Forward Looking Statements:

This report includes certain forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the economic environment, competition, products and pricing in geographic and business areas in which Mayflower Bancorp, Inc. ("the Company") and its wholly owned subsidiary, Mayflower Co-operative Bank (the "Bank") operate, prevailing interest rates, changes in government regulations and policies affecting financial services companies, credit quality and credit risk management, and the other risk factors referred to in the Company's Annual Report on Form 10-K for the year ended April 30, 2009. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report.

Critical Accounting Policies:

Accounting policies involving significant judgments and assumptions by management, which have, or could have, a material effect on the carrying value of certain assets and impact income, are considered critical accounting policies. The Company believes the following are critical accounting policies:

Allowance for Loan Losses:

A provision for loan losses represents a charge or credit against current earnings and an addition to or deduction from the allowance for loan losses. In determining the amount to provide for potential loan losses, a key factor is the current adequacy of the allowance for loan losses. Management uses a methodology to systematically measure the amount of estimated loan loss exposure inherent in the loan portfolio for purposes of establishing an adequate allowance for loan losses. The methodology includes three elements: (1) an analysis of individual loans deemed to be impaired or potentially impaired and a subsequent allocation as required, (2) general loss allocations for various categories of loans based on loss experience factors, and (3) an unallocated allowance. General and unallocated allowances are determined as a function of management's assessment of many factors including the risk characteristics of the loan portfolio, concentrations of credit, current and anticipated economic conditions that may affect borrowers' ability to pay, and trends in loan delinquencies and charge-offs.

Material estimates that are susceptible to change in the near-term relate to the allowance for loan losses. Any significant changes in these assumptions and/or conditions could result in higher than estimated losses that could adversely affect the Company's earnings. Management believes that the allowance for loan losses as currently constituted is adequate based on its review of the portfolio and other factors associated with the loans. While management uses available information to recognize loan losses, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. In addition, regulatory agencies, as part of their examination process, periodically review the Company's allowance for loan losses and may require the Company to recognize additional allowances based on judgments different than those of management, which could also adversely affect the Company's earnings.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest 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 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

Impairment is measured on a loan by loan basis for commercial, commercial real estate, and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of similar balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are the subject of a restructuring agreement.

The Company also maintains an allowance for possible losses on its outstanding loan commitments. The allowance for loan losses on off-balance sheet credit exposures (shown separately on the balance sheet) is maintained based on expected drawdowns of committed loans and their loss experience factors and management's assessment of various other factors including current and anticipated economic conditions that may affect the borrowers' ability to pay, and trends in loan delinquencies and charge-offs.

Other-Than-Temporarily Impaired Investment Securities:

Management judgment is involved in the evaluation of declines in value of individual investment securities held by the Company. Declines in value that are deemed other-than-temporary are recognized in the income statement through a write-down in the recorded value of the affected security. Management considers many factors in their analysis of which, if any, securities might be classified as other-than-temporarily impaired, including industry analyst reports, sector credit ratings, volatility in market price and other relevant information such as financial condition, earnings capacity and near term prospects of the issuing company and the length of time and extent to which the market value has been less than cost.

Whenever a debt or equity security is deemed to be other-than temporarily impaired as determined by management's analysis, it is written-down to its current fair market value. Any unfavorable change in general market conditions or the condition of a specific issuer could cause an increase in the Company's impairment write-downs on investment securities, which would have an adverse effect on the Company's earnings.

Liquidity and Capital Resources:

The Company's primary sources of liquidity are deposits, loan payments and payoffs, investment income, principal repayments and maturities of investments, and advances from the Federal Home Loan Bank of Boston. The Company's liquidity management program is designed to insure that sufficient funds are available to meet its daily cash requirements and this management program has proven to be successful toward that end. As a member of The Co-operative Central Bank's Reserve Fund, the Company also has the right to borrow from that entity's Reserve Fund for short-term cash needs. The Company has also established a line of credit with The Federal Reserve Bank, collateralized by certain securities issued by Government Sponsored Entities.

The Company believes its capital resources, including deposits, scheduled loan repayments, revenue generated from the sales of loans and investment securities, unused borrowing capacity at the Federal Home Loan Bank of Boston, and revenue from other sources are adequate to meet its funding commitments and requirements. At July 31, 2009 and April 30, 2009, the Company's and the Bank's capital ratios were in excess of regulatory requirements and the Company and the Bank are considered to be well-capitalized under regulatory all requirements.

