of the Employer maintained on the Executive’s personal computers and to return all Employer-provided computers or communication devices. The Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Employer. The Executive hereby assigns to the Employer all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” of the Employer includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Corporation or the Bank. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Employer if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Employer institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Employer, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Employer’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

9

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Employer (including an individual who was an officer or employee of the Employer during the one year period following the Executive’s termination) for one year after the Executive’s employment termination, other than a termination by the Employer without Cause or termination by the Executive for Good Reason.

7.2 Covenant Not to Solicit Customers. The Executive agrees not to, directly or indirectly (without the written consent of the Employer) on his own behalf or in the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or appropriate, directly or by assisting others, any business from any of the Employers’ customers (or the customers of any affiliate of the Employers), including actively sought prospective customers, with whom the Executive has or had material contact during the last two years of the Executive’s employment, for purposes of providing products or services that are competitive with those provided by the Employers, for one year after the Executive’s employment termination, other than a termination by the Employer without Cause or termination by the Executive for Good Reason.

7.3 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Employer for one year after employment termination, other than a termination by the Employer without Cause or a termination by the Executive for Good Reason. For purposes of this Section 7.3:

(1) the term compete means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Employer at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words directly or indirectly mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Employer in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Employer when the Executive’s employment terminated.

(3) the term customer means any person to whom the Employer is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

10

(4) the term financial institution means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Employer or any of its affiliated corporations.

(5) financial product or service means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Employer or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term person means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term territory means the geographic area within a fifty (50) miles radius of any office or branch of the Bank.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Employer’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that the Employer would not have entered into this Agreement without such covenants in force.

7.4 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Employer would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Employer’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Employer to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Employer from pursuing any other or additional remedies for the breach or threatened breach.

7.5 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

11

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Employers and any successor to the Employers, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Employers by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Employers’ obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Employer. By agreement in form and substance satisfactory to the Executive, the Employers shall require any successor to all or substantially all of the business or assets of the Employers expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Employers would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, the Employer shall have no liability to pay any amount to the assignee or transferee.

8.2 Arbitration. Except for any claim for injunctive relief, any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Employer and the Executive agree that they will seek to enforce any arbitration award in the Superior Court of Norfolk County. The decision of the arbitration panel shall be final and biding upon the parties and judgment upon the award rendered by the arbitration panel may be entered by any court having jurisdiction. The Employer and the Executive agree to share equally the fees and expenses associated with the arbitration proceedings. The Executive must initial here:             

8.3 Attorneys’ Fees. With respect to arbitration of disputes and litigation ensues between the parties concerning the enforcement of an arbitration award, each party shall pay its own fees, costs and expenses; provided, however, the Employer shall advance to the Executive reasonable fees, costs and expenses incurred by the Executive in preparing for and in initiating or defending against any proceeding or suit brought to enforce rights or obligations set forth in this Agreement. Such advances shall be made within thirty (30) days after receiving copies of invoices presented by the Executive for such fees, costs and expenses. The Executive shall have the obligation to reimburse the Employer within sixty (60) days following the final disposition of the matter (including appeals) to the full extent of the aggregate advances unless the panel of arbitrators or court, as the case may be, has ruled in favor of the Executive on the merits of the substantive issues in dispute.

8.4 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Massachusetts, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Norfolk County, Massachusetts.

12

8.5 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Employer. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement, including the agreement with the Bank, dated May 16, 2007, are hereby rescinded, revoked, and rendered null and void by the parties.

8.6 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the board of directors of the Corporation and the Bank at the Bank’s executive offices.

8.7 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.8 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.9 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Articles 6 and 7 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

8.10 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.11 Compliance with Internal Revenue Code Section 409A. The Employer and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, such provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Employer shall reform the provision. However, the Employer shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Employer shall not be required to incur any additional compensation expense as a result of the reformed provision.

13

8.12 Regulatory Requirements.

(a) If the Executive is removed and/or permanently prohibited from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Employer under this Agreement shall terminate, as of the effective date of such order, except for the payment of Annual Base Salary due and owing under Section 3.1 on the effective date of said order, and reimbursement under Section 3.5 of expenses incurred as of the effective date of termination.

(b) If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Employer under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer shall reinstate (in whole or in part) any of its obligations which were suspended.

(c) If the Employer is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but the vested rights of the parties shall not be affected.

(d) All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the contract is necessary for the continued operation of the Employer (1) by the director of the Federal Deposit Insurance Corporation (the “FDIC”) or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Section 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of the Employer when the Employer is determined by the Director to be in an unsafe and unsound condition. Any rights of the Executive that have already vested, however, shall not be affected by such action.

(e) All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.

(f) Notwithstanding anything contained in this Agreement to the contrary, no payments shall be made pursuant any provision herein in contravention of the requirements of the Federal Deposit Insurance Act (12 U.S.C. 1828(k)).

[signature page to follow]

14

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

WELLESLEY BANCORP, INC.

For the Board of Directors

WELLESLEY BANK

For the Board of Directors

Thomas J. Fontaine

15

EX-10.3

Exhibit 10.3

AMENDED AND RESTATED EXECUTIVE SALARY

CONTINUATION AGREEMENT

THIS AGREEMENT, made and entered into this 17^th day of October, 2007, by and between Wellesley Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the “Bank”), and Thomas J. Fontaine, an Executive of the Bank (hereinafter referred to as the “Executive”), a member of a select group of management and highly compensated employees of the Bank shall amend and restate the Executive Salary Continuation Agreement effective June 1, 2007.

WHEREAS, the Executive has been and continues to be a valued Executive of the Bank;

WHEREAS, the purpose of this Agreement is to further the growth and development of the Bank by providing the Executive with supplemental retirement income, and thereby encourage the Executive’s productive efforts on behalf of the Bank and the Bank’s depositors, and to align the interests of the Executive and those depositors.

WHEREAS, it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to make certain payments to the Executive at retirement or the Executive’s Beneficiary in the event of the Executive’s death pursuant to this Agreement;

ACCORDINGLY, it is intended that the Agreement be “unfunded” for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and not be construed to provide income to the participant or Beneficiary under the Internal Revenue Code of 1986, as amended (the “Code”), particularly Section 409A of the Code and guidance or regulations issued thereunder, prior to actual receipt of benefits; and

THEREFORE, it is agreed as follows:

I. EFFECTIVE DATE

The Effective Date of this Agreement shall be June 1,2007.

II. FRINGE BENEFITS

The salary continuation benefits provided by this Agreement are granted by the Bank as a fringe benefit to the Executive and are not part of any salary reduction plan or an arrangement deferring a bonus or a salary increase. The Executive has no option to take any current payment or bonus in lieu of these salary continuation benefits except as set forth hereinafter.

III. DEFINITIONS

A. Beneficiary:

The Executive shall have the right to name a Beneficiary of the Death Benefit. The Executive shall have the right to name such Beneficiary at any time prior to the Executive’s death and submit it to the Plan Administrator (or Plan Administrator’s representative) on the form provided. Once received and acknowledged by the Plan Administrator, the form shall be effective. The Executive may change a Beneficiary designation at any time by submitting a new form to the Plan Administrator. Any such change shall follow the same rules as for the original Beneficiary designation and shall automatically supersede the existing Beneficiary form on file with the Plan Administrator.

If the Executive dies without a valid Beneficiary designation on file with the Plan Administrator, death benefits shall be paid to the Executive’s estate.

If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount.

B. Change in Control:

“Change in Control” shall mean a change in ownership or control of the Bank as defined in Treasury Regulation Section 1.409A-3(i)(5) or any subsequently applicable Treasury Regulation. The formation of a mutual holding company shall not constitute a Change in Control event.

C. Discharge For Cause:

The term “For Cause” shall mean any of the following that result in an adverse effect on the Bank: (i) the commission of a felony or gross misdemeanor involving fraud or dishonesty; (ii) the willful violation of any banking law, rule, or banking regulation (other than a traffic violation or similar offense); (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. If a dispute arises

2

as to discharge “For Cause,” such dispute shall be resolved by arbitration as set forth in this Agreement. In the alternative, if the Executive is permitted to resign due to inappropriate conduct as defined above, the Board of Directors may vote to deny all benefits. A majority decision by the Board of Directors is required for forfeiture of the Executive’s benefits.

D. Plan Year:

Any reference to “Plan Year” shall mean a calendar year from January 1^st to December 31^st. In the year of implementation, the term “Plan Year” shall mean the period from the Effective Date to December 31^st of the year of the Effective Date.

E. Restriction on Timing of Distribution:

Notwithstanding any provision of this Agreement to the contrary, distributions to the Executive may not commence earlier than six (6) months after the date of a Separation from Service, as that term is used under Section 409A if, pursuant to Internal Revenue Code Section 409A, the Executive is considered a “specified employee” under Internal Revenue Code Section 416(i), of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise. In the event a distribution is delayed pursuant to this paragraph, the originally scheduled payment shall be delayed for six (6) months, and shall commence instead on the first day of the seventh month following Separation from Service. If payments are scheduled to be made in installments, the first six (6) months of installment payments shall be delayed, aggregated, and paid instead on the first day of the seventh month, after which all installment payments shall be made on their regular schedule. If payment is scheduled to be made in a lump sum, the lump payment shall be delayed for six (6) months and instead be made on the first day of the seventh month.

F. Retirement Date:

“Retirement Date” shall mean the later of the Executive’s sixty-fifth (65^th) birthday or Separation from Service.

G. Normal Retirement Age:

“Normal Retirement Age” shall mean the date on which the Executive attains age sixty-five (65).

3

H. Separation from Service:

“Separation from Service” shall mean the Executive has experienced a termination of employment with the Bank. For purposes of this Agreement, whether a termination of employment or service has occurred is determined based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an Executive or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an Executive or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Executive continues to be treated as an Executive for other purposes (such as continuation of salary and participation in Executive benefit programs), whether similarly situated service providers have been treated consistently, and whether the Executive is permitted, and realistically available, to perform services for other service recipients in the same line of business. An Executive will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is fifty percent (50%) or more of the average level of service performed by the Executive during the immediately preceding thirty-six (36) month period.

IV. RETIREMENT BENEFIT

Upon attainment of the Retirement Date, the Bank, shall pay the Executive a lump sum benefit amount, equivalent to a fifteen (15) year benefit, equal to eighty-five percent (85%) of the Executive’s highest W-2 compensation earned by the Executive in any calendar year of employment with the Bank plus any reductions from the Executive’s personal contributions to a qualified retirement plan (401(k), less the following: (i) the Bank’s portion of social security benefits; (ii) the Bank’s qualified defined benefit plan; and (iii) the Bank’s match in the Bank provided 401(k) plan. W-2 wages shall include all compensation including salary, bonuses, and other compensation plus any reductions for salary deferred as a contribution by the Executive to the Bank provided 401(k) plan and any salary reductions attributed to the Executive’s contributions to the Bank’s medical savings plan. Said benefit shall be paid thirty (30) days following the Executive’s Separation from Service.

V. DEATH BENEFIT

In the event the Executive should die at any time after the Effective Date of this

4

Agreement, the Bank will pay the accrued balance on the date of death, of the Executive’s Accrued Liability Retirement Account in one (l) lump sum to the Executive’s Beneficiary. Said payment due hereunder shall be made within sixty (60) days of the Executive’s death.

VI. BENEFIT ACCOUNTING/ ACCRUED LIABILITY RETIREMENT ACCOUNT

The Bank shall account for this benefit using the regulatory accounting principles of the Bank’s primary federal regulator. The Bank shall establish an Accrued Liability Retirement Account for the Executive into which appropriate reserves shall be accrued. The Bank and the Executive agree that calculations impacting the reserve account and payment under this Agreement shall be made, when applicable, using a discount rate of six and one quarter percent (6.25%).

VII. VESTING

The Executive shall be one hundred percent (100%) vested in the Accrued Liability Retirement Account from the Effective Date of this Agreement.

VIII.  TERMINATION OF EMPLOYMENT

In the event that the employment of the Executive shall terminate prior to the Normal Retirement Age, by the Executive’s voluntary action, or by the Executive’s discharge by the Bank with or without cause, then the Bank shall pay to the Executive an amount of money equal to balance of the Executive’s Accrued Liability Retirement Account on the date of Separation from Service. Such balance shall be paid in one (1) lump sum the first day of the second month following said Separation from Service.

IX. CHANGE IN CONTROL

Upon a Change in Control, the Executive shall become one hundred percent (100%) vested in the Retirement Benefit. The Executive shall receive the Retirement Benefit as if the Executive had been continuously employed by the Bank until the Executive’s Normal Retirement Age. Such benefit shall be paid in accordance with Paragraph IV, commencing on the first day of the month following the Executive’s Normal Retirement Age.

X. RESTRICTIONS ON FUNDING

The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The Executive, their beneficiary(ies), or any successor in interest shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation.

5

The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Agreement or to refrain from funding the same and to determine the extent, nature and method of such funding. Should the Bank elect to fund this Agreement, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or annuities, the Bank reserves the absolute right, in its sale discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien, right, title or interest in any specific funding investment or assets of the Bank.

If the Bank elects to invest in a life insurance, disability or annuity policy on the life of the Executive, then the Executive shall assist the Bank by freely submitting to a physical exam and supplying such additional information necessary to obtain such insurance or annuities.

XII. MISCELLANEOUS

A. Alienability and Assignment Prohibition:

Neither the Executive nor any Beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the benefits payable hereunder nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by the Executive or the Executive’s Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise.

B. Amendment or Revocation:

Subject to Paragraph XIV, it is agreed by and between the parties hereto that, during the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part, by the mutual written consent of the Executive and the Bank. Any such amendment shall not be effective to decrease or restrict any Executive’s accrued benefit under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive, and provided further, no amendment shall be made, or if made, shall be effective, if such amendment would cause the Agreement to violate Internal Revenue Code Section 409A.

C. Applicable Law:

The validity and interpretation of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts.

6

D. Binding Obligation of the Bank and any Successor in Interest:

The Bank shall not merge or consolidate into or with another bank or sell substantially all of its assets to another bank, firm or person until such bank, firm or person expressly agree, in writing, to assume and discharge the duties and obligations of the Bank under this Agreement. This Agreement shall be binding upon the parties hereto, their successors, beneficiaries, heirs and personal representatives.

E. Gender:

Whenever in this Agreement words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply.

F. Headings:

Headings and subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement.

G. Not a Contract of Employment:

This Agreement shall not be deemed to constitute a contract of employment between the parties hereto, nor shall any provision hereof restrict the right of the Bank to discharge the Executive, or restrict the right of the Executive to terminate employment.

H. Opportunity to Consult with Independent Advisors:

The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and counsel regarding both the benefits granted to him under the terms of this Agreement and the: (i) terms and conditions which may affect the Executive’s right to these benefits; and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code, Section 409A of the Code and guidance or regulations thereunder, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her

7

heirs, beneficiaries, legal representative, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions.

I. Partial Invalidity:

If any term, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and the Agreement shall remain in full force and effect notwithstanding such partial invalidity.

J. Permissible Acceleration Provision:

Under Treasury Regulation Section 1.409A-3(j)(4), a payment of deferred compensation may not be accelerated except as provided in regulations by the Internal Revenue Code. This Agreement allows all permissible payment accelerations under 1.409A-3(j)(4) that include but are not limited to payments necessary to comply with a domestic relations order, payments necessary to comply with certain conflict of interest rules, payments intended to pay employment taxes, and other permissible payments are allowed as permitted by statute or regulation.

K. Subsequent Changes to Time and Form of Payment:

The Bank may permit subsequent changes to the time and form of payment. Any such change shall be considered made only when it becomes irrevocable under the terms of the Agreement. Any subsequent time and form of payment changes will be considered irrevocable not later than thirty (30) days following acceptance of the change by the Plan Administrator, subject to the following rules:

a. the subsequent change may not take effect until at least twelve (12) months after the date on which the change is made;

b. the payment (except in the case of death, disability, or unforeseeable emergency) upon which the change is made is deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid; and

c. in the case of a payment made at a specified time, the change must be made not less than twelve (12) months before the date the payment is scheduled to be paid.

8

L. Tax Withholding:

The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies).

XIII.  ADMINISTRATIVE AND CLAIMS PROVISIONS

A. Plan Administrator:

The “Plan Administrator” of this Agreement shall be Wellesley Bank. As Plan Administrator, the Bank shall be responsible for the management, control and administration of the Agreement. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Agreement including the employment of advisors and the delegation of ministerial duties to qualified individuals.

B. Claims Procedure:

a. Filing a Claim for Benefits:

Any insured, Beneficiary, or other individual, (“Claimant”) entitled to benefits under this Agreement will file a claim request with the Plan Administrator. The Plan Administrator will, upon written request of a Claimant, make available copies of all forms and instructions necessary to file a claim for benefits or advise the Claimant where such forms and instructions may be obtained. If the claim relates to disability benefits, then the Plan Administrator shall designate a sub-committee to conduct the initial review of the claim (and applicable references below to the Plan Administrator shall mean such sub-committee).

b. Denial of Claim:

A claim for benefits under this Agreement will be denied if the Bank determines that the Claimant is not entitled to receive benefits under the Agreement. Notice of a denial shall be furnished the Claimant within a reasonable period of time after receipt of the claim for benefits by the Plan Administrator. This time period shall not exceed more than ninety (90) days after the receipt of the properly submitted claim. In the event that the claim for benefits pertains to disability, the Plan Administrator shall provide written notice within forty-five (45) days. However, if the Plan Administrator determines, in its discretion, that an extension of

9

time for processing the claim is required, such extension shall not exceed an additional ninety (90) days. In the case of a claim for disability benefits, the forty-five (45) day review period may be extended for up to thirty (30) days if necessary due to circumstances beyond the Plan Administrator’s control, and for an additional thirty (30) days, if necessary. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review.

c. Content of Notice:

The Plan Administrator shall provide written notice to every Claimant who is denied a claim for benefits which notice shall set forth the following:

(i.) The specific reason or reasons for the denial;

(ii.) Specific reference to pertinent Agreement provisions on which the denial is based;

(iii.) A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and

(iv.) Any other information required by applicable regulations, including with respect to disability benefits.

d. Review Procedure:

The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a claim to the Plan Administrator for a full and fair review. The Claimant, or his duly authorized representative, may:

(i.) Request a review upon written application to the Plan Administrator. Application for review must be made within sixty (60) days of receipt of written notice of denial of claim. If the denial of claim pertains to disability, application for review must be made within one hundred eighty (180) days of receipt of written notice of the denial of claim;

(ii.) Review and copy (free of charge) pertinent Agreement documents, records and other information relevant to the Claimant’s claim for benefits;

10

(iii.) Submit issues and concerns in writing, as well as documents, records, and other information relating to the claim.

e. Decision on Review:

A decision on review of a denied claim shall be made in the following manner:

(i.) The Plan Administrator may, in its sole discretion, hold a hearing on the denied claim. If the Claimant’s initial claim is for disability benefits, any review of a denied claim shall be made by members of the Plan Administrator other than the original decision maker(s) and such person(s) shall not be a subordinate of the original decision maker(s). The decision on review shall be made promptly, but generally not later than sixty (60) days after receipt of the application for review. In the event that the denied claim pertains to disability, such decision shall not be made later than forty-five (45) days after receipt of the application for review. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall the extension exceed a period of sixty (60) days from the end of the initial period. In the event the denied claim pertains to disability, written notice of such extension shall be furnished to the Claimant prior to the termination of the initial forty-five (45) day period. In no event shall the extension exceed a period of thirty (30) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review.

(ii.) The decision on review shall be in writing and shall include specific reasons for the decision written in an understandable manner with specific references to the pertinent Agreement provisions upon which the decision is based.

(iii.) The review will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether

11

such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for disability benefits. For example, the claim will be reviewed without deference to the initial adverse benefits determination and, if the initial adverse benefit determination was based in whole or in part on a medical judgment, the Plan Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination or the subordinate of such individual. If the Plan Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Plan Administrator will identify such experts.

(iv.) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to the Claimant’s claim for benefits.

f. Exhaustion of Remedies:

A Claimant must follow the claims review procedures under this Agreement and exhaust his or her administrative remedies before taking any further action with respect to a claim for benefits.

C. Arbitration:

If claimants continue to dispute the benefit denial based upon completed performance of this Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an Arbitrator for final arbitration. The Arbitrator shall be selected by mutual agreement of the Bank and the claimants. The Arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Arbitrator with respect to any controversy properly submitted to it for determination.

Where a dispute arises as to the Bank’s discharge of the Executive “For Cause,” such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder.

12

XIV. TERMlNATION OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE LAW, RULES OR REGULATIONS

The Bank is entering into this Agreement upon the assumption that certain existing tax laws, rules and regulations will continue in effect in their current form. If any said assumptions should change and said change has a detrimental effect on this Agreement, then the Bank reserves the right to terminate or modify this Agreement accordingly. Any such termination or modification shall not be effective to decrease or restrict the Executive’s Accrued Liability Retirement Account under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive, and provided further, no amendment shall be made, or if made, shall be effective, if such termination or modification would cause the Agreement to violate Internal Revenue Code Section 409A. Upon a Change in Control, this paragraph shall become null and void effective immediately upon said Change in Control.

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy.

WELLESLEY BANK

Wellesley, Massachusetts

/s/ Eloise C. Thibault	By:	/s/ Theodore F. Parker
Witness		(Bank Officer other than Executive) Title
/s/ Eloise C. Thibault		/s/ Thomas J. Fontaine
Witness		Thomas J. Fontaine

EX-10.4

Exhibit 10.4

FORM OF

WELLESLEY BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

WELLESLEY BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Table of Contents

ARTICLE I	Introduction	1
ARTICLE II	Definitions	1
ARTICLE III	Eligibility and Participation	3
ARTICLE IV	Benefits	4
ARTICLE V	Accounts	5
ARTICLE VI	Supplemental Benefit Payments	6
ARTICLE VII	Claims Procedures	7
ARTICLE VIII	Amendment and Termination	8
ARTICLE IX	General Provisions	8

ARTICLE I

INTRODUCTION

Section 1.01 Purpose, Design and Intent.

(a) The purpose of the Wellesley Bank Supplemental Executive Retirement Plan (the “Plan”) is to assist Wellesley Bank (the “Bank”) in retaining the services of key employees until their retirement, to induce such employees to use their best efforts to enhance the business of the Bank and its affiliates, and to provide certain supplemental retirement benefits to such employees, which cannot otherwise be provided under certain tax-qualified retirement plans.

(b) The Plan, in relevant part, is intended to constitute an unfunded “excess benefit plan” as defined in Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended. In this respect, the Plan is specifically designed to provide certain key employees with retirement benefits that would have been provided under various tax-qualified retirement plans sponsored by the Bank but for the applicable limitations placed on benefits and contributions under such plans by various provisions of the Internal Revenue Code of 1986, as amended.

ARTICLE II

DEFINITIONS

Section 2.01 Definitions. In this Plan, whenever the context so indicates, the singular or the plural number and the masculine or feminine gender shall be deemed to include the other, the terms “he,” “his,” and “him,” shall refer to a Participant or a beneficiary of a Participant, as the case may be, and, except as otherwise provided, or unless the context otherwise requires, the capitalized terms shall have the following meanings:

(a) “401(k) Plan” means [401(k) Plan].

(b) “Applicable Limitations” means one or more of the following, as applicable:

(i) the maximum limitations on annual additions to a tax-qualified defined contribution plan under Section 415(c) of the Code; and

(ii) the maximum limitation on the annual amount of compensation that may, under Section 401(a)(17) of the Code, be taken into account in determining contributions to and benefits under tax-qualified plans; and

(iii) the maximum limitations, under Section 401(k), 401(m), or 402(g) of the Code, on pre-tax contributions that may be made to a qualified defined contribution plan.

(c) “Bank” means Wellesley Bank and its successors.

(d) “Board of Directors” means the Board of Directors of the Bank.

(e) “Change in Control” means a change in control of the Bank or the Corporation as defined in Section 409A of the Code and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including:

1

(i) Change in ownership: a change in ownership of the Corporation occurs on the date any one person or group accumulates ownership of Corporation stock constituting more than 50% of the total fair market value or total voting power of Corporation stock; or

(ii) Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Corporation’s board of directors; or

(iii) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the Corporation’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of the Corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

(f) “Code” means the Internal Revenue Code of 1986, as amended.

(g) “Committee” means the person(s) designated by the Board of Directors, pursuant to Section 9.02 of the Plan, to administer the Plan.

(h) “Common Stock” means the common stock of the Corporation.

(i) “Corporation” means Wellesley Bancorp, Inc. and its successors.

(j) “Eligible Individual” means any Employee who participates in the ESOP or 401(k) Plan, as the case may be, and whom the Board of Directors determines is one of a “select group of management or highly compensated employees,” as such phrase is used for purposes of Sections 101, 201, and 301 of ERISA.

(k) “Employee” means any person employed by the Bank or an Affiliate.

(l) “Employer” means the Bank or Affiliate thereof that employs the Employee.

(m) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(n) “ESOP” means the Wellesley Savings Bank Employee Stock Ownership Plan, as amended from time to time.

(o) “ESOP Acquisition Loan” means a loan or other extension of credit incurred by the trustee of the ESOP in connection with the purchase of Common Stock on behalf of the ESOP.

(p) “ESOP Valuation Date” means any day as of which the investment experience of the trust fund of the ESOP is determined and individuals’ accounts under the ESOP are adjusted accordingly.

(q) “Effective Date” means [date].

2

(r) “Participant” means an Eligible Employee who is entitled to benefits under the Plan.

(s) “Plan” means this Wellesley Bank Supplemental Executive Retirement Plan, as amended from time to time.

(t) “Separation from Service” means a termination of a Participant’s services (whether as an employee or as an independent contractor) to the Bank. Whether a Separation from Service has occurred shall be determined in accordance with the requirements of Section 409A of the Code based on whether the facts and circumstances indicate that the Bank and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would performed after a certain date or (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period.

(u) “Supplemental ESOP Account” means an account established by an Employer, pursuant to Section 5.01 of the Plan, with respect to a Participant’s Supplemental ESOP Benefit.

(v) “Supplemental ESOP Benefit” means the benefit credited to a Participant pursuant to Section 4.01 of the Plan.

(w) “Supplemental Savings Account” means an account established by an Employer, pursuant to Section 5.03 of the Plan, with respect to a Participant’s Supplemental Savings Benefit.

(x) “Supplemental Savings Benefit” means the benefit credited to a Participant pursuant to Section 4.03 of the Plan.

(y) “Supplemental Stock Ownership Account” means an account established by an Employer, pursuant to Section 5.02 of the Plan, with respect to a Participant’s Supplemental Stock Ownership Benefit.

(z) “Supplemental Stock Ownership Benefit” means the benefit credited to a Participant pursuant to Section 4.02 of the Plan.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

Section 3.01 Eligibility and Participation.

(a) Each Eligible Employee may participate in the Plan. An Eligible Employee shall become a Participant in the Plan upon designation as such by the Board of Directors. An Eligible Employee whom the Board of Directors designates as a Participant in the Plan shall commence participation as of the date established by the Board of Directors. The Board of Directors shall establish an Eligible Employee’s date of participation at the same time it designates the Eligible Employee as a Participant in the Plan.

(b) The Board of Directors may, at any time, designate an Eligible Employee as a Participant for any or all supplemental benefits provided for under Article IV of the Plan.

3

ARTICLE IV

BENEFITS

Section 4.01 Supplemental ESOP Benefit.

As of the last day of each plan year of the ESOP, the Employer shall credit the Participant’s Supplemental ESOP Account with a Supplemental ESOP Benefit equal to the excess of (a) over (b), where:

(a) Equals the annual contributions made by the Employer and/or the number of shares of Common Stock released for allocation in connection with the repayment of an ESOP Acquisition Loan that would otherwise be allocated to the accounts of the Participant under the ESOP for the applicable plan year, if the provisions of the ESOP were administered without regard to any of the Applicable Limitations; and

(b) Equals the annual contributions made by the Employer and/or the number of shares of common stock released for allocation in connection with the repayment of an ESOP Acquisition Loan that are actually allocated to the accounts of the Participant under the provisions of the ESOP for that particular plan year, after giving effect to any reduction of such allocation required by any of the Applicable Limitations.

Section 4.02 Supplemental Stock Ownership Benefit.

(a) Upon a Change in Control, the Employer shall credit to the Participant’s Supplemental Stock Ownership Account a Supplemental Stock Ownership Benefit equal to (i) less (ii), the result of which is multiplied by (iii), where:

(i) Equals the total number of shares of Common Stock acquired with the proceeds of all ESOP Acquisition Loans (together with any dividends, cash proceeds, or other medium related to such ESOP Acquisition Loans) that would have been allocated or credited for the benefit of the Participant under the ESOP and/or this Plan, as the case may be, had the Participant continued in the employ of the Employer through the first ESOP Valuation Date following the last scheduled payment of principal and interest on all ESOP Acquisition Loans outstanding at the time of the Change in Control; and

(ii) Equals the total number of shares of Common Stock acquired with the proceeds of all ESOP Acquisition Loans (together with any dividends, cash proceeds, or other medium related to such ESOP Acquisition Loans) and allocated for the benefit of the Participant under the ESOP and/or this Plan, as the case may be, as of the first ESOP Valuation Date following the Change in Control; and

(iii) Equals the fair market value of the Common Stock immediately preceding the Change in Control.

(b) For purposes of clause (i) of subsection (a) of this Section 4.02, the total number of shares of Common Stock shall be determined by multiplying the sum of (i) and (ii) by (iii), where:

(i) Equals the average of the total shares of Common Stock acquired with the proceeds of an ESOP Acquisition Loan and allocated for the benefit of the Participant under the ESOP as of the three most recent ESOP Valuation Dates preceding the Change in Control (or lesser number if the Participant has not participated in the ESOP for three full years);

4

(ii) Equals the average number of shares of Common Stock credited to the Participant’s Supplemental ESOP Account for the three most recent plan years of the ESOP (such that the three most recent plan years coincide with the three most recent ESOP Valuation Dates referred to in (i) above); and

(iii) Equals the original number of scheduled annual payments on the ESOP Acquisition Loan.

Section 4.03 Supplemental Savings Benefit.

A Participant’s Supplemental Savings Benefit under the Plan shall be equal to the excess of (a) over (b), where:

(a) is the sum of the matching contributions and other contributions of the Employer that would otherwise be allocated to an account of the Participant under the 401(k) Plan for a particular year, if the provisions of the 401(k) Plan were administered without regard to any of the Applicable Limitations; and

(b) is the sum of the matching contributions and other contributions of the Employer that are actually allocated on account of the Participant under the provisions of the 401(k) Plan for that particular year, after giving effect to any reduction of such allocation required by any of the Applicable Limitations.

ARTICLE V

ACCOUNTS

Section 5.01 Supplemental ESOP Benefit Account.

For each Participant who is credited with a benefit pursuant to Section 4.01 of the Plan, the Employer shall establish, as a memorandum account on its books, a Supplemental ESOP Account. Each year, the Committee shall credit to the Participant’s Supplemental ESOP Account the amount of benefits determined under Section 4.01 of the Plan for that year. The Committee shall credit the account with an amount equal to the appropriate number of shares of Common Stock or other medium of contribution that would have otherwise been made to the Participant’s accounts under the ESOP but for the limitations imposed by the Code. Shares of Common Stock shall be valued under this Plan in the same manner as under the ESOP. Cash contributions credited to a Participant’s Supplemental ESOP Account shall be credited annually with interest at a rate equal to the combined weighted return provided to the Participant’s non-stock accounts under the ESOP.

