Lake Sunapee Bank (LSBG) 10-Q 2007 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarter Ended September 30, 2007

Commission File Number 0-17859

NEW HAMPSHIRE THRIFT

BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

State of Delaware	02-0430695
(State of Incorporation)	(IRS Employer I.D. Number)
9 Main St., PO Box 9, Newport, NH	03773
(Address of principal executive offices)	(Zip Code)

603-863-0886

(Registrant’s telephone number, including area code)

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

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

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x

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

The number of shares outstanding of the issuer’s common stock, $.01 par value per share, as of November 2, 2007, was 5,732,423.

NEW HAMPSHIRE THRIFT BANCSHARES, INC.

INDEX TO FORM 10-Q

		Page
PART I.	FINANCIAL INFORMATION
Item 1	Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets - September 30, 2007 (unaudited) and December 31, 2006	1
	Condensed Consolidated Statements of Income (unaudited) - For the Three Months Ended September 30, 2007 and 2006 For the Nine Months Ended September 30, 2007 and 2006	2
	Condensed Consolidated Statements of Cash Flows (unaudited) - For the Nine Months Ended September 30, 2007 and 2006	3
	Notes To Condensed Consolidated Financial Statements (unaudited) -	5
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4	Controls and Procedures	21
Item 4T	Controls and Procedures	21
PART II.	OTHER INFORMATION
Item 1	Legal Proceedings	23
Item 1A	Risk Factors	23
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3	Defaults Upon Senior Securities	23
Item 4	Submission of Matters to a Vote of Common Shareholders	23
Item 5	Other Information	23
Item 6	Exhibits	23
	Signatures	26

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2007 AND DECEMBER 31, 2006

	September 30, 2007			December 31, 2006
	(Unaudited)
ASSETS
Cash and due from banks	$	18,211,551		$	17,146,780
Federal Home Loan Bank overnight deposit		11,525,000			17,800,000
Cash and cash equivalents		29,736,551			34,946,780
Securities available-for-sale		89,127,049			91,522,303
Federal Home Loan Bank stock		7,165,000			7,540,600
Loans held-for-sale		1,001,375			1,770,500
Loans receivable, net		570,679,942			492,711,797
Accrued interest receivable		3,099,161			2,381,693
Premises and equipment, net		15,646,200			12,830,316
Investments in real estate		3,506,851			3,236,784
Goodwill and Other Intangible Assets		22,121,971			12,140,016
Investment in partially owned Charter Holding Corp., at equity		3,299,041			3,140,320
Other assets		15,354,443			9,809,921
Total assets	$	760,737,584		$	672,031,030
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Checking accounts (noninterest-bearing)	$	45,759,616		$	38,663,553
Savings and interest-bearing checking accounts		284,432,409			241,772,835
Time deposits		249,335,025			185,069,432
Total deposits		579,527,050			465,505,820
Securities sold under agreements to repurchase		12,074,803			8,881,864
Federal Home Loan Bank advances		75,104,349			120,000,000
Subordinated debentures		20,620,000			20,620,000
Accrued expenses and other liabilities		11,735,297			8,613,940
Total liabilities		699,061,499			623,621,624
SHAREHOLDERS’ EQUITY
Preferred stock, $.01 par value per share: 2,500,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $.01 par value per share: 10,000,000 shares authorized,
5,418,640 issued and 4,979,561 shares outstanding at September 30, 2007, and 4,293,580 issued, and 4,180,080 shares outstanding at December 31, 2006		54,186			42,936
Paid-in capital		34,205,022			17,930,597
Retained earnings		35,609,213			33,941,729
Accumulated other comprehensive loss		(1,314,976	)		(1,707,556	)
Treasury Stock, 439,079 shares at September 30, 2007 and 113,500 shares at December 31, 2006		(6,877,360	)		(1,798,300	)
Total shareholders’ equity		61,676,085			48,409,406
Total liabilities and shareholders’ equity	$	760,737,584		$	672,031,030

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended September 30, 2007 and 2006

For the Nine Months Ended September 30, 2007 and 2006

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Interest and dividend income
Interest and fees on loans	$	8,911,132	$	7,329,647	$	24,250,519	$	20,984,934
Interest on debt investments:
Taxable		1,089,062		1,110,142		3,172,635		3,415,765
Dividends		137,662		187,815		401,387		267,722
Other		172,107		127,234		470,018		269,168
Total interest and dividend income		10,309,963		8,754,838		28,294,559		24,937,589
Interest expense
Interest on deposits		3,448,374		2,196,851		8,788,715		5,333,751
Interest on advances and other borrowed money		1,514,181		2,068,762		5,143,704		5,412,039
Total interest expense		4,962,555		4,265,613		13,932,419		10,745,790
Net interest and dividend income		5,347,408		4,489,225		14,362,140		14,191,799
Provision for loan losses		60,000		51,000		105,000		159,776
Net interest and dividend income after provision for loan losses		5,287,408		4,438,225		14,257,140		14,032,023
Noninterest income
Customer service fees		1,277,233		1,119,312		3,428,718		2,990,033
Income on other investments		1,432		—		144,171		—
Net gain on sales of loans		236,739		165,012		622,624		471,810
Rental income		157,922		158,951		468,703		401,885
Income from equity interest in Charter Holding Corp.		61,784		41,418		158,721		149,423
Brokerage service income		33,963		24,273		103,884		137,992
Other income		—		32,035		7,887		112,128
Total noninterest income		1,769,073		1,541,001		4,934,708		4,263,271
Noninterest expenses
Salaries and employee benefits		2,531,430		2,264,379		7,192,636		6,551,614
Occupancy expenses		876,859		658,635		2,428,649		1,986,189
Advertising and promotion		101,002		61,434		270,397		243,330
Depositors’ insurance		16,037		13,931		44,835		43,607
Outside services		196,545		140,548		542,515		484,724
Professional services		128,088		131,294		409,381		383,731
ATM processing fees		138,304		98,609		371,836		295,906
Supplies		130,155		97,550		300,360		258,076
Amortization of mortgage servicing rights in excess of mortgage servicing income		43,060		45,941		118,316		157,723
Other expenses		945,221		607,330		2,433,346		1,926,954
Total noninterest expenses		5,106,701		4,119,651		14,112,271		12,331,854
Income before provision for income taxes		1,949,780		1,859,575		5,079,577		5,963,440
Provision for income taxes		656,953		641,194		1,682,186		1,987,142
Net income	$	1,292,827	$	1,218,381	$	3,397,391	$	3,976,298
Comprehensive net income	$	1,869,604	$	2,568,737	$	3,789,971	$	4,032,878
Earnings per common share, basic	$	0.26	$	0.29	$	0.75	$	0.94
Number of Shares, basic		5,029,579		4,202,060		4,545,794		4,216,887
Earnings per common share, assuming dilution	$	0.25	$	0.28	$	0.73	$	0.92
Number of Shares, assuming dilution		5,105,898		4,324,570		4,633,188		4,333,570
Dividends declared per common share	$	0.13	$	0.13	$	0.39	$	0.38