At July 31, 2009, the Company's total assets were $246.9 million as compared to $249.5 million at April 30, 2009, a decrease of $2.6 million. During the three months ended July 31, 2009, total loans decreased by $8.3 million while total investment securities increased by $1.5 million and cash and cash equivalent balances increased by $3.9 million.

During the quarter ended July 31, 2009, prevailing low interest rates resulted in increased residential mortgage lending, as the Company originated $8.5 million in residential mortgages as compared to $6.2 million originated for the same period one year ago. During the quarter, the Company sold $11.2 million of fixed-rate residential loans in the secondary mortgage market, producing gains of $189,000. This is compared to sales of $647,000 for the prior year period which resulted in gains of $19,000. This activity, combined with other mortgage payoffs and regularly scheduled amortization, resulted in a $6.0 million decrease (or 12.3%) in residential loan balances as compared to April 30, 2009.

Additionally, since April 30, 2009, other loan categories have also decreased. Construction loan balances outstanding decreased by $909,000 or 21.2%, commercial loans and mortgages decreased by $858,000 or 1.8%, home equity loans and lines of credit decreased by $481,000 or 2.1%, and consumer loan balances decreased by $108,000 or 6.5%. In aggregate, net loans outstanding decreased by $8.3 million from $131.1 million at April 30, 2009 to $122.8 million at July 31, 2009.

The overall strength of the Company's loan portfolio will continue to rely heavily on the health of the New England and local economies. In particular, commercial business, construction and commercial real estate financing are generally considered to involve a higher degree of credit risk than long-term financing of residential properties due to their higher potential for default and the possible difficulty of disposing of underlying collateral, if any.

Non performing assets are comprised of non-accrual loans, non-accrual investments and real estate acquired by foreclosure. Nonperforming loans consist of loans that are more than 90 days past due and loans less than 90 days past due on which the Company has ceased accruing interest. As of July 31, 2009, nonperforming assets totaled $1.1 million, compared to $935,000 at April 30, 2009. At July 31, 2009, nonperforming assets are comprised of nonperforming loans totaling $397,000 and real-estate acquired by foreclosure of $663,000.

At July 31, 2009, the Company's allowance for loan losses was $1,286,000, which represented 1.05% of net loans receivable at that date. This compares to $1,305,000 at April 30, 2009, which represented 1.00% of net loans receivable. During the quarter, the Company charged off $21,000 in residential mortgages and recovered $2,000 in commercial loans previously charged off. The Company's loan portfolio continues to rely heavily on the strength of the local real estate market and a significant deterioration in that market or other negative economic conditions could have a negative impact on the Company's results. As management continues to closely monitor the Company's loan portfolio, higher provisions for loan losses and foreclosed property expense may be required should economic conditions worsen or the levels of non-performing assets increase.

The Company also maintains an allowance for loan losses against off-balance sheet credit exposures (shown separately on the balance sheet). This allowance totaled $110,000 at July 31, 2009 and April 30, 2009. This allowance is intended to protect the Company against losses on undrawn or unfunded loan commitments made to customers.

Total deposits, after interest credited, decreased by $136,000 from $214.0 million at April 30, 2009 to $213.8 million at July 31, 2009. Additionally, during the quarter, advances and borrowings decreased by $2.0 million, from $13.9 million at April 30, 2009 to $11.9 million at July 31, 2009.

Results of Operations:

Comparison of the three months ended July 31, 2009 and July 31, 2008.

General:

Net income for the three months ended July 31, 2009 was $232,000 compared with net income of $250,000 for the three months ended July 31, 2008, a decrease of $18,000 or 7.2%. Net interest income increased by $45,000, total non-interest income increased by $188,000, and total non-interest expense increased by $247,000.

The Company's results largely depend upon its net interest margin, which is the difference between the income earned on loans and investments, and the interest paid on deposits and borrowings as a percentage of average interest-earning assets. During the three months ended July 31, 2009, the Company's net interest margin increased from 3.19% to 3.26%. This increase in net interest margin is partially the result of the maturity of shorter-term certificates of deposit repricing into lower rates, as offset by reduced yields earned on investments and loans.