Section 5.02 Supplemental Stock Ownership Account.

The Employer shall establish, as a memorandum account on its books, a Supplemental Stock Ownership Account. Upon a Change in Control, the Committee shall credit to the Participant’s Supplemental Stock Ownership Account the amount of benefits determined under Section 4.02 of the Plan. The Committee shall credit the account with an amount equal to the appropriate number of shares of Common Stock or other medium of contribution that would have otherwise been made to the Participant’s accounts under the ESOP. Shares of Common Stock shall be valued under this Plan in the same manner as under the ESOP. Cash contributions credited to a Participant’s Supplemental Stock Ownership Account shall be credited annually with interest at a rate equal to the combined weighted return provided to the Participant’s non-stock accounts under the ESOP.

5

Section 5.03 Supplemental Savings Account.

The Employer shall establish a memorandum account on its books, a Supplemental Savings Account, for each Participant, and each year the Committee will credit the amount of contributions determined under Section 4.03 of the Plan. Contributions credited to a Participant’s Supplemental Savings Account shall be credited monthly with interest at a rate equal to the combined weighted return provided to the Participant’s account(s) under the 401(k) Plan.

ARTICLE VI

SUPPLEMENTAL BENEFIT PAYMENTS

Section 6.01 Payment of Supplemental ESOP Benefit.

(a) A Participant’s Supplemental ESOP Benefit shall be paid to the Participant or, in the event of the Participant’s death, to his beneficiary (as designated on a form acceptable to the Employer), in a single lump sum cash payment as soon as administratively practicable, but in no event not later than sixty (60) days, following the Participant’s Separation from Service.

(b) A Participant shall have a non-forfeitable right to the Supplemental ESOP Benefit credited to him under this Plan in the same percentage as he has with respect to benefits allocated to him under the ESOP at the time the benefits become distributable to him under the ESOP.

Section 6.02 Payment of Supplemental Stock Ownership Benefit.

(a) A Participant’s Supplemental Stock Ownership Benefit shall be paid to the Participant or, in the event of the Participant’s death, to his beneficiary (as designated on a form acceptable to the Employer), in a single lump sum cash payment as soon as administratively practicable, but in no event not later than sixty (60) days, following the Participant’s Separation from Service.

(b) A Participant shall always have a fully non-forfeitable right to the Supplemental Stock Ownership Benefit credited to him under this Plan.

Section 6.03 Payment of Supplemental Savings Benefit.

(a) A Participant’s Supplemental Savings Benefit shall be paid to the Participant or, in the event of the Participant’s death, to his beneficiary (as designated on a form acceptable to the Employer) in a single sum cash payment, as soon as administratively practicable, but in no event not later than sixty (60) days, following the Participant’s Separation from Service.

(b) A Participant shall have a non-forfeitable right to his Supplemental Savings Benefit under this Plan in the same percentage as he has to any matching contributions under the 401(k) Plan at the time of his Separation from Service.

Section 6.04 Payment to Specified Employees.

Notwithstanding anything in Article VI, if when a Separation from Service occurs the Participant is a “specified employee” within the meaning of Section 409A of the Code, the benefit shall be paid to the Participant in a single lump sum cash payment without interest on the first business day of the seventh (7^th) month after which the Participant incurs a Separation from Service.

6

ARTICLE VII

CLAIMS PROCEDURES

Section 7.01 Claims Reviewer.

For purposes of handling claims with respect to this Plan, the “Claims Reviewer” shall be the Committee, unless the Committee designates another person or group of persons as Claims Reviewer.

Section 7.02 Claims Procedure.

(a) An initial claim for benefits under the Plan must be made by the Participant or his beneficiary or beneficiaries in accordance with the terms of this Section 7.02.

(b) Not later than ninety (90) days after receipt of such a claim, the Claims Reviewer will render a written decision on the claim to the claimant, unless special circumstances require the extension of such 90-day period. If such extension is necessary, the Claims Reviewer shall provide the Participant or the Participant’s beneficiary or beneficiaries with written notification of such extension before the expiration of the initial 90-day period. Such notice shall specify the reason or reasons for the extension and the date by which a final decision can be expected. In no event shall such extension exceed a period of ninety (90) days from the end of the initial 90-day period.

(c) In the event the Claims Reviewer denies the claim of a Participant or any beneficiary in whole or in part, the Claims Reviewer’s written notification shall specify, in a manner calculated to be understood by the claimant, the reason for the denial; a reference to the Plan or other document or form that is the basis for the denial; a description of any additional material or information necessary for the claimant to perfect the claim; an explanation as to why such information or material is necessary; and an explanation of the applicable claims procedure.

(d) Should the claim be denied in whole or in part and should the claimant be dissatisfied with the Claims Reviewer’s disposition of the claimant’s claim, the claimant may have a full and fair review of the claim by the Committee upon written request submitted by the claimant or the claimant’s duly authorized representative and received by the Committee within sixty (60) days after the claimant receives written notification that the claimant’s claim has been denied. In connection with such review, the claimant or the claimant’s duly authorized representative shall be entitled to review pertinent documents and submit the claimant’s views as to the issues, in writing. The Committee shall act to deny or accept the claim within sixty (60) days after receipt of the claimant’s written request for review unless special circumstances require the extension of such 60-day period. If such extension is necessary, the Committee shall provide the claimant with written notification of such extension before the expiration of such initial 60-day period. In all events, the Committee shall act to deny or accept the claim within one hundred and twenty (120) days of the receipt of the claimant’s written request for review. The action of the Committee shall be in the form of a written notice to the claimant and its contents shall include all of the requirements for action on the original claim.

(e) In no event may a claimant commence legal action for benefits the claimant believes are due the claimant until the claimant has exhausted all of the remedies and procedures afforded the claimant by this Article VII.

7

ARTICLE VIII

AMENDMENT AND TERMINATION

Section 8.01 Amendment of the Plan.

The Bank may from time to time and at any time amend the Plan; provided, however, that such amendment may not adversely affect the rights of any Participant or beneficiary with respect to any benefit under the Plan to which the Participant or beneficiary may have previously become entitled prior to the effective date of such amendment without the consent of the Participant or beneficiary. The Committee shall be authorized to make minor or administrative changes to the Plan, as well as amendments required by applicable federal or state law (or authorized or made desirable by such statutes); provided, however, that such amendments must subsequently be ratified by the Board of Directors.

Section 8.02 Termination of the Plan.

The Bank may terminate the Plan at any time; provided, however, that such termination may not adversely affect the rights of any Participant or beneficiary with respect to any benefit under the Plan to which the Participant or beneficiary may have previously become entitled prior to the effective date of such termination without the consent of the Participant or beneficiary. Any amounts credited to the supplemental accounts of any Participant shall remain subject to the provisions of the Plan and no distribution of benefits shall be accelerated because of termination of the Plan.

ARTICLE IX

GENERAL PROVISIONS

Section 9.01 Unfunded, Unsecured Promise to Make Payments in the Future.

The right of a Participant or any beneficiary to receive a distribution under this Plan shall be an unsecured claim against the general assets of the Bank or its Affiliates, and neither a Participant, nor his designated beneficiary or beneficiaries, shall have any rights in or against any amount credited to any account under this Plan or any other assets of the Bank or an Affiliate. The Plan at all times shall be considered entirely unfunded both for tax purposes and for purposes of Title I of ERISA. Any funds invested hereunder shall continue for all purposes to be part of the general assets of the Bank or an Affiliate and available to its general creditors in the event of bankruptcy or insolvency. Accounts under this Plan and any benefits which may be payable pursuant to this Plan are not subject in any manner to anticipation, sale, alienation, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or a Participant’s beneficiary. The Plan constitutes a mere promise by the Bank or Affiliate to make benefit payments in the future. No interest or right to receive a benefit may be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such Participant or beneficiary, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.

Section 9.02 Committee as Plan Administrator.

(a) The Plan shall be administered by the Committee designated by the Board of Directors of the Bank.

(b) The Committee shall have the authority, duty and power to interpret and construe the provisions of the Plan as it deems appropriate. The Committee shall have the duty and responsibility of maintaining records, making the requisite calculations and disbursing the payments hereunder. In

8

addition, the Committee shall have the authority and power to delegate any of its administrative duties to employees of the Bank or an Affiliate, as they may deem appropriate. The Committee shall be entitled to rely on all tables, valuations, certificates, opinions, data and reports furnished by any actuary, accountant, controller, counsel or other person employed or retained by the Bank with respect to the Plan. The interpretations, determinations, regulations and calculations of the Committee shall be final and binding on all persons and parties concerned.

Section 9.03 Expenses.

Expenses of administration of the Plan shall be paid by the Bank or an Affiliate.

Section 9.04 Statements.

The Committee shall furnish individual annual statements of accrued benefits to each Participant, or current beneficiary, in such form as determined by the Committee or as required by law.

Section 9.05 Rights of Participants and Beneficiaries.

(a) The sole rights of a Participant or beneficiary under this Plan shall be to have this Plan administered according to its provisions and to receive whatever benefits he may be entitled to hereunder.

(b) Nothing in the Plan shall be interpreted as a guaranty that any funds in any trust which may be established in connection with the Plan or assets of the Bank or an Affiliate will be sufficient to pay any benefit hereunder.

(c) The adoption and maintenance of this Plan shall not be construed as creating any contract of employment or service between the Bank or an Affiliate and any Participant or other individual. The Plan shall not affect the right of the Bank or an Affiliate to deal with any Participants in employment or service respects, including their hiring, discharge, compensation, and other conditions of employment or service.

Section 9.06 Incompetent Individuals.

The Committee may, from time to time, establish rules and procedures which it determines to be necessary for the proper administration of the Plan and the benefits payable to a Participant or beneficiary in the event that such Participant or beneficiary is declared incompetent and a conservator or other person is appointed and legally charged with that Participant’s or beneficiary’s care. Except as otherwise provided for herein, when the Committee determines that such Participant or beneficiary is unable to manage his financial affairs, the Committee may pay such Participant’s or beneficiary’s benefits to such conservator, person legally charged with such Participant’s or beneficiary’s care, or institution then contributing toward or providing for the care and maintenance of such Participant or beneficiary. Any such payment shall constitute a complete discharge of any liability of the Bank or an Affiliate and the Plan for such Participant or beneficiary.

Section 9.07 Sale, Merger or Consolidation of the Bank.

The Plan may be continued after a sale of assets of the Bank, or a merger or consolidation of the Bank into or with another corporation or entity only if, and to the extent that, the transferee, purchaser or successor entity agrees to continue the Plan. Additionally, upon a merger, consolidation or other Change in Control, any amounts credited to Participant’s deferral accounts shall be placed in a grantor trust to the

9

extent not already in such a trust. In the event that the Plan is not continued by the transferee, purchaser or successor entity, then the Plan shall be terminated subject to the provisions of Section 8.02 of the Plan. Any legal fees incurred by a Participant in determining benefits to which such Participant is entitled under the Plan following a sale, merger, or consolidation of the Bank or an Affiliate of which the Participant is an Employee or, if applicable, a member of the Board of Directors, shall be paid by the resulting or succeeding entity.

Section 9.08 Location of Participants.

Each Participant shall keep the Bank informed of his current address and the current address of his designated beneficiary or beneficiaries. The Bank shall not be obligated to search for any person. If such person is not located within three (3) years after the date on which payment of the Participant’s benefits payable under this Plan may first be made, payment may be made as though the Participant or his beneficiary had died at the end of such three-year period.

Section 9.09 Liability of the Bank and its Affiliates.

Notwithstanding any provision herein to the contrary, neither the Bank nor any individual acting as an employee or agent of the Bank shall be liable to any Participant, former Participant, beneficiary, or any other person for any claim, loss, liability or expense incurred in connection with the Plan, unless attributable to fraud or willful misconduct on the part of the Bank or any such employee or agent of the Bank.

Section 9.10 Governing Law.

All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the United States and, to the extent not preempted by such laws, by the laws of the Commonwealth of Massachusetts.

[Signature page follows]

10

This Plan has been approved and adopted by the Board of Directors of the Bank and is effective as of [Date].

Attest:	WELLESLEY BANK
	By:
		For the entire of Board of Directors

11

EX-10.5

Exhibit 10.5

FORM OF

WELLESLEY BANK

EMPLOYEE SEVERANCE COMPENSATION PLAN

A. Purpose.

The primary purpose of the Wellesley Bank Employee Severance Compensation Plan is to ensure the successful continuation of the business of Wellesley Bank and the fair and equitable treatment of the employees of Wellesley Bank following a Change in Control.

B. Definitions.

In this Plan, whenever the context so indicates, the singular or the plural number and the masculine or feminine gender shall be deemed to include the other, the terms “he,” “his,” and “him,” shall refer to an employee and, except as otherwise provided, or unless the context otherwise requires, the capitalized terms shall have the following meanings:

“Bank” means Wellesley Bank and its successors.

“Base Compensation” means

(a) For salaried employees, the employee’s annual base salary at the rate in effect on his termination date or, if greater, the rate in effect on the date immediately preceding the Change in Control.

(b) For employees whose compensation is determined in whole or in part on the basis of commission income, the employee’s base salary at his termination date (or, if greater, the employee’s base salary on the date immediately preceding the effective date of the Change in Control), if any, plus the commissions earned by the employee in the twelve (12) full calendar months preceding his termination of employment (or, if greater, the commissions earned in the twelve (12) full calendar months immediately preceding the effective date of the Change in Control).

(c) For hourly employees, the employee’s total hourly wages for the twelve (12) full calendar months preceding his termination of employment or, if greater, the twelve (12) full calendar months preceding the effective date of the Change in Control.

“Board of Directors” means the Board of Directors of the Bank.

“Cause” means grounds for termination of employment due to the employee’s personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order.

“Change in Control” means a change in control of the Bank or the Corporation, as defined in Section 409A of the Code and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including:

(a) Change in ownership: a change in ownership of the Corporation occurs on the date any one person or group accumulates ownership of Corporation stock constituting more than 50% of the total fair market value or total voting power of Corporation stock;

(b) Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Corporation’s board of directors; or

(c) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the Corporation’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of the Corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

“Change in Control Severance Benefit” means the benefit provided for in Paragraph D of the Plan.

“Code” means the Internal Revenue Code of 1986, as amended.

“Comparable Position” means a position that would (i) provide the employee with base compensation and benefits that are comparable in the aggregate to those provided to the employee prior to the Change in Control; (ii) provide the employee with an opportunity for variable bonus compensation that is comparable to the opportunity provided to the employee prior to the Change in Control; (iii) be in a location that would not require the employee to increase his daily one-way commuting distance by more than thirty-five (35) miles as compared to the employee’s commuting distance immediately prior to the Change in Control; and (iv) have job skill requirements and duties that are comparable to the requirements and duties of the position held by the employee immediately prior to the Change in Control.

“Corporation” means Wellesley Bancorp, Inc. and its successors.

“Plan” means this Wellesley Bank Employee Severance Compensation Plan, as may be amended from time to time.

“Year of Service” means each 12-month period of service following an employee’s date of hire during which the employee completes at least one hour of service each month. The taking of a leave of absence shall not eliminate a period of time from being a Year of Service if the period of time otherwise qualifies as a year of service. A “leave of absence” means (i) the taking of an authorized or approved leave of absence under the provisions of the federal Family and Medical Leave Act (“FMLA”), (ii) any state law providing qualitatively similar benefits as the FMLA, or (iii) a leave of absence authorized under the policies of the Bank.

C. Covered Employees.

(a) Any employee of the Bank with at least one Year of Service as of the date of his termination of employment shall receive a Change in Control Severance Benefit if, within the period beginning on the effective date of a Change in Control and ending on the first anniversary of the effective date of the Change in Control, (i) the Bank terminates the employee’s employment without Cause, or (ii) the employee terminates employment with the Bank voluntarily after being offered continued employment in a position that is not a Comparable Position.

(b) Notwithstanding the foregoing, no employee shall be eligible for a Change in Control Severance Benefit if, at the time of his termination of employment, the employee is a party to an individual employment agreement or change in control agreement with the Bank and/or the Corporation pursuant to which he is entitled to severance benefits.

2

D. Determination and Payment of the Change in Control Severance Benefit.

(a) The Change in Control Severance Benefit payable to an eligible employee under this Plan shall be determined under as follows:

(1) Except as provided for in Paragraph D(a)(2), an eligible employee shall receive a Change in Control Severance Benefit equal to the product of (i) the employee’s Years of Service from his hire date (including partial years and years prior to the adoption of this Plan) through the date of the termination of his employment and (ii) an amount equal to the employee’s Base Compensation for two (2) weeks. The maximum payment to an eligible employee shall be an amount equal to fifty-two (52) week’s of Base Compensation and the minimum payment shall be an amount equal to four (4) week’s of Base Compensation.

(2) An eligible employee who is designated as a Vice President or above shall receive a Change in Control Severance Benefit equal to fifty-two week’s of Base Compensation, regardless of the employees Years of Service.

(b) The Change in Control Severance Benefit shall be paid in a lump sum not later than five (5) business days after the date of the eligible employee’s termination of employment.

(c) All payments under this Plan will be subject to required withholding for federal, state and local tax purposes.

E. Parachute Payment.

Notwithstanding anything in this Plan to the contrary, if a Change in Control Severance Benefit that is otherwise payable to an employee who is a “disqualified individual” would constitute an “excess parachute payment,” taking into account payments under this Plan and otherwise, then the benefit payable under this Plan shall be reduced to the maximum amount which does not include an excess parachute payment. The terms “disqualified individual” and “excess parachute payment” shall have the same meanings as under Section 280G of the Code.

F. Adoption by Affiliates.

Upon approval by the Board of Directors, this Plan may be adopted by any “subsidiary” or “parent” of the Bank. Upon such adoption, the provisions of the Plan shall be fully applicable to the employees of that subsidiary or parent. The term “subsidiary” means any corporation in which the Bank, directly or indirectly, holds a majority of the voting power of its outstanding shares of capital stock. The term “parent” means any corporation which holds a majority of the voting power of the outstanding shares of capital stock of the Bank.

G. Administration.

The Plan shall be administered by the Board of Directors, which shall have the discretion to interpret the terms of the Plan and to make all determinations about eligibility and payment of benefits. All decisions of the Board of Directors, any action taken by the Board of Directors with respect to the Plan and within the powers granted to the Board of Directors under the Plan, and any interpretation by the Board of Directors of any term or condition of the Plan, shall be conclusive and binding on all persons, and will be given the maximum possible deference allowed by law. The Board of Directors may delegate and reallocate any authority and responsibility with respect to the Plan.

3

H. Source of Payments.

Unless otherwise determined by the Board of Directors, all payments and benefits provided under this Agreement shall be paid solely by the Bank or, if applicable, any affiliate that adopts the Plan.

I. Inalienability.

In no event may any employee sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors, nor liable to attachment, execution or other legal process.

J. Governing Law.

The provisions of the Plan will be construed, administered and enforced in accordance with the laws of the Commonwealth of Massachusetts, except to the extent that federal law applies.

K. Severability.

If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.

L. No Employment Rights.

Neither the establishment nor the terms of this Plan shall be held or construed to confer upon any employee the right to a continuation of employment, nor constitute a contract of employment, express or implied. The Bank and, if applicable, any affiliate that adopts the Plan, reserves the right to dismiss or otherwise deal with any employee to the same extent and on the same basis as though this Plan had not been adopted. Nothing in this Plan is intended to alter the at-will status of an employee’s employment status, it being understood that, except to the extent otherwise expressly set forth to the contrary in an individual employment-related agreement, the employment of any employee may be terminated at any time by the Bank or, if applicable, any affiliate that adopts the Plan.

M. Amendment and Termination.

The Board of Directors may terminate or amend the Plan in any respect, unless a Change in Control has previously occurred. If a Change in Control occurs, the Plan no longer shall be subject to amendment, change, substitution, deletion, revocation or termination in any respect whatsoever. The form of any proper amendment or termination of the Plan shall be a written instrument signed by a duly authorized officer or officers of the Bank, certifying that the amendment or termination has been approved by the Board of Directors. A proper amendment of the Plan automatically shall effect a corresponding amendment to each Participant’s rights hereunder. A proper termination of the Plan automatically shall effect a termination of all employees’ rights and benefits hereunder.

N. Required Provisions.

(1) In the event any of the provisions of this Paragraph N are in conflict with the terms of this Plan, this Paragraph N shall prevail.

4

(2) The Bank may terminate an employee’s employment at any time, but any termination by the Bank, other than termination for Cause, shall not prejudice an employee’s right to compensation or other benefits under this Plan. An employee shall not have the right to receive compensation or other benefits for any period after termination for Cause.

(3) If an employee is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligations under this Plan shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion: (i) pay the employee all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were suspended.

(4) If an employee is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all obligations of the Bank under this Plan shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

(5) If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations under this Plan shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

(6) Any payments made to employees pursuant to this Plan, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. §1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.

[signature page to follow]

5

This plan has been approved and adopted by the Board of Directors of the Bank and is effective as of [date].

	WELLESLEY BANK
Attest:	By:
		For the Entire Board of Directors

6

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Prospectus and Registration Statement on Form S-1, of our report dated September 8, 2011 on the consolidated financial statements of Wellesley Bank as of December 31, 2010 and 2009, and for the years then ended, appearing in the Prospectus, which is a part of this Registration Statement on Form S-1. We further consent to the reference to us under the heading “Experts” in such Prospectus.

/s/ Wolf & Company, P.C.

Boston, Massachusetts

September 9, 2011

EX-23.3

Exhibits 23.3

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

September 9, 2011

Board of Directors

Wellesley Bank

40 Central Street

Wellesley, Massachusetts 02482

Members of the Board:

We hereby consent to the use of our firm’s name in the Application for Conversion, and amendments thereto, filed by Wellesley Bank with the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Massachusetts Division of Banks. We also consent to the use of our firm’s name in the Registration Statement on Form S-1, and amendments thereto, filed by Wellesley Bancorp, Inc. with the Securities and Exchange Commission. Additionally, we consent to the inclusion of, summary of, and reference to our Conversion Valuation Appraisal Report in such filings and amendments, including the Prospectus of Wellesley Bancorp, Inc.

Sincerely,

FELDMAN FINANCIAL ADVISORS, INC.

EX-99.1

Exhibit 99.1

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

Wellesley Bank

Wellesley, Massachusetts

Conversion Valuation Appraisal Report

Valued as of August 23, 2011

Prepared By

Feldman Financial Advisors, Inc.

Washington, DC

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

August 23, 2011

Board of Directors

Wellesley Bank

40 Central Street

Wellesley, Massachusetts 02482

Members of the Board:

At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of Wellesley Bank (the “Bank”) in connection with the simultaneous conversion of the Bank from the mutual to stock form of ownership, the issuance of the Bank’s capital stock to Wellesley Bancorp, Inc. (“Wellesley Bancorp” or the “Company”), the offering of shares of common stock of the Company for sale to certain depositors of the Bank, employee benefit plans of the Bank, and other members of the general public, and the contribution of shares of common stock and cash to the Bank’s charitable foundation (collectively referred to herein as the “Conversion”). It is the intention to contribute to the charitable foundation amounts of common stock and cash equal to 7% and 1%, respectively, of the gross offering proceeds. This Appraisal is furnished pursuant to the Bank’s regulatory filing of the Application for Conversion (“Application”) with the Federal Deposit Insurance Corporation (“FDIC”) and the Massachusetts Commissioner of Banks.

Feldman Financial Advisors, Inc. (“Feldman Financial”) is a financial consulting and economic research firm that specializes in financial valuations and analyses of business enterprises and securities in the thrift, banking, and mortgage industries. The background of Feldman Financial is presented in Exhibit I. In preparing the Appraisal, we conducted an analysis of the Bank that included discussions with the Bank’s management, the Bank’s legal counsel, Kilpatrick Townsend & Stockton LLP, and the Bank’s independent auditor, Wolf & Company, P.C. In addition, where appropriate, we considered information based on other available published sources that we believe are reliable; however, we cannot guarantee the accuracy and completeness of such information.

We also reviewed, among other factors, the economy in the Bank’s primary market area and compared the Bank’s financial condition and operating performance with that of selected publicly traded thrift institutions. We reviewed conditions in the securities markets in general and in the market for thrift institution common stocks in particular.

The Appraisal is based on the Bank’s representation that the information contained in the Application and additional evidence furnished to us by the Bank and its independent auditor are truthful, accurate, and complete. We did not independently verify the financial statements and other information provided by the Bank and its independent auditor, nor did we independently value the assets or liabilities of the Bank. The Appraisal considers the Bank only as a going concern and should not be considered as an indication of the liquidation value of the Bank.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Directors

Wellesley Bank

August 23, 2011

Page Two

It is our opinion that, as of August 23, 2011, the estimated aggregate pro forma market value of the Bank, inclusive of common stock to be issued to the charitable foundation, was within a range (the “Valuation Range”) of $21,828,000 to $29,532,000 with a midpoint value of $25,680,000. The Valuation Range was based upon a 15% decrease from the midpoint to determine the minimum and a 15% increase from the midpoint to establish the maximum. Assuming an additional 15% increase above the maximum value would result in an adjusted maximum value of $33,961,800. As previously noted, it is the intention to contribute 7% of the gross offering proceeds to the charitable foundation. Therefore, assuming an offering price of $10.00 per share of common stock, the Company will offer for sale a minimum of 2,040,000 shares, a midpoint of 2,400,000 shares, a maximum of 2,760,000 shares, and an adjusted maximum of 3,174,000 shares.

Our Appraisal is not intended, and must not be construed, to be a recommendation of any kind as to the advisability of purchasing shares of common stock in the Conversion. Moreover, because the Appraisal is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of stock in the Conversion will thereafter be able to sell such shares at prices related to the foregoing estimate of the Bank’s pro forma market value. Feldman Financial is not a seller of securities within the meaning of any federal or state securities laws and any report prepared by Feldman Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. Except for the fee that we shall receive from the Bank for preparing this Appraisal, we are independent of the Bank, the Company, and their respective directors and officers. We are also independent of other professional firms engaged by the Bank and the Company to assist with the Conversion.

The Valuation Range reported herein will be updated as appropriate. These updates will consider, among other factors, any developments or changes in the Bank’s operating performance, financial condition, or management policies, and current conditions in the securities markets for thrift institution common stocks. Should any such new developments or changes be material, in our opinion, to the valuation of the Bank, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in detail at that time.

Respectfully submitted,

Feldman Financial Advisors, Inc.

/s/    Trent R. Feldman

Trent R. Feldman

President

/s/    Peter W. L. Williams

Peter W. L. Williams

Principal

FELDMAN FINANCIAL ADVISORS, INC.

TABLE OF CONTENTS

TAB			PAGE
	INTRODUCTION		1
I.	Chapter One – BUSINESS OF WELLESLEY BANK
	General Overview		4
	Financial Condition		10
	Income and Expense Trends		22
	Interest Rate Risk Management		30
	Asset Quality		33
	Subsidiary Activity		36
	Office Properties		37
	Market Area		39
II.	Chapter Two – COMPARISONS WITH PUBLICLY TRADED THRIFTS
	General Overview		46
	Selection Criteria		47
	Recent Financial Comparisons		51
III.	Chapter Three – MARKET VALUE ADJUSTMENTS
	General Overview		65
	Earnings Prospects		66
	Financial Condition		67
	Market Area		68
	Management		70
	Dividend Policy		70
	Liquidity of the Issue		71
	Subscription Interest		72
	Recent Acquisition Activity		73
	Effect of Government Regulations and Regulatory Reform		74
	Stock Market Conditions		76
	New Issue Discount		78
	Adjustments Conclusion		81
	Valuation Approach		81
	Valuation Conclusion		84
IV.	Appendix – EXHIBITS
	I	Background of Feldman Financial Advisors, Inc	I-1
	II-1	Consolidated Balance Sheets	II-1
	II-2	Consolidated Income Statements	II-2
	II-3	Loan Portfolio Composition	II-3
	II-4	Investment Portfolio Composition	II-4
	II-5	Deposit Account Distribution	II-5
	II-6	Borrowed Funds Distribution	II-6
	III	Financial and Market Data for All Public Thrifts	III-1
	IV-1	Pro Forma Assumptions for Conversion Stock Offering	IV-1
	IV-2	Pro Forma Conversion Valuation Range	IV-2
	IV-3	Pro Forma Conversion Analysis at the Maximum Valuation	IV-3
	IV-4	Comparative Valuation Ratio Differential	IV-4

i

FELDMAN FINANCIAL ADVISORS, INC.

LIST OF TABLES

TAB			PAGE
I.	Chapter One – BUSINESS OF WELLESLEY BANK
	Table 1	Selected Financial Condition Data	10
	Table 2	Relative Balance Sheet Concentrations	11
	Table 3	Income Statement Summary	23
	Table 4	Selected Operating Ratios	24
	Table 5	Income Statement Ratios	26
	Table 6	Yield and Cost Summary	29
	Table 7	Interest Rate Risk Analysis	32
	Table 8	Non-performing Assets Summary	34
	Table 9	Allowance for Loan Loss Summary	35
	Table 10	Branch Office Deposit Data	38
	Table 11	Selected Demographic Data	40
	Table 12	Deposit Market Share in the Boston MSA	44
	Table 13	Deposit Market Share in the Town of Wellesley	45
II.	Chapter Two – COMPARISONS WITH PUBLICLY TRADED THRIFTS
	Table 14	Comparative Group Operating Summary	50
	Table 15	Key Financial Comparisons	52
	Table 16	General Operating Characteristics	59
	Table 17	Summary Financial Performance Ratios	60
	Table 18	Income and Expense Analysis	61
	Table 19	Yield-Cost Structure and Growth Rates	62
	Table 20	Balance Sheet Composition	63
	Table 21	Regulatory Capital, Credit Risk, and Loan Composition	64
III.	Chapter Three – MARKET VALUE ADJUSTMENTS
	Table 22	Summary of Recent Massachusetts Acquisition Activity	75
	Table 23	Comparative Stock Index Performance	77
	Table 24	Summary of Recent Standard Conversion Stock Offerings	80
	Table 25	Comparative Pro Forma Market Valuation Analysis	86

ii

FELDMAN FINANCIAL ADVISORS, INC.

INTRODUCTION

As requested, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of Wellesley Bank (the “Bank”) in connection with the simultaneous conversion of the Bank from the mutual to stock form of ownership, the issuance of the Bank’s capital stock to Wellesley Bancorp, Inc. (“Wellesley Bancorp” or the “Company”), the offering of shares of common stock of the Company for sale to certain depositors of the Bank, employee benefit plans of the Bank, and other members of the general public, and the contribution of shares of common stock and cash to the Bank’s charitable foundation (collectively referred to herein as the “Conversion”). It is the intention to contribute to the charitable foundation amounts of common stock and cash equal to 7% and 1%, respectively, of the gross offering proceeds. This appraisal report is furnished pursuant to the Bank’s filing of the Application for Conversion with the Federal Deposit Insurance Corporation (“FDIC”) and the Massachusetts Commissioner of Banks. Our estimate of the pro forma market value of Wellesley Bank, inclusive of shares to be issued to the charitable foundation, is expressed in the form of a range (“Valuation Range”) based on accepted regulatory guidelines.