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2007 and 2006

(Unaudited)

	September 30, 2007			September 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,397,391		$	3,976,298
Depreciation and amortization		1,201,009			996,286
Amortization of securities, net		61,930			287,593
Net decrease in mortgage servicing rights		181,497			243,158
Net decrease in loans held-for-sale		769,125			1,850,900
Provision for loan losses		105,000			159,776
Amortization of core deposit intangible		134,969			—
Increase in accrued interest receivable and other assets		(3,494,970	)		(2,316,968	)
Income from equity interest in Charter Holding Corp.		(158,721	)		(149,423	)
Change in deferred loan origination fees and cost, net		129,888			11,997
Increase in accrued expenses and other liabilities		2,301,437			4,089,199
Recognition of stock-based compensation expense		—			28,050
Net cash provided by operating activities		4,628,555			9,176,866
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(1,797,984	)		(3,308,387	)
Proceeds from maturities of securities available-for-sale		24,033,218			14,534,351
Purchases of securities available-for-sale		(3,740,467	)		(1,499,634	)
Redemptions (purchases) of Federal Home Loan Bank stock		759,500			(1,833,100	)
Redemption of Federal Reserve Bank stock		12,000			—
Loan originations and principal collections, net		(11,846,324	)		(30,940,619	)
Cash and cash equivalents acquired from First Brandon Financial Corporation, net of expenses paid of $953,586		12,705,324			—
Cash paid for First Brandon Financial Corporation acquisition		(4,399,768	)		—
Net cash (used in) provided by investing activities		15,725,499			(23,047,389	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits		24,173,661			(3,480,290	)
Net increase (decrease) in securities sold under agreements to repurchase		1,423,327			(1,305,419	)
Net (decrease) increase in advances from Federal Home Loan Bank		(45,015,308	)		20,000,000
Net increase in other borrowings		—			—
Dividends paid		(1,729,907	)		(1,604,142	)
Payments to acquire treasury stock		(5,079,060	)		(1,436,929	)
Proceeds from exercise of stock options		663,004			732,125
Net cash (used in) provided by financing activities		(25,564,283	)		12,905,345
NET DECREASE IN CASH AND CASH EQUIVALENTS		(5,210,229	)		(965,178	)
CASH AND CASH EQUIVALENTS, beginning of period		34,946,780			26,345,434
CASH AND CASH EQUIVALENTS, end of period	$	29,736,551		$	25,380,256

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(continued)

For the Nine Months Ended September 30, 2007 and 2006

(Unaudited)

	September 30, 2007		September 30, 2006
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest on deposit accounts	$	8,669,495	$	5,134,382
Interest on advances and other borrowed money		5,357,400		5,423,512
Total interest paid	$	14,026,895	$	10,557,894
Income taxes, net	$	1,933,558	$	1,863,517
First Brandon Financial Corporation merger:
Cash and cash equivalents acquired	$	13,658,910
Available-for-sale securities		17,309,352
Federal Home Loan Bank stock		383,900
Federal Reserve Bank stock		12,000
Net loans acquired		66,356,709
Fixed assets acquired		2,488,976
Accrued interest receivable		491,562
Other Assets acquired		2,456,955
Core deposit intangible		2,227,000
		105,385,364
Deposits assumed		89,847,569
Federal Home Loan Bank borrowings assumed		119,657
Securities sold under agreements to repurchase		1,769,612
Other liabilities assumed		604,346
		92,341,184
Net assets acquired		13,044,180
Merger costs		20,934,104
Goodwill	$	7,889,924

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2007

(Unaudited)

Note A—Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and, accordingly, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The December 31, 2006 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of the management of New Hampshire Thrift Bancshares, Inc. (the “Company”), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

Note B—Accounting Policies

The accounting principles followed by New Hampshire Thrift Bancshares, Inc. and Subsidiaries and the methods of applying these principles which materially affect the determination of financial position, results of operations, or changes in financial position are consistent with those used for the year 2006.

The consolidated financial statements include the accounts of the Company, Lake Sunapee Bank, fsb (the “Bank”), Lake Sunapee Group, Inc. (“LSGI”) which owns and maintains all buildings, and Lake Sunapee Financial Services Corp. (“LSFSC”), which was formed to handle the flow of funds from the brokerage services. LSGI and LSFSC are wholly-owned subsidiaries of the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

NHTB Capital Trust II and NHTB Capital Trust III, affiliates of the Company, were formed to sell capital securities to the public through a third party trust pool. In accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46(R)”), these affiliates have not been included in the consolidated financial statements.

Note C—Impact of New Accounting Standards

In March 2006, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No. 156, “Accounting for Servicing of Financial Assets - an amendment of FASB Statement No. 140.” SFAS No. 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in specific situations. Additionally, the servicing asset or servicing liability shall be initially measured at fair value; however, an entity may elect the “amortization method” or “fair value method” for subsequent balance sheet reporting periods. SFAS No. 156 is effective as of an entity’s first fiscal year beginning after September 15, 2006. Early adoption is permitted as of the beginning of an entity’s fiscal year, provided the entity has not yet issued financial statements, including interim financial statements, for any period of that fiscal year. Adoption of this statement did not have a material impact on the Company’s financial condition, results of operations or cash flows.