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

ANALYSIS OF INTEREST RATE SPREAD

The following table reflects the weighted average yield, interest earned, and
the average balances of loans and investments, and the weighted average rates,
interest expense, and the average balances of deposits and borrowed funds for
the periods indicated. The yield data for loans does not include loan
origination and other loan fees.



                                                                       Three months ended July 31,
                                                           2009                                           2008
                                            Average                       Rate             Average                       Rate
                                          Balance (1)     Interest    (Annualized)       Balance (1)     Interest    (Annualized)
                                                                          (Dollars in Thousands)

Interest-earning assets:
Loans                                    $     128,068   $    1,947           6.08 %    $     127,156   $    2,035           6.40 %
Investment securities                           91,385          977           4.28 %           94,633        1,134           4.79 %
Short-term investments and interest
bearing deposits in banks                        6,161            3           0.19 %            3,220           15           1.86 %


All interest-earning assets              $     225,614   $    2,927           5.19 %    $     225,009   $    3,184           5.66 %


Interest-bearing liabilities:
Deposits                                       212,451          953           1.79 %          202,639        1,209           2.39 %
Borrowed funds                                  12,962          136           4.20 %           17,711          182           4.11 %


All interest-bearing liabilities         $     225,413        1,089           1.93 %    $     220,350        1,391           2.53 %


Net interest income                                      $    1,838                                     $    1,793


Weighted average interest rate spread
(2)                                                                           3.26 %                                         3.13 %


Net interest margin                                                           3.26 %                                         3.19 %

(1) Average balances calculated using daily balances

(2) Represents the weighted average yield earned on all interest earning assets during the period less the weighted average interest rate paid on all interest bearing liabilities.

                                                                  Three months ended July 31,
                                                                         2009 vs. 2008
                                                              Changes due to increase (decrease)
                                                                        (in thousands)
                                                                                                   Rate/
                                                       Total           Volume         Rate         Volume
Interest income:
Loans                                                $     (88 )      $     15       $ (102 )     $     (1 )
Investment securities                                     (157 )           (39 )       (122 )            4
Short-term investments                                     (12 )            14          (14 )          (12 )


Total                                                     (257 )           (10 )       (238 )           (9 )


Interest expense:
Deposits                                                  (256 )            59         (300 )          (15 )
Borrowed funds                                             (46 )           (49 )          4             (1 )


Total                                                     (302 )            10         (296 )          (16 )


Increase (decrease) in net interest and dividend
income                                               $      45        $    (20 )     $   58       $      7

Interest and Dividend Income:

Total interest and dividend income decreased by $257,000, or 8.1%, for the three months ended July 31, 2009. Interest income from loans decreased by $88,000. This decrease was due to a decrease in the average rate earned on loans, from 6.40% to 6.08% on an annualized basis, offset by an increase of $912,000 in the average balance of loans outstanding. Interest and dividend income on investment securities decreased by $157,000 as a result of a decrease of $3.2 million in the average balance of investments and by a decrease in the average yield earned, from 4.79% in the 2008 quarter to 4.28% in the 2009 quarter. Interest on short-term investments decreased by $12,000 due to a decrease in the average yield earned, from 1.86% in the 2008 quarter to 0.19% in the 2009 quarter, offset by an increase of $2.9 million in the average balance of short-term investments.

Interest Expense:

Interest expense decreased by $302,000, or 21.7%, to $1.1 million for the three months ended July 31, 2009. Interest expense on deposits decreased by $256,000 as a result of a decrease in the average rate paid, from 2.39% to 1.79%, offset by an increase of $9.8 million in the average balance of deposits. Interest expense on borrowed funds decreased by $46,000, or 25.3%, for the three months ended July 31, 2009. This decrease was due to a decrease of $4.7 million in the average balance of advances

Provision for Loan Losses:

The provision for loan losses was zero for the quarter ended July 31, 2009 and the quarter ended July 31, 2008. The allowance for loan losses is maintained at a level that management considers adequate to provide for probable losses based upon evaluation of known and inherent risks in the loan portfolio. In determining the appropriate level for the allowance for loan loss, the Company considers past loss experience, evaluations of underlying collateral, prevailing economic conditions, the nature of the loan portfolio and levels of non-performing and other classified loans. While management uses available information to recognize loan losses, future additions to the allowance may be necessary based on additional increases in nonperforming loans, changes in economic conditions, or for other reasons.