In the course of preparing the Appraisal, we reviewed and discussed with the Bank’s management and the Bank’s independent accountants, Wolf & Company, P.C., the audited financial statements of the Bank’s operations for the years ended December 31, 2009 and 2010. We also reviewed and discussed with management other financial matters of the Bank. Where appropriate, we considered information based upon other available public sources, which we believe to be reliable; however, we cannot guarantee the accuracy or completeness of such information. We visited the Bank’s primary market area and examined the prevailing economic conditions. We also examined the competitive environment within which the Bank operates and assessed the Bank’s relative strengths and weaknesses.

1

FELDMAN FINANCIAL ADVISORS, INC.

We examined and compared the Bank’s financial performance with selected segments of the thrift industry and selected publicly traded thrift institutions. We reviewed conditions in the securities markets in general and the market for thrift institution common stocks in particular. We included in our analysis an examination of the potential effects of the Conversion on the Bank’s operating characteristics and financial performance as they relate to the estimated pro forma market value of the Bank.

In preparing the Appraisal, we have relied upon and assumed the accuracy and completeness of financial and statistical information provided by the Bank and its independent accountants. We did not independently verify the financial statements and other information provided by the Bank and its independent accountants, nor did we independently value the assets or liabilities of the Bank. The Appraisal considers the Bank only as a going concern and should not be considered as an indication of the liquidation value of the Bank.

Our Appraisal is not intended, and must not be construed, to be a recommendation of any kind as to the advisability of purchasing shares of common stock in the Conversion. Moreover, because the Appraisal is necessarily based on estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the Conversion will thereafter be able to sell such shares at prices related to the foregoing estimate of the Bank’s pro forma market value. Feldman Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by Feldman Financial shall not be

2

FELDMAN FINANCIAL ADVISORS, INC.

used as an offer or solicitation with respect to the purchase or sale of any securities. Except for the fee that we shall receive from the Bank for preparing this Appraisal, we are independent of the Bank, the Company, and their respective directors and officers. We are also independent of other professional firms engaged by the Bank and the Company to assist with the Conversion.

The Valuation Range reported in this Appraisal will be updated as appropriate. These updates will consider, among other factors, any developments or changes in the Bank’s financial performance or management policies, and current conditions in the securities market for thrift institution common stocks. Should any such developments or changes be material, in our opinion, to the valuation of the Bank, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in detail at that time.

3

FELDMAN FINANCIAL ADVISORS, INC.

I. BUSINESS OF WELLESLEY BANK

General Overview

Wellesley Bank is a Massachusetts chartered cooperative bank headquartered in Wellesley, Massachusetts. Founded originally in 1911, the Bank operates as a community-oriented financial institution offering traditional financial services to consumer and businesses in its primary market area. At June 30, 2011, Wellesley Bank had total assets of $264.8 million, net loans of $205.4 million, total deposits of $228.4 million, and equity capital of $21.4 million or 8.10% of total assets. The Bank conducts operations from its executive office and two full service branches in the town of Wellesley. The Bank is subject to extensive regulation by the Massachusetts Commissioner of Banks, as its chartering agency, and by the Federal Deposit Insurance Corporation (“FDIC”), as its deposit insurer. The Bank is a member of the Federal Home Loan Bank (“FHLB”) of Boston.

The Bank is primarily engaged in the business of attracting deposits from the general public and using those funds to originate primarily residential mortgage loans, commercial real estate loans and construction loans and, to a lesser extent, commercial business loans, home equity lines of credit and other consumer loans. The Bank conducts its lending and deposit activities primarily with individuals and small businesses in its primary market area, which includes the communities of Wellesley, Dover, and Needham in Norfolk County and the communities of Natick, Newton, and Weston in Middlesex County. The Bank also offers customers a range of non-deposit products, including mutual funds, stocks, bonds, and exchange traded funds through its wholly-owned subsidiary, Wellesley Investment Partners, LLC, a registered investment advisor.

4

FELDMAN FINANCIAL ADVISORS, INC.

The Bank experienced significant growth over the past five years. At December 31, 2005, the Bank had total assets of $165.9 million. By December 31, 2010, the Bank had expanded its total assets to $262.0 million. The Bank’s asset base increased at a compound annual growth rate of 9.6% over this five-year period. In addition, the Bank began to broaden the diversification of its loan portfolio primarily through the increased origination of commercial real estate and construction loans.

The Bank’s recent loan growth was fueled largely by the growth of the commercial real estate loan portfolio, which expanded from $30.2 million at December 31, 2005 to $65.7 million at June 30, 2011. The construction loan portfolio also increased from $24.7 million at December 31, 2005 to $36.7 million at June 30, 2011. Although their relative concentration has declined in recent years, residential loans remain the largest category of loans within the Bank’s portfolio with $68.3 million of loans outstanding at June 30, 2011, or 32.7% of total loans.

The Bank’s asset growth was funded chiefly by deposit expansion. The Bank’s deposits increased at a compound annual growth rate of 10.9% from $132.2 million at December 31, 2005 to $222.1 million at December 31, 2010. The Bank’s balance sheet expansion was also supported by capital accumulation from profitable operations. The Bank reported positive earnings in each year from 2005 to 2010. The solid economy and above-average income demographics in the Bank’s primary market area contributed to the Bank’s favorable growth and earnings trends. However, the Bank did begin to experience an increase in non-performing assets in conjunction with the expansion and diversification of its loan portfolio and the lingering effects of the economic recession. Total non-performing assets (including troubled debt restructurings) increased from zero at year-end 2006 and year-end 2007 to $4.6 million or 1.73%

5

FELDMAN FINANCIAL ADVISORS, INC.

of total assets at June 30, 2011. The Bank increased its provision for loan losses in 2010 and the first half of 2011 to reflect increased levels of non-performing assets and loan charge-offs. The allowance for loan losses amounted to $3.2 million or 1.55% of total loans at June 30, 2011.

The Bank’s primary objective is to operate and grow a profitable community-oriented financial institution serving customers in its primary market area. The Bank has sought to achieve this through the adoption of a business strategy designed to maintain a strong capital position and high asset quality. The Bank’s specific operating strategies include the following:

• Increasing its deposit market share within the town of Wellesley and the surrounding communities. Since its inception in 1911, Wellesley Bank has primarily served the town of Wellesley, Massachusetts and the immediate surrounding communities. Despite considerable competition from larger financial institutions with greater resources, the Bank has made significant progress in recent years to increase its market presence in the town of Wellesley. Total deposits have increased $84.6 million, or 58.8%, from $143.8 million at December 31, 2006 to $228.4 million at June 30, 2011. The Bank has 12.71% of the deposits in the town of Wellesley at June 30, 2010, representing the third largest market share out of 12 financial institutions with branches in the town of Wellesley. The Bank believes the Wellesley market area will continue to provide opportunities for growth and it intends to continue to increase its market share in the town of Wellesley through the opening of its third Wellesley branch office in the first quarter of 2012.

• Continuing to emphasize commercial real estate, construction, and commercial business loans, as well as increasing commercial business deposits in its market area. Recently, the Bank has worked to increase its commercial relationships by diversifying the loan portfolio beyond residential mortgages and offering business deposit and checking products. Since year-end 2006, the commercial real estate, construction and commercial business loan portfolio has increased $47.0 million, or 66.5%, and was 56.3% of total loans at June 30, 2011. In connection with the increase in commercial business loans, the Bank also has focused on providing a full banking relationship and experienced an increase in business deposit and checking accounts. Since year-end 2006, business deposit and checking accounts increased $16.3 million, or 94.2%, and represented 14.8% of total deposits at June 30, 2011.

With the additional capital raised in the Conversion, the Bank expects to continue to pursue the larger lending relationships associated with commercial real estate and construction lending. In addition, the Bank plans to continue to expand and develop business deposit and checking products to better serve its commercial customers. The Bank believes its current staff of experienced commercial lenders is capable of managing these increasing commercial and construction relationships and does not expect to hire any additional commercial lending staff in the near future.

6

FELDMAN FINANCIAL ADVISORS, INC.

• Increasing residential mortgage lending in its market area. The Bank believes there are significant opportunities to increase residential mortgage lending in its market area. The town of Wellesley and its surrounding communities has a sound economy and has not been as negatively affected by the recent recession as other regions of the United States. As a result, the demand for residential mortgage loans in the Bank’s market area, in particular larger “jumbo” loans, has not been significantly impacted by the downturn in the economy. In order to take advantage of these opportunities, after the Conversion, the Bank expects to hire an additional residential mortgage lender to complement its existing residential mortgage lending operations and expects to increase its larger residential mortgage relationships.

• Continuing conservative underwriting practices and while a high quality loan portfolio. The Bank believes that strong asset quality is a key to long-term financial success. The Bank has sought to maintain a high level of asset quality and moderate credit risk by using conservative underwriting standards and by diligent monitoring and collection efforts. Although non-performing loans increased from $2.0 million at year-end 2008 to $3.5 million at June 30, 2011, non-performing loans were 1.66% of total loans and 1.31% of total assets at June 30, 2011. While the Bank intends to increase its commercial real estate, construction, and commercial business lending, it intends to continue its philosophy of managing large loan exposures through conservative loan underwriting and credit administration standards.

• Seeking to enhance fee income by growing investment advisory services. The Bank’s profits rely heavily on the spread between the interest earned on loans and securities and interest paid on deposits and borrowings. In order to decrease its reliance on net interest income, the Bank has pursued initiatives to increase non-interest income. The Bank offers a full array of investment services for individuals and small businesses, including full access to financial market instruments, such as mutual funds and equities, through Wellesley Investment Partners, LLC. Investment management fees totaled $71,000 in 2010 and $52,000 for the six months ended June 30, 2011. After the Conversion, the Bank intends to continue to enhance its fee income through Wellesley Investment Partners, LLC by engaging at least one additional sales-focused investment or financial planning professional.

• Emphasizing lower cost core deposits to maintain low funding costs. The Bank seeks to increase net interest income by controlling costs of funding. Over the past several years, the Bank has sought to reduce its dependence on traditional higher cost certificates of deposits in favor of stable lower cost demand deposits. The Bank has utilized additional product offerings, technology, and a focus on customer service in working toward this goal. In addition, the Bank intends to seek demand deposits by growing commercial banking relationships. Core deposits (demand, NOW, money market, and savings accounts) composed 49.8% of the Bank’s total deposits at June 30, 2011, as compared to 38.4% at December 31, 2008.

7

FELDMAN FINANCIAL ADVISORS, INC.

While the Bank’s present equity capital level is solid at 8.10% of total assets as of June 30, 2011, the Bank believes it is a prudent course of action to raise additional capital in order to facilitate its growth objectives and loan diversification, and provide a greater capital cushion in response to the heightened risk profile associated with uncertain economic conditions. The Bank’s equity position increased from $13.6 million at December 31, 2005 to $21.4 million at June 30, 2011 as a result of profitable operating results contributing to retained earnings. However, the ratio of total equity to total assets declined moderately from 8.18% at December 31, 2005 to 8.10% at June 30, 2011 due to the steady asset growth.

The Bank believes that raising capital also will help address the needs of the communities it serves and enhance its ability to expand or to make acquisitions. After the Conversion, the Bank will have increased financial capacity to merge with or acquire other financial institutions or business enterprises. Additionally, the Bank expects to benefit from its employees and directors having stock ownership in its business, since that is viewed as an effective performance incentive and a means of attracting, retaining, and compensating employees and directors.

As a stock holding company, the Company will have greater flexibility than the Bank now has in considering mergers and acquisitions, including the offer consideration paid in a transaction. The Bank’s current mutual cooperative bank structure, by its nature, limits its ability to offer any common stock as consideration in a merger or acquisition transactions. The stock holding company structure will enhance the ability of the Company to compete with other bidders when acquisition opportunities arise by better enabling it to offer stock or cash consideration, or a combination of the two.

8

FELDMAN FINANCIAL ADVISORS, INC.

In summary, the Bank’s primary reasons for implementing the Conversion and undertaking the stock offering are to:

• increase the capital of Wellesley Bank to support future lending and operational growth;

• enhance profitability and earnings through reinvesting and leveraging the offering proceeds, primarily through traditional funding and lending activities;

• support future branching activities;

• support the future acquisition of other financial institutions or financial services companies;

• retain and attract qualified personnel by establishing stock-based benefit plans; and

• increase the Bank’s philanthropic endeavors to the community it serves through the formation and funding of the Wellesley Bank Charitable Foundation.

The remainder of Chapter I examines in more detail the trends addressed in this section, including the impact of changes in the Bank’s economic and competitive environment, and recent management initiatives. The discussion is supplemented by the exhibits in the Appendix. Exhibit II-1 summarizes the Bank’s consolidated balance sheets as of the years ended December 31, 2009 and 2010 and as of June 30, 2011. Exhibit II-2 presents the Bank’s consolidated income statements for the years ended December 31, 2009 and 2010 and the six months ended June 30, 2010 and 2011.

9

FELDMAN FINANCIAL ADVISORS, INC.

Financial Condition

Table 1 presents selected data concerning the Bank’s financial position as of December 31, 2006 to 2010 and June 30, 2011. Table 2 displays relative balance sheet concentrations for the Bank as of the corresponding periods.

Table 1

Selected Financial Condition Data

As of December 31, 2006 to 2010 and June 30, 2011

(Dollars in Thousands)

	June 30, 2011		December 31,
			2010		2009		2008		2007		2006
Total assets	$	264,774	$	262,002	$	245,829	$	241,284	$	214,919	$	186,445
Cash and cash equivalents		18,637		18,397		9,370		5,072		5,624		4,901
Securities available for sale		28,506		25,565		28,188		29,621		25,669		20,971
Loans receivable, net		205,386		204,117		184,370		194,640		174,141		152,011
Total deposits		228,375		222,140		195,625		187,804		158,361		143,816
Short-term borrowings		6,423		5,804		6,270		4,395		4,238		4,133
Long-term debt		7,500		12,500		24,500		30,000		34,600		22,350
Total equity capital		21,445		20,408		18,303		16,958		16,199		15,034

Source: Wellesley Bank, preliminary prospectus.

Asset Composition

The Bank’s total assets amounted to $264.8 million at June 30, 2011, reflecting a 1.1% or $2.8 million increase from total assets of $262.0 million at year-end 2010. The Bank’s asset base had previously expanded at a compound annual growth rate of 8.9% between year-end 2006 and year-end 2010. Steady expansion of the Bank’s loan portfolio fueled the asset growth, in particular within the commercial real estate, construction, and home equity lending categories. Consistent increases in total deposits, reflecting a compound annual growth rate of 11.5% between year-end 2006 and year-end 2010, supported the asset growth and allowed the Bank to rely less on borrowings as funding sources.

10

FELDMAN FINANCIAL ADVISORS, INC.

Table 2

Relative Balance Sheet Concentrations

As of December 31, 2006 to 2010 and June 30, 2011

(Percent of Total Assets)

	June 30, 2011 (%)		December 31,
			2010 (%)		2009 (%)		2008 (%)		2007 (%)		2006 (%)
Cash and cash equivalents		7.04		7.02		3.81		2.10		2.62		2.63
Certificates of deposit		0.64		1.31		5.25		0.87		0.05		0.05
Securities available for sale		10.77		9.76		11.47		12.28		11.94		11.25
Federal Home Loan Bank stock		0.73		0.74		0.79		0.80		0.90		0.76
Loans receivable, net		77.57		77.91		75.00		80.67		81.03		81.53
Bank-owned life insurance		1.56		1.55		1.59		1.56		1.68		1.87
Other assets		1.70		1.72		2.09		1.72		1.78		1.91
Total assets		100.00		100.00		100.00		100.00		100.00		100.00
Total deposits		86.25		84.79		79.58		77.84		73.68		77.14
Short-term borrowings		2.43		2.22		2.55		1.82		1.97		2.22
Long-term debt		2.83		4.77		9.97		12.43		16.10		11.99
Other liabilities		0.39		0.44		0.46		0.88		0.71		0.60
Total liabilities		91.90		92.21		92.55		92.97		92.46		91.94
Total equity capital		8.10		7.79		7.45		7.03		7.54		8.06
Total liabilities and equity		100.00		100.00		100.00		100.00		100.00		100.00

Source: Wellesley Bank, preliminary prospectus; Feldman Financial calculations.

As presented in Exhibit II-3, the Bank’s current loan portfolio includes real estate mortgage loans as core products. The largest components of the Bank’s loan portfolio are residential mortgage loans, commercial mortgage loans, and construction loans. Residential mortgage loans remain the largest category type within the Bank’s loan portfolio, although commercial real estate loans occupy an increasing concentration of the overall portfolio. While commercial business loans and home equity lines of credit represent lesser levels of portfolio concentration, these types of loans comprise important elements of the Bank’s growth strategies in becoming a diversified, full service financial institution. For the six months ended June 30, 2011 and the year ended December 31, 2010, the Bank originated $41.4 million and $74.1 million of total loans, respectively, and sold $2.1 million and $6.3 million of loans, all of which were residential mortgage loans.

11

FELDMAN FINANCIAL ADVISORS, INC.

The Bank originates loans for investment purposes, although it generally sells newly originated, conforming fixed-rate residential mortgage loans into the secondary market with servicing released. The Bank intends to continue to emphasize residential and commercial mortgage lending, while also concentrating on ways to expand its commercial business lending activities with a focus on serving small businesses and emphasizing relationship banking in its primary market area. The Bank does not originate loans generally known as subprime loans, Alt-A loans, or negative amortization loans, and does not portfolio interest-only residential mortgage loans.

Residential mortgage loans. Residential mortgage loans totaled $68.3 million or 32.7% of the Bank’s loan portfolio at June 30, 2011, consisting of $53.2 million and $15.1 million of adjustable-rate and fixed-rate loans, respectively. The Bank offers fixed-rate and adjustable-rate residential mortgage loans with terms up to 30 years. Generally, the Bank’s fixed-rate loans conform to Fannie Mae and Freddie Mac underwriting guidelines and are originated with the intention to sell. The Bank’s adjustable-rate mortgage loans generally adjust annually or every three years after an initial fixed period that ranges from three to seven years. Interest rates and payments on adjustable-rate loans generally are adjusted to a rate equal to a specified percentage above the three-year U.S. Treasury index. Depending on the loan type, the maximum amount by which the interest rate may be increased or decreased is generally 2% per adjustment period and the lifetime interest rate caps range from 5% to 6% over the initial interest rate of the loan. The Bank’s adjustable-rate loans generally have prepayment penalties.

12

FELDMAN FINANCIAL ADVISORS, INC.

The Bank’s current lending practice is generally to (i) sell to the secondary market newly originated, 15-year or longer term conforming fixed-rate residential mortgage loans, and (ii) hold in portfolio non-conforming loans, shorter-term fixed-rate loans, and adjustable-rate loans. Generally, conforming fixed-rate loans are sold to third parties with servicing released. The Bank will make loans with loan-to-value ratios up to 90% (95% for first time homebuyers only); however, the Bank generally requires private mortgage insurance for loans with a loan-to-value ratio over 90%.

Commercial real estate loans. Commercial real estate loans totaled $65.7 million or 31.4% of the Bank’s loan portfolio at June 30, 2011, inclusive of $3.7 million in multi-family real estate loans. The commercial real estate loan portfolio consisted of $10.8 million in fixed-rate loans and $54.9 million of adjustable-rate loans at June 30, 2011. The Bank currently targets new individual commercial real estate loan and multi-family originations to small- and mid-size owner-occupants and investors in its market area between $1.0 million and $4.0 million, which is the Bank’s current internal limit on loans to one borrower. Due to loan amortizations and lower than targeted size originations, the average size for loans in this portfolio was approximately $750,000 at June 30, 2011.

The Bank’s commercial real estate and multi-family loans are generally secured by properties used for business purposes such as office buildings, warehouses, retail facilities, and apartment buildings. In addition to originating these loans, the Bank also participates in commercial real estate loans with other financial institutions located primarily in Massachusetts. At June 30, 2011, the Bank’s largest commercial real estate loan was for $3.9 million and was secured by a commercial research and development building located in Massachusetts outside of

13

FELDMAN FINANCIAL ADVISORS, INC.

the Bank’s primary market area. At June 30, 2011, the Bank’s largest multi-family real estate loan was for $2.9 million and was secured by several income-producing properties in Massachusetts outside of the Bank’s primary market area. Both of these loans were performing according to their original repayment terms at June 30, 2011. At June 30, 2011, loan participations purchased totaled $325,000. The properties securing these loans are located entirely in Massachusetts.

Construction loans. Construction loans totaled $36.7 million or 17.6% of the Bank’s loan portfolio at June 30, 2011. The Bank primarily originates construction loans to contractors and builders, and to a lesser extent individuals, to finance the construction of residential dwellings. The Bank also makes construction loans for commercial development projects, including small industrial buildings and retail and office buildings. The Bank lends to experienced local builders and its construction loans are primarily secured by properties located within a 15-mile radius of Wellesley, Massachusetts.

The Bank’s construction loans generally are fixed-rate interest-only loans that provide for the payment of interest only during the construction phase, which usually ranges from 12 to 24 months. The interest rates on the construction loans generally give consideration to the prime rate as published in The Wall Street Journal and market conditions. At the end of the construction phase, the loan may be paid in full or converted to a permanent mortgage loan. Construction loans generally can be made with a maximum loan to value ratio of 80% of the appraised market value estimated upon completion of the project.

Most of the Bank’s loans for the construction of residential properties are for residences being built that have not been sold prior to commencement of construction (speculative loans).

14

FELDMAN FINANCIAL ADVISORS, INC.

At June 30, 2011, the Bank’s construction loan portfolio consisted of $23.8 million in loans that were secured by residential real estate speculative loan projects, $4.9 million in loans that were secured by owner-occupied residential real estate, and $8.0 million in loans that were secured by commercial real estate speculative loan projects.

At June 30, 2011, the Bank’s largest outstanding construction loan relationship was for a speculative project aggregating $3.0 million, substantially all of which was outstanding. This loan is secured by two high-end residential homes located in Massachusetts outside of the Bank’s primary market area. This loan was performing according to its original repayment terms at June 30, 2011.

Commercial business loans. At June 30, 2011, commercial business loans amounted to $15.2 million or 7.3% of the Bank’s total loan portfolio. The Bank’s commercial lending products include term loans, revolving lines of credit, and equipment loans. The Bank makes commercial business loans and lines of credit with either variable or fixed rates of interest. Variable rates are based on the prime rate as published in The Wall Street Journal, plus a margin. Fixed-rate business loans are generally indexed to a corresponding U.S. Treasury rate, plus a margin.

The Bank’s is focusing its commercial business lending efforts on small- to medium-sized, privately-held companies with local or regional businesses that operate in its market area. In addition, commercial business loans are generally made only to existing customers having a business or individual deposit account and new borrowers are expected to establish appropriate deposit relationships with the Bank if not already a depositor.

15

FELDMAN FINANCIAL ADVISORS, INC.

Depending on the collateral used to secure the loans, commercial business loans are made by the Bank in amounts of up to 80% of the value of the collateral securing the loan. At June 30, 2011, the Bank’s largest commercial business loan was a $1.7 million loan and its largest commercial line of credit was $1.2 million, none of which was outstanding at June 30, 2011. All of these loans are secured by assets of the respective borrowers and were performing according to their original terms at June 30, 2011.

Home equity lines of credit and other consumer loans. Home equity lines of credit totaled $22.6 million in outstanding loans or 10.8% of the Bank’s loan portfolio at June 30, 2011. Home equity lines of credit are secured by owner-occupied residences, have adjustable rates of interest with 10-year draws amortized over 15 years that are indexed to the prime rate as published by The Wall Street Journal, and generally are subject to an interest rate floor. The Bank’s home equity lines of credit generally have a monthly variable interest rate. The Bank offers home equity lines of credit with cumulative loan-to-value ratios generally up to 85%, when taking into account both the balance of the home equity loan and the first mortgage loan. The Bank typically does not hold a first mortgage position on the homes that secure home equity lines of credit. The Bank also occasionally makes fixed-rate second mortgage loans, automobile loans, loans secured by passbook or certificate accounts, and overdraft loans. At June 30, 2011, other consumer loans were $429,000 or 0.2% of total loans.

Exhibit II-4 presents a summary of the Bank’s investment portfolio as of December 31, 2009 and 2010 and June 30, 2011. At June 30, 2011, the Bank’s securities portfolio consisted primarily of residential mortgage-backed securities issued by U.S. government agencies and government-sponsored enterprises and state and municipal bonds. Securities increased by $2.9

16

FELDMAN FINANCIAL ADVISORS, INC.

million, or 11.5%, in the six months ended June 30, 2011 due to the purchase of additional securities resulting from excess liquidity. Securities decreased by $2.6 million, or 9.3%, in the year ended December 31, 2010 primarily due to the sales and maturities of debt securities and pay-downs of mortgage-backed securities.

The Bank’s investment objectives are to (i) provide and maintain liquidity, (ii) establish an acceptable level of interest rate and credit risk, (iii) provide an alternate source of low-risk investments when demand for loans is weak, and (iv) generate a favorable return. Management, working with Wellesley Investment Partners, LLC, a wholly-owned subsidiary of the Bank and a registered investment advisor, is responsible for the day-to-day management of the investment portfolio. While the Bank has the authority under applicable law to invest in derivative securities, the Bank had no investments in derivative securities as of June 30, 2011.

Liability Composition

Deposits are the Bank’s major external source of funds for lending and investment purposes. Exhibit II-5 presents a summary of the Bank’s deposit composition as of December 31, 2009 and 2010 and June 30, 2011. Total deposits amounted to $228.4 million or 86.3% of total assets and 93.9% of total liabilities at June 30, 2011. Total deposits increased by 13.6% from $195.6 million at year-end 2009 to $222.1 million at year-end 2010, and increased by 2.8% during the first half of 2011.

The Bank attracts deposits from within its market area through advertising and its website by offering of a broad selection of deposit instruments, including non-interest bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts, and certificates of deposit. The Bank does not utilize

17

FELDMAN FINANCIAL ADVISORS, INC.

brokered deposits. In addition to accounts for individuals, the Bank also offers several commercial checking accounts designed for the businesses operating in its market area and strongly encourages commercial borrowers to utilize its commercial business deposit products.

The Bank’s deposit account terms vary according to the minimum balance required, the time periods the funds must remain on deposit, and the interest rate, among other factors. In determining the terms of its deposit accounts, the Bank considers the rates offered by its competition, its liquidity needs, internal profitability, and customer preferences and concerns. The Bank generally reviews its deposit mix and pricing on a weekly basis. The Bank’s deposit pricing strategy has generally been to offer competitive rates and to offer periodically special rates in order to attract deposits of a specific type or term.

The Bank’s deposit base at June 30, 2011 comprised $114.7 million of certificate accounts (50.2% of total deposits), $46.1 million of money market accounts (20.2%), $27.0 million of non-interest bearing demand accounts (11.8%), $24.9 million of regular and other savings accounts (10.9%), and $15.6 million of NOW checking accounts (6.8%). Jumbo certificates of deposit, which have minimum balances of $100,000, amounted to $73.4 million or 32.1% of total deposits at June 30, 2011.

Money market accounts increased by 26.0% and 23.4% for the years ended December 31, 2009 and 2010, respectively, and increased 8.4% during the six months ended June 30, 2011. Regular and other savings accounts increased by 45.5% and 49.8% for the years ended December 31, 2009 and 2010, respectively, and increased 5.4% for the six months ended June 30, 2011. Concurrently, certificate accounts remained fairly stable and declined in relation to total deposits from 61.6% at December 31, 2008 to 50.2% at June 30, 2011. The recent deposit trends reflect

18

FELDMAN FINANCIAL ADVISORS, INC.

the Bank’s continuing efforts to decrease its reliance on certificates of deposit as well as customers shifting their certificates of deposit to more liquid deposit accounts due to low interest rates. In addition, recent increases in core deposits reflect the Bank’s efforts in expanding services to small business customers.

The Bank utilizes borrowings as a supplemental source of funds when they can be invested profitably or to meet asset/liability management objectives. The Bank’s borrowings consist of (i) FHLB borrowings, (ii) Co-operative Central Bank borrowings, and (iii) securities sold under agreement to repurchase. At June 30, 2011, the Bank had a borrowing capacity of $15.8 million from the FHLB of Boston, of which $7.5 million was outstanding. At June 30, 2011, the Bank also had an available line of credit of $1.3 million with the FHLB of Boston at an interest rate that adjusts daily. The Bank had no overnight FHLB advances as of June 30, 2011. The FHLB borrowings are secured by a blanket lien on residential real estate.

The Co-operative Central Bank borrowings for liquidity purposes are available to all cooperative member banks. Loan advances from the Co-operative Central Bank will generally be made on an unsecured basis. At June 30, 2011, the Bank had $11.4 million of borrowing capacity with the Co-operative Central Bank, none of which was outstanding.

Securities sold under agreements to repurchase are customer deposits that are invested overnight in mortgage-related securities. The customers, predominantly commercial customers of the Bank, set a predetermined balance and deposits in excess of that amount are transferred into the repurchase account from each customer’s checking account. The next banking day, the funds are re-credited to their individual checking account along with interest earned at market rates. These types of accounts are often referred to as sweep accounts.

19

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-6 presents a summary of the Bank’s recent borrowing activity. The Bank’s outstanding FHLB advances have declined from $30.0 million, $24.5 million, and $12.5 million at December 31, 2008, 2009, and 2010, respectively, to $7.5 million at June 30, 2011. Similarly, average FHLB borrowings during the period declined from $30.8 million, $25.4 million, and $18.2 million in 2008, 2009, and 2010, respectively, to $12.0 million for the first half of 2011. The reduction in FHLB borrowings resulted primarily from the Bank’s success in shifting its funding mix to include a greater concentration of lower-cost deposits, including non-interest bearing demand deposit accounts for small business customers. Average balances of short-term borrowings (securities sold under agreements to repurchase) amounted to $6.4 million in 2009, $7.1 million in 2010, and $7.0 million for the first half of 2011. The weighted average interest rate of FHLB advances was 3.65% at June 30, 2011, and the weighted average interest rate of short-term borrowings was 1.14% at June 30, 2011.

Equity Capital

Wellesley Bank has historically maintained solid capital levels. Due to significant asset expansion and balance sheet leverage, the Bank’s ratio of total equity to total assets declined from 8.06% at December 31, 2006 to 7.03% at December 31, 2008. During this period, the Bank’s assets increased 29.4% from $186.4 million to $241.3 million, while total equity increased 12.8% from $15.0 million to $17.0 million. Thereafter, more moderate asset growth and increased earnings allowed the Bank to reinforce its capital level as total equity increased to $21.4 million and the ratio of total equity to total assets advanced to 8.10% at June 30, 2011.

The Bank’s capital level remains strong in comparison to minimum regulatory requirements. The Bank’s regulatory capital ratios of Tier 1 Leverage Capital, Tier 1 Risk-based

20

FELDMAN FINANCIAL ADVISORS, INC.

Capital, and Total Risk-based Capital were 7.95%, 10.88%, and 12.14%, respectively, as of June 30, 2011. In comparison, the minimum regulatory requirements for the Bank under FDIC guidelines were 3.00%, 4.00%, and 8.00%, and the threshold requirements for regulatory “well capitalized” levels were 5.00%, 6.00%, and 10.00%, respectively. Based on these regulatory capital ratios and requirements, the Bank was considered well capitalized as of June 30, 2011.

21

FELDMAN FINANCIAL ADVISORS, INC.

Income and Expense Trends

Table 3 displays the main components of Wellesley Bank’s earnings performance for the years ended December 31, 2006 to 2010 and the six months ended June 30, 2010 and 2011. Table 4 presents a summary of selected operating ratios. Table 5 displays the Bank’s principal income and expense ratios as a percent of average assets. Table 6 presents the Bank’s weighted average yields on interest-earning assets and weighted average costs of interest-bearing liabilities.