In June 2006 the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement 109” (FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles (GAAP) and enhances disclosures about fair value measurements. SFAS 157 retains the exchange price notion and clarifies that the exchange price is the price that would be received for an asset or paid to transfer a liability (an exit

5

price) in an orderly transaction between market participants on the measurement date. SFAS 157 is effective for the Company’s consolidated financial statements for the year beginning on January 1, 2008, with earlier adoption permitted. The adoption of this statement is not expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 158, “Employer’s Accounting for Defined Benefit Pension and other Postretirement Plans - an amendment of FASB Statements No 87, 88, 106 and 132(R)” (“SFAS 158”). SFAS 158 requires (1) the recognition of an asset or liability for the over-funded or under-funded status of a defined benefit plan, (2) the recognition of actuarial gains and losses and prior service costs and credits in other comprehensive income, (3) measurement of plan assets and benefit obligations as of the employer’s balance sheet date, rather than at interim measurement dates as currently allowed, and (4) disclosure of additional information concerning actuarial gains and losses and prior service costs and credits recognized in other comprehensive income. This statement is effective for financial statements with fiscal years ending after December 15, 2006. Adoption of this Statement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In September 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) on Issue No. 06-4 “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” (EITF Issue 06-4). EITF 06-4 requires companies with an endorsement split-dollar life insurance arrangement to recognize a liability for future postretirement benefits. The effective date is for fiscal years beginning after December 15, 2007, with earlier application permitted. Companies should recognize the effects of applying this issue through either (a) a change in accounting principle through a cumulative effect adjustment to retained earnings or (b) a change in accounting principle through retrospective application to all periods. The Company is currently evaluating and has not yet determined the impact the new EITF is expected to have on its financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115” (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The new standard is effective at the beginning of the Company’s fiscal year beginning January 1, 2008, and early application may be elected in certain circumstances. The Company is currently evaluating and has not yet determined the impact the new standard is expected to have on its financial position, results of operations or cash flows.

Note D—Stock-based Compensation

At September 30, 2007, the Company has three stock-based employee compensation plans. The Company accounts for those plans under SFAS 123R. No stock-based employee compensation cost was recognized for its fixed stock option plans during the quarters ended September 30, 2006, or September 30, 2007.

Note E—Pension Benefits

The following summarizes the net periodic pension (benefit) cost for the three and nine months ended September 30:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
Service cost	$	—		$	116,865		$	—		$	350,595
Interest cost		76,170			85,234			228,510			255,702
Expected return on plan assets		(139,948	)		(125,201	)		(419,844	)		(375,603	)
Amortization of prior service cost		—			(52	)		—			(156	)
Amortization of unrecognized net loss		6,921			27,641			20,763			82,923
Net periodic pension (benefit) cost	$	(56,857	)	$	104,487		$	(170,571	)	$	313,461

6

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part I. Item 2 Management’s Discussion and Analysis

Forward-looking Statements

Statements included in this discussion and in future filings by the Company with the Securities and Exchange Commission, in the Company’s press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect the Company’s actual results, and could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: (1) the Company’s loan portfolio includes loans with a higher risk of loss; (2) if the Company’s allowance for loan losses is not sufficient to cover actual loan losses, earnings could decrease; (3) changes in interest rates could adversely affect the Company’s results of operations and financial condition; the local economy may affect future growth possibilities; (4) the Company depends on its executive officers and key personnel to continue the implementation of its long-term business strategy and could be harmed by the loss of their services; (5) the Company operates in a highly regulated environment, and changes in laws and regulations to which it is subject may adversely affect its results of operations; (6) competition in the Bank’s primary market area may reduce its ability to attract and retain deposits and originate loans; (7) if the Company fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report financial results or prevent fraud, and, as a result, investors and depositors could lose confidence in the Company’s financial reporting, which could adversely affect its business, the trading price of its stock and its ability to attract additional deposits; (8) the Company’s Certificate of Incorporation and bylaws may prevent a transaction you may favor or limit growth opportunities, which could cause the market price of the Company’s common stock to decline; (9) the Company may not be able to pay dividends in the future in accordance with past practice; (10) NHTB may fail to successfully integrate the business of First Brandon National Bank (“First Brandon”) or First Community Bank (“First Community”), or to integrate them in a timely manner; (11) NHTB may fail to achieve anticipated cost savings from the acquisitions of First Brandon and First Community, or to achieve savings in a timely manner; and (12) costs, customer loss and business disruption in connection with the acquisitions or the integration of companies may be greater than expected. The foregoing list should not be construed as exhaustive, and the Company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.

General

New Hampshire Thrift Bancshares, Inc. (the “Company”), a Delaware holding company organized on July 5, 1989, is the parent company of Lake Sunapee Bank, fsb (the “Bank”), a federally-chartered savings bank. The Bank is a member of the Federal Deposit Insurance Corporation (“FDIC”) and its deposits are insured through the Deposit Insurance Fund (“DIF”). The Bank is regulated by the Office of Thrift Supervision (“OTS”).

The Company’s profitability is derived primarily from the Bank. The Bank’s earnings in turn are generated from the net income from the earnings on its loan and investment portfolios less the cost of its deposit accounts and borrowings. These core revenues are supplemented by gains on sales of loans originated for sale, retail banking service fees, gains on the sale of investment securities, and brokerage fees. The Bank passes on its earnings to the Company to the extent allowed by OTS regulations. As of

7

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

September 30, 2007, the Company had $1,058,723 available which it plans to use along with its dividends from the Bank to continue its annual quarterly payout of $0.13 per share and pay its subordinated debenture interest payments.

Overview

• On June 1, 2007, NHTB closed the acquisition with First Brandon, and merged First Brandon with and into Lake Sunapee Bank (“the Bank”). The acquisition added $105.4 million in assets, $66.4 million in loans, and 89.8 million in deposits.

• Total assets stood at $760,737,584 at September 30, 2007, compared to $672,031,030 at December 31, 2006.

• Net loans outstanding increased to $570,679,942 at September 30, 2007 from $492,711,797 at December 31, 2006.

• The Company’s earnings decreased by 14.56% to $3,397,391, or $0.73 per diluted common share, for the nine months September 30, 2007 from $3,976,298, or $0.92 per diluted common share, for the same period in 2006.

• The Company’s earnings increased by 6.11% to $1,292,827, or $.25 per diluted common share, for the quarter ended September 30, 2007 from $1,218,381, or $.28 per diluted common share for the same period in 2006.

• During the first nine months of 2007, the Bank originated $149,542,811 in loans, compared to $147,526,406 in loans originated for the nine months ended September 30, 2006.

• The Bank’s servicing portfolio increased to $303,177,854 at September 30, 2007 from $298,893,938 at September 30, 2006, or 1.43%.

• The Bank’s interest rate margin decreased to 3.04% at September 30, 2007, from 3.18% at September 30, 2006.