Non-interest Income:

Non-interest income increased by $188,000, or 69.6%, for the three months ended July 31, 2009 as compared to the three months ended July 31, 2008. This increase is primarily a result of an increase of $170,000 in gains on sales of loans and an increase of $17,000 in gains/losses on sales of investments. The improvement in gains on sales of loans was due to increased one-to-four family residential mortgage originations and subsequent mortgage sale activity. Loan origination and other loan fees decreased by $8,000, a result of increased amortization of the mortgage servicing asset, and other income increased by $9,000.

Non-interest Expense:

Non-interest expense increased by $247,000 or 14.4% for the quarter ended July 31, 2009. This increase was comprised of an increase of $77,000 in FDIC assessment expense, a result of an increase in the cost of FDIC deposit insurance premiums and the accrual for the FDIC special assessment intended to re-capitalize its insurance fund. Additionally, salary and benefit expense increased by $74,000 due to employees hired to staff the new branch in Plymouth, MA and to the hiring of an additional commercial loan officer. Losses and expenses of other real estate owned increased by $24,000 due to higher balances of other real estate owned, and occupancy and equipment expenses increased by $10,000 due to the opening of the new Plymouth, MA branch. Other expenses increased by $59,000 due to increased marketing costs associated with the new branch office and as a function of ATM conversion costs. Finally, data processing increased by $3,000.

Provision for Income Taxes:

The provision for income taxes increased by $4,000 for the three months ended July 31, 2009 when compared to the three months ended July 31, 2008. Effective income tax rates were 30.5% and 28.2% respectively in the 2009 and 2008 periods. The lower effective tax rate in comparison to statutory rates is reflective of income earned by a non-Bank investment subsidiary, which is taxed, for state tax purposes, at a lower rate; and by dividends received deductions on dividend income generated by the Company's marketable equity portfolio.

The Company's net earnings depend primarily upon the difference between the income (interest and dividends) earned on its loans and investment securities (earning assets) and the interest paid on its deposits and borrowed funds (interest-bearing liabilities), together with other income and other operating expenses. The Company's investment income and interest paid (cost of funds) are significantly affected by general economic conditions and by policies of regulatory authorities.

Market risk is the risk of loss from adverse changes in market prices and rates. The Company's market risk arises primarily from interest rate risk inherent in its lending, security investments, and deposit taking activities. To that end, management actively monitors and manages its interest rate risk exposure.

The Company's primary objective in managing interest rate risk is to minimize the adverse impact of changes on its net interest income and capital, while adjusting its rate-sensitive asset and liability structure to obtain the maximum net yield on that structure. The Company relies primarily on this structure to control interest rate risk. However, a sudden and substantial shift in interest rates may adversely impact the Company's earnings to the extent that the interest rate earned on interest-earning assets and interest paid on interest-bearing liabilities do not change at the same frequency, to the same extent or on the same basis.

Delinquent Loans, Loans in Foreclosure and Foreclosed Property:

The following table sets forth information with respect to the Company's
non-performing assets as of the date indicated.



                                                    July 31,         April 30,        July 31,
                                                      2009             2009             2008
                                                              (Dollars in Thousands)
Loans past due over 90 days:
Residential mortages                                $     385       $       345       $     617
Commercial and construction mortgages                      -                 -               -
Commercial time and demand loans                           -                 -               -
Consumer and other loans                                   12                -               -

                                                    $     397       $       345       $     617


Loans past due over 90 days as a percentage of:
Net loans receivable                                     0.32 %            0.26 %          0.48 %
Total assets                                             0.16 %            0.14 %          0.26 %

Non-performing assets
**Non-accrual loans                                 $     397       $       345       $     617
Real estate acquired by foreclosure                       663               590             637

                                                    $   1,060       $       935       $   1,254


Non-performing assets as a percentage of:
Net loans receivable                                     0.86 %            0.71 %          0.99 %
Total assets                                             0.43 %            0.37 %          0.52 %

Allowance for loan losses                           $   1,286       $     1,305       $   1,376

Allowance for loan losses as a percentage of
non-performing loans                                   323.93 %          378.26 %        223.01 %

Allowance for loan losses as a percentage of net
loans                                                    1.05 %            1.00 %          1.08 %

** Includes loans which are contractually past due 90 days or more and/or loans less than 90 days past due on which the Bank has ceased accruing interest