General Overview

Wellesley Bank has exhibited a record of steady profitability, reflecting a trend of relatively stable net interest margins, favorable efficiency ratios, and low levels of credit-related loss provisions. The Bank’s ROA indicated an annual average of 0.58% for the five-year period from 2006 to 2010. The Bank’s earnings and ROA declined to $687,000 and 0.31%, respectively, in 2008 due mainly to a narrowing net interest margin and an impairment loss on Fannie Mae preferred stock securities. The Bank’s earnings rebounded to $1.1 million and $2.2 million for 2009 and 2010, respectively, as profitable balance sheet expansion fueled increases in net interest income. The Bank’s net interest income continued to rise in the first half of 2011, but was offset partially by increases in the loan loss provision and non-interest expense.

Six Months Ended June 30, 2010 and 2011

Net income was $958,000 for the six months ended June 30, 2011 as compared to $1.0 million for the six months ended June 30, 2010. The annualized ROA declined to 0.73% for the first half of 2011 versus 0.81% for the 2010 period. The $54,000 or 5.3% earnings decrease was primarily due to a $304,000 increase in non-interest expense and $100,000 increase in the loan loss provision, partially offset by an increase of $284,000 in net interest income.

22

FELDMAN FINANCIAL ADVISORS, INC.

Table 3

Income Statement Summary

For the Years Ended December 31, 2006 to 2010

And the Six Months Ended June 30, 2010 and 2011

(Dollars in Thousands)

	Six Months Ended June 30,				Year Ended December 31,
	2011		2010		2010		2009		2008			2007		2006
Interest and dividend income	$	6,450	$	6,526	$	13,337	$	13,382	$	13,553		$	13,214	$	11,192
Interest expense		1,427		1,787		3,379		5,553		6,739			6,875		4,921
Net interest income		5,023		4,739		9,968		7,829		6,814			6,339		6,271
Provision for loan losses		600		500		1,100		300		445			260		70
Net interest income after prov.		4,423		4,239		8,858		7,529		6,369			6,079		6,201
Non-interest income (loss)		229		211		552		258		(347	)		339		254
Non-interest expense		3,153		2,849		5,999		5,945		5,030			4,782		4,338
Income before income taxes		1,499		1,601		3,411		1,842		992			1,636		2,117
Income tax provision		541		589		1,258		697		305			553		749
Net income	$	958	$	1,012	$	2,153	$	1,145	$	687		$	1,083	$	1,368

Source: Wellesley Bank, preliminary prospectus.

Net interest income for the six months ended June 30, 2011 totaled $5.0 million compared to $4.7 million for the six months ended June 30, 2010, an increase of $284,000, or 6.0%. The increase in net interest income was primarily due to a decrease in interest expense. Interest expense decreased $360,000, or 20.1%, during this period primarily due to a 43.7% decrease in the average balance of FHLB advances and a decrease in the average rates paid on interest bearing liabilities, in particular certificates of deposit. The average rates paid on deposits and borrowings decreased by 41 basis points in the 2011 period. The decrease in the cost of deposits and borrowings was primarily due to a declining long-term interest rate environment and the Bank’s continued focus on reducing deposit interest rates by not aggressively competing for certificates of deposit. FHLB borrowings decreased as the Bank paid off certain advances upon maturity during the 2011 period.

23

FELDMAN FINANCIAL ADVISORS, INC.

Table 4

Selected Operating Ratios

As of or For the Years Ended December 31, 2006 to 2010

And As of or For the Six Months Ended June 30, 2010 and 2011

	As of or For the Six Months Ended June 30,						As of or For the Year Ended December 31,
	2011			2010			2010			2009			2008			2007			2006
Performance Ratios (1)
Return on average assets		0.73	%		0.81	%		0.84	%		0.45	%		0.31	%		0.54	%		0.78	%
Return on average equity		9.27			10.89			11.17			6.50			4.12			6.84			9.35
Interest rate spread (2)		3.75			3.71			3.82			2.84			2.81			2.71			3.24
Net interest margin (3)		3.96			3.97			4.07			3.21			3.22			3.29			3.77
Non-interest expense to average assets		2.40			2.29			2.35			2.36			2.24			2.37			2.48
Efficiency ratio (4)		60.03			57.56			57.08			73.51			77.75			71.61			66.48
Average interest-earning assets to average interest-bearing liabilities		119.11			117.10			117.70			116.14			112.98			115.81			117.17
Average equity to average total assets		7.86			7.47			7.57			6.99			7.41			7.85			8.37
Capital Ratios
Tier 1 capital to average total assets (5)		7.95			7.53			7.74			7.00			7.06			7.45			8.33
Tier 1 risk-based capital to risk-wtd. assets		10.88			10.47			10.64			10.63			9.90			10.36			11.32
Total risk-based capital to risk-wtd. assets		12.14			11.72			11.90			11.86			11.10			11.39			12.37
Asset Quality Ratios
Non-performing loans to total assets (6)		1.31			0.99			0.77			0.29			0.81			0.00			0.00
Non-performing loans to total loans (6)		1.66			1.27			0.97			0.38			0.99			0.00			0.00
Allowance for loan losses to non- performing loans (6)		93.27			95.02			133.96			292.20			104.55			—			—
Allowance for loan losses to total loans		1.55			1.23			1.30			1.10			1.04			0.91			0.92
Net charge-offs to average loans during the period		0.03			0.05			0.24			0.15			0.00			0.04			0.00
Other Data
Number of full service offices		2			2			2			2			2			2			2

(1) Performance ratios for the six months ended June 30, 2010 and 2011 are annualized.

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

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

(4) Represents non-interest expense divided by the sum of net interest income and non-interest income, excluding gains or losses on the sale of securities.

(5) Average assets represent average assets for the most recent quarter within the respective period.

(6) There were no non-performing loans at December 31, 2006 and 2007.

Source: Wellesley Bank, preliminary prospectus.

24

FELDMAN FINANCIAL ADVISORS, INC.

Interest income remained steady at $6.5 million for both the 2010 and 2011 six-month periods. The average balance of interest earning assets increased 6.0%, partially offset by a decrease in the average rate earned on these assets of 37 basis points. Interest income from loans increased $113,000, or 1.9%, due to a 14.7% increase in the average balance of loans, partially offset by a decrease in the average rate paid on loans of 33 basis points. Interest income from taxable investment securities decreased $170,000, or 37.4%, due to a decrease in the average rate paid on taxable investment securities of 123 basis points and an 11.2% decrease in the average balance of taxable investment securities.

The provision for loan losses was $600,000 for the six months ended June 30, 2011, compared to $500,000 for the six months ended June 30, 2010. The increase in the provision was due to increases in total non-performing assets, which increased from $926,000 at December 31, 2009 to $3.1 million at December 31, 2010 and $4.6 million at June 30, 2011.

Non-interest income increased $18,000 or 8.5% to $229,000 during the six months ended June 30, 2011 from $211,000 for the six months ended June 30, 2010. The increase was primarily due to an increase in wealth management fees during the 2011 period resulting from the Bank’s continuing efforts to expand its investment advisory services. The annualized ratio of non-interest income to average assets measured 0.17% for both 2010 and 2011 periods.

Non-interest expense increased $304,000 or 10.7% to $3.2 million for the first half of 2011 from $2.8 million for the first half of 2010. Factors that contributed to the increase in non-interest expense during the 2011 period were increased salaries and employee benefits, increased occupancy and equipment costs, and increased FDIC assessments. The annualized ratio of non-interest expense to average assets increased from 2.29% to 2.40% in the 2011 period.

25

FELDMAN FINANCIAL ADVISORS, INC.

Table 5

Income Statement Ratios

For the Years Ended December 31, 2006 to 2010

And the Six Months Ended June 30, 2010 and 2011

(Percent of Average Assets)

	Six Months Ended June 30,						Year Ended December 31,
	2011(1)			2010(1)			2010			2009			2008			2007			2006
Interest and dividend income		4.89	%		5.23	%		5.23	%		5.31	%		6.03	%		6.53	%		6.41	%
Interest expense		1.08			1.42			1.33			2.20			3.00			3.40			2.82
Net interest income		3.81			3.80			3.90			3.11			3.03			3.13			3.49
Provision for loan losses		0.46			0.40			0.43			0.12			0.20			0.13			0.04
Net interest income after provision for loan losses		3.35			3.40			3.47			2.99			2.83			3.00			3.55
Non-interest income (loss)		0.17			0.17			0.22			0.10			(0.15	)		0.17			0.15
Non-interest expense		2.40			2.29			2.35			2.36			2.24			2.37			2.48
Income before income taxes		1.13			1.28			1.34			0.73			0.44			0.81			1.21
Income tax provision		0.40			0.47			0.50			0.28			0.13			0.27			0.43
Net income		0.73	%		0.81	%		0.84	%		0.45	%		0.31	%		0.54	%		0.78	%

(1) Ratios for the six months ended June 30, 2010 and 2011 are annualized.

Source: Wellesley Bank, preliminary prospectus; Feldman Financial calculations.

Years Ended December 31, 2009 and 2010

Net income for the year ended December 31, 2010 increased to $2.2 million as compared to $1.1 million for the year ended December 31, 2009. The increase was primarily due to a decrease of $2.2 million in interest expense, partially offset by an increase of $800,000 in the provision for loan losses and an increase of $561,000 in the income tax expense. The Bank’s ROA improved from 0.45% in 2009 to 0.84% in 2010.

Net interest income for the year ended December 31, 2010 totaled $10.0 million, compared to $7.8 million for the year ended December 31, 2009, representing an increase of $2.1 million or 27.2%. The increase in net interest income was primarily due to a decrease in interest expense. Interest expense decreased $2.2 million, or 39.2%, during this period primarily due to a

26

FELDMAN FINANCIAL ADVISORS, INC.

decrease in the average rates paid on interest bearing liabilities, in particular certificates of deposit. The average rates paid on deposits and borrowings decreased by 103 basis points in 2010. The decrease in the cost of deposits was primarily due to a declining interest rate environment for certificates of deposit and the Bank’s continued focus on reducing deposit interest rates by not aggressively competing for certificates of deposit, the average balance of which decreased 8.6% in 2010. The Bank experienced an increase in the average balance of deposits of 2.6% in 2010, while the average balance of FHLB advances decreased by 28.3% over the same period.

Interest income decreased slightly to $13.3 million for 2010 from $13.4 million for 2009. The average balance of interest earning assets increased 0.5%, offset by a decrease in the average rate earned on these assets of five basis points. Interest income from loans increased $260,000, or 2.2%, due to a 3.9% increase in the average balance of loans, partially offset by a decrease in the average rate paid on loans of 10 basis points. Interest income from taxable investment securities decreased $293,000, or 25.8%, due to a decrease in the average rate paid on taxable investment securities of 70 basis points and a 12.8% decrease in the average balance of taxable investment securities.

The Bank’s yield on total interest-earning assets declined 5 basis points from 5.49% in 2009 to 5.44% in 2010, while the cost of interest-bearing liabilities decreased by 103 basis points from 2.65% in 2009 to 1.62% in 2010. As a result, the Bank’ net interest rate spread advanced 98 basis points from 2.84% in 2009 to 3.82% in 2010. Similarly, the Bank’s net interest margin improved from 3.21% in 2009 to 4.07% in 2010.

27

FELDMAN FINANCIAL ADVISORS, INC.

During the year ended December 31, 2010, the Bank recorded a $1.1 million provision to the allowance for loan losses. The loan loss provision amounted to $300,000 in the prior year. The increased provision in 2010 was attributable to net loan charge-offs totaling $470,000, increased non-performing loans and criticized and classified assets, the continuing change in the mix of the portfolio, and adverse economic conditions. From December 31, 2009 to December 31, 2010, non-performing loans increased from $705,000 to $2.0 million and criticized and classified assets increased from $4.8 million to $7.9 million.

Non-interest income increased $294,000 to $552,000 during the year ended December 31, 2010 from $258,000 for the year ended December 31, 2009. In 2010, the Bank recorded a gain on the sale of securities of $82,000 compared to a loss on the sale of securities of $131,000 in 2009. Income from customer service fees increased $28,000, or 20.1%, primarily due to changes in the Bank’s fee structure, and wealth management fees increased $28,000, or 65.1%, resulting from the Bank’s ongoing continuing efforts to expand its investment advisory services. Excluding the impact of securities gains or losses, the ratio of non-interest income increased from 0.14% in 2009 to 0.18% in 2010.

Non-interest expense increased by $54,000 or 0.9% to $6.0 million in 2010 from $5.9 for 2009. The increase was primarily due to an increase of $230,000 or 30.7% in other general and administrative expenses resulting from increases in advertising and professional fees. In addition, contribution expense increased $71,000 due to an expansion of the Bank’s community giving associated with its 100th anniversary, and occupancy and equipment expense increased $61,000 as a result of increases in certain maintenance and service contracts. Partially offsetting these increases were decreases in salaries and employee benefits due to the reduction in benefit

28

FELDMAN FINANCIAL ADVISORS, INC.

costs associated with the retirement of the Bank’s former Chief Executive Officer and a decrease in FDIC insurance. In the second quarter of 2009, the FDIC announced a special assessment of five basis points on each insured institution’s assets less Tier 1 capital. This special assessment was recognized and paid in September 2009. The ratio of non-interest expense was relatively unchanged at 2.35% in 2010, compared to 2.36% for 2009.

Table 6

Yield and Cost Summary

For the Years Ended December 31, 2008 to 2010

And the Six Months Ended June 30, 2010 and 2011

	Six Months Ended June 30						Year Ended December 31,
	2011(1)			2010(1)			2010			2009			2008
Weighted Average Yields
Short-term investments		0.22	%		0.20	%		0.20	%		0.18	%		2.19	%
Certificates of deposit		1.90			1.57			1.65			1.69			4.94
Investment securities: taxable		2.95			4.18			3.97			4.67			5.61
Investment securities: tax-exempt		3.31			3.63			3.48			3.67			3.78
Total loans		5.80			6.13			6.10			6.20			6.63
FHLB stock		0.31			0.00			0.00			0.00			3.89
Total interest-earning assets		5.09			5.46			5.44			5.49			6.41
Weighted Average Costs
Regular savings accounts		0.57			0.59			0.59			0.57			1.17
NOW checking accounts		0.19			0.17			0.17			0.17			0.32
Money market accounts		0.63			0.78			0.79			1.00			1.89
Certificates of deposit		1.61			1.88			1.78			3.06			4.24
Total interest-bearing deposits		1.16			1.41			1.34			2.34			3.36
Short-term borrowings		1.16			1.23			1.24			1.51			2.35
Long-term debt		4.40			4.78			4.62			5.07			4.99
Total interest-bearing liabilities		1.34			1.75			1.62			2.65			3.60
Net interest spread (2)		3.75			3.71			3.82			2.84			2.81
Net interest margin (3)		3.96			3.97			4.07			3.21			3.22

(1) Ratios for the six-month periods have been annualized.

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

(3) Represents net interest income as a percentage of average interest-earning assets.

Source: Wellesley Bank, preliminary prospectus.

29

FELDMAN FINANCIAL ADVISORS, INC.

Interest Rate Risk Management

The Bank manages the interest rate sensitivity of its 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 the Bank’s earnings while decreases in interest rates may beneficially affect earnings. To reduce the potential volatility of earnings, the Bank has sought to improve the match between asset and liability maturities and rates, while maintaining an acceptable interest rate spread. The Bank seeks to maximize net interest income and net income within the confines of acceptable interest rate and credit risk. In accordance with these objectives, the Bank has also established policies for monitoring its interest rate risk exposure, liquidity needs, liquidity sources, and balance sheet composition.

The Bank’s strategy for managing interest rate risk emphasizes (i) originating adjustable-rate loans for retention in loan portfolio, (ii) selling in the secondary market substantially all newly originated, conforming fixed-rate residential mortgage loans, (iii) promoting core deposit products and short-term time deposits, (iv) adjusting the maturities of borrowings, and (v) adjusting the investment portfolio mix and duration. The Bank currently does not participate in hedging programs, interest rate swaps, or other activities involving the use of derivative financial instruments.

The Bank has an Asset/Liability Committee that includes members of management and functions to communicate, coordinate and control all aspects involving 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.

30

FELDMAN FINANCIAL ADVISORS, INC.

The Bank’s goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income and the present value of equity. Net interest income and present value of equity 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 and the present value of equity under a range of assumptions. The simulations incorporate 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 also incorporates management’s current assessment of the risk that pricing margins will change adversely over time due to competition or other factors.

Table 7 sets forth an approximation of the Bank’s exposure as a percentage of estimated net interest income for the next 12-month period using interest income and equity simulations. The simulations use projected repricing of assets and liabilities at June 30, 2011 on the basis of contractual maturities, anticipated repayments, and scheduled rate adjustments. Table 7 summarizes the interest rate sensitivity of the projected net interest income and present value of equity as of June 30, 2011, assuming instantaneous and sustained parallel shifts in the U.S. Treasury yield curve of 100 to 300 basis points either up or down in various increments. Because of the current level of interest rates, scenarios of down 100-plus basis points have not been considered.

31

FELDMAN FINANCIAL ADVISORS, INC.

As shown in Table 7, the Bank’s present value of equity would be negatively impacted by an immediate increase in interest rates from current levels. Table 7 indicates that the Bank’s present value of equity was $33.1 million as of June 30, 2011. Based upon the assumptions utilized, an immediate 100 basis point increase in market interest rates would result in a $1.9 million decrease in the present value of equity. However, an immediate 100 basis point increase would have a positive impact of $37,000 on net interest income. Conversely, a 100 basis point decrease in market rates would result in a $1.9 million increase in the present value of equity and a $189,000 decrease in net interest income.

Table 7

Interest Rate Risk Analysis

As of June 30, 2011

(Dollars in Thousands)

	Present Value of Equity								Projected Net Interest Income
Change in Interest Rates (basis points)	Estimated Present Value of Equity		Change from Base (000s)			Change from Base (%)			Net Interest Income (000s)		Change from Base (000s)			Change from Base (%)
+ 300 b.p.	$	28,009	$	(5,041	)		(15.25	)%	$	10,030	$	109			1.10	%
+ 200 b.p.		29,545		(3,505	)		(10.61	)		9,953		32			0.32
+ 100 b.p.		31,183		(1,867	)		(5.65	)		9,958		37			0.37
0 b.p.		33,050		—			—			9,921		—			—
- 100 b.p.		34,929		1,879			5.69			9,732		(189	)		(1.90	)

Source: Wellesley Bank, preliminary prospectus.

32

FELDMAN FINANCIAL ADVISORS, INC.

Asset Quality

Table 8 summarizes the Bank’s total non-performing assets (“NPAs”) as of December 31, 2006 to 2010 and June 30, 2011. Historically, Wellesley Bank exhibited an excellent record of asset quality until experiencing an upturn in NPAs during 2010 and the first half of 2011. The Bank reported no NPAs at year-end 2006 and 2007. The Bank’s ratio of non-performing assets (including troubled debt restructurings) to total assets increased from 0.38% at December 31, 2009 to 1.20% and 1.73%, at December 31, 2010 and June 30, 2011, respectively. As of June 30, 2011, the Bank’s non-performing assets totaled $4.6 million and comprised $3.5 million of non-accrual loans and $1.1 million of accruing troubled debt restructurings, which are loans that have been modified through term extensions or other concessions to help borrowers stay current and avoid foreclosure or default.

In order to reflect the increased risk inherent in the loan portfolio, the Bank increased its loan loss provision from $300,000 in 2009 to $1.1 million for 2010, reflecting the increased levels of non-performing assets and loan charge-offs. Total charge-offs increased from $289,000 in 2009 to $470,000 in 2010. As a result, the loan loss allowance increased by $630,000 from $2.1 million or 1.10% of total loans at year-end 2009 to $2.7 million or 1.30% of total loans at year-end 2010. The Bank continued to bolster its loan loss allowance in the first half of 2011 by making a provision of $600,000. Loan charge-offs amounted to $61,000 for the first half of 2011. As a result, at June 30, 2011, the loan loss allowance was $3.2 million, measuring 1.55% of total loans and 93.3% of non-performing loans. The largest concentration of the loan loss allowance at June 30, 2011 represented reserves established against the commercial real estate and construction loan portfolios.

33

FELDMAN FINANCIAL ADVISORS, INC.

Table 8

Non-performing Assets Summary

As of December 31, 2006 to 2010 and June 30, 2011

(Dollars in Thousands)

	June 30,			December 31,
	2011			2010			2009			2008			2007			2006
Non-accrual loans
Residential mortgage loans	$	1,893		$	2,008		$	705		$	549		$	—		$	—
Commercial real estate loans		1,425			—			—			239			—			—
Construction loans		—			—			—			1,170			—			—
Commercial business loans		125			—			—			—			—			—
Consumer loans		19			—			—			—			—			—
Total non-accrual loans		3,462			2,008			705			1,958			—			—
Total non-performing loans		3,462			2,008			705			1,958			—			—
Real estate owned loans		—			—			—			—			—			—
Total non-performing assets		3,462			3,462			705			1,958			—			—
Accruing troubled debt restructurings (1)		1,115			1,124			221			—			—			—
Total non-performing assets and accruing troubled debt restructurings	$	4,577		$	3,132		$	926		$	1,958		$	—		$	—
Total non-performing loans to total loans		1.66	%		0.97	%		0.38	%		0.99	%		0.00	%		0.00	%
Total non-performing loans to total assets		1.31	%		0.77	%		0.29	%		0.81	%		0.00	%		0.00	%
Total non-performing assets and accruing troubled debt restructurings to total assets		1.73	%		1.20	%		0.38	%		0.81	%		0.00	%		0.00	%

(1) The Bank did not have any non-accruing troubled debt restructurings at the dates indicated.

Source: Wellesley Bank, preliminary prospectus.

34

FELDMAN FINANCIAL ADVISORS, INC.

Table 9

Allowance for Loan Loss Summary

For the Years Ended December 31, 2006 to 2010

And the Six Months Ended June 30, 2011

(Dollars in Thousands)

	Six Months Ended June 30,						Year Ended December 31,
	2011			2010			2010			2009			2008			2007			2006
Allowance for loan losses at beginning of period	$	2,690		$	2,060		$	2,060		$	2,047		$	1,606		$	1,418		$	1,348
Provision for loan losses		600			500			1,100			300			445			260			70
Charge-offs
Residential real estate loans		61			—			140			261			—			—			—
Commercial real estate loans		—			100			149			—			—			—			—
Construction loans		—			—			118			—			—			—			—
Commercial business loans		—			—			60			28			4			72			—
Consumer loans		—			—			3			—			—			—			—
Total charge-offs		61			100			470			289			4			72			—
Total recoveries		—			—			—			2			—			—			—
Net charge-offs		61			100			470			287			4			72			—
Allowance for loan losses at end of period	$	3,229		$	2,460		$	2,690		$	2,060		$	2,047		$	1,606		$	1,418
Allowance for loan losses to non-performing loans (1)		93.27	%		95.02	%		133.96	%		292.20	%		104.55	%		—			—
Allowance for loan losses to total loans outstanding at the end of the period		1.55	%		1.23	%		1.30	%		1.10	%		1.04	%		0.91	%		0.92	%
Net charge-offs to average loans outstanding during the period (2)		0.03	%		0.05	%		0.24	%		0.15	%		0.00	%		0.04	%		0.00	%

(1) There were no non-performing loans at December 31, 2007 or 2006.

(2) There were no loan charge-offs in 2006 and $4,000 of loan charge-offs in 2008.

Source: Wellesley Bank, preliminary prospectus.

35

FELDMAN FINANCIAL ADVISORS, INC.

Subsidiary Activity

Wellesley Bank has three wholly-owned subsidiaries: Wellesley Investment Partners, LLC, (ii) Wellesley Securities Corporation, and (iii) Central Linden LLC. The operations of the subsidiaries are described below.

Wellesley Investment Partners, LLC, established in 2007, is a Massachusetts limited liability company that offers customers a range of non-deposit investment products, including mutual funds and equities, through a third-party registered broker-dealer. Wellesley Investment Partners is a registered investment advisor. Investment management fees relating to the Bank’s investment advisory services totaled $52,000, $71,000 and $43,000 for the six months ended June 30, 2011 and years ended December 31, 2010 and 2009, respectively. After the Conversion, the Bank intends to continue to enhance its fee income through Wellesley Investment Partners by engaging at least one additional sales-focused investment or financial planning professional.

Wellesley Securities Corporation, established in 1992, is a Massachusetts corporation that engages in buying, selling and holding securities on its own behalf. As a Massachusetts securities corporation, the income earned on Wellesley Securities Corporation’s investment securities is subject to a lower state tax rate than that assessed on income earned on investment securities maintained at Wellesley Bank. At June 30, 2011, Wellesley Securities Corporation had total assets of $6.9 million and total equity of $6.3 million.

Central Linden LLC, organized in 2010, is a Massachusetts limited liability company formed for the purpose of holding, managing and selling foreclosed real estate. Central Linden is currently inactive and at June 30, 2011 had no assets and no equity.

36

FELDMAN FINANCIAL ADVISORS, INC.

Office Properties

Wellesley Bank currently conducts business from its executive office and two full service branches in the town of Wellesley, Massachusetts. The Bank owns its Central Street branch office. The Bank leases its Church Street executive office (subject to a renewable lease that expires in 2018) and the Linden Street branch office (subject to a renewable lease that expires in 2012). At June 30, 2011, the total net book value of the Bank’s land, buildings, furniture, fixtures and equipment was $795,000. As previously noted, the Bank plans to open a third branch office in Wellesley during the first quarter of 2012. A map of the Bank’s branch office network is presented below.

37

FELDMAN FINANCIAL ADVISORS, INC.

Table 10 provides deposit data for the Bank’s branch offices from June 30, 2006 to June 30, 2010. The Bank’s deposits increased by a compound annual growth rate (“CAGR”) of 9.1% over this period with the bulk of the deposit increase occurring at the Linden Street branch. With regard to branch deposits, the Wellesley Center branch exhibited a CAGR of 4.3% and the Linden Street branch experienced a CAGR of 22.7%. As of June 30, 2010, the Bank’s two branches maintained significant deposit totals with the Wellesley Center branch at $107.4 million and the Linden Street branch at $103.6 million.

Table 10

Branch Office Deposit Data

(Dollars in Thousands)

	2006		2007		June 30, 2008		2009		2010		‘06-10 CAGR (%)
Location	(000s)		(000s)		(000s)		(000s)		(000s)
Wellesley Center Branch
40 Central Street	$	90,888	$	91,401	$	99,530	$	111,064	$	107,369		4.25
Wellesley, MA 02482
Linden Street Branch
197 Linden Street		45,676		60,043		69,495		92,055		103,550		22.71
Wellesley, MA 02482
Total Deposits	$	136,564	$	151,444	$	169,025	$	203,119	$	210,919		9.08

Source: SNL Financial.

38

FELDMAN FINANCIAL ADVISORS, INC.

Market Area

Overview of Market Area

The Bank is headquartered in the town of Wellesley, Massachusetts, where it operates two retail branch offices and an administrative office. Wellesley is an affluent and predominantly residential community, located approximately 13 miles west of Boston. Its desirable geographic location and appealing physical characteristics make it a highly attractive suburb for people who work in Boston. Although mainly residential, Wellesley is also an employment center with several office parks located primarily on its eastern border.

The town is also a college community, having within its boundaries Wellesley College and Babson College, two private educational institutions, as well as Massachusetts Bay Community College. Wellesley boasts a highly regarded public school system, a thriving downtown with boutique shops and restaurants, and accessible commuting distance to Boston via commuter rail trains and Interstate 95/Route 128, a circumferential highway that skirts the town’s eastern border. The town has a total area of 10.49 square miles, of which land occupies 10.18 square miles and water occupies 0.31 square miles. Wellesley is located in Norfolk County, Massachusetts, which is part of the Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area (“Boston MSA”).

Table 11 presents comparative demographic data for the United States, the Commonwealth of Massachusetts, the Boston MSA, and the town of Wellesley. The Boston MSA had an estimated population of approximately 4.6 million in 2010. The town of Wellesley had an estimated population of 27,018 in 2010. Population growth rates for the Boston MSA and Wellesley are expected to continue to lag the nationwide trends.

39

FELDMAN FINANCIAL ADVISORS, INC.

Table 11

Selected Demographic Data

	United States			Massachusetts			Boston MSA			Town of Wellesley
Total Population
2010—Current		311,212,863			6,555,736			4,568,927			27,018
2015—Projected		323,209,391			6,617,085			4,637,752			27,054
% Change 2000-10		10.59	%		3.25	%		4.04	%		1.52	%
% Change 2010-15		3.85	%		0.94	%		1.51	%		0.13	%
Age Distribution, 2010
0—14 Age Group		20.08	%		18.41	%		18.54	%		22.16	%
15—34 Age Group		27.22	%		26.78	%		27.21	%		26.10	%
35—54 Age Group		28.03	%		29.11	%		29.58	%		25.93	%
55—69 Age Group		15.54	%		15.74	%		15.31	%		15.70	%
70+ Age Group		9.12	%		9.97	%		9.36	%		10.10	%
Median Age (years)		37.0			38.7			38.2			37.8
Total Households
2010—Current		116,761,140			2,520,494			1,745,031			8,654
2015—Projected		121,359,607			2,546,375			1,773,323			8,683
% Change 2000-10		10.69	%		3.15	%		3.89	%		0.70	%
% Change 2010-15		3.94	%		1.03	%		1.62	%		0.34	%
Median Household Income
2010—Current	$	54,442		$	67,515		$	74,931		$	154,493
2015—Projected	$	61,189		$	78,847		$	87,099		$	191,801
% Change 2000-10		29.12	%		33.59	%		37.26	%		35.89	%
% Change 2010-15		12.39	%		16.78	%		16.24	%		24.15	%
Average Household Income
2010—Current	$	70,173		$	88,257		$	97,315		$	208,283
2015—Projected	$	79,340		$	103,031		$	113,414		$	247,566
% Change 2000-10		23.88	%		32.99	%		34.79	%		29.48	%
% Change 2010-15		13.06	%		16.74	%		16.54	%		18.86	%
Per Capita Income
2010—Current	$	26,739		$	34,458		$	37,661		$	68,731
2015—Projected	$	30,241		$	40,240		$	43,918		$	81,746
% Change 2000-10		23.87	%		32.78	%		34.43	%		30.01	%
% Change 2010-15		13.10	%		16.78	%		16.61	%		18.94	%

40

FELDMAN FINANCIAL ADVISORS, INC.