• The Company announced on October 12, 2007 a quarterly dividend in the amount of $0.13 per share payable on October 31, 2007.

• On June 14, 2007, the Company announced a stock repurchase program until the repurchase of 243,380 shares is complete. As of November 2, 2007, 64,092 shares of common stock had been repurchased under the June 14, 2007 plan.

• As previously announced, on October 1, 2007, NHTB completed its acquisition of First Community, expanding NHTB’s presence in Vermont. The acquisition of First Community creates a combined company with approximately $844.1 million in assets with 29 branches in New Hampshire and Vermont.

Critical Accounting Policies

The Company considers the following accounting policies to be most critical in their potential effect on its financial position or results of operations:

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Allowance for Loan Losses

The allowance for loan losses is established through a charge to the provision for loan losses. Provisions are made to reserve for estimated losses in outstanding loan balances. The allowance for loan losses is a significant estimate and is regularly reviewed by the Company for adequacy by assessing such factors as changes in the mix and volume of the loan portfolio; trends in portfolio credit quality, including delinquency and charge-off rates; and current economic conditions that may affect a borrower’s ability to repay. The Company’s methodology with respect to the assessment of the adequacy of the allowance for loan losses is more fully discussed on pages 12-15 of this report.

Income Taxes

The Company must estimate income tax expense for each period for which a statement of operations is presented. This involves estimating the Company’s actual current tax exposure as well as assessing temporary differences resulting from differing treatment of items, such as timing of the deduction of expenses, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the Company’s consolidated balance sheets. The Company must also assess the likelihood that any deferred tax assets will be recovered from future taxable income and to the extent that recovery is not likely, a valuation allowance must be established. Significant management judgment is required in determining income tax expense, and deferred tax assets and liabilities. As of September 30, 2007, there were no valuation allowances set aside against any deferred tax assets.

Interest Income Recognition

Interest on loans is included in income as earned based upon interest rates applied to unpaid principal. Interest is not accrued on loans 90 days or more past due. Interest is not accrued on other loans when management believes collection is doubtful. All loans considered impaired are nonaccruing. Interest on non-accruing loans is recognized as payments are received when the ultimate collectibility of interest is no longer considered doubtful. When a loan is placed on nonaccrual status, all interest previously accrued is reversed against current-period interest income.

Capital Securities

On March 30, 2004, NHTB Capital Trust II (“Trust II”), a Connecticut statutory trust formed by the Company, completed the sale of $10.0 million of 6.06%, 5 Year Fixed-Floating Capital Securities (“Capital Securities II”). Trust II also issued common securities to the Company and used the net proceeds from the offering to purchase a like amount of 6.06% Junior Subordinated Deferrable Interest Debentures (“Debentures II”) of the Company. Debentures II are the sole assets of Trust II. The Company used the proceeds to redeem the securities issued by NHTB Capital Trust I (“Trust I”), which were callable on September 30, 2004. Total expenses associated with the offering of $160,402 are included in other assets and are being amortized on a straight-line basis over the life of Debentures II.

Capital Securities II accrue and pay distributions quarterly at an annual rate of 6.06% for the first 5 years of the stated liquidation amount of $10 per Capital Security. The Company has fully and unconditionally guaranteed all of the obligations of the Trust. The guaranty covers the quarterly distributions and payments on liquidation or redemption of Capital Securities II, but only to the extent that the Trust has funds necessary to make these payments.

Capital Securities II are mandatorily redeemable upon the maturing of Debentures II on March 30, 2034 or upon earlier redemption as provided in the Indenture. The Company has the right to redeem Debentures II, in whole or in part on or after March 30, 2009 at the liquidation amount plus any accrued but unpaid interest to the redemption date.

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On March 30, 2004, NHTB Capital Trust III (“Trust III”), a Connecticut statutory trust formed by the Company, completed the sale of $10.0 million of Floating Capital Securities, adjustable every three months at LIBOR plus 2.79% (“Capital Securities III”). Trust III also issued common securities to the Company and used the net proceeds from the offering to purchase a like amount of Junior Subordinated Deferrable Interest Debentures (“Debentures III”) of the Company. Debentures III are the sole assets of Trust III. The Company used a portion of the proceeds to redeem the balance of securities issued by Trust I, which were callable on September 30, 2004. The balance of the proceeds of Trust III is being used for general corporate purposes. Total expenses associated with the offering of $160,402 are included in other assets and are being amortized on a straight-line basis over the life of Debentures III.

Capital Securities III accrue and pay distributions quarterly based on the stated liquidation amount of $10 per Capital Security. The Company has fully and unconditionally guaranteed all of the obligations of Trust III. The guaranty covers the quarterly distributions and payments on liquidation or redemption of Capital Securities III, but only to the extent that Trust III has funds necessary to make these payments.

Capital Securities III are mandatorily redeemable upon the maturing of Debentures III on March 30, 2034 or upon earlier redemption as provided in the Indenture. The Company has the right to redeem Debentures III, in whole or in part on or after March 30, 2009 at the liquidation amount plus any accrued but unpaid interest to the redemption date.

Debentures II and III are included on the Company’s consolidated balance sheet as “Subordinated debentures.”

Charter Holding Corp.

On October 2, 2000, the Bank and two other New Hampshire banks acquired Charter Holding Corp. (“CHC”) and Phoenix New England Trust Company (“PNET”) from Phoenix Home Life Mutual Insurance Company of Hartford, Connecticut. Contemporaneous with the acquisition, CHC and PNET merged under the continuing name of Charter Holding Corp. with assets of approximately $1.7 billion under management. As a result of the acquisitions and merger, at a cost of $3,003,337 each, the Bank and each of the other two banks own one-third of CHC. Headquartered in Concord, New Hampshire, CHC provides trust and investment services from more than a dozen offices across New Hampshire, as well as one in Norwich, Vermont. The Bank purchased CHC as a means to provide trust and investments services as well as insurance products to the Bank’s customers. By doing so, the Bank anticipates non-interest income to be enhanced. For the nine-month period ended September 30, 2007, the Bank realized $158,721 in undistributed income, compared to undistributed income of $149,423 for the same period in 2006.

The Bank has entered into an agreement with Charter New England Agency (“CNEA”), a subsidiary of CHC, which enables the Bank to sell brokerage, securities, and insurance products. For the nine months ended September 30, 2007, the Bank generated commissions in the amount of $103,884, as compared to $137,992, for the same period in 2006.

First Community Acquisition

On October 1, 2007, NHTB announced completed its acquisition of First Community for approximately $15.5 million in cash and stock. The acquisition thereby further expanded NHTB’s New

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Hampshire-based banking franchise into the State of Vermont. First Community merged with and into NHTB’s subsidiary bank, Lake Sunapee Bank, fsb. First Community operates 5 branches located in Woodstock, Killington and Rutland, Vermont and has over $83.4 million in assets. The acquisition of First Community creates a combined company with approximately $844 million in assets and 29 branches in New Hampshire and Vermont.

Pursuant to the terms of the merger agreement each outstanding share of First Community common stock was converted into the right to receive $12.00 in cash or 0.7477 shares of NHTB common stock. First Community shareholders had the right to elect either cash or stock with the constraint that the overall transaction had to be consummated with 80% of the First Community shares being exchanged for NHTB stock and 20% being exchanged for cash.

Following the merger, one current director of First Community was nominated to the Board of Directors of NHTB and to the Board of Directors of Lake Sunapee Bank, fsb, for a term to expire at Lake Sunapee Bank’s next annual meeting, and renominated for such position until at least the third anniversary of the Merger. The remaining members of the current Board of Directors of First Community whose primary residences are located in Vermont have been invited to serve as members of the First Community Division Advisory Board established and maintained by NHTB.

Financial Condition and Results of Operations

Comparison of Financial Condition at September 30, 2007 and December 31, 2006

During the nine months ended September 30, 2007, total assets increased by $88,706,554, including approximately $105.4 million from the First Brandon acquisition, from $672,031,030 at December 31, 2006 to $760,737,584 at September 30, 2007. Total net loans increased $77,968,145, including approximately $66.4 million from the First Brandon acquisition, from $492,711,797 at December 31, 2006 to $570,679,942 at September 30, 2007. During the nine months ended September 30, 2007, the Bank originated $149,542,811 in loans, compared to $147,526,406 for the same period in 2006. Total loans sold into the secondary market amounted to $34,691,518 for the nine months ended September 30, 2007, compared to $26,837,552 for the same period in 2006. Selling fixed rate loans into the secondary market helps protect the Bank against interest rate risk and provides the Bank with fee income. At September 30, 2007, the Bank’s mortgage loan servicing portfolio amounted to $303,177,854, as compared to $298,893,938 at September 30, 2006. The Bank expects to continue to sell fixed rate loans into the secondary market in order to manage interest rate risk. Market risk exposure during the production cycle is managed through the use of secondary market forward commitments. At September 30, 2007, adjustable rate mortgages comprised approximately 77% of the Bank’s real estate mortgage loan portfolio. This is consistent with prior years.

For the nine months ended September 30, 2007, securities available-for-sale decreased by $2,395,254, to $89,127,049, as the Bank utilized funds from either maturing or called securities to pay off maturing Federal Home Loan Bank (“FHLB”) advances. This decrease was partially offset by the addition of $17.3 million in securities available-for-sale in the First Brandon acquisition. The Bank’s net unrealized loss (after-tax) on its investment portfolio amounted to $671,847 as of September 30, 2007 compared to a net unrealized loss of $1,064,427 as of December 31, 2006. Management is of the opinion that this unrealized loss is temporary.

Real estate owned and property acquired in settlement of loans (“OREO”) remained unchanged at $115,000.

During the nine months ended September 30, 2007, deposits increased by $114,021,230, including approximately $89.8 million from the First Brandon acquisition, to $579,527,050 as of

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

September 30, 2007 from $465,505,820 as of December 31, 2006. Non-interest bearing checking accounts increased $7,096,063, or 18.35%, to $45,759,616 as of September 30, 2007 from $38,663,553 as of December 31, 2006. Savings and interest-bearing checking accounts increased $42,659,574, or 17.64%. Time deposits increased $64,265,593, or 34.73%, to $249,335,025 as customers opted for higher yielding time deposits

Securities sold under agreement to repurchase increased by $3,192,939 to $12,074,803 during the nine months ended September 30, 2007 from $8,881,864 as of December 31, 2006. Repurchase agreements are collateralized by some of the Bank’s government and agency investment securities.

Advances from the Federal Home Loan Bank (FHLB) decreased by $44,895,651 during the nine months ended September 30, 2007 to $75,104,349, as the Bank utilized the proceeds from deposit inflows and maturing securities to fund maturing FHLB advances as part of a de-leveraging strategy, which allowed the Bank to pay-off higher costing liabilities.

Goodwill and Other Intangible Assets amounted to $22,121,971, or 2.91% of total assets, as of September 30, 2007 compared to $12,140,016, or 1.81% of total assets, as of December 31, 2006. This increase was due to the acquisition of First Brandon.

Allowance for Loan Losses

The Bank maintains an allowance for loan losses to absorb losses inherent in the loan portfolio. Adjustments to the allowance are charged to income through the provision for loan losses. The Bank considers many factors in determining the appropriate amount of the allowance and tests the adequacy at least quarterly by using a model whereby loss factors are applied to outstanding loans by type. In determining the loss factors, the Bank considers historical losses, market conditions, and qualitative factors that, in management’s judgment, affect the collectibility of the portfolio. The bank enhanced adequacy testing through further stratification of the loan portfolio and by establishing acceptable ranges for the loss factors applicable to each loan type.

The allowance for loan losses incorporates the results of measuring impairment for specifically identified non-homogeneous problem loans in accordance with SFAS No. 114 “Accounting by Creditors for Impairment of a Loan,” and SFAS No. 118, “Accounting by Creditors for Impairment of a Loan – Income Recognition and Disclosures.” In accordance with SFAS No.’s 114 and 118 the specific allowance reduces the carrying amount of the impaired loans to their estimated fair value. A loan is recognized as impaired when it is probable that principal and/or interest are not collectible in accordance with the loan’s contractual terms. Measurement of impairment is based on the present value of expected cash flows, market price of the loan, or the fair value of collateral. Measurement of impairment does not apply to large groups of smaller balance homogeneous loans such as residential mortgages, home equity loans, or consumer loans.

The Bank’s commercial loan officers review the financial condition of commercial loan customers on a regular basis and perform visual inspections of facilities and inventories. The Bank also has an internal loan review, audit, and compliance program. Results of the internal loan reviews, audit and compliance reviews are reported directly to the Audit Committee of the Bank’s Board of Directors.