Table 11 (continued)

	United States			Massachusetts			Boston MSA			Town of Wellesley
Household Net Worth
Median	$	93,084		$	152,588		$	173,838		$	1,000,001
Average	$	418,865		$	619,351		$	704,534		$	1,962,955
Current Household Net Worth
$0 – $35,000		34.96	%		28.10	%		26.37	%		5.45	%
$35,000 – $100,000		16.38	%		14.32	%		13.85	%		3.88	%
$100,000 – $250,000		19.13	%		17.37	%		16.43	%		8.83	%
$250,000 – $500,000		12.97	%		14.94	%		14.80	%		10.33	%
$500,000+		16.56	%		25.28	%		28.55	%		71.50	%
Total Number of Owner
Occupied Housing Units
2010 – Current		76,868,769			1,549,344			1,058,889			7,009
2015 – Projected		80,072,859			1,565,426			1,076,403			7,028
% Change 2000-10		10.10	%		2.74	%		3.50	%		-1.82	%
% Change 2010-15		4.17	%		1.04	%		1.65	%		0.27	%
Value of Owner Occupied
Housing Units
2007 – Median	$	194,300		$	366,400		$	396,400			NA
2009 – Median	$	185,200		$	338,500		$	369,200		$	893,700
% Change 2007-09		-4.7	%		-7.6	%		-6.9	%		NA
Current Value of Owner
Occupied Housing Units
$0 – $100,000		27.39	%		2.39	%		2.27	%		0.21	%
$100,000 – $200,000		34.48	%		19.41	%		12.80	%		1.06	%
$200,000 – $300,000		17.08	%		28.98	%		27.71	%		0.73	%
$300,000 – $500,000		12.49	%		29.94	%		34.32	%		8.62	%
$500,000 – $750,000		5.07	%		11.85	%		13.76	%		27.04	%
$750,000 +		3.49	%		7.43	%		9.14	%		62.34	%
Unemployment Rates
June 2010		9.6	%		8.5	%		7.9	%		6.5	%
May 2011		8.7	%		7.4	%		6.6	%		5.0	%
June 2011		9.3	%		7.8	%		7.1	%		5.5	%

Source: SNL Financial, ESRI, Massachusetts Office of Labor and Workforce Development, and United States Census Bureau.

41

FELDMAN FINANCIAL ADVISORS, INC.

The median household income in Wellesley for 2010 was $154,493, surpassing the national median of $54,442 and the Boston MSA median of $97,315. The median household income for Wellesley is projected to increase by 24.1% to $191,801 in 2015. Reflecting its wealthy population base, Wellesley reported a median household net worth of $1.0 million for 2010, compared to $93,084 for the United States and $173,838 for the Boston MSA. The average household net worth for Wellesley exceeded $1.9 million. Approximately 71.5% of the households in Wellesley had a net worth in excess of $500,000. The median value of owner occupied housing units in Wellesley was $893,700 in 2009, above the national median of $185,200 and the Boston MSA median of $369,200.

The economy of Wellesley is centered mainly around the following employment sectors: (i) educational and health services, (ii) professional and business services, and (iii) financial activities. Approximately 97.3% of the adult residents in Wellesley have a high school diploma and 78.5% have a bachelor’s college degree or higher. The unemployment rate in Wellesley has historically measured below the national and state rates in recent years. The unemployment rate for Wellesley was 5.5% in June 2011, compared to the national, state, and Boston MSA unemployment rates of 9.3%, 7.8%, and 7.1%, respectively.

Market Share Analysis

Table 12 displays branch deposit data for the top 25 financial institutions in the Boston MSA as of June 30, 2010 (with deposit data adjusted for completed and pending mergers). Wellesley Bank ranked 72^nd in the Boston MSA out of 133 financial institutions with total deposits of $210.9 million and a market share of 0.12%. Previously, as of June 30, 2009, the Bank ranked 80^th in the Boston MSA with total deposits of $203.1 million and a market share of

42

FELDMAN FINANCIAL ADVISORS, INC.

0.13%. Wellesley Bank’s deposits increased by 3.8% between June 30, 2009 and 2010, while the total deposits in the Boston MSA increased by 9.9% from $154.6 billion to $169.8 billion over the same period. The top three financial institutions (Bank of America, RBS Citizens, and State Street Bank & Trust Company) held $85.9 billion or 50.6% of the deposit market in the Boston MSA.

Table 13 displays retail branch deposit data as of June 30, 2010 for the financial institutions operating in Wellesley (adjusted for completed and pending mergers). With total deposits of $210.9 million as of June 30, 2010 and a market share of 13.0%, Wellesley Bank ranked third in the town of Wellesley out of 11 financial institutions. Bank of America was the deposit market leader in Wellesley with a market share of 27.4%, followed by Boston Private Bank & Trust Company with a market share of 19.3%. Wellesley Bank had the largest market share among the four thrift institutions operating in the town of Wellesley. Previously, as of June 30, 2009, Wellesley Bank ranked fourth in the town of Wellesley with total deposits of $203.1 million and a market share of 13.2%.

43

FELDMAN FINANCIAL ADVISORS, INC.

Table 12

Deposit Market Share in the Boston MSA

Data as of June 30, 2010

(Adjusted for Completed and Pending Mergers)

Rank	Parent Company	Financial Institution	Inst. Type	Branch Count		Deposit Market Share (%)		Total Deposits ($000)
1	Bank of America Corp. (NC)	Bank of America, NA	Bank		201		23.58		40,045,850
2	Royal Bank of Scotland	RBS Citizens, NA	Bank		210		14.03		23,829,645
3	State Street Corp. (MA)	State Street B&TC	Bank		1		12.98		22,044,394
4	Banco Santander SA	Sovereign Bank	Thrift		165		6.24		10,593,745
5	Bank of NY Mellon Corp. (NY)	Bank of NY Mellon	Bank		2		5.32		9,036,889
6	Toronto-Dominion Bank	TD Bank, NA	Bank		109		3.81		6,468,643
7	Eastern Bank Corp., MHC (MA)	Eastern Bank	Thrift		88		3.46		5,878,314
8	Middlesex Bancorp, D49MHC (MA)	Middlesex SB	Thrift		30		2.05		3,479,128
9	People’s United Financial (CT)	People’s United Bank	Thrift		57		1.98		3,368,021
10	Independent Bank Corp. (MA)	Rockland Trust Co.	Bank		44		1.49		2,529,286
11	Boston Private Financial (MA)	Boston Private B&TC	Bank		11		1.40		2,374,928
12	Salem Five Bancorp (MA)	Salem Five Cents SB	Thrift		29		1.21		2,047,574
13	Brookline Bancorp, Inc. (MA)	Brookline Bank	Thrift		26		1.14		1,927,331
14	Century Bancorp Inc. (MA)	Century B&TC	Bank		24		1.09		1,856,904
15	Cambridge Fin’l Group, MHC (MA)	Cambridge SB	Thrift		16		1.03		1,743,719
16	Meridian Fin’l Services, MHC (MA)	East Boston SB	Thrift		25		0.81		1,375,856
17	First Republic Bank (CA)	First Republic Bank	Bank		2		0.80		1,363,505
18	Citigroup, Inc. (NY)	Citibank, NA	Bank		31		0.79		1,339,563
19	Enterprise Bancorp, Inc. (MA)	Enterprise B&TC	Bank		16		0.65		1,099,021
20	Watertown Savings Bank (MA)	Watertown SB	Bank		9		0.56		955,930
21	Cambridge Bancorp (MA)	Cambridge Trust Co.	Bank		12		0.55		925,548
22	Dedham Inst. for Savings (MA)	Dedham Inst. for Svgs.	Thrift		12		0.52		890,298
23	Inst. for Svgs. in Newburyport (MA)	Inst. for Svgs.-Newbrypt.	Thrift		8		0.52		882,960
24	Needham Bank (MA)	Needham Bank	Bank		6		0.47		806,123
25	Hyde Park Bancorp, MHC (MA)	Hyde Park SB	Thrift		6		0.45		771,411
72	Wellesley Bank (MA)	Wellesley Bank	Thrift		2		0.12		210,919
	Total (134 financial institutions)				1,524		100.00		169,806,756

Source: SNL Financial.

44

FELDMAN FINANCIAL ADVISORS, INC.

Table 13

Deposit Market Share in the Town of Wellesley

Data as of June 30, 2010

(Adjusted for Completed and Pending Mergers)

Rank	Parent Company	Financial Institution	Inst. Type	Branch Count		Deposit Market Share (%)		Total Deposits ($000)
1	Bank of America Corp. (NC)	Bank of America, NA	Bank		3		27.42		444,957
2	Boston Private Financial (MA)	Boston Private B&TC	Bank		1		19.28		312,937
3	Wellesley Bank (MA)	Wellesley Bank	Thrift		2		13.00		210,919
4	Royal Bank of Scotland	RBS Citizens, NA	Bank		2		12.35		200,491
5	Middlesex Bancorp, MHC (MA)	Middlesex Savings Bank	Thrift		1		8.33		135,215
6	Toronto-Dominion Bank	TD Bank, NA	Bank		2		6.94		112,657
7	Needham Bank (MA)	Needham Bank	Bank		1		6.20		100,566
8	Banco Santander SA	Sovereign Bank	Thrift		1		4.01		65,125
9	Citigroup, Inc. (NY)	Citibank, NA	Bank		1		2.37		38,450
10	Brookline Bancorp, Inc. (MA)	Brookline Bank	Thrift		1		0.06		1,001
11	Beal Financial Corp. (TX)	Beal Bank	Thrift		1		0.03		531
	Total (11 financial institutions)				16		100.00		1,622,849

Source: SNL Financial.

45

FELDMAN FINANCIAL ADVISORS, INC.

II. COMPARISONS WITH PUBLICLY TRADED THRIFTS

General Overview

The comparative market approach provides a sound basis for determining estimates of going-concern valuations where a regular and active market exists for the stocks of peer institutions. The comparative market approach was utilized in determining the estimated pro forma market value of the Bank because: (i) reliable market and financial data are readily available for comparable institutions; (ii) the comparative market method is accepted by the applicable regulatory guidelines; and (iii) other alternative valuation methods (such as income capitalization, liquidation analysis, or discounted cash flow) are unlikely to produce a valuation relevant to the future trading patterns of the related equity interest. The generally employed valuation method in initial public offerings, where possible, is the comparative market approach, which also can be relied upon to determine pro forma market value in a thrift stock conversion.

The comparative market approach derives valuation benchmarks from the trading patterns of selected peer institutions that, due to certain factors such as financial performance and operating strategies, enable the appraiser to estimate the potential value of the subject institution in a stock conversion offering. The pricing and trading history of recent initial public offerings of thrifts are also examined to provide evidence of the “new issue discount” that must be considered. In Chapter II, our valuation analysis focuses on the selection and comparison of the Bank with a comparable group of publicly traded thrift institutions (the “Comparative Group”). Chapter III will detail any additional discounts or premiums that we believe are appropriate to the Bank’s pro forma market value.

46

FELDMAN FINANCIAL ADVISORS, INC.

Selection Criteria

Selected market price and financial performance data for all public thrifts listed on major stock exchanges are shown in Exhibit III. The list excludes companies that are subject to being acquired under a pending merger transaction and companies that have a majority ownership interest controlled by a mutual holding company (“MHC”). Several criteria, discussed below, were used to select the individual members of the Comparative Group from the overall universe of publicly traded thrifts.

• Operating characteristics – An institution’s operating characteristics are the most important factors because they affect investors’ expected rates of return on a company’s stock under various business/economic scenarios, and they influence the market’s general perception of the quality and attractiveness of a given company. Operating characteristics, which may vary in importance during the business cycle, include financial variables such as profitability, balance sheet growth, capitalization, asset quality, and other factors such as lines of business and management strategies.

• Degree of marketability and liquidity – Marketability of a stock reflects the relative ease and promptness with which a security may be sold when desired, at a representative current price, without material concession in price merely because of the necessity of sale. Marketability also connotes the existence of buying interest as well as selling interest and is usually indicated by trading volumes and the spread between the bid and asked price for a security. Liquidity of the stock issue refers to the organized market exchange process whereby the security can be converted into cash. We attempted to limit our selection to companies that have access to a regular trading market or price quotations, and therefore only considered companies listed on major stock exchanges. We eliminated for consideration companies with market prices that were materially influenced by announced acquisitions or other unusual circumstances. However, the expectation of continued industry consolidation is currently embedded in thrift equity valuations.

• Geographic Location – The region of the country where a company operates is also of importance in selecting the comparative group. The operating environment for thrift institutions varies from region to region with respect to business and economic environments, real estate market conditions, speculative takeover activity, and investment climates. Economic and investor climates can also vary greatly within a region, particularly due to takeover activity.

47

FELDMAN FINANCIAL ADVISORS, INC.

The operations of Wellesley Bank fit the general profile of a diversifying thrift institution, concentrating primarily on real estate lending in its local market and relying significantly on certificates of deposit and other interest-bearing deposit accounts as funding sources. Residential mortgage loans remain a core product in the Bank’s loan portfolio. However, the Bank has diversified its loan mix through the origination of commercial real estate and construction loans and, to a lesser extent, home equity lines of credit and commercial business loans.

In determining the Comparative Group composition, we focused chiefly on Wellesley Bank’s asset size, capital level, credit risk profile, and geographic location. Attempting to concentrate on the Bank’s performance characteristics and to develop a meaningful number of comparables for valuation purposes, we expanded the geographic criterion for comparable thrifts beyond the New England region of the United States. As with any composition of a group of comparable companies, the selection criteria were broadened sufficiently to assemble a meaningful number of members. Specifically, we applied the following selection criteria:

• Publicly traded thrift – stockholder-owned thrift whose shares are traded on the New York, NYSE Amex, or NASDAQ stock markets.

• Non-acquisition target – company is not subject to a pending acquisition.

• Excludes mutual holding companies – company’s majority ownership interest is not held by an MHC.

• Seasoned trading issue – company has been publicly traded for a minimum of one full year.

• Asset size – total assets between $150 million and $650 million.

• Profitability – positive core earnings for the most recent reporting period over the past twelve months.

• Capitalization – tangible equity to assets ratio greater than or equal to 6.0%.

• Credit risk exposure – ratio of total non-performing assets to total assets less than or equal to 4.0%.

• Geographic location – preference for companies based in the New England region, with consideration also granted to companies in Mid-Atlantic states.

48

FELDMAN FINANCIAL ADVISORS, INC.

As a result of applying the stated criteria, the screening process produced a reliable representation of publicly traded thrifts. A general operating summary of the ten companies included in the Comparative Group is presented in Table 14. All of the selected companies are traded on the NASDAQ market. The Comparative Group ranged in asset size from $228.9 million at WVS Financial Corp. to $629.6 million at BCSB Bancorp. The median and average asset sizes of the Comparative Group were $475.6 million and $434.5 million, respectively, compared to Wellesley Bank’s total assets of $264.8 million at June 30, 2011. The asset size range was extended to encapsulate a meaningful number of comparables since only a few number of small publicly held thrifts trade on the major stock exchanges. However, three of the selected comparables have total assets less than $250 million: WVS Financial Corp. at $228.9 million, CMS Bancorp at $247.5 million, and Mayflower Bancorp at $248.7 million.

Five of the comparables are located in New England states: Central Bancorp, Chicopee Bancorp, Hampden Bancorp, and Mayflower Bancorp in Massachusetts; and Newport Bancorp in Rhode Island. The other five comparables are located in Mid-Atlantic states: CMS Bancorp and Elmira Savings in New York; WVS Financial Corp. in Pennsylvania; and BCSB Bancorp and OBA Financial Services in Maryland.

In comparison to recent performance trends of the aggregate public thrift industry, the Comparative Group generally exhibited comparable profitability and capital levels and more favorable asset quality ratios. While some differences inevitably may exist between Wellesley Bank and the individual companies, we believe that the selected Comparative Group on the whole provides a meaningful basis of financial comparison for valuation purposes.

49

FELDMAN FINANCIAL ADVISORS, INC.

Table 14

Comparative Group Operating Summary

As of June 30, 2011

Company	City	State	No. of Offices		Conversion Offering Date		Total Assets ($Mil.)		Tang. Equity/ Assets (%)
Wellesley Bank	Wellesley	MA		2		NA	$	264.7		8.10
Comparative Group
BCSB Bancorp, Inc.	Baltimore	MD		17		04/11/08		629.6		8.16
Central Bancorp, Inc.	Somerville	MA		11		10/24/86		497.2		9.08
Chicopee Bancorp, Inc.	Chicopee	MA		8		07/20/06		580.0		15.70
CMS Bancorp, Inc.	White Plains	NY		6		04/04/07		247.5		8.91
Elmira Savings Bank, FSB	Elmira	NY		12		03/01/85		499.7		9.38
Hampden Bancorp, Inc.	Springfield	MA		10		01/17/07		573.3		16.31
Mayflower Bancorp, Inc. (1)	Middleboro	MA		8		12/23/87		248.7		8.67
Newport Bancorp, Inc.	Newport	RI		6		07/07/06		453.9		11.21
OBA Financial Services, Inc.	Germantown	MD		5		01/22/10		386.4		20.92
WVS Financial Corp.	Pittsburgh	PA		6		11/29/93		228.9		12.62

(1) As of July 31, 2011.

Source: Wellesley Bank; SNL Financial.

50

FELDMAN FINANCIAL ADVISORS, INC.

Recent Financial Comparisons

Table 15 summarizes certain key financial comparisons between Wellesley Bank and the Comparative Group. Tables 16 through 21 contain the detailed financial comparisons of the Bank with the individual Comparative Group companies based on measures of profitability, income and expense components, yield-cost structure, capital levels, balance sheet composition, asset quality, and growth rates. Financial data for the Bank, the Comparative Group, and All Public Thrift aggregate were utilized for the latest available period as of for the last twelve months (“LTM”) ended June 30, 2011. Mayflower Bancorp’s financial reporting period is not on a calendar year cycle and therefore its recent data is reflected for the LTM ended July 31, 2011.

Wellesley Bank’s LTM ROA was 0.80%, reflecting a profitability measure above the Comparative Group median of 0.24% and the All Public Thrift median of 0.43%. The Bank’s higher ROA was attributable mainly to a higher net interest margin and a lower level of operating expense. The Bank’s LTM return on average equity (“ROE”) was 10.27% and positioned above the Comparative Group median of 2.33%. Only one member of the Comparative Group, Elmira Savings Bank at 0.99%, reported an LTM ROA above that of the Bank.

Based on core earnings as adjusted to exclude intangibles amortization expense and non-recurring income and expense items, the Bank’s core profitability ratios also surpassed those of the Comparative Group. The Bank’s core earnings for the LTM period excluded $82,000 of pre-tax gains on sales of investment securities. The Bank’s LTM core ROA of 0.78% was above the Comparative Group median of 0.23% and the All Public Thrift median of positive 0.46%. The Bank’s LTM core ROE of 10.01% also outperformed the Comparative Group median of 0.23% and the All Public Thrift median of positive 0.46%.

51

FELDMAN FINANCIAL ADVISORS, INC.

Table 15

Key Financial Comparisons

Wellesley Bank and the Comparative Group

As of For the Last Twelve Months Ended June 30, 2011

(Ratios in Percent)

	Wellesley Bank		Comparative Group Median		All Public Thrift Median
Profitability
LTM Return on Average Assets (ROA)		0.80		0.24		0.43
LTM Return on Average Equity (ROE)		10.27		2.33		3.33
Core Return on Avg. Assets (Core ROA)		0.78		0.23		0.46
Core Return on Avg. Equity (Core ROE)		10.01		2.06		3.77
Income and Expense (% of avg. assets)
Total Interest Income		5.08		4.46		4.46
Total Interest Expense		1.16		1.44		1.36
Net Interest Income		3.92		3.15		3.13
Provision for Loan Losses		0.46		0.19		0.37
Other Operating Income		0.19		0.43		0.63
Net Secs. Gains and Non-rec. Income		0.03		0.03		0.02
General and Administrative Expense		2.41		3.03		2.91
Intangibles Amortization Expense		0.00		0.00		0.00
Non-recurring Expense		0.00		0.00		0.00
Pre-tax Core Earnings		1.24		0.33		0.60
Efficiency Ratio		58.74		83.46		69.76
Yield-Cost Data
Yield on Interest-earning Assets		5.21		4.76		4.87
Cost of Interest-bearing Liabilities		1.43		1.74		1.57
Net Interest Spread		3.78		3.03		3.41
Net Interest Margin		4.02		3.39		3.44
Asset Utilization (% of avg. total assets)
Avg. Interest-earning Assets		97.49		93.26		93.84
Avg. Interest-bearing Liabilities		80.93		82.36		80.19
Avg. Net Interest-earning Assets		16.57		13.41		11.80

52

FELDMAN FINANCIAL ADVISORS, INC.

Table 15 (continued)

Key Financial Comparisons

Wellesley Bank and the Comparative Group

As of For the Last Twelve Months Ended June 30, 2011

(Ratios in Percent)

	Wellesley Bank		Comparative Group Median		All Public Thrift Median
Balance Sheet Composition (% of total assets)
Cash and Securities		19.17		21.56		25.30
Loans Receivable, net		77.57		70.90		67.93
Real Estate		0.00		0.10		0.40
Intangible Assets		0.00		0.00		0.04
Other Assets		3.26		4.66		4.86
Total Deposits		86.25		71.23		72.70
Borrowed Funds		5.26		13.97		13.32
Other Liabilities		0.39		0.83		0.95
Total Equity		8.10		11.46		11.61
Loan Portfolio (% of total loans)
Residential Mortgage Loans		43.49		53.48		41.55
Other Real Estate Mortgage Loans		49.03		37.59		47.48
Non-mortgage Loans		7.48		9.37		8.18
Growth Rates
Total Assets		3.47		0.44		0.35
Total Loans		4.62		1.25		(2.71	)
Total Deposits		8.28		1.51		1.42
Regulatory Capital Ratios
Tier 1 Leverage Ratio		7.95		10.43		9.95
Tier 1 Risk-based Capital		10.88		16.53		15.61
Total Risk-based Capital		12.14		17.68		16.53
Credit Risk Ratios
Non-performing Loans / Total Loans		1.66		2.98		3.62
Non-performing Assets / Total Assets		1.73		1.57		3.01
Reserves / Total Loans		1.55		1.01		1.54
Reserves / Non-performing Loans		93.27		31.82		42.87

Source: Wellesley Bank; SNL Financial; Feldman Financial.

53

FELDMAN FINANCIAL ADVISORS, INC.

As shown in Table 15, the Bank’s net interest margin of 4.02% exceeded the Comparative Group median of 3.39% and the All Public Thrift median of 3.44%. The Bank’s net interest margin has been fortified by steady yields on its diverse loan portfolio and a declining cost of funds in the current interest rate environment. The Bank’s weighted average yield on interest-earning assets measured 5.21% for the LTM period, surpassing the Comparative Group median of 4.76%. The Bank’s weighted average cost of interest-bearing liabilities at 1.43% was below the Comparative Group median of 1.74%. Accordingly, the Bank’s net interest spread of 3.78% was higher than the Comparative Group median of 3.03%.

Supporting the Bank’s strong net interest margin was a high concentration of assets invested in loans. The Bank’s ratio of net loans to assets was 77.6%, above the Comparative Group median of 70.9%. Contributing to the Bank’s lower cost of funds was its lesser utilization of borrowings. The Bank’s ratio of borrowed funds to total assets was 5.3%, compared to the Comparative Group median of 14.0%. The relatively stable economy in the Bank’s primary market area along with the Bank’s strategic business initiatives has facilitated achieving steady growth of loans and deposits in recent years.

The Bank’s non-interest operating income (excluding securities gains and other non-recurring income) totaled 0.19% of average assets, noticeably lagging the Comparative Group and All Public Thrift medians of 0.43% and 0.63%, respectively. The Bank is seeking to expand its investment advisory services as a means of augmenting its fee income. Other members of the Comparative Group, including Elmira Savings Bank and Mayflower Bancorp, have developed a solid track record of consistently generating non-interest revenue from mortgage banking operations, service charges on deposit accounts, debit card services, or other fee income sources.

54

FELDMAN FINANCIAL ADVISORS, INC.

The Bank also generated gains on sale of investment securities, which amounted to 0.03% of average assets for the LTM period and was comparable to the Comparative Group and All Public Thrift medians of 0.03% and 0.02%, respectively.

The Bank’s operating expense ratio at 2.41% of average assets for the LTM period was below the Comparative Group median of 3.03% and All Public Thrift median of 2.91%. The Bank has been able to expand its operations efficiently by leveraging its existing infrastructure without incurring significant increases in operating expenses. The Bank’s efficiency is also furthered the by its relatively large branch sizes in terms of amount of deposits. The Bank only operates two branch offices, while the other members of the Comparative Group with similar asset sizes have a network of offices ranging from six to eight. The Bank’s average branch size was $114.2 million in deposits at June 30, 2011, compared to the Comparative Group average branch size of $36.2 million. The Bank does plan to open another branch in the first quarter of 2012 and expand its investment advisory services, which – along with the stock benefit plans to be implemented after the Conversion – will add to its operating expense base.

The Bank’s efficiency ratio (non-interest expense less intangibles amortization expense as a percent of net interest income plus non-interest operating income) was 58.7% for the recent LTM period, comparing favorably to the Comparative Group and All Public Thrift medians of 83.5% and 69.8%, respectively. (The efficiency ratio can be evaluated as the amount of operating expense required to generate a dollar of operating revenue.) The Bank’s higher net interest margin and lower operating expense ratio provide sufficient competitive advantages to offset its lower level of non-interest income production. The Bank’s efficiency ratio was lower than each of the corresponding ratios reported by all of the Comparative Group companies. As a noteworthy contrast, it is common for smaller financial institutions to exhibit higher efficiency ratios since economies of scale are more challenging to achieve.

55

FELDMAN FINANCIAL ADVISORS, INC.

Prior to 2010, the Bank had increased its provision for loan losses moderately to reflect the overall growth of the loan portfolio. However in 2010, Wellesley Bank increased the provision significantly due to increased levels of non-performing loans and charge-offs. For the recent LTM period, the Bank’s provision for loan losses amounted to 0.46% of average assets and exceeded the Comparative Group and All Public Thrift medians of 0.19% and 0.37%, respectively. Several members of the Comparative Group also reported elevated levels of loan loss provisions but none to the extent as recorded by the Bank.

Table 20 profiles the overall balance sheet composition of the Bank versus that of the Comparative Group. As noted previously, the Bank’s net total loans amounted to 77.6% of total assets as of June 30, 2011, above the median of 70.9% for the Comparative Group. The Bank’s ratio of cash and securities to total assets was 19.2%, measuring slightly below the median of 21.6% for the Comparative Group. The Bank had no goodwill or other intangible assets on its balance sheet as of June 30, 2011. The earning power of the Bank’s balance sheet is strengthened by relatively low levels of non-earning assets such as intangible assets and fixed assets.

The Bank’s borrowings level at 5.3% of total assets primarily reflected its usage of FHLB advances and repurchase agreements as supplemental funding sources, and was markedly lower than the Comparative Group’s median borrowings level of 14.0%. The Bank has experienced steady deposit growth in recent years, which has allowed it to reduce its reliance on borrowings to fund asset growth. The Bank’s equity level before the Conversion was 8.10% relative to total assets, which was slightly lower than the Comparative Group and All Public Thrift medians of 11.46% and 11.61%, respectively.

56

FELDMAN FINANCIAL ADVISORS, INC.

The Bank had made considerable strides toward diversifying its loan portfolio away from the traditional thrift institution model’s reliance on residential mortgages as evidenced by the loan composition data displayed in Table 21. The Bank’s level of residential mortgage loans (including home equity loans secured by residential properties) measured 43.5% of total loans as of June 30, 2011, compared to the Comparative Group median of 53.5% based on regulatory financial data. The Bank’s concentration of other real estate mortgage loans, which include commercial real estate mortgages and construction loans, measured 49.0% of total loans and was higher than the Comparative Group median of 37.6%. The Bank’s ratio of non-mortgage loans, which include commercial business loans and other consumer loans, amounted to 7.5% of total loans and was positioned slightly below the Comparative Group median of 9.4%.

The Bank’s consistent deposit growth in recent periods is reflected in the comparative growth rates. The Bank’s deposit growth rate measured 8.3% over the LTM period and surpassed the Comparative Group median of 1.5%. The Bank also exhibited positive growth rates of loans and assets that exceeded the corresponding medians for the Comparative Group and All Public Thrift aggregate. The sluggish economy and mounting credit-related losses have forced many financial institutions to emphasize capital preservation and credit remediation over growth objectives.

The Bank’s 1.73% ratio of total non-performing assets (including troubled debt restructurings) to total assets was slightly higher than the Comparative Group median of 1.57%, but measured below the All Public Thrift median of 3.01%. However, the Bank’s ratio of

57

FELDMAN FINANCIAL ADVISORS, INC.

reserves to non-performing loans compared favorably to the aggregate medians and reflected the healthy additions to reserves made by the Bank in the LTM period. The Bank’s 1.55% ratio of reserves to total loans surpassed the Comparative Group and All Public Thrift medians of 1.01% and 1.54%, respectively. Additionally, the Bank’s 93.3% ratio of reserves to non-performing loans was higher than the Comparative Group and All Public Thrift medians of 31.8% and 42.9%, respectively.

In summary, the Bank’s recent earnings results outperformed the results exhibited by the Comparative Group and All Public Thrift segments. The Bank’s profitability is characterized by a strong net interest margin and relatively low operating expenses, despite incurring increased provisions for loan losses. The Bank’s net interest margin has been reinforced by the yield potential of its diverse loan portfolio in a market rate environment that is beneficial to a lower cost of funds. While the Bank exhibited a lower level of non-interest income versus the Comparative Group companies, its operating efficiency and net interest income generation were sufficiently offsetting factors. The Bank’s earnings growth outlook will depend largely on the Bank’s ability to maintain satisfactory loan quality as its manages and grows the portfolio, to stabilize the net interest margin across movements in the interest rate environment, and to control non-interest expense as it expands its branching and lending operations.

58

FELDMAN FINANCIAL ADVISORS, INC.

Table 16

General Operating Characteristics

As of June 30, 2011

	City	State	Ticker	Exchange	No. of Offices	Conversion Offering Date	Total Assets ($000s)		Net Loans ($000s)		Total Deposits ($000s)		Total Equity ($000s)
Wellesley Bank	Wellesley	MA	NA	NA	2	NA		264,774		205,386		228,375		21,445
Comparative Group Average								434,538		292,623		313,229		54,595
Comparative Group Median								475,574		336,153		289,910		51,163
Comparative Group
BCSB Bancorp, Inc.	Baltimore	MD	BCSB	NASDAQ	17	04/11/08		629,564		364,975		553,446		51,455
Central Bancorp, Inc.	Somerville	MA	CEBK	NASDAQ	11	10/24/86		497,238		413,534		317,499		47,156
Chicopee Bancorp, Inc.	Chicopee	MA	CBNK	NASDAQ	8	07/20/06		580,028		443,224		404,151		91,060
CMS Bancorp, Inc.	White Plains	NY	CMSB	NASDAQ	6	04/04/07		247,509		180,270		188,034		22,055
Elmira Savings Bank, FSB	Elmira	NY	ESBK	NASDAQ	12	03/01/85		499,745		317,130		365,550		58,528
Hampden Bancorp, Inc.	Springfield	MA	HBNK	NASDAQ	10	01/17/07		573,326		398,108		417,255		93,516
Mayflower Bancorp, Inc. (1)	Middleboro	MA	MFLR	NASDAQ	8	12/23/87		248,730		124,240		223,242		21,568
Newport Bancorp, Inc.	Newport	RI	NFSB	NASDAQ	6	07/07/06		453,910		355,175		262,320		50,870
OBA Financial Services, Inc.	Germantown	MD	OBAF	NASDAQ	5	01/22/10		386,445		279,620		257,031		80,860
WVS Financial Corp.	Pittsburgh	PA	WVFC	NASDAQ	6	11/29/93		228,888		49,952		143,766		28,878

(1) As of July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

59

FELDMAN FINANCIAL ADVISORS, INC.