The allowance for loan losses at September 30, 2007 was $4,480,486 compared to $3,975,122 at December 31, 2006. The increase is a result of the $579,304 allowance acquired in the First Brandon acquisition as well as $113,484 of loan charge-offs, $31,317 of recoveries, $105,000 in provisions for overdrafts, and the charge-offs and recoveries associated with the overdraft privilege program during the first nine months of 2007. In addition to these loan charge-offs and loan recoveries just mentioned, the Bank had $205,598 of overdraft charge-offs and $108,825 of overdraft recoveries during the nine-month

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

period ended September 30, 2007. Under the overdraft privilege program the Bank pays items drawn on customer checking accounts and allows accounts with a negative balance to remain open. Customers pay a fee for the courtesy pay service. The privilege is suspended on accounts carrying a negative balance for 30 consecutive days, and the accounts are charged-off when remaining negative for 60 days. The courtesy pay service is not considered traditional lending; it is available to consumers without credit analysis or loan underwriting. The service helps customers and contributes to Bank revenue. Overdraft charge-offs are an inevitable consequence of the service as items are paid despite non-sufficient funds and some customers fail to bring their accounts positive within 60 days. Consistent with other recent operating periods, except for the acquired allowance, the majority of the allowance for loan loss activity was due to the fee for service overdraft privilege program. For purposes of financial reporting, the allowance for losses associated with the overdraft program is consolidated with the allowance for loan and lease losses. On that consolidated basis, the Bank experienced $319,082 in charge-offs and $140,142 in recoveries during the first nine months of 2007. The entire $105,000 provision was attributable to the overdraft program. That compares with charge-offs, recoveries and provisions for the year ended December 31, 2006 of $467,018, $189,788 and $230,011, respectively. At September 30, 2007, the portion of the allowance allocated to overdrafts was $32,363, representing 14% of total overdrafts and 112% of the aggregate negative balance of accounts that remained negative for 30 days or more. The Bank makes provisions to fund the allowance for overdraft charge-offs and seeks to maintain the allowance at a level approximately equal to the aggregate negative balance of accounts that have been negative for 30 days or more. At September 30, 2007 and December 31, 2006 the total allowance for loan loss represented 0.78% and 0.80% of loans respectively.

Excluding the overdraft losses, the majority of the loan charge-offs were attributable to two residential mortgage loans. The Bank was never active in the sub-prime mortgage market and has not experienced the higher default rates of those lenders who participated in that business segment. The loan defaults experienced by the bank continue to result from isolated incidents and are not associated with trends or patterns. Overall, loan delinquency remains at historically low levels.

The following is a summary of activity in the allowance for loan losses account for the periods indicated:

	For the Nine Months Ended Sept. 30,			For the years ended December 31,
	2007			2006			2005			2004			2003			2002
Balance, beginning of period	$	3,975,122			4,022,341		$	4,019,450		$	3,898,650		$	3,875,708		$	4,405,385
Charged-off loans		(319,082	)		(467,018	)		(123,885	)		(14,737	)		(86,642	)		(687,899	)
Recoveries		140,142			189,788			38,276			60,540			9,588			38,222
Balance from acquisition		579,304			—			—			—			—			—
Provision charged to income		105,000			230,011			88,500			74,997			99,996			120,000
Balance, end of period	$	4,480,486		$	3,975,122		$	4,022,341		$	4,019,450		$	3,898,650		$	3,875,708

Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention do not result from trends or uncertainties, which the Bank reasonably expects will materially impact future operating results, liquidity, or capital resources. As of September 30, 2007, there were no other loans not included in the tables below or discussed where known information about the possible credit problems of the borrowers caused management to have doubts as to the ability of the borrower to comply with present loan repayment terms, or to repay the loan through liquidation of collateral, which may result in disclosure of such loans in the future.

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Classified loans include non-performing loans and performing loans that have been adversely classified. Total classified loans were $5,097,790 on September 30, 2007 compared to $4,063,615 at December 31, 2006. The Bank also had $115,000 of Other Real Estate Owned at September 30, 2007, compared to no OREO at December 31, 2006. The increase in classified loans comes from the adverse classification of some loans and the increase of loans over 90 days past due. Loans 90 days or more past due, including some impaired loans, were $1,219,105 at September 30, 2007 compared to $753,992 at December 31, 2006. The impaired loan total at September 30, 2007 was $2,825,798, and $339,173 of that amount was over 90 days past due. Although the impaired loans are on non-accrual status, the Bank had $2,486,625 of impaired loans still paying interest with the interest income recorded on a cash basis as of September 30, 2007. The impaired loan total at September 30, 2007 compares to the $305,307 recorded investment in impaired loans at December 31, 2006. The increase is primarily due to the impairment of one commercial real estate loan. The increase in non-performing loans, from $753,992 on December 31, 2006 to $3,705,730 on September 30, 2007 is largely due to the inclusion of the $2,486,625 impaired commercial real estate loan. While payments are still being made on that loan, it is considered impaired as defined by FAS 114. The increase in non-performing loans is also attributable to three residential mortgage loans with a combined balance of about $563,000. Those loans were over 90 days past due at September 30, 2007 and, as such, were placed on non-accrual status and considered non-performing. One of those loans is in foreclosure while repayment is still expected on the other two. Loans 30 to 89 days past due were $4,271,672 at the end of September 2007 compared to $1,511,770 at year-end 2006. The higher balance of past due loans is a result of more loans being past due. That is partially due to the portfolio growth that came with the acquisition of First Brandon. In addition, an increasing number of borrowers are experiencing difficulty with loan repayment as other expenses reduce the remainder of their disposable income. A review of classified loans for possible loan losses, combined with the results of adequacy testing, contributed to the determination that, except for provisions pertaining to the overdraft program, no additional provision was needed during the first nine months of 2007.

The following table shows the breakdown of non-performing assets and non-performing assets as a percentage of total assets (dollars in thousands):

	Sept. 30, 2007				December 31, 2006
90 day delinquent loans (1)	$	880	0.12	%	$	449	0.07	%
Nonaccrual impaired loans		2,826	0.37	%		305	0.04	%
Other real estate and chattel property owned		115	0.01	%		—	0.00	%
Total non-performing assets	$	3,821	0.50	%	$	754	0.11	%

(1) All loans 90 days or more delinquent are placed on non-accruing status.