Table 17

Summary Financial Performance Ratios

As of or For the Last Twelve Months Ended June 30, 2011

	Total Assets ($000s)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		Total NPAs/ Assets (%)		Net Interest Margin (%)		Effcy. Ratio (%)		LTM ROA (%)		LTM ROE (%)		Core ROA (%)		Core ROE (%)
Wellesley Bank		264,774		8.10		8.10		1.73		4.02		58.74		0.80		10.27		0.78		10.01
Comparative Group Average		434,538		12.37		12.10		1.72		3.29		81.03		0.35		3.27		0.33		2.98
Comparative Group Median		475,574		11.46		10.30		1.57		3.39		83.46		0.24		2.33		0.23		2.06
All Public Thrift Average		2,791,873		12.21		11.68		4.45		3.36		71.06		0.11		1.02		0.14		1.31
All Public Thrift Median		885,625		11.61		10.71		3.01		3.44		69.76		0.43		3.33		0.46		3.77
Comparative Group
BCSB Bancorp, Inc.		629,564		8.17		8.16		2.29		3.20		86.13		0.18		2.04		0.21		2.30
Central Bancorp, Inc.		497,238		9.48		9.08		3.49		3.44		85.97		0.24		2.62		0.17		1.81
Chicopee Bancorp, Inc.		580,028		15.70		15.70		1.01		3.30		88.50		0.13		0.79		0.11		0.67
CMS Bancorp, Inc.		247,509		8.91		8.91		2.09		3.24		95.59		0.12		1.38		0.06		0.63
Elmira Savings Bank, FSB		499,745		11.71		9.38		0.74		3.57		61.40		0.99		8.68		0.95		8.34
Hampden Bancorp, Inc.		573,326		16.31		16.31		3.38		3.34		81.60		0.23		1.40		0.24		1.46
Mayflower Bancorp, Inc. (1)		248,730		8.67		8.67		0.75		3.72		78.10		0.55		6.44		0.47		5.47
Newport Bancorp, Inc.		453,910		11.21		11.21		0.24		3.63		78.01		0.43		3.87		0.42		3.76
OBA Financial Services, Inc.		386,445		20.92		20.92		2.11		3.70		85.32		0.23		1.06		0.22		0.99
WVS Financial Corp.		228,888		12.62		12.62		1.05		1.79		69.69		0.43		4.37		0.43		4.37

(1) As of for the LTM ended July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

60

FELDMAN FINANCIAL ADVISORS, INC.

Table 18

Income and Expense Analysis

For the Last Twelve Months Ended June 30, 2011

	As a Percent of Average Assets
	Interest Income		Interest Expense		Net Interest Income		Other Oper. Income		Non-rec. Income			Loan Loss Prov.			Gen. & Admin. Expense		Amort. & Imp. Intang,		Non-rec. Expense		Pretax Core Earnings
Wellesley Bank		5.08		1.16		3.92		0.19		0.03			0.46			2.41		0.00		0.00		1.24
Comparative Group Average		4.38		1.36		3.05		0.43		0.05			0.17			2.86		0.00		0.00		0.46
Comparative Group Median		4.46		1.44		3.15		0.43		0.03			0.19			3.03		0.00		0.00		0.33
All Public Thrift Average		4.47		1.38		3.10		0.81		0.07			0.69			2.89		0.04		0.06		0.33
All Public Thrift Median		4.46		1.36		3.13		0.63		0.02			0.37			2.91		0.00		0.00		0.60
Comparative Group
BCSB Bancorp, Inc.		4.41		1.44		2.97		0.41		(0.03	)		0.18			2.91		0.00		0.00		0.29
Central Bancorp, Inc.		4.72		1.44		3.28		0.36		0.11			0.26			3.14		0.00		0.00		0.26
Chicopee Bancorp, Inc.		4.35		1.33		3.02		0.45		0.03			0.21			3.21		0.00		0.00		0.06
CMS Bancorp, Inc.		4.70		1.52		3.18		0.21		0.10			0.15			3.24		0.00		0.00		0.00
Elmira Savings Bank, FSB		4.51		1.42		3.09		0.81		0.09			0.10			2.40		0.03		0.00		1.40
Hampden Bancorp, Inc.		4.46		1.33		3.13		0.53		(0.01	)		0.33			2.98		0.00		0.00		0.34
Mayflower Bancorp, Inc. (1)		4.13		0.72		3.41		0.63		0.13			0.08			3.26		0.00		0.00		0.71
Newport Bancorp, Inc.		4.87		1.49		3.37		0.51		0.02			0.24			3.05		0.00		0.00		0.60
OBA Financial Services, Inc.		NA		NA		3.30		0.24		0.02			0.20			3.02		0.00		0.00		0.32
WVS Financial Corp.		3.27		1.49		1.77		0.18		0.00			(0.01	)		1.36		0.00		0.00		0.60

(1) For the LTM ended July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

61

FELDMAN FINANCIAL ADVISORS, INC.

Table 19

Yield-Cost Structure and Growth Rates

For the Last Twelve Months Ended June 30, 2011

	Avg. Int. Earn. Assets/ Assets		Avg. Int.-Bear. Liabs./ Assets		Avg. Net Earning Assets/ Assets		Avg. Equity/ Assets		Yield  on Int.-Earn. Assets		Cost of Int-Bear. Liabs.		Net Interest Spread		Asset Growth Rate			Loan Growth Rate			Deposit Growth Rate
Wellesley Bank		97.49		80.93		16.57		7.83		5.21		1.43		3.78		3.47			4.62			8.28
Comparative Group Average		93.53		82.00		12.02		12.27		4.69		1.65		3.03		(3.36	)		(1.43	)		(0.29	)
Comparative Group Median		93.26		82.36		13.41		10.50		4.76		1.74		3.03		0.44			1.25			1.51
All Public Thrift Average		93.01		80.07		11.92		11.79		4.84		1.60		3.27		(0.13	)		(1.18	)		1.98
All Public Thrift Median		93.84		80.19		11.80		10.95		4.87		1.57		3.41		0.35			(2.71	)		1.42
Comparative Group
BCSB Bancorp, Inc.		92.78		83.72		9.06		9.02		4.75		1.72		3.03		1.16			(8.63	)		2.91
Central Bancorp, Inc.		95.46		81.35		14.11		9.16		4.95		1.77		3.18		(5.60	)		(6.80	)		(4.92	)
Chicopee Bancorp, Inc.		95.78		77.93		17.85		16.30		4.69		1.71		2.98		4.14			2.45			10.46
CMS Bancorp, Inc.		98.24		84.61		13.63		8.79		4.78		1.80		2.99		2.04			1.04			2.59
Elmira Savings Bank, FSB		86.54		79.93		6.61		11.42		5.22		1.78		3.43		0.10			6.17			4.61
Hampden Bancorp, Inc.		93.60		73.29		20.31		16.34		4.76		1.82		2.95		(2.09	)		(3.73	)		(0.67	)
Mayflower Bancorp, Inc. (1)		91.79		82.36		9.43		8.52		4.50		0.88		3.63		(1.92	)		2.81			0.44
Newport Bancorp, Inc.		92.92		89.16		3.76		11.07		5.24		1.68		3.56		0.78			2.09			0.37
OBA Financial Services, Inc.		89.09		NA		NA		22.15		NA		NA		NA		3.30			1.45			10.11
WVS Financial Corp.		99.07		85.66		13.41		9.92		3.30		1.74		1.55		(35.46	)		(11.20	)		(28.80	)

(1) For the LTM ended July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

62

FELDMAN FINANCIAL ADVISORS, INC.

Table 20

Balance Sheet Composition

As of June 30, 2011

	As a Percent of Total Assets
	Cash & Securities		Net Loans		Real Est. Owned		Intang. Assets		Other Assets		Total Deposits		Borrowed Funds		Other Liabs.		Total Liabs.		Total Equity
Wellesley Bank		19.17		77.57		0.00		0.00		3.26		86.25		5.26		0.39		91.90		8.10
Comparative Group Average		22.68		64.57		0.13		0.30		4.68		72.02		14.74		0.87		87.63		12.37
Comparative Group Median		21.56		70.90		0.10		0.00		4.66		71.23		13.97		0.83		88.54		11.46
All Public Thrift Average		26.50		66.39		0.77		0.69		5.23		72.81		13.82		1.09		87.73		12.21
All Public Thrift Median		25.30		67.93		0.40		0.04		4.86		72.70		13.32		0.95		88.39		11.61
Comparative Group
BCSB Bancorp, Inc.		35.88		57.97		0.45		0.01		5.68		87.91		2.70		1.22		91.83		8.17
Central Bancorp, Inc.		12.63		83.17		0.03		0.45		3.73		63.85		25.88		0.79		90.52		9.48
Chicopee Bancorp, Inc.		18.30		76.41		0.09		0.00		5.20		69.68		14.58		0.05		84.30		15.70
CMS Bancorp, Inc.		24.83		72.83		0.00		0.00		2.34		75.97		13.92		1.20		91.09		8.91
Elmira Savings Bank, FSB		29.72		63.46		0.14		2.57		4.11		73.15		14.02		1.12		88.29		11.71
Hampden Bancorp, Inc.		NA		69.44		0.23		0.00		NA		72.78		9.54		1.37		83.69		16.31
Mayflower Bancorp, Inc. (1)		NA		49.95		0.20		0.00		NA		89.75		1.01		0.57		91.33		8.67
Newport Bancorp, Inc.		14.72		78.25		0.04		0.00		6.99		57.79		30.21		0.79		88.79		11.21
OBA Financial Services, Inc.		NA		72.36		0.03		0.00		NA		66.51		11.69		0.87		79.08		20.92
WVS Financial Corp.		NA		21.82		0.10		0.00		NA		62.81		23.84		0.74		87.38		12.62

(1) As of July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

63

FELDMAN FINANCIAL ADVISORS, INC.

Table 21

Regulatory Capital, Credit Risk, and Loan Composition

As of or For the Last Twelve Months Ended June 30, 2011

	Tier 1 Leverage Capital Ratio		Tier 1 Risk- based Capital		Total Risk- based Capital		NPLs/ Loans		Total NPAs/ Assets		Resrvs./ NPLs		Resrvs./ Loans		Resid. 1-4 Mtgs./ Loans		Other Real Est. Mtgs./ Loans		Non-mtg. Loans/ Loans
Wellesley Bank		7.95		10.88		12.14		1.66		1.73		93.27		1.55		43.49		49.03		7.48
Comparative Group Average		11.46		18.00		18.94		2.58		1.72		72.87		1.00		53.17		37.24		9.59
Comparative Group Median		10.43		16.53		17.68		2.98		1.57		31.82		1.01		53.48		37.59		9.37
All Public Thrift Average		10.68		17.12		18.20		5.22		4.45		61.70		1.88		44.19		45.39		10.42
All Public Thrift Median		9.95		15.61		16.53		3.62		3.01		42.87		1.54		41.55		47.48		8.18
Comparative Group
BCSB Bancorp, Inc.		10.01		15.74		16.52		3.14		2.29		33.42		1.05		48.96		47.95		3.09
Central Bancorp, Inc.		10.85		16.87		18.17		4.12		3.49		25.65		1.06		54.82		44.47		0.71
Chicopee Bancorp, Inc.		15.62		18.30		19.21		1.27		1.01		78.22		1.00		39.98		41.10		18.92
CMS Bancorp, Inc.		7.80		15.54		16.19		3.10		2.09		14.50		0.66		63.63		24.62		11.75
Elmira Savings Bank, FSB		9.24		16.19		17.19		1.16		0.74		75.22		0.94		62.08		18.45		19.47
Hampden Bancorp, Inc.		15.82		22.86		24.11		4.49		3.38		30.22		1.36		45.86		38.83		15.31
Mayflower Bancorp, Inc. (1)		7.97		15.92		16.97		1.10		0.75		86.36		0.95		62.56		30.81		6.63
Newport Bancorp, Inc.		9.45		14.30		15.54		0.31		0.24		332.76		1.03		63.21		36.35		0.44
OBA Financial Services, Inc.		15.16		23.49		24.25		2.85		2.11		23.31		0.67		52.13		35.24		12.63
WVS Financial Corp.		12.64		20.79		21.25		4.28		1.05		29.07		1.25		38.48		54.54		6.98

(1) As of or for the LTM ended July 31, 2011.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

64

FELDMAN FINANCIAL ADVISORS, INC.

III. MARKET VALUE ADJUSTMENTS

General Overview

This concluding chapter of the Appraisal identifies certain additional adjustments to the Bank’s estimated pro forma market value relative to the Comparative Group selected in Chapter II. The adjustments discussed in this chapter are made from the viewpoints of potential investors, which would include depositors holding subscription rights and unrelated parties who may purchase stock in a community offering. It is assumed that these potential investors are aware of all relevant and necessary facts as they would pertain to the value of the Bank relative to other publicly traded thrift institutions and relative to alternative investments.

Our appraised value is predicated on a continuation of the current operating environment for the Bank and thrift institutions in general. Changes in the Bank’s operating performance along with changes in the local and national economy, the stock market, interest rates, the regulatory environment, and other external factors may occur from time to time, often with great unpredictability, which could impact materially the pro forma market value of the Bank or thrift stocks in general. Therefore, the Valuation Range provided herein is subject to a more current re-evaluation prior to the actual completion of the Conversion.

In addition to the comparative operating fundamentals discussed in Chapter II, it is important to address additional market value adjustments based on certain financial and other criteria, which include, among other factors:

(1) Earnings Prospects

(2) Financial Condition

(3) Market Area

(4) Management

(5) Dividend Policy

65

FELDMAN FINANCIAL ADVISORS, INC.

(6) Liquidity of the Issue

(7) Subscription Interest

(8) Recent Acquisition Activity

(9) Effect of Government Regulations and Regulatory Reform

(10) Stock Market Conditions

(11) New Issue Discount

Earnings Prospects

Earnings prospects are dependent upon the sensitivity of asset yields and liability costs to changes in market rates, the credit quality of assets, the stability of non-interest components of income and expense, and the ability to leverage the balance sheet. Each of the foregoing is an important factor for investors in assessing earnings prospects. The Bank’s profitability in recent years has advanced steadily due to a combination of earnings fundamentals reflecting an improved net interest margin and stabilized operating expenses.

Wellesley Bank’s core earnings surpassed the results reported by the Comparative Group for the recent LTM period. The Bank’s core earnings amounted to 0.78% of average assets versus the Comparative Group average and median of 0.33% and 0.23%, respectively. The Bank’s higher net interest margin and more favorable efficiency ratio were the chief factors contributing to the Bank’s earnings advantage. As discussed earlier, the Bank’s net interest margin has been strengthened by the consistent yields generated by its diverse loan portfolio and an increasing concentration of lower cost core deposits as funding sources. However, the Bank is expected to experience additional operating costs related to the opening of another branch, the hiring of new personnel, expenses associated with becoming a publicly traded company, and the implementation of stock benefit plans. Due to its public company obligations, the Bank hired a new Chief Financial Officer in August 2011 and in the future may be required to expand its

66

FELDMAN FINANCIAL ADVISORS, INC.

accounting staff further and to expand internal audit and risk management functions, all of which will increase operating expenses and adversely affect profitability. The Bank’s level of recent loan loss provisions was higher than that of the Comparative Group and could pose a drag on future earnings if the Bank’s asset quality experiences any material deterioration.

Asset expansion over the past five years allowed the Bank to leverage its operating franchise and reap the benefits of improved efficiency in the form of a declining operating expense ratio. Generation of fee income has not been a historical strength of the Bank and could provide an important cushion to earnings volatility resulting from interest rate movements.

The Company’s increased capital position following the Conversion will help to improve its net interest margin across changing interest rate and business cycles and provide additional leverage capacity to grow the balance sheet. The Company will be faced with the challenge of generating a competitive return on equity following the Conversion, as its equity capital will increase to a robust level relative to total assets. However, the earnings fundamentals presently in place offer favorable trend-lines for the growth and predictability of the Bank’s future earnings. Therefore, based on the Bank’s current earnings fundamentals and recent operating results, we believe that a slight upward adjustment is warranted to the Bank’s pro forma market value for fundamental earnings prospects relative to the Comparative Group.

Financial Condition

As discussed and summarized in Chapter I, the Bank’s overall loan composition reflects a diverse concentration of residential mortgage, commercial real estate, and construction loans, supplemented by increasing volumes of commercial business loans and home equity lines of credit. In addition to continuing to emphasize its residential, commercial and construction

67

FELDMAN FINANCIAL ADVISORS, INC.

mortgage lending activity, the Bank seeks to expand its commercial business lending activity and increase commercial-related deposits. In the immediate short-term following the Conversion, the consolidated Company is expected to experience an increase in liquidity as the net offering proceeds are leveraged gradually and re-deployed on the balance sheet. Based on the financial comparisons reviewed in the prior chapter, we note that the Bank’s balance sheet structure was very similar to that of the Comparative Group on the whole, with the notable exception of a lesser reliance on borrowings.

The Bank’s 1.73% ratio of total non-performing assets to total asset loans as of June 30, 2011 was slightly higher than the Comparative Group average and median of 1.72% and 1.57%, respectively. As on offsetting factor, the Bank’s ratios of loan loss reserves in relation to non-performing loans and to total loans were higher than the Comparative Group averages and medians. Before the infusion of net capital proceeds, the Bank’s ratio of tangible equity to assets was 8.10% and below the Comparative Group average and median of 12.10% and 10.30%, respectively, but would surpass the Comparative Group levels on a pro forma basis.

The selection criteria for the Comparative Group ensured a collection of companies with solid capital positions and generally satisfactory asset quality, similar to the Bank. We believe that the balance sheet, asset quality, and capitalization fundamentals of the Bank are largely similar to that of the Comparative Group. Therefore, on the whole, we believe that no additional adjustment is warranted for the Bank’s financial condition relative to the Comparative Group.

Market Area

The members of the Comparative Group were drawn from the New England and Mid-Atlantic regions of the country. The selection criteria parameters produced four public thrifts

68

FELDMAN FINANCIAL ADVISORS, INC.

operating in the Bank’s home state of Massachusetts (Central Bancorp, Chicopee Bancorp, Hampden Bancorp, and Mayflower Bancorp). A fifth company included among the Comparative Group is also located in New England (Newport Bancorp in Rhode Island), while the remaining five companies are all located in Mid-Atlantic states.

The Comparative Group companies are characterized by a cross-section of market areas that encompass suburban and urban locations in smaller to larger metropolitan areas with relatively stable economies and moderate population growth prospects, very similar to that experienced by the Bank’s market area. However, the wealth and income demographics of the Bank’s market area, along with its relatively low unemployment rate, are unparalleled in contrast to the market areas of the Comparative Group companies. As discussed earlier, the town of Wellesley exhibited a median household income of approximately $154,000, a median household net worth of $1.0 million, and unemployment rate of 5.5%. Surrounding communities that the Bank considers part of its market area, including Dover and Needham in Norfolk County and Natick, Newton and Weston in Middlesex County, also exhibited very favorable demographic characteristics with regard to wealth, income, and employment.

Other members of the Comparative Group also exhibited above-average income and wealth characteristics, including Central Bancorp (Middlesex County, Massachusetts), CMS Bancorp (Westchester County, New York), and OBA Financial Services (Montgomery County, Maryland). Nonetheless, the demographic trends of the Bank’s market area remain notably superior to the characteristics experienced by the operating franchises of the Comparative Group companies and have an affirmatively positive impact on the growth capacity and earnings outlook of financial institutions competing for profitable business opportunities. Therefore, based on the above considerations, we believe that an upward adjustment is warranted for the Bank’s market area.

69

FELDMAN FINANCIAL ADVISORS, INC.

Management

Management’s principal challenges are to generate profitable results, monitor credit risks, and control operating costs while the Bank competes in an increasingly challenging financial services environment. The normal challenges facing the Bank in attempting to deliver earnings growth and enhance its competitiveness remain paramount as it attempts to leverage the stock offering proceeds. The Bank has assembled a senior management team led by individuals who have been promoted from within and recruited externally where specific competencies were targeted. As reflected by its historical operating results, we believe that investors will take into account that the Bank is professionally and capably managed by an experienced management team. Investors will likely rely upon actual earnings results as the means of evaluating the future performance of the Bank’s management as the Bank pursues its earnings and growth objectives following the Conversion. Therefore, based on these considerations, we believe no adjustment is warranted relative to the Comparative Group for this factor.

Dividend Policy

Following the Conversion, the Board of Directors of the Company will consider adopting a policy of paying cash dividends. However, there is no guarantee that the Company will pay dividends or that, if paid, dividends will not be reduced or eliminated in the future. The Board of Directors may declare and pay periodic special cash dividends in addition to, or in lieu of, regular cash dividends. In determining whether to declare or pay any dividends, whether regular or special, the Board of Directors will take into account the Company’s and Bank’s financial condition and operating results, tax considerations, capital requirements, industry standards, applicable regulatory guidelines, and economic conditions.

70

FELDMAN FINANCIAL ADVISORS, INC.

Payment of cash dividends has become commonplace among publicly traded thrifts with relatively high capital levels. Of the ten members of the Comparative Group, five currently pay regular cash dividends. The average dividend yield of the Comparative Group was 1.20% and the median was 0.50% as of August 23, 2011. The average dividend yield of the All Public Thrift aggregate was 1.62% and the median was 1.31% as of August 23, 2011. Although the Company has yet to establish a policy of paying regular cash dividends, we believe that investors will take note of its solid dividend-paying capacity as evidenced by strong pro forma capital ratios and consistently positive earnings record. Therefore, we have concluded that no adjustment was warranted for purposes of dividend policy.

Liquidity of the Issue

With the increased number of market makers and institutional investors following thrift stocks, the majority of thrift stock conversions are able to develop a public market for their new stock issues. Most publicly traded thrift stocks continue to be traded on the NASDAQ market. All of the ten members of the Comparative Group are listed on the NASDAQ market. In conjunction with the Conversion, the Company will apply to have its common stock listed on the NASDAQ market.

The number of active buyers and sellers of shares of common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of common stock can be sold. In order to list its shares on NASDAQ, the Company must have at least three broker-dealers who will make a market in the common stock following the Conversion. The

71

FELDMAN FINANCIAL ADVISORS, INC.

development of a public market having the desirable characteristics of depth, liquidity and orderliness is facilitated by trading on an active exchange such as the NASDAQ market. Therefore, we have concluded the no adjustment to the Bank’s pro forma market value is warranted for anticipated liquidity of its common stock issue.

Subscription Interest

Wellesley Bank has retained the services of Sandler O’Neill + Partners, L.P. to assist in the marketing and sale of the stock offering. The Bank’s employee stock ownership plan (“ESOP”) plans to purchase 8.0% of the total amount of shares to be sold in the stock offering. The Bank expects its directors, executive officers and their associates, to purchase 250,500 shares of common stock in the offering for an aggregate amount of approximately $2.5 million based on a $10.00 offering price per share. Except for the tax-qualified employee benefit plans, no person may purchase in the aggregate more than $200,000 of the common stock, or 20,000 shares sold in the offering. No person, either alone or together with associates of or persons acting in concert with such person, may purchase more than $350,000 of the common stock, or 35,000 shares sold in the offering. The minimum purchase in the offering will be 25 shares or an aggregate amount of $250.

If any shares remain available for purchase after satisfaction of all orders from eligible subscribers in the subscription offering, the Bank may offer shares in a community offering to the following persons in the stated order of priority: (i) first priority to natural persons who are residents of the municipalities of Wellesley, Dover, Needham, Newton, Natick and Weston; and (ii) second priority to other persons to whom the Bank delivers a prospectus. If necessary, any shares of common stock not purchased in the subscription offering and community offering may be offered for sale to the general public in a syndicated offering to be managed by Sandler O’Neill + Partners, L.P. in conjunction with other registered broker-dealers.

72

FELDMAN FINANCIAL ADVISORS, INC.

Recent subscription interest in thrift stock conversion offerings has been solid and broad-based. Six full stock conversion offerings have been completed since April 2011 and each offering was oversubscribed and closed at the adjusted maximum of the valuation range. Until recently over the prior year, while a few conversion offering experienced strong interest and received orders above the maximum offering amount, most converting thrifts had moderately exceeded the minimum of offering ranges and two conversion transactions were postponed due to an inability to sell sufficient shares. As evident, subscription interest is cyclical and influenced by general stock market conditions and the overall economic outlook. We are not currently aware of any meaningful market evidence or specific characteristics that might help predict the likely level of interest in the Bank’s subscription offering. Accordingly, absent actual results of the subscription offering, we believe that subscription interest is currently a neutral factor and at present requires no further adjustment.

Recent Acquisition Activity

Table 22 summarizes recent acquisition activity involving banks and thrifts based in Massachusetts. People’s United Financial, Eastern Bank Corp., and Brookline Bancorp have been among the most active acquirers of banks and thrifts in Massachusetts and adjacent states. Another continuing trend has been announcement of merger transactions involving two mutual thrift institutions. The largest recent acquisition of a Massachusetts bank or thrift involved the purchase in June 2011 of Danvers Bancorp (total assets of $2.6 billion) by People’s United Financial. Previously, Danvers Bancorp had completed its mutual to stock conversion in January 2008. A number of mid-sized banks and thrifts, ranging in asset size from $250 million to $1 billion, have also been acquired.

73

FELDMAN FINANCIAL ADVISORS, INC.

Many bank and thrift acquisition transactions nationwide have been characterized by sellers experiencing financial difficulties and subsequently being acquired or recapitalized in change of control transactions at prices near or below book value. However, acquisition valuations can vary widely according to the financial profile of the seller and trends in underlying trading market valuations. The articles of incorporation and bylaws of the Company and certain banking regulations may prevent or make more difficult an involuntary acquisition of the Company. Accordingly, at the present time, we do not believe that acquisition premiums are a significant factor to consider in determining the Bank’s pro forma market value.

Effect of Government Regulations and Regulatory Reform

In response to the financial crisis of 2008 and early 2009, Congress undertook actions that were intended to strengthen confidence and encourage liquidity in financial institutions. The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in July 2010 and provided for new restrictions and an expanded framework of regulatory oversight for financial institutions and their holding companies. The legislation also provided for the creation of a consumer financial protection bureau that will have broad authority to issue regulations governing the services and products provided by financial institutions. The implemented legislation could increase compliance costs, raise regulatory capital requirements, alter loan loss provisioning practices, and otherwise adversely impact operations of banks and thrifts. The potential also exists for additional federal or state laws and regulations, or changes in policy, affecting lending and funding practices and liquidity standards.

74

FELDMAN FINANCIAL ADVISORS, INC.

Table 22

Summary of Recent Massachusetts Bank and Thrift Acquisition Activity

Transactions Announced Since January 1, 2008

				Seller’s Prior Financial Data																	Offer Value to
Buyer	State	Seller	B/T (1)	Total Assets ($Mil.)		TanEq./ Assets (%)		NPAs/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Date Anncd.		Status (2)	Offer Value ($Mil.)		Book Value (%)		Tang. Book (%)		LTM EPS (x)		Total Assets (%)
Average					595.2		8.11		2.02		(0.27	)		(4.52	)		NA	NA		128.4		155.4		165.9		24.6		12.54
Median					402.6		8.06		1.36		(0.26	)		(2.94	)		NA	NA		104.4		148.5		154.9		25.0		12.23
Salem Five Bancorp (3)	MA	Stoneham Savings Bank	T		366.8		5.58		4.93		(1.29	)		(19.55	)		07/07/11	P		NA		NA		NA		NA		NA
People’s United Financial	CT	Danvers Bancorp, Inc.	T		2,631.0		10.01		0.73		0.65			5.71			01/20/11	C		488.9		163.2		184.1		28.5		18.58
Hometown Bank (3)	MA	Athol-Clinton Co-op Bank	T		89.2		9.17		13.20		(1.50	)		(15.30	)		12/31/10	C		NA		NA		NA		NA		NA
Berkshire Bank	MA	Legacy Bancorp, Inc.	T		972.0		10.68		2.26		(0.76	)		(5.85	)		12/21/10	C		112.8		96.3		110.7		NM		11.61
Brookline Bancorp, Inc.	MA	First Ipswich Bancorp	B		262.4		5.02		2.26		(0.46	)		(8.51	)		10/27/10	C		19.0		136.6		145.2		NM		7.25
Citizens-Union SB MHC (3)	MA	Bank of Fall River	B		163.3		8.06		1.87		0.36			4.44			08/20/10	C		NA		NA		NA		NA		NA
People’s United Financial	CT	LSB Corporation	T		806.6		7.69		1.36		0.70			8.07			07/15/10	C		95.9		152.5		152.5		20.8		11.89
Eastern Bank Corp. MHC	MA	Wainwright B&TC	B		1,047.6		7.04		0.90		0.69			8.28			06/28/10	C		162.8		198.3		200.2		26.0		15.55
Bridgewater SB (3)	MA	East Bridgewater SB	T		138.4		8.42		0.00		(0.26	)		(2.94	)		10/09/09	C		NA		NA		NA		NA		NA
East Boston SB MHC (3)	MA	Mt. Washington Co-op Bank	T		517.7		6.12		2.29		(0.80	)		(13.02	)		07/20/09	C		NA		NA		NA		NA		NA
United Bank	MA	CNB Financial Corp.	B		297.2		6.68		1.61		(0.59	)		(8.59	)		06/25/09	C		24.8		124.2		124.2		NM		8.33
Danversbank	MA	Beverly National Corp.	B		484.7		8.61		0.04		(0.03	)		(0.35	)		06/16/09	C		60.9		144.4		144.4		NM		12.56
Middlesex Savings Bank	MA	Service Bancorp, Inc. MHC	T		402.6		4.29		1.81		(2.52	)		(37.64	)		12/08/08	C		21.9		268.2		268.2		NM		5.43
Independent Bank Corp.	MA	Benjamin Franklin Bancorp	T		980.7		7.48		1.02		0.49			4.34			11/08/08	C		124.8		114.2		172.0		25.0		12.73
Hyde Park Co-op Bank (3)	MA	Commonwealth Co-op Bank	T		42.7		9.45		0.00		(0.50	)		(5.04	)		08/20/08	C		NA		NA		NA		NA		NA
Mechanics Co-op Bank (3)	MA	Lafayette Federal SB	T		113.8		10.15		0.06		0.20			1.95			05/23/08	C		NA		NA		NA		NA		NA
Eastern Bank Corp. MHC	MA	MASSBANK Corp.	T		801.8		13.47		0.02		0.95			7.21			03/10/08	C		171.9		155.7		157.3		22.5		21.44

(1) B=bank; T=thrift.

(2) P=pending; C=completed.

(3) Merger involving two mutual thrift institutions.

Source: SNL Financial.

75

FELDMAN FINANCIAL ADVISORS, INC.

Following the Conversion, the Bank will become a stock cooperative bank and the wholly-owned subsidiary of Wellesley Bancorp, a registered bank holding company subject to regulation by the Federal Reserve Board. As a fully converted stock thrift insured by the FDIC and supervised by its primary regulators, the Bank will continue to operate in the same regulatory environment that is substantially similar to that faced by the Comparative Group companies. As of June 30, 2011, the Bank was considered well capitalized, similar to all the members of the Comparative Group. Therefore, given these factors, we believe that no specific adjustment is necessary for the effect of government regulations and regulatory reform.

Stock Market Conditions

Table 23 displays the performance of the SNL All Public Thrift, SNL New England Thrift, and SNL $250 Million to $500 Million-Asset Thrift stock indexes, as compared to the Dow Jones Industrials Average Standard & Poor’s 500-Stock Index (“S&P 500”) over various time periods.

Following the stock market turmoil in 2008 related to the systemic financial crisis, the overall market rebounded in 2009 and 2010 while the various public thrift indexes were generally more sluggish. The All Public Thrift Index declined by 38.2% in 2008, parallel with the 38.5% decline in the S&P 500.

The All Public Thrift Index declined further by 10.2% in 2009, while the S&P 500 rebounded firmly and advanced 23.5% in 2009. While the broader market staged a strong rally in 2009, the financial sector continued to suffer due to intensifying credit losses and mounting failures of distressed institutions.

76

FELDMAN FINANCIAL ADVISORS, INC.

Table 23

Comparative Stock Index Performance

Index	12/31/07- 12/31/08			12/31/08- 12/31/09			12/31/09- 12/31/10			12/31/10- 08/23/11			12/31/07- 08/23/11
SNL All Public Thrifts		-38.2	%		-10.2	%		0.9	%		-23.1	%		-57.0	%
SNL Thrifts $250-500 Mil. Assets		-24.6	%		1.2	%		18.3	%		1.8	%		-8.2	%
SNL New England Thrifts		1.9	%		-7.9	%		-1.0	%		-15.6	%		-21.7	%
SNL NASDAQ Thrifts		-5.9	%		-12.0	%		-4.2	%		-18.8	%		-35.6	%
Dow Jones Industrials Average		-33.8	%		18.8	%		11.0	%		-3.5	%		-15.7	%
S&P 500 Stock Index		-38.5	%		23.5	%		12.8	%		-7.6	%		-20.8	%

Source: SNL Financial.

The All Public Thrift Index stabilized in 2010 with a change of 0.9%, while the SNL $250 Million-$500 Million-Asset Thrift Index increased by 18.3%. The New England Thrift Index, which because of market weighting is influenced heavily by People’s United Financial (Bridgeport, Connecticut), declined by 1.0% in 2010.

As the banking industry showed increased signs of stabilizing into 2010, the public thrift indexes fared better through the first of half of 2010. However, commencing in the month of July 2010, there was a major sell-off in financial stocks. Trading prices of banks and thrifts fell on the lack of consensus regarding the prospects for economic growth and increased uncertainty about the Federal Reserve’s capacity to revive the stumbling economic recovery. The declining market in the summer months also reflected concerns of a potential “double dip” in the U.S. economy, as growth in consumer spending slowed and unemployment remained at historically high levels. Trading prices of bank and thrift stocks turned weaker again in October 2010 on the

77

FELDMAN FINANCIAL ADVISORS, INC.

heels of negative industry news concerning improper mortgage foreclosure practices and fraudulent documentation. In the first quarter of 2011, financial stocks staged a rally, spurred by more favorable industry earnings developments. However, concerns about the sustainability of the economic recovery, underpinned by rising oil prices, stalled the rally in the spring of 2011.

Bank and thrift stocks trended sideways through much of the summer of 2011 without much clear direction. However, stock prices of publicly traded banks and thrifts were pummeled in August 2011 following the action by Standard & Poor’s to downgrade the U.S. government’s credit rating. Over a month-long stretch of volatile trading, the SNL Thrift Index declined sharply by 18.4% from July 19, 2011 to August 19, 2011. During the same period, the Dow Jones Industrials Average declined by over 1,700 points or 14.1% from 12,587 at July 19, 2011 to 10,818 at August 19, 2011. The equity markets were also whipsawed by the debate over the debt ceiling, continued weakness in the U.S. economy, and flare-ups of Europe’s debt woes.

The market volatility and uncertainty experienced by financial stocks reinforced lingering concerns about the near-term outlook for the banking industry set against the backdrop of stagnant housing markets, stubbornly high jobless rates, and expectedly tighter regulations. For the year-to-date period, the SNL Thrift Index is down 23.1% through August 23, 2011. Therefore, we believe the uncertain industry environment and the volatile swings in the market for bank and thrift stocks warrant a downward adjustment.

New Issue Discount

A “new issue” discount that reflects investor concerns and investment risks inherent in all initial public offerings (“IPOs”) is a factor to be considered for purposes of valuing converting thrifts. The magnitude of the new issue discount typically expands during periods of

78

FELDMAN FINANCIAL ADVISORS, INC.

declining thrift stock prices as investors require larger inducements, and narrows during strong market conditions. The thrift conversion market continues to respond to the after-market performance of recent offerings. Table 24 presents a summary of standard full conversion offerings since January 1, 2010.

Thrift stock conversion activity had diminished considerably in the wake of the sharp marked downturn in market conditions. There were only four standard conversion offerings in 2008, followed by three such transactions in 2009. Thrift conversion activity accelerated in 2010 as improved market conditions in the first half of the year, increased regulatory uncertainty, and mounting capital pressures converged to stimulate interest in the conversion market. Twelve standard thrift conversions were completed in 2010, followed by eight such offerings thus far in 2011. The recent after-market price performance of standard thrift conversion IPOs has been mixed. Of the 20 standard conversion offerings completed since January 1, 2010, the average and median one-week price changes were 8.7% and 11.3%, respectively. As shown in Table 24, the cumulative price changes for all recent conversion issues were an average of 20.2% and median of 17.8%

The pro forma pricing ratios for the recent standard conversion offerings indicated average and median price-to-book value ratios of 53.9% and 55.0%, respectively. The average and median pro forma price-to-tangible book value ratios were 54.3% and 56.4%, respectively. The average and median pro forma price-to-LTM earnings ratios were 27.5x and 25.7x, respectively. However, almost half of the companies reported not meaningful (“NM”) ratios on a P/E basis due to negative or extremely low levels of pro forma earnings.

79

FELDMAN FINANCIAL ADVISORS, INC.

Table 24

Summary of Recent Standard Conversion Stock Offerings

Transactions Completed Since January 1, 2010

									Pro Forma Ratios								8/23/11 Closing Price ($)		After-Market Trading Price Change									Change Through 8/23/11 (%)
Company	State	Stock Exchange	IPO Conv. Date		Total Assets ($Mil.)		Gross Offering Proceeds ($Mil.)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ LTM EPS (x)		IPO Price ($)				One Day (%)			One Week (%)			One Month (%)
Average—All Standard Offerings	NA	NA		NA		375.2		40.5		53.9		54.3		27.5		NA		NA		8.5			8.7			9.6			20.2
Median—All Standard Offerings	NA	NA		NA		239.9		25.3		55.0		56.4		25.7		NA		NA		7.4			11.3			10.0			17.8
Average—NASDAQ	NA	NA		NA		551.4		62.1		57.2		57.9		27.0		10.0		12.2		12.1			11.1			12.0			21.8
Median—NASDAQ	NA	NA		NA		402.6		39.9		58.7		59.1		27.8		10.0		11.8		16.4			14.5			10.3			17.8
Average—OTC	NA	NA		NA		110.9		8.1		48.8		48.9		28.1		NA		NA		3.1			5.0			6.1			18.0
Median—OTC	NA	NA		NA		90.7		6.1		44.0		44.0		22.5		NA		NA		0.0			0.0			5.0			0.0
IF Bancorp, Inc.	IL	NASDAQ		07/08/11		409.5		45.0		64.0		64.0		14.8		10.00		10.90		16.7			15.6			10.0			9.0
State Investors Bancorp, Inc.	LA	NASDAQ		07/07/11		214.4		29.1		63.6		63.6		43.5		10.00		11.50		18.5			17.5			16.0			15.0
First Connecticut Bancorp, Inc.	CT	NASDAQ		06/30/11		1,454.6		171.9		73.2		73.2		40.0		10.00		10.35		10.8			10.9			11.1			3.5
Franklin Financial Corporation	VA	NASDAQ		04/28/11		980.7		138.9		58.0		58.0		NM		10.00		11.65		19.7			18.5			19.6			16.5
Sunshine Financial Inc.	FL	OTC		04/06/11		149.9		12.3		49.5		50.0		49.4		10.00		9.23		12.5			13.5			15.0			(7.7	)
Fraternity Community Bancorp, Inc.	MD	OTC		04/01/11		169.7		15.9		53.6		53.6		NM		10.00		8.60		12.6			11.7			10.0			(14.0	)
Anchor Bancorp	WA	NASDAQ		01/26/11		522.2		25.5		37.7		37.7		38.5		10.00		8.15		0.0			0.0			4.5			(18.5	)
Wolverine Bancorp, Inc.	MI	NASDAQ		01/20/11		307.6		25.1		40.2		40.2		NM		10.00		14.10		24.5			20.0			35.0			41.0
SP Bancorp, Inc.	TX	NASDAQ		11/01/10		233.9		17.3		55.9		55.9		NM		10.00		10.99		(6.0	)		(6.2	)		(9.9	)		9.9
Madison Bancorp, Inc.	MD	OTC		10/07/10		150.7		6.1		44.0		44.0		NM		10.00		9.80		0.0			0.0			0.0			(2.0	)
Standard Financial Corp.	PA	NASDAQ		10/07/10		395.8		34.8		49.4		57.0		10.7		10.00		15.08		19.0			18.5			29.5			50.8
Century Next Financial Corp.	LA	OTC		10/01/10		90.7		10.6		61.5		61.5		21.4		10.00		14.50		0.0			15.0			10.0			45.0
United-American Savings Bank	PA	OTC		08/06/10		60.2		3.0		54.2		54.2		23.7		10.00		13.35		0.0			(5.0	)		5.0			33.5
Peoples Federal Bancshares, Inc.	MA	NASDAQ		07/07/10		487.7		66.1		65.2		65.2		27.8		10.00		13.62		4.0			7.5			4.2			36.2
Fairmount Bancorp, Inc.	MD	OTC		06/03/10		67.3		4.4		44.0		44.0		10.1		10.00		17.00		0.0			5.0			10.0			70.0
Harvard Illinois Bancorp, Inc.	IL	OTC		04/09/10		157.2		7.8		43.1		43.1		NM		10.00		8.90		0.0			0.0			(1.0	)		(11.0	)
OBA Financial Services, Inc.	MD	NASDAQ		01/22/10		357.9		46.3		59.4		59.4		NM		10.00		13.86		3.9			1.5			3.0			38.6
OmniAmerican Bancorp, Inc.	TX	NASDAQ		01/21/10		1,006.3		119.0		62.0		62.0		NM		10.00		14.01		18.5			14.0			9.9			40.1
Versailles Financial Corporation	OH	OTC		01/11/10		41.6		4.3		40.5		40.5		36.0		10.00		13.00		0.0			0.0			0.0			30.0
Athens Bancshares Corporation	TN	NASDAQ		01/07/10		246.0		26.8		58.0		58.8		13.9		10.00		11.90		16.0			15.0			10.6			19.0

Source: SNL Financial.

80

FELDMAN FINANCIAL ADVISORS, INC.

Accordingly, thrift conversions continue to be priced at discounts to publicly traded companies. This is due to the relatively high pro forma equity ratios, expected low returns on equity, and the uncertainty regarding the prospects of an institution to leverage the balance sheet prudently and effectively in the current low interest rate environment and against the backdrop of unsteady real estate market conditions. Moreover, the uneven after-market price performance of thrift IPOs and the extreme price volatility in the current market provide added reason to continue to factor in a new issue discount for valuation of current thrift IPOs.

Adjustments Conclusion

It is our opinion that the Bank’s pro forma market value should be discounted relative to the Comparative Group because of factors associated with stock market conditions and the new issue discount, offset partially by upward adjustments for the Bank’s earnings prospects and market area. Individual discounts and premiums are not necessarily additive and may, to some extent, offset or overlay each other. Currently, converting thrifts are often valued at meaningful discounts to peer institutions relative to price-to-book and price-to-earnings ratios. It is the judgment of the appraiser to balance the relative dynamics of price-to-book and price-to-earnings discounts or premiums.

Valuation Approach

In determining the estimated pro forma market value of Wellesley Bank, we have employed the comparative company approach and considered the following pricing ratios: price-to-earnings per share (“P/E”), price-to-book value per share (“P/B”), price-to-tangible book value per share (“P/TB”), and price-to-assets (“P/A”). Table 25 presents the trading market valuation ratios of the Comparative Group and All Public Thrift averages and medians as of August 23,

81

FELDMAN FINANCIAL ADVISORS, INC.

2011. As shown in Table 25, the average and median P/B ratios for the Comparative Group were 78.9% and 78.1%, respectively. The average and median P/TB ratios for the Comparative Group were 83.1% and 82.2%, respectively. The average and median P/E ratios for the Comparative Group were 25.8x and 18.6x respectively. On a core earnings basis, average and median core P/E ratios of the Comparative Group were 17.6x and 15.6x, respectively. Several of the Comparative Group companies reported P/E ratios that were distortedly high due to low levels of profitability. Such ratios are represented as not meaningful and were not utilized for comparative valuation analysis.

Investors continue to make decisions to purchase thrift conversion stocks and more seasoned thrift issues based upon consideration of core earnings profitability and P/B comparisons. The P/E ratio remains an important valuation ratio in the current thrift stock market environment. The Bank’s LTM earnings for the period ended June 30, 2011 amounted to $2.10 million. On a core earnings basis, which excludes the Bank’s gain on sales of securities, the Bank’s LTM core earnings amounted to $2.05 million.

Based on our comparative financial and valuation analyses, we concluded that the Bank should be discounted relative to the trading valuation ratios of the overall Comparative Group. In consideration of the foregoing factors along with the additional adjustments discussed in this chapter, we have determined a pro forma P/B and P/TB ratio of 61.7% for the Bank, which reflects an aggregate midpoint value of approximately $25.7 million based on the assumptions summarized in Exhibit IV. Employing a range of 15% above and below the midpoint, the resulting minimum value of approximately $21.8 million reflects a 56.8% P/B ratio and the resulting maximum value of approximately $27.6 million reflects a 65.8% P/B ratio. The

82

FELDMAN FINANCIAL ADVISORS, INC.

adjusted maximum, computed as an additional 15.0% above the maximum, is positioned at approximately $33.9 million and a P/B ratio of 69.9%. The Bank’s pro forma P/B and P/TB ratios are equivalent due to the absence of any intangible assets on the Bank’s balance sheet.

The Bank’s pro forma maximum P/B ratio of 65.8% reflects a discount of 16.6% to the Comparative Group average P/B ratio of 78.9% and a discount of 15.7% to the Comparative Group median P/B ratio of 78.1%. At the adjusted maximum, the Bank’s pro forma P/B ratio of 69.9% is positioned at an 11.4% discount to the Comparative Group average and 10.5% discount to the Comparative Group median. Also, at the adjusted maximum, the Bank’s pro forma P/TB ratio of 69.0% is positioned at a 15.9% discount to the corresponding Comparative Group average of 83.1% and 15.0% discount to the Comparative Group median of 82.2%.

As noted earlier, recent thrift conversion activity has been characterized by oversubscribed offerings and final pricing at the adjusted maximum of the valuation range. Therefore, investors have become acclimated to focusing on the upper end of conversion valuation ranges as attainable benchmarks. At the adjusted maximum, the Bank is valued at pro forma P/B and P/TB ratios of 69.9%. As compared to recent conversion offerings in Table 24 regarding P/B and P/TB ratios, the Bank’s pro forma valuation ratios would rank second only to First Connecticut Bancorp, which completed its conversion offering on June 30, 2011 through the sale of $171.9 million of common stock at pro forma P/B and P/TB ratios of 73.2%. First Connecticut Bancorp is the holding company for Farmington Bank, which is much larger than the Bank and had pre-conversion total assets of $1.5 billion. Since its IPO price of $10.00 per share, First Connecticut Bancorp’s stock price has advanced marginally and was up 3.5% at $10.35 as of August 23, 2011.

83

FELDMAN FINANCIAL ADVISORS, INC.

Based on the Valuation Range as indicated above, the Bank’s pro forma P/E ratios based on LTM earnings reflected values of 12.3x at the midpoint, 14.5x at the maximum, and 16.9x at the adjusted maximum. Consideration of core earnings produced pro/forma P/E ratios of 12.7x at the midpoint, 14.5x at the maximum, an 17.2x at the adjusted maximum. The Bank’s core P/E ratios were discounted to the Comparative Group median of 21.0x and in range of the Comparative Group median of 15.3x.

Based on the price-to-assets valuation metric, the Bank’s pro forma midpoint of $27.6 million reflects a corresponding P/A ratio of 9.01%, ranging from 7.75% at the pro forma valuation minimum to 10.25% and 11.63% at the maximum and adjusted maximum, respectively. The Bank’s stronger capitalization level on a pro forma basis generally resulted in P/A ratio premiums range in contrast to the Comparative Group average P/A ratio of 9.46% and median P/A ratio of 7.47%.

On a pro forma basis, the Company’s ratio of equity to assets ranges from 13.64% at the valuation minimum and 14.62% at the midpoint to 15.57% and 16.64% at the maximum and adjusted maximum, respectively. However, we note that the Bank’s higher pro forma P/A valuation ratios are also indicative of the challenge facing the Bank in generating a competitive ROE and advancing the other valuation metrics to trading market levels.

Valuation Conclusion

It is our opinion that, as of August 23, 2011, the estimated aggregate pro forma market value of the Bank, inclusive of common stock to be issued to the charitable foundation, was within a range (the “Valuation Range”) of $21,828,000 to $29,532,000 with a midpoint value of $25,680,000. The Valuation Range was based upon a 15% decrease from the midpoint to

84

FELDMAN FINANCIAL ADVISORS, INC.

determine the minimum and a 15% increase from the midpoint to establish the maximum. Assuming an additional 15% increase above the maximum value would result in an adjusted maximum value of $33,961,800. As previously noted, it is the intention to contribute 7% of the gross offering proceeds to the charitable foundation. Therefore, assuming an offering price of $10.00 per share of common stock, the Company will offer for sale a minimum of 2,040,000 shares, a midpoint of 2,400,000 shares, a maximum of 2,760,000 shares, and an adjusted maximum of 3,174,000 shares.

Exhibit IV-1 displays the assumptions utilized in calculating the pro forma financial consequences of the stock offering. Exhibit IV-2 displays the pro forma financial data at each level of the Valuation Range. Exhibit IV-3 provides more detailed data at the maximum valuation. Exhibit IV-4 compares the Bank’s pro forma valuation ratios with the averages and medians reported by the Comparative Group and All Public Thrifts.

85

FELDMAN FINANCIAL ADVISORS, INC.

Table 25

Comparative Pro Forma Market Valuation Analysis

Wellesley Bank and the Comparative Group

Computed from Market Price Data as of August 23, 2011

Company	Current Stock Price ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		Current Dividend Yield (%)
Wellesley Bank(1)
Pro Forma Minimum		10.00		21.8		10.4		10.6		56.8		56.8		7.75		13.64		13.64		0.00
Pro Forma Midpoint		10.00		25.7		12.3		12.7		61.7		61.7		9.01		14.62		14.62		0.00
Pro Forma Maximum		10.00		29.5		14.5		14.9		65.8		65.8		10.25		15.57		15.57		0.00
Pro Forma Adj. Maximum		10.00		34.0		16.9		17.2		69.9		69.9		11.63		16.64		16.64		0.00
Comparative Group Average		NA		42.2		25.8		21.0		78.9		83.1		9.46		12.37		12.10		1.20
Comparative Group Median		NA		35.2		18.6		15.3		78.1		82.2		7.47		11.46		10.30		0.50
All Public Thrift Average(2)		NA		273.3		18.4		17.6		72.7		81.7		8.77		12.28		11.72		1.62
All Public Thrift Median(2)		NA		59.3		15.3		15.6		73.4		77.5		8.19		11.71		10.71		1.31
Comparative Group
BCSB Bancorp, Inc.		12.40		39.6		NM		43.3		76.9		77.0		6.29		8.17		8.16		0.00
Central Bancorp, Inc.		17.91		30.1		48.4		NM		80.5		85.6		6.18		9.48		9.08		1.12
Chicopee Bancorp, Inc.		14.10		82.1		NM		NM		90.8		90.8		14.26		15.70		15.70		0.00
CMS Bancorp, Inc.		8.10		15.1		47.6		NM		68.4		68.4		6.10		8.91		8.91		0.00
Elmira Savings Bank, FSB		15.69		30.9		9.0		9.5		77.2		113.8		6.41		11.71		9.38		5.10
Hampden Bancorp, Inc.		11.90		80.9		NM		NM		86.5		86.5		14.11		16.31		16.31		1.01
Mayflower Bancorp, Inc.		7.99		16.6		12.3		14.4		76.9		76.9		6.67		8.67		8.67		3.00
Newport Bancorp, Inc.		12.73		44.4		21.9		22.6		87.3		87.3		9.78		11.21		11.21		0.00
OBA Financial Services, Inc.		13.86		63.8		NM		NM		78.9		78.9		16.51		20.92		20.92		0.00
WVS Financial Corp.		9.20		18.9		15.3		15.3		65.6		65.6		8.27		12.62		12.62		1.74

(1) Pro forma ratios assume issuance of 100% of the to-be-outstanding common stock, reflecting aggregate pro forma market value of $21.8 million at the minimum, $25.7 million at the midpoint, $29.5 million at the maximum, and $34.0 million at the adjusted maximum of the valuation range.

(2) Excludes companies subject to mutual holding company ownership or pending acquisition.

Source: Wellesley Bank; SNL Financial; Feldman Financial.

86

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit I

Background of Feldman Financial Advisors, Inc.

Overview of Firm

Feldman Financial Advisors provides consulting and advisory services to financial institutions and mortgage companies in the areas of corporate valuations, mergers and acquisitions, strategic planning, branch sales and purchases, developing and implementing regulatory business and capital plans, and expert witness testimony and analysis. Our senior staff members have been involved in the stock conversion process since 1982 and have valued more than 350 converting institutions.

Feldman Financial Advisors was incorporated in February 1996 by a group of consultants who were previously associated with Credit Suisse First Boston and Kaplan Associates. Each of the principals at Feldman Financial Advisors has more than 10 years experience in consulting and all were officers of their prior firm. Our senior staff collectively has worked with more than 1,000 banks, thrifts and mortgage companies nationwide. The firm’s office is located in Washington, D.C.

Background of Senior Professional Staff

Trent Feldman - President. Trent is a nationally recognized expert in providing strategic advice to and valuing service companies, and advising on mergers and acquisitions. Trent was with Kaplan Associates for 14 years and was one of three founding principals at that firm. Trent also has worked at the Federal Home Loan Bank Board and with the California State Legislature. Trent holds Bachelors and Masters Degrees from the University of California at Los Angeles.

Peter Williams - Principal. Peter specializes in merger and acquisition analysis, stock and other corporate valuations, strategic business plans and retail delivery analysis. Peter was with Kaplan Associates for 13 years. Peter also served as a Corporate Planning Analyst with the Wilmington Trust Company in Delaware. Peter holds a BA in Economics from Yale University and an MBA in Finance and Investments from George Washington University.

Michael Green - Principal. Mike is an expert in mergers and acquisition analysis, financial institution and corporate valuations, and strategic and business plans. During Mike’s 10 years at Kaplan Associates, his experience also included business restructurings, litigation support, mark-to-market analysis, and goodwill valuations. Mike holds a BA in Finance and Economics from Rutgers College.

Greg Izydorczyk - Senior Vice President. Greg specializes in merger and acquisition analysis and corporate valuations and also has experience in mark-to-market analysis and business plans. Greg was with Kaplan Associates for three years. Previous, Greg worked as a Senior Auditor for First Virginia Bank and Integra Financial and as a Financial Analyst with Airbus Industrie of N.A. Greg holds a BS in Finance from Pennsylvania State University and an MBA in Finance from the Katz Graduate School, University of Pittsburgh.

I-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-1

Consolidated Balance Sheets

Wellesley Bank

As of December 31, 2009 and 2010 and June 30, 2011

(Dollars in Thousands)

	June 30, 2011			December 31,
				2010			2009
Assets
Cash and due from banks	$	3,877		$	3,780		$	3,049
Short-term investments		14,760			14,617			6,321
Certificates of deposit		1,691			3,433			12,910
Securities available for sale, at fair value		28,506			25,565			28,188
Federal Home Loan Bank stock		1,930			1,930			1,930
Loans receivable		208,615			206,807			186,430
Allowance for loan losses		(3,229	)		(2,690	)		(2,060	)
Loans receivable, net		205,386			204,117			184,370
Bank-owned life insurance		4,135			4,062			3,911
Premises and equipment, net		795			786			772
Accrued interest receivable		827			865			846
Net deferred tax asset		1,286			1,168			780
Prepaid FDIC assessment		582			767			1,134
Other assets		999			912			1,618
Total Assets	$	264,774		$	262,002		$	245,829
Liabilities and Equity
Total deposits	$	228,375		$	222,140		$	195,625
Short-term borrowings		6,423			5,804			6,270
Long-term debt		7,500			12,500			24,500
Accrued expenses and other liabilities		1,031			1,150			1,131
Total Liabilities		243,329			241,594			227,526
Retained earnings		21,057			20,099			17,946
Accumulated other comprehensive income		388			309			357
Total Equity		21,445			20,408			18,303
Total Liabilities and Equity	$	264,774		$	262,002		$	245,829

Source: Wellesley Bank, financial statements.

II-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-2

Consolidated Income Statements

Wellesley Bank

For the Years Ended December 31, 2009 and 2010

And the Six Months Ended June 30, 2010 and 2011

(Dollars in Thousands)

	Six Months Ended June 30,				Year Ended December 31,
	2011		2010		2010		2009
Total interest and dividend income	$	6,450	$	6,526	$	13,337	$	13,382
Total interest expense		1,427		1,787		3,379		5,553
Net interest income		5,023		4,739		9,958		7,829
Provision for loan losses		600		500		1,100		300
Net interest income after provision		4,423		4,239		8,858		7,529
Customer service fees		78		79		167		139
Income of bank-owned life insurance		73		75		151		145
Wealth management fees		52		28		71		43
Gain (loss) on sale of securities		—		—		82		(131	)
Other non-interest income		26		29		81		62
Total non-interest income		229		211		552		258
Salaries and employee benefits		1,886		1,714		3,495		3,672
Occupancy expense		403		359		743		682
Data processing		189		183		371		319
FDIC insurance		185		127		275		510
Contributions		14		9		83		12
Foreclosed assets, net		—		—		52		—
Other expenses		476		457		980		750
Total non-interest expense		3,153		2,849		5,999		5,945
Income before income taxes		1,499		1,601		3,411		1,842
Provision for income taxes		541		589		1,258		697
Net income	$	958	$	1,102	$	2,153	$	1,145

Source: Wellesley Bank, financial statements.

II-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-3

Loan Portfolio Composition

As of December 31, 2009 and 2010 and June 30, 2011

(Dollars in Thousands)

	June 30, 2011						December 31,
							2010						2009
	Amount			Percent			Amount			Percent			Amount			Percent
Real estate loans
Residential—fixed	$	15,134			7.24	%	$	18,993			9.17	%	$	20,110			10.77	%
Residential—variable		53,195			25.45			53,897			26.01			53,333			28.55
Commercial		65,720			31.45			53,907			26.02			49,911			26.72
Construction		36,746			17.58			40,770			19.68			31,223			16.71
Total real estate loans		170,795			81.72			167,567			80.88			154,577			82.75
Commercial loans
Secured	$	14,736			7.05		$	14,413			6.96		$	13,585			7.27
Unsecured		472			0.23			492			0.24			295			0.16
Total commercial loans		15,208			7.28			14,905			7.20			13,880			7.43
Consumer loans
Secured	$	22,554			10.79		$	24,198			11.68		$	17,805			9.53
Unsecured		429			0.21			503			0.24			539			0.29
Total consumer loans		22,983			11.00			24,701			11.92			18,344			9.82
Total loans		208,986			100.00	%		207,173			100.00	%		186,801			100.00	%
Less:
Net deferred origination fees		(371	)					(366	)					(371	)
Allowance for loan losses		(3,229	)					(2,690	)					(2,060	)
Net total loans	$	205,386					$	204,117					$	184,370

Source: Wellesley Bank, preliminary prospectus.

II-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-4

Investment Portfolio Composition

As of December 31, 2009 and 2010 and June 30, 2011

(Dollars in Thousands)

	June 30, 2011				December 31,
					2010				2009
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available for sale
Residential mortgage-backed secs.:
Govt. National Mortgage Assn.	$	12,257	$	12,441	$	11,418	$	11,614	$	10,162	$	10,295
Govt.-sponsored enterprises		4,222		4,399		4,503		4,671		7,884		8,147
SBA asset-backed securities		2,557		2,596		2,700		2,711		960		1,014
State and municipal bonds		8,013		8,246		5,606		5,713		4,450		4,571
Government-sponsored enterprise obligations		393		413		422		443		3,148		3,154
Corporate bonds		406		411		401		413		994		1,007
Total investment securities	$	27,866	$	28,506	$	25,050	$	25,565	$	27,598	$	28,188

Source: Wellesley Bank, preliminary prospectus.

II-4

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-5

Deposit Account Distribution

As of December 31, 2009 and 2010 and June 30, 2011

(Dollars in Thousands)

	June 30, 2011					December 31,
						2010					2009
	Amount		Percent			Amount		Percent			Amount		Percent
Non-certificate accounts
Demand accounts	$	27,021		11.83	%	$	26,512		11.93	%	$	21,987		11.24	%
NOW accounts		15,591		6.83			14,914		6.71			12,508		6.39
Money market accounts		46,129		20.20			42,563		19.16			34,493		17.63
Savings accounts		24,916		10.91			23,642		10.64			15,786		8.07
Total non-certificate accounts		113,657		49.77			107,631		48.45			84,774		43.33
Certificate accounts
Certificates—less than $100,000		41,361		18.11			41,261		18.58			42,861		21.91
Certificates—$100,000 and greater		73,357		32.12			73,248		32.97			67,990		34.76
Total certificate accounts		114,718		50.23			114,509		51.55			110,851		56.67
Total deposits	$	228,375		100.00	%	$	222,140		100.00	%	$	195,625		100.00	%

Source: Wellesley Bank, preliminary prospectus.

II-5

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-6

Borrowed Funds Distribution

As of or For the Years Ended December 31, 2009 and 2010

And As of or For the Six Months Ended June 30, 2011

(Dollars in Thousands)

	Six Months Ended June 30, 2011			Year Ended December 31,
				2010			2009
Short-term borrowings (1)
Balance outstanding at end of the period	$	6,423		$	5,804		$	6,270
Average balance during the period		6,957			7,113			6,403
Maximum outstanding at any month-end		7,441			8,123			8,042
Weighted average rate at end of the period		1.14	%		1.24	%		1.74	%
Weighted average rate during the period		1.16	%		1.24	%		1.51	%
Long-term debt (2)
Balance outstanding at end of the period	$	7,500		$	12,500		$	24,500
Average balance during the period		12,002			18,204			25,384
Maximum outstanding at any month-end		12,500			24,500			29,500
Weighted average rate at end of the period		3.65	%		4.40	%		4.71	%
Weighted average rate during the period		4.40	%		4.62	%		5.07	%

(1) Consisting entirely of securities sold under agreements to repurchase.

(2) Consisting entirely of FHLB advances.

Source: Wellesley Bank, preliminary prospectus.