The following table sets forth the allocation of the loan loss valuation allowance and the percentage of loans in each category to total loans (dollars in thousands):

	Sept. 30, 2007					December 31, 2006
Real estate loans-
Conventional	$	2,365		88	%	$	2,592		78	%
Construction		372		5	%		357		3	%
Collateral and consumer		196		3	%		130		13	%
Commercial and municipal		1,502		4	%		850		6	%
Impaired Loans		45		0	%		46		0	%
Total valuation allowance	$	4,480		100	%	$	3,975		100	%
Total valuation allowance as percentage of total loans		0.78	%				0.80	%

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Bank believes the allowance for loan losses is at a level sufficient to cover inherent losses, given the current level of risk in the loan portfolio. At the same time, the Bank recognizes that the determination of future loss potential is intrinsically uncertain. Future adjustments to the allowance may be necessary if economic, real estate, and other conditions differ substantially from the current operating environment resulting in increased levels of non-performing loans and substantial differences between estimated and actual losses. Adjustments to the allowance are charged to income through the provision for loan losses.

Comparison of the Operating Results for the Nine Months and the Three Months Ended

September 30, 2007 and September 30, 2006

Consolidated net income for the nine months ended September 30, 2007 in the amount of $3,397,391, or $0.73 per share (assuming dilution), compares to $3,976,298, or $0.92 per share (assuming dilution) for the first nine months of 2006, a decrease of 14.56%. For the third quarter ended September 30, 2007, net income totaled $1,292,827, or $.25 per share (assuming dilution), compared to $1,218,381, or $.28 per share (assuming dilution), for the same period in 2006, an increase of 6.11%. The Company’s returns on average assets and equity for the nine months ended September 30, 2007 were 0.65% and 9.15%, respectively, compared to 0.81% and 11.82%, respectively, for the same period in 2006. The above results include four months of operations from the acquisition of First Brandon, which closed on June 1, 2007, and merged with and into the Bank.

The $578,907 decrease in net income for the nine months ended September 30, 2007 reflects an increase of $1,780,417 in noninterest expense, due in part to the opening of two new branch offices and the consummation of the First Brandon acquisition. The increase in noninterest expense was partially offset by increases in net interest and dividend income and noninterest income in the amount of $170,341 and $671,437, respectively. The $74,446 increase in net income for the quarter ended September 30, 2007 reflects an increase of $858,183 in net interest and dividend income, as well as an increase in noninterest income in the amount of $228,072. Positive results from the First Brandon acquisition contributed to these increases. An increase in noninterest expense in the amount of $987,050, due in part to the First Brandon acquisition, partially offset the above gains. Sharp increases in the Bank’s cost of funds, as customers opted for higher yielding time deposits, reduced the Bank’s interest rate margin to 3.04% at September 30, 2007, from 3.18% at September 30, 2006. Total loan production for the nine months ended September 30, 2007 amounted to $149,542,811, compared to $147,526,406 for the nine months ended September 30, 2006.

Total interest income for the nine months ended September 30, 2007 increased by $3,356,970, or 13.46%, to $28,294,559 from $24,937,589 for the same period in 2006. For the three months ended September 30, 2007, total interest income increased by $1,555,125, or 17.76%, to $10,309,963 from $8,754,838 for the same period in 2006. Interest and fees on loans increased $3,262,585, or 15.56%, and $1,581,485, or 21.58%, for the nine and three month periods, respectively, due to the increase in the Bank’s loan portfolio and the acquisition of First Brandon.

For the nine months ended September 30, 2007, interest and dividends on investment securities decreased $109,465, or 2.97%, to $3,574,022, from $3,683,487 for the same period in 2006. For the quarter ended September 30, 2007, interest and dividends on investment securities decreased $71,233, or 5.49%, to 1,226,724, from $1,297,957 for the same period in 2006. Lower balances in investment securities caused by cash-flows from maturing securities being used to pay-off maturing FHLB advances was the primary cause for the decrease in interest and dividends on investment securities.

For the nine months ended September 30, 2007, total interest expense increased by $3,186,629, or 29.65%, to $13,932,419, from $10,745,790 for the same period in 2006. For the three months ended

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

September 30, 2007, total interest expense increased $696,942, or 16.34%, to $4,962,555, from $4,265,613 for the same period in 2006. For the nine months and three months ended September 30, 2007, interest on deposits increased $3,454,964, or 64.78%, and $1,251,523, or 56.97%, respectively. The increases were attributable to a rising interest rate environment and a shift of deposits to higher yielding time deposits.

For the nine months ended September 30, 2007, interest on advances and other borrowed money decreased $268,335, or 4.96%, to $5,143,704, from $5,412,039 for the same period in 2006. For the quarter ended September 30, 2007, interest on advances and other borrowed money decreased by $554,581, or 26.81%, to $1,514,181,, from $2,068,762 for the same period in 2006. The Bank paid off maturing FHLB advances in the amount of $45,000,000 during the first nine months of 2007, which contributed to the decrease.

The allowance for loan losses was $4,480,486 on September 30, 2007 compared to $4,007,861 on September 30, 2006. The allowance for loan losses represented 0.78% of total loans at September 30, 2007 down from 0.80% at September 30, 2006. The increase in the allowance is primarily due to the $579,304 allowance acquired from First Brandon in the second quarter of 2007. During the first nine months of 2007, provisions of $105,000 were made to the allowance compared to provisions of $159,776 made during the same period in 2006. Except for the provisions allocated to the fee for service overdraft program, no additional provision for loan loss were made in the first nine months of 2007 or 2006. Net charge-offs, including activity associated with the overdraft program, were $178,940 in the first nine months of 2007. That compares to net charge-offs of $174,256 during the first nine months of 2006.

For the three months ended September 30, 2007 loan charge-offs and recoveries, including the charge-offs and recoveries associated with the overdraft program, were $151,788 and $42,090 respectively. As a result, net charge-offs for the three-month period were $109,698. That compares to charge-offs, recoveries, and net charge-offs of $97,156, $34,768, and $62,389, respectively for the same three-month period in 2006. About 65% of the charge-offs during the third quarter of 2007 were attributable to the fee for service overdraft program compared to 93% in the third quarter of 2006. During the three month period ended September 30, 2007 the Bank made provisions of $60,000 to fund the allowance. That compares to $51,000 during the same period in 2006. In both 2007 and 2006 all of the provisions were made to fund the portion of the allowance allocated to overdrafts. The overdraft charge-offs in 2007 were similar to the level experienced in 2006. Excluding the overdrafts, loan charge-offs were higher in 2007, but remained at historically low levels.