II-6

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)			Tang. Equity/ Assets (%)			LTM ROA (%)			LTM ROE (%)			Closing Price 8/23/11 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
All Public Thrifts(1)
Alliance Bancorp, Inc.	PA	ALLB		467		18.40			18.40			0.47			3.24			10.55		57.8		27.1		26.6		67.2		67.2		12.37		1.31
Anchor Bancorp	WA	ANCB		510		12.18			12.18			NA			NA			8.15		20.8		NA		NA		33.4		33.4		4.07		0.00
Anchor BanCorp Wisconsin Inc.	WI	ABCW		3,241		(0.15	)		(0.15	)		(0.94	)		NM			0.63		13.7		NM		NM		NM		NM		0.43		0.00
Astoria Financial Corp.	NY	AF		17,120		7.47			6.46			0.49			7.17			9.39		925.4		9.9		9.9		72.3		84.6		5.40		3.74
Athens Bancshares Corp.	TN	AFCB		283		17.72			17.61			0.59			3.35			11.90		32.9		18.3		17.8		65.5		66.0		11.61		1.60
Atlantic Coast Financial Corp.	FL	ACFC		802		6.75			6.74			(1.45	)		(23.00	)		3.35		8.8		NM		NM		16.3		16.3		1.10		0.00
Bank Mutual Corp.	WI	BKMU		2,523		10.67			10.64			(4.22	)		(36.21	)		3.16		146.1		NM		NM		54.9		55.0		5.80		2.51
BankAtlantic Bancorp, Inc.	FL	BBX		3,864		0.68			0.32			(1.58	)		NM			0.69		53.2		NM		NM		209.7		459.1		1.40		0.00
BankFinancial Corp.	IL	BFIN		1,663		15.06			13.65			(0.28	)		(1.76	)		7.81		164.6		NM		NM		65.7		73.7		9.90		2.87
BankUnited, Inc.	FL	BKU		10,847		13.61			13.06			0.45			3.72			19.98		1,943.1		40.0		16.0		131.6		138.0		17.91		0.00
BCSB Bancorp, Inc.	MD	BCSB		630		8.17			8.16			0.18			2.04			12.40		39.6		NM		43.3		76.9		77.0		6.29		0.00
Beacon Federal Bancorp, Inc.	NY	BFED		1,041		10.90			10.90			0.56			5.33			13.51		85.9		14.1		12.5		75.7		75.7		8.25		1.69
Berkshire Hills Bancorp, Inc.	MA	BHLB		3,226		13.80			8.32			0.40			2.90			20.16		426.0		24.6		16.0		75.8		133.6		10.45		2.89
BofI Holding, Inc.	CA	BOFI		1,940		7.62			7.62			1.26			14.83			14.01		146.2		7.5		7.7		102.5		102.5		7.56		0.00
Broadway Financial Corp.	CA	BYFC		447		6.87			6.87			(0.36	)		(5.39	)		1.58		2.8		NM		NM		19.1		19.1		0.64		0.00
Brookline Bancorp, Inc.	MA	BRKL		3,115		16.17			14.75			1.02			5.76			7.55		447.0		16.1		15.7		89.0		99.3		14.33		3.13
Cape Bancorp, Inc.	NJ	CBNJ		1,068		13.53			11.63			1.09			8.54			8.35		111.2		8.9		10.1		76.9		91.5		10.41		0.00
Capitol Federal Financial, Inc.	KS	CFFN		9,602		20.14			20.14			0.40			2.47			10.44		1,748.7		47.5		27.4		90.4		90.4		18.21		8.10
Carver Bancorp, Inc.	NY	CARV		678		3.23			3.22			(5.75	)		NM			0.63		1.6		NM		NA		NM		NM		0.24		0.00
Central Bancorp, Inc.	MA	CEBK		497		9.48			9.08			0.24			2.62			17.91		30.1		48.4		NM		80.5		85.6		6.18		1.05
Central Federal Corp.	OH	CFBK		278		4.42			4.38			(1.70	)		(31.64	)		0.70		2.9		NM		NM		55.7		56.9		1.07		0.00
CFS Bancorp, Inc.	IN	CITZ		1,128		10.30			10.29			0.31			3.05			5.40		58.7		16.9		18.3		50.5		50.5		5.20		0.76
Chicopee Bancorp, Inc.	MA	CBNK		580		15.70			15.70			0.13			0.79			14.10		82.1		NM		NM		90.8		90.8		14.26		0.00
Citizens Community Bancorp, Inc.	WI	CZWI		552		9.60			9.50			(1.26	)		(14.04	)		5.44		27.9		NM		NM		52.6		53.2		5.05		0.00
Citizens South Banking Corp.	NC	CSBC		1,118		8.48			8.34			(0.06	)		(0.64	)		3.90		44.9		NM		NM		60.4		61.8		4.09		0.88
CMS Bancorp, Inc.	NY	CMSB		248		8.91			8.91			0.12			1.38			8.10		15.1		47.6		NM		68.4		68.4		6.10		0.00
Colonial Financial Services, Inc.	NJ	COBK		601		11.95			11.95			0.52			4.56			11.70		49.0		15.2		15.0		68.2		68.2		8.15		0.00
Community Financial Corp.	VA	CFFC		523		9.58			9.58			0.20			2.19			3.08		13.4		38.5		38.5		35.5		35.5		2.63		0.00
Dime Community Bancshares, Inc.	NY	DCOM		4,093		8.49			7.22			1.11			13.72			11.30		395.5		8.4		8.1		113.7		135.4		9.65		3.84
Eagle Bancorp Montana, Inc.	MT	EBMT		331		15.85			15.85			0.73			4.57			10.40		40.8		16.8		16.9		77.7		77.7		12.31		2.62

III-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III (continued)

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 8/23/11 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
Elmira Savings Bank, FSB	NY	ESBK		500		11.71		9.38		0.99			8.68			15.69		30.9		9.0		9.5		77.2		113.8		6.41		4.38
ESB Financial Corp.	PA	ESBF		1,968		9.04		7.04		0.81			9.03			11.44		170.1		11.3		11.7		95.1		124.6		8.63		2.46
ESSA Bancorp, Inc.	PA	ESSA		1,103		14.93		14.78		0.42			2.66			11.28		137.8		28.9		32.2		85.1		86.1		12.70		1.69
FedFirst Financial Corp.	PA	FFCO		346		17.30		16.99		0.14			0.87			13.50		40.4		NM		44.4		67.5		69.0		11.68		0.87
FFD Financial Corp.	OH	FFDF		220		8.64		8.64		0.64			7.26			14.81		15.0		11.1		11.1		NA		NA		NA		4.59
Fidelity Bancorp, Inc.	PA	FSBI		667		7.56		7.19		0.14			1.93			8.95		27.4		NM		14.8		62.8		66.9		4.15		1.34
First Advantage Bancorp	TN	FABK		350		19.33		19.33		0.55			2.79			12.58		51.4		28.6		28.9		75.9		75.9		14.67		1.65
First Bancshares, Inc.	MO	FBSI		204		9.56		9.51		(1.80	)		(17.27	)		6.78		10.5		NM		NM		53.9		54.2		5.15		0.00
First Capital, Inc.	IN	FCAP		445		11.15		10.05		0.83			7.69			18.13		50.5		13.5		13.8		102.0		114.6		11.35		4.57
First Clover Leaf Financial Corp.	IL	FCLF		567		13.89		11.97		0.61			4.46			6.44		50.6		14.0		14.0		64.3		76.3		8.94		3.54
First Connecticut Bancorp, Inc.	CT	FBNK		1,632		16.12		16.12		NA			NA			10.35		185.1		NA		NA		70.4		70.4		11.34		0.00
First Defiance Financial Corp.	OH	FDEF		2,046		13.16		10.40		0.58			4.83			13.82		134.4		12.3		11.1		57.8		79.3		6.69		0.00
First Federal Bancshares of Ark.	AR	FFBH		616		13.48		13.46		(1.50	)		(20.61	)		6.00		115.8		NM		NM		139.4		139.6		18.79		0.00
First Federal of North. Mich. Bancorp	MI	FFNM		219		10.99		10.80		0.06			0.60			3.67		10.6		NM		35.9		44.0		44.9		4.83		0.00
First Financial Holdings, Inc.	SC	FFCH		3,222		8.27		8.10		(1.31	)		(13.83	)		5.87		97.0		NM		NM		48.1		49.6		3.07		1.80
First Financial Northwest, Inc.	WA	FFNW		1,152		15.57		15.57		(0.72	)		(4.97	)		4.51		84.8		NM		NM		47.3		47.3		7.37		0.00
First PacTrust Bancorp, Inc.	CA	FPTB		882		18.19		18.19		0.77			5.39			11.66		135.2		11.2		16.3		83.8		83.8		15.25		3.01
First Place Financial Corp.	OH	FPFC		3,153		8.01		7.75		(0.97	)		(11.45	)		0.70		12.1		NM		NM		6.5		6.8		0.39		0.00
First Savings Financial Group, Inc.	IN	FSFG		524		11.08		9.67		0.73			6.72			15.72		37.2		9.2		8.4		64.1		74.6		7.10		0.00
Flagstar Bancorp, Inc.	MI	FBC		12,663		9.27		NA		(2.23	)		(25.06	)		0.62		343.7		NM		NM		37.2		NA		2.77		0.00
Flushing Financial Corp.	NY	FFIC		4,323		9.37		9.01		0.94			10.30			11.21		353.3		8.6		8.2		87.2		91.1		8.17		3.71
Fox Chase Bancorp, Inc.	PA	FXCB		1,088		19.29		19.29		0.36			1.98			12.51		176.0		41.7		NM		86.8		86.8		16.74		0.00
Franklin Financial Corp.	VA	FRNK		1,115		23.02		23.02		NA			(2.63	)		11.65		166.6		NA		NA		64.9		64.9		14.94		0.00
Hampden Bancorp, Inc.	MA	HBNK		573		16.31		16.31		0.23			1.40			11.90		80.9		NM		NM		86.5		86.5		14.11		0.90
Harleysville Savings Financial Corp.	PA	HARL		858		6.59		6.59		0.65			10.35			14.08		52.8		9.4		10.7		93.3		93.3		6.15		5.22
Heritage Financial Group, Inc.	GA	HBOS		964		12.67		12.27		0.15			1.25			11.28		98.3		NM		NM		80.5		83.5		10.20		3.46
HF Financial Corp.	SD	HFFC		1,191		7.93		7.59		0.06			0.72			8.97		62.6		NM		18.0		66.2		69.4		5.25		4.11
Hingham Institution for Savings	MA	HIFS		1,067		7.28		7.28		1.12			15.34			52.10		110.7		9.8		9.8		142.6		142.6		10.38		2.16
HMN Financial, Inc.	MN	HMNF		807		8.37		8.37		(2.37	)		(27.55	)		1.95		8.6		NM		NM		19.9		19.9		1.09		0.00
Home Bancorp, Inc.	LA	HBCP		717		18.64		18.46		0.63			3.35			13.92		111.1		23.2		19.5		83.6		84.7		15.59		0.00
Home Federal Bancorp, Inc.	LA	HFBL		233		21.94		21.94		0.93			4.38			13.30		40.5		19.9		22.9		NA		NA		NA		1.84

III-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III (continued)

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 8/23/11 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
HopFed Bancorp, Inc.	KY	HFBC		1,062		10.47		10.41		0.14			1.34			7.46		54.8		NM		NM		58.9		59.3		5.25		3.54
Hudson City Bancorp, Inc.	NJ	HCBK		51,779		9.44		9.17		(0.37	)		(3.98	)		5.66		2,985.7		NM		6.6		61.0		63.0		5.76		4.71
IF Bancorp, Inc.	IL	IROQ		NA		NA		NA		NA			NA			10.90		52.4		NA		NA		NA		NA		NA		0.00
Jacksonville Bancorp, Inc.	IL	JXSB		305		12.70		11.92		1.00			8.56			13.70		26.5		8.6		9.0		68.3		73.5		8.68		2.78
Jefferson Bancshares, Inc.	TN	JFBI		562		10.11		NA		0.20			2.20			3.10		20.6		15.5		NM		36.2		NA		3.66		0.00
Kaiser Federal Financial Group, Inc.	CA	KFFG		856		18.38		18.00		1.00			6.60			11.91		113.8		12.5		12.5		NA		NA		NA		1.95
Louisiana Bancorp, Inc.	LA	LABC		320		18.40		18.40		0.74			3.90			15.90		52.6		21.8		22.8		92.8		92.8		17.07		0.00
LSB Financial Corp.	IN	LSBI		360		10.09		10.09		0.49			5.10			13.00		20.2		11.1		11.1		55.6		55.6		5.61		0.00
Mayflower Bancorp, Inc.	MA	MFLR		249		8.67		8.67		0.55			6.44			7.99		16.6		12.3		14.4		76.9		76.9		6.67		2.83
Meta Financial Group, Inc.	IA	CASH		1,074		7.27		7.14		0.45			6.23			18.39		57.3		11.6		16.9		73.4		74.8		5.34		1.63
MutualFirst Financial, Inc.	IN	MFSF		1,430		9.51		9.26		0.31			3.32			7.45		52.1		19.6		12.5		50.0		52.0		3.72		2.58
NASB Financial, Inc.	MO	NASB		1,257		11.50		11.33		(1.56	)		(13.28	)		10.00		78.7		NM		NM		54.4		55.4		6.26		0.00
Naugatuck Valley Financial Corp.	CT	NVSL		596		13.84		13.84		0.28			2.88			7.39		51.7		32.1		28.3		62.7		62.7		8.68		1.78
New Hampshire Thrift Bancshares, Inc.	NH	NHTB		1,031		9.30		6.71		0.82			8.83			12.80		73.9		9.6		12.7		85.9		128.8		7.24		4.14
New York Community Bancorp, Inc.	NY	NYB		40,603		13.69		8.03		1.29			9.67			12.20		5,336.6		10.2		10.2		96.0		174.4		13.14		5.31
Newport Bancorp, Inc.	RI	NFSB		454		11.21		11.21		0.43			3.87			12.73		44.4		21.9		22.6		87.3		87.3		9.78		0.00
Northwest Bancshares, Inc.	PA	NWBI		8,087		15.17		13.30		0.74			4.69			11.33		1,170.2		19.9		18.9		95.3		111.2		14.47		3.40
OBA Financial Services, Inc.	MD	OBAF		386		20.92		20.92		0.23			1.06			13.86		63.8		NM		NA		78.9		78.9		16.51		0.00
Ocean Shore Holding Co.	NJ	OSHC		860		11.95		11.95		0.61			5.17			11.25		82.1		14.6		14.1		79.8		79.8		9.54		2.10
OceanFirst Financial Corp.	NJ	OCFC		2,239		9.53		9.53		0.94			10.55			11.95		225.2		10.2		10.2		105.6		105.6		10.06		3.73
OmniAmerican Bancorp, Inc.	TX	OABC		1,328		15.16		15.16		0.19			1.12			14.01		163.4		NM		NM		81.2		81.2		12.30		0.00
Oneida Financial Corp.	NY	ONFC		658		13.79		10.36		0.87			6.58			8.72		62.5		11.3		10.4		70.8		99.1		9.53		6.11
Oritani Financial Corp.	NJ	ORIT		2,587		24.95		24.95		1.13			4.42			12.34		685.0		22.9		22.8		106.1		106.1		26.48		3.13
Park Bancorp, Inc.	IL	PFED		208		7.69		7.69		(2.57	)		(29.00	)		2.57		3.1		NM		NM		19.2		19.2		1.47		0.00
Peoples Federal Bancshares, Inc.	MA	PEOP		538		21.82		21.82		(0.03	)		(0.14	)		13.62		97.3		NA		NA		82.9		82.9		18.08		0.00
People’s United Financial, Inc.	CT	PBCT		25,323		20.51		13.89		0.67			3.01			10.89		4,100.1		23.7		19.8		74.4		119.1		15.27		4.43
Provident Financial Holdings, Inc.	CA	PROV		1,315		10.78		10.78		0.97			9.74			8.29		94.7		7.1		7.5		66.8		66.8		7.20		0.50
Provident Financial Services, Inc.	NJ	PFS		6,880		13.64		NA		0.77			5.66			11.65		699.4		12.5		11.8		74.5		NA		10.17		2.91
Provident New York Bancorp	NY	PBNY		2,976		14.42		9.37		0.60			4.14			6.43		244.6		13.7		18.3		57.0		92.8		8.21		2.86
Pulaski Financial Corp.	MO	PULB		1,332		8.94		8.67		0.65			7.62			6.40		70.3		9.6		9.5		76.5		80.2		5.16		5.51
PVF Capital Corp.	OH	PVFC		777		9.58		9.58		(1.17	)		(12.22	)		1.52		39.0		NM		NM		52.4		52.4		5.02		0.00

III-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III (continued)

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 8/23/11 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
River Valley Bancorp	IN	RIVR		400		8.25		8.23		0.59			7.17			16.20		24.5		12.8		14.6		87.7		87.9		6.21		5.25
Riverview Bancorp, Inc.	WA	RVSB		886		12.23		9.60		0.38			3.07			2.54		57.1		15.9		15.6		52.9		69.6		6.45		0.00
Rockville Financial, Inc.	CT	RCKB		1,747		19.01		18.96		0.28			2.23			9.24		272.6		NM		30.9		82.1		82.4		15.61		2.13
Severn Bancorp, Inc.	MD	SVBI		937		11.20		11.17		0.07			0.65			2.45		24.7		NM		NA		31.7		31.8		2.71		0.00
SI Financial Group, Inc.	CT	SIFI		949		13.69		13.32		0.30			2.55			9.25		97.8		35.6		34.0		75.3		77.7		10.31		1.36
SP Bancorp, Inc.	TX	SPBC		266		12.21		12.21		0.41			3.74			10.99		19.0		NA		NA		58.3		58.3		7.13		0.00
Standard Financial Corp.	PA	STND		438		17.68		15.85		0.54			3.43			15.08		52.5		NA		NA		67.8		77.3		11.98		0.00
State Investors Bancorp, Inc.	LA	SIBC		284		7.67		7.67		NA			4.45			11.50		33.5		NA		NA		NA		NA		NA		0.00
Territorial Bancorp Inc.	HI	TBNK		1,488		14.95		14.94		0.87			5.60			20.19		233.8		18.0		17.9		105.2		105.3		15.73		1.41
TF Financial Corp.	PA	THRD		692		10.91		10.32		0.43			4.00			21.23		60.0		19.1		20.1		79.4		84.5		8.66		3.59
Timberland Bancorp, Inc.	WA	TSBK		735		11.75		11.01		0.14			1.18			4.94		34.8		NM		NM		49.4		54.1		4.84		0.00
TrustCo Bank Corp NY	NY	TRST		4,070		6.61		6.60		0.77			11.70			4.31		401.5		10.8		11.5		124.0		124.2		8.19		4.14
United Community Financial Corp.	OH	UCFC		2,102		8.71		8.69		(1.17	)		(13.61	)		0.97		30.1		NM		NM		16.4		16.4		1.43		0.00
United Financial Bancorp, Inc.	MA	UBNK		1,610		14.15		13.69		0.67			4.68			15.35		247.2		21.9		21.5		108.5		112.8		15.35		2.10
ViewPoint Financial Group, Inc.	TX	VPFG		2,964		13.73		13.71		0.81			5.69			11.57		403.1		16.1		17.6		99.0		99.2		13.60		1.37
Washington Federal, Inc.	WA	WFSL		13,323		13.96		12.28		0.72			5.22			14.50		1,599.1		16.9		18.0		86.1		99.8		12.02		1.31
Wayne Savings Bancshares, Inc.	OH	WAYN		412		9.59		9.16		0.51			5.36			8.43		25.3		11.9		11.5		64.1		67.5		6.15		2.80
Westfield Financial, Inc.	MA	WFD		1,241		17.81		17.80		0.39			2.15			7.37		205.3		40.9		NM		92.9		93.0		16.56		2.59
Wolverine Bancorp, Inc.	MI	WBKC		306		20.99		20.99		0.24			1.46			14.10		35.4		NA		NA		55.1		55.1		11.56		0.00
WSB Holdings, Inc.	MD	WSB		390		13.57		13.57		(0.29	)		(2.21	)		2.35		18.8		NM		36.7		35.5		35.5		4.81		0.00
WSFS Financial Corp.	DE	WSFS		4,152		9.06		8.29		0.51			5.46			33.44		287.7		16.3		20.6		88.9		99.5		7.02		1.01
WVS Financial Corp.	PA	WVFC		229		12.62		12.62		0.43			4.37			9.20		18.9		15.3		15.3		65.6		65.6		8.27		1.72
Average	NA	NA		2,792		12.28		11.72		0.11			1.02			NA		273.3		18.4		17.6		72.7		81.7		8.77		1.62
Median	NA	NA		886		11.71		10.71		0.43			3.33			NA		59.3		15.3		15.6		73.4		77.5		8.19		1.31

(1) Public thrifts traded on NYSE, NYSE Amex, and NASDAQ; excludes companies subject to pending acquisitions or mutual holding company ownership.

Note: NM = not meaningful; ROE ratios less than -100% = NM; price/earnings ratios that are negative or greater than 100 = NM

Source: SNL Financial; Feldman Financial.

III-4

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-1

Pro Forma Assumptions for Conversion Stock Offering

1. The total amount of the net offering proceeds was fully invested at the beginning of the applicable period.

2. The net offering proceeds are invested to yield a return of 1.76%, which represented the yield on five-year U.S. Treasury securities at June 30, 2011. The effective combined federal and state corporate income tax rate was assumed to be 40.0%, resulting in a net after-tax yield of 1.06%.

3. It is assumed that the Bank’s charitable foundation receives a contribution of common stock and cash equal to 7% and 1%, respectively, of the aggregate amount of common stock sold in the offering.

4. It is assumed that 8% of the total shares of common stock to be issued in the offering, including shares contributed to the foundation, will be acquired by the Bank’s employee stock ownership plan (“ESOP”). Pro forma adjustments have been made to earnings and equity to reflect the impact of the ESOP. The annual expense is estimated based on a 15-year loan to the ESOP from the Company. No re-investment is assumed on proceeds used to fund the ESOP.

5. It is assumed that that the Bank’s restricted stock plan (“RSP”) will purchase in the open market a number of shares equal to 4% of the total shares issued in the offering, including shares issued to the foundation. Also, it is assumed that these shares are acquired at the initial public offering price of $10.00 per share. Pro forma adjustments have been made to earnings and equity to reflect the impact of the RSP. The annual expense is estimated based on a five-year vesting period. No re-investment is assumed on proceeds used to fund the RSP.

6. It is assumed that an additional 10% of the total shares issued in the offering, including foundation shares, will be reserved for issuance by the Bank’s stock option plan. Pro forma net income has been adjusted to reflect the expense associated with the granting of options at an assumed options value of $3.93 per share. It is further assumed that options for all shares reserved under the plan were granted to plan participants at the beginning of the period, 25% of the options granted were non-qualified options for income tax purposes, the options would vest at a rate of 20% per year, and compensation expense will be recognized on a straight-line basis over the five-year vesting period

7. The fair value of stock options has been estimated at $3.93 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 0.00%; an expected option life of 10 years; a risk-free interest rate of 3.18%; and a volatility rate of 21.89% based on an index of publicly traded thrift institutions.

8. Total offering expenses, including marketing agent fees and expense, are estimated at $1.23 million.

9. No effect has been given in the pro forma equity calculation for the assumed earnings on the net proceeds.

10. No effect has been given in the pro forma earnings calculation for the non-recurring charitable expense associated with the foundation contribution.

11. No effect has been given to withdrawals from deposit accounts for the purpose of purchasing common stock in the offering.

IV-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-2

Pro Forma Conversion Valuation Range

Historical Financial Data as of June 30, 2011

(Dollars in Thousands, Except Per Share Data)

	Minimum			Midpoint			Maximum			Adj. Max.
Shares outstanding		2,182,800			2,568,000			2,953,200			3,396,180
Shares sold		2,040,000			2,400,000			2,760,000			3,174,000
Offering price	$	10.00		$	10.00		$	10.00		$	10.00
Pro forma market value	$	21,828		$	25,680		$	29,532		$	33,962
Gross proceeds	$	20,400		$	24,000		$	27,600		$	31,740
Less: estimated offering expenses		(1,230	)		(1,230	)		(1,230	)		(1,230	)
Net conversion proceeds		19,170			22,770			26,370			30,510
Less: cash contribution to foundation		(204	)		(240	)		(276	)		(317	)
Less: ESOP purchase		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: RSP purchase		(873	)		(1,027	)		(1,181	)		(1,358	)
Net investable proceeds	$	16,347		$	19,449		$	22,550		$	26,118
Net Income:
Historical LTM ended 6/30/11	$	2,099		$	2,099		$	2,099		$	2,099
Pro forma income on net proceeds		173			206			239			277
Pro forma ESOP adjustment		(70	)		(82	)		(95	)		(109	)
Pro forma RSP adjustment		(105	)		(123	)		(142	)		(163	)
Pro forma option adjustment		(154	)		(182	)		(209	)		(240	)
Pro forma net income [excl. contribution]	$	1,943		$	1,918		$	1,892		$	1,864
Pro forma earnings per share	$	0.96		$	0.81		$	0.69		$	0.59
Core Earnings:
Historical LTM ended 6/30/11	$	2,050		$	2,050		$	2,050		$	2,050
Pro forma income on net proceeds		173			206			239			277
Pro forma ESOP adjustment		(70	)		(82	)		(95	)		(109	)
Pro forma RSP adjustment		(105	)		(123	)		(142	)		(163	)
Pro forma option adjustment		(154	)		(182	)		(209	)		(240	)
Pro forma core earnings [excl. contribution]	$	1,894		$	1,869		$	1,843		$	1,815
Pro forma core earnings per share	$	0.94		$	0.79		$	0.67		$	0.58
Total Equity	$	21,445		$	21,445		$	21,445		$	21,445
Net conversion proceeds		19,170			22,770			26,370			30,510
Plus: common stock issued to foundation		1,428			1,680			1,932			2,222
Less: charitable contribution expense, net		(979	)		(1,152	)		(1,325	)		(1,524	)
Less: ESOP purchase		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: RSP purchase		(873	)		(1,027	)		(1,181	)		(1,358	)
Pro forma total equity	$	38,445		$	41,662		$	44,878		$	48,578
Pro forma book value	$	17.61		$	16.22		$	15.20		$	14.30
Tangible Equity	$	21,445		$	21,445		$	21,445		$	21,445
Net conversion proceeds		19,170			22,770			26,370			30,510
Plus: common stock issued to foundation		1,428			1,680			1,932			2,222
Less: charitable contribution expense, net		(979	)		(1,152	)		(1,325	)		(1,524	)
Less: ESOP purchase		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: RSP purchase		(873	)		(1,027	)		(1,181	)		(1,358	)
Pro forma tangible equity	$	38,445		$	41,662		$	44,878		$	48,578
Pro forma tangible book value	$	17.61		$	16.22		$	15.20		$	14.30
Total Assets	$	264,796		$	264,796		$	264,796		$	264,796
Net conversion proceeds		19,170			22,770			26,370			30,510
Plus: common stock issued to foundation		1,428			1,680			1,932			2,222
Less: charitable contribution expense, net		(979	)		(1,152	)		(1,325	)		(1,524	)
Less: ESOP purchase		(1,746	)		(2,054	)		(2,363	)		(2,717	)
Less: RSP purchase		(873	)		(1,027	)		(1,181	)		(1,358	)
Pro forma total assets	$	281,796		$	285,013		$	288,229		$	291,929
Pro Forma Ratios:
Price / LTM EPS		10.4			12.3			14.5			16.9
Price / Core EPS		10.6			12.7			14.9			17.2
Price / Book Value		56.8	%		61.7	%		65.8	%		69.9	%
Price / Tangible Book Value		56.8	%		61.7	%		65.8	%		69.9	%
Price / Total Assets		7.75	%		9.01	%		10.25	%		11.63	%
Total Equity / Assets		13.64	%		14.62	%		15.57	%		16.64	%
Tangible Equity / Assets		13.64	%		14.62	%		15.57	%		16.64	%

IV-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-3

Pro Forma Conversion Analysis at the Maximum Valuation

Wellesley Bank

Historical Financial Data as of June 30, 2001

Valuation Parameters	Symbol	Data
Net income—LTM	Y	$	2,099,000
Core earnings—LTM	Y		2,050,000
Net worth	B		21,445,000
Tangible net worth	B		21,445,000
Total assets	A		264,796,000
Expenses in conversion	X		1,230,000
Other proceeds not reinvested	O		3,544,000
ESOP purchase	E		2,363,000
ESOP expense (pre-tax)	F		158,333
RSP purchase	M		1,181,000
RSP expense (pre-tax)	N		236,667
Stock option expense (pre-tax)	Q		216,936
Option expense tax-deductible	D		25.00	%
Re-investment rate (after-tax)	R		1.06	%
Tax rate	T		40.00	%
Shares for EPS	S		92.53	%
Pro Forma Valuation Ratios at Maximum Value
Price / LTM EPS	P/E		14.49
Price / Core EPS	P/E		14.93
Price / Book Value	P/B		65.79	%
Price / Tangible Book	P/TB		65.79	%
Price / Assets	P/A		10.25	%

Pro Forma Calculation at Maximum Value					Based on
	V	=	(P/E /S)*((Y-R*(O+X)-(F+N)*(1-T)-(Q-Q*D*T)))	= $29,532,000	[LTM earnings]
			1 - (P/E / S) * R
	V	=	(P/E / S)*((Y-R*(O+X)-(F+N)*(1-T)-(Q-Q*D*T))	= $29,532,000	[Core earnings]
			1 - (P/E / S) * R
	V	=	P/B * (B - X - E - M)	= $29,532,000	[Book value]
			1 - P/B
	V	=	P/TB * (B - X - E - M)	= $29,532,000	[Tangible book]
			1 - P/TB
	V	=	P/A * (B - X - E - M)	= $29,532,000	[Total assets]
			1 - P/A

Pro Forma Valuation Range
Minimum	=	$	25,680,000	x	0.85	=	$	21,828,000
Midpoint	=	$	25,680,000	x	1.00	=	$	25,680,000
Maximum	=	$	25,680,000	x	1.15	=	$	29,532,000
Adj. Max.	=	$	29,532,000	x	1.15	=	$	33,961,800

IV-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-4

Comparative Valuation Ratio Differential

Pro Forma Conversion Valuation Range

Computed from Market Price Data as of August 23, 2011

Valuation Ratio	Symbol	Wellesley Bank		Comparative Group
				Average			Median
Price / Book Value	P/B				78.9			78.1
Minimum	(%)		56.8		-28.0	%		-27.3	%
Midpoint			61.7		-21.8	%		-21.0	%
Maximum			65.8		-16.6	%		-15.7	%
Adj. Maximum			69.9		-11.4	%		-10.5	%
Price / Tangible Book	P/TB				83.1			82.2
Minimum	(%)		56.8		-31.6	%		-30.9	%
Midpoint			61.7		-25.8	%		-24.9	%
Maximum			65.8		-20.8	%		-20.0	%
Adj. Maximum			69.9		-15.9	%		-15.0	%
Price / LTM EPS	P/E				25.8			18.6
Minimum	(x)		10.4		-59.6	%		-44.1	%
Midpoint			12.3		-52.1	%		-33.8	%
Maximum			14.5		-43.8	%		-22.3	%
Adj. Maximum			16.9		-34.3	%		-9.1	%
Price / Core EPS	P/E				21.0			15.3
Minimum	(x)		10.6		-49.4	%		-30.6	%
Midpoint			12.7		-39.8	%		-17.4	%
Maximum			14.9		-29.0	%		-2.7	%
Adj. Maximum			17.2		-18.0	%		12.4	%
Price / Total Assets	P/A				9.46			7.47
Minimum	(%)		7.75		-18.1	%		3.7	%
Midpoint			9.01		-4.7	%		20.6	%
Maximum			10.25		8.3	%		37.2	%
Adj. Maximum			11.63		23.0	%		55.7	%

IV-4