For the nine months ended September 30, 2007, total noninterest income increased by $671,437, or 15.75%, which includes results from the First Brandon acquisition, to $4,934,708 as of September 30, 2007, from $4,263,271 for the same period in 2006. The increase in noninterest income for the nine-month period ended September 30, 2007 was the result of an increase in the amount of $438,685, or 14.67%, in customer service fees due to increased customer accounts and associated increases in ATM and overdraft fees. In addition, an increase in net gain on sale of loans in the amount of $150,814 contributed to the increase in noninterest income.

For the three months ended September 30, 2007, total noninterest income increased by $228,072, or 14.80%, which includes four months of operation of the First Brandon division, from $1,541,001 in 2006, to $1,769,073 for the same period in 2007. The increase in noninterest income for the quarter ended September 30, 2007, was partially due to an increase in the amount of $157,921, or 14.11%, in customer service fees.

For the nine months ended September 30, 2007, total noninterest expenses increased $1,780,417, or 14.44%, from $12,331,854 during the nine months ended September 30, 2006, to $14,112,271 for the

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NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

same period in 2007. For the three months ended September 30, 2007, total noninterest expenses increased by $987,050, or 23.96%, from $4,119,651 during the three months ended September 30, 2006, to $5,106,701 for the same period in 2007. Included in the noninterest expenses increase for both the nine and three months ended June 30, 2007, are approximately $400,000 and $300,000, respectively, in expenses associated with the First Brandon acquisition.

For the nine-month period ended September 30, 2007:

• Salaries and employee benefits increased by $641,022, or 9.78%, to $7,192,636 for the nine months ended September 30, 2007 from $6,551,614 for the nine months ended September 30, 2006. Gross salaries and benefits paid increased $705,053, or 9.93%, from $7,100,900 during the nine months ended September 30, 2006, to $7,805,953 for the same period in 2007. The increase in gross salaries and employee benefits includes approximately $550,000 in salaries and employee benefits incurred from the First Brandon acquisition. The deferral of salary and benefit expenses associated with the origination of mortgage loans increased slightly in the amount of $64,031, or 11.66%, from $549,286 for the nine months ended September 30, 2006 to $613,317 for the nine months ended September 30, 2007.

• Occupancy expenses increased by $442,460, or 22.28%, from $1,986,189 for the nine months ended September 30, 2006 to $2,428,649 for the nine months ended September 30, 2007. Depreciation costs associated with the recent opening of five new branch offices the retrofitting of several of the Bank’s branch offices, as well as four months of operation of the First Brandon division, contributed to the increase in occupancy expenses.

• Advertising and promotion increased by $27,067, or 11.12%, from $243,330 for the nine months ended September 30, 2006 to $270,397 for the nine months ended September 30, 2007. Included in this increase are advertising and promotion expenses associated with the opening of two new branch offices, as well as four months of operations of the First Brandon division.

• Outside services increased by $57,791, or 11.92%, from $484,724 for the nine months ended September 30, 2006 to $542,515 for the nine months ended September 30, 2007. Expenses associated with data processing fees and the Bank’s Overdraft Protection Program contributed to the increase in outside services. The Bank pays a percentage of the fees collected on overdrafts to an outside firm for services rendered in monitoring the program.

• Professional services increased by $25,650, or 6.68%, from $383,731 for the nine months ended September 30, 2006 to $409,381 for the nine months ended September 30, 2007.

• ATM processing fees increased by $75,930, or 25.66%, from $295,906 for the nine months ended September 30, 2006 to $371,836 for the nine months ended September 30, 2007, due to continuing, increased volume of transactions, partly because of the opening of two new branch offices and four months of operations of the First Brandon division. Increased revenues from ATM transactions offset ATM processing fees.

• Amortization of mortgage servicing rights in excess of mortgage servicing income decreased in the amount of $39,407, or 24.98%, from $157,723 for the nine months ended September 30, 2006 to $118,316 for the nine months ended September 30, 2007 due to a lower amount of prepayments of loans associated with the Bank’s mortgage loan servicing portfolio as the number of mortgage loan refinancings slowed.

17

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• Other expenses increased by $506,392 or 26.28%, from $1,926,954 for the nine months ended September 30, 2006 to $2,433,346 for the nine months ended September 30, 2007, due to expenses associated with the Bank’s overdraft protection program, the amortization of the Core Deposit Intangible in the amount of $134,969, and four months of operations of the First Brandon division.

For the three-month period ended September 30, 2007:

• Salaries and employee benefits increased by $267,051, or 11.79%, to $2,531,430 for the three months ended September 30, 2007 from $2,264,379 for the three months ended September 30, 2006. Gross salaries and benefits paid increased $320,101, or 13.15%, to $2,754,188 during the three months ended September 30, 2007, from $2,434,087 at September 30, 2006. The increase in gross salaries and employee benefits includes approximately $300,000 in salaries and employee benefits from the First Brandon operations for the three months ended September 30, 2007.

• Occupancy expenses increased by $218,224, or 33.13%, from $658,635 for the three months ended September 30, 2006 to $876,859 for the three months ended September 30, 2007. Depreciation costs associated with the recent opening of five new branch offices, the retrofitting of several of the Bank’s branch offices, as well as three months of operations of the First Brandon division, contributed to the increase in occupancy expenses.

• Advertising and promotion increased by $39,568, or 64.41%, from $61,434 for the three months ended September 30, 2006 to $101,002 for the three months ended September 30, 2007. Included in the increase in advertising and promotion are expenditures associated with promoting the First Brandon division during the transition phase after the acquisition.

• Outside services increased by $55,997, or 39.84%, from $140,548 for the three months ended September 30, 2006 to $196,545 for the three months ended September 30, 2007. Expenses associated with data processing fees and the Bank’s Overdraft Protection Program contributed to the increase in outside services. The Bank pays a percentage of the fees collected on overdrafts to an outside firm for services rendered in monitoring the program.

• Professional services decreased by $3,206, or 2.44%, from $131,294 for the three months ended September 30, 2006 to $128,088 for the three months ended September 30, 2007.

• ATM processing fees increased by $39,695, or 40.25%, from $98,609 for the three months ended September 30, 2006 to $138,304 for the three months ended September 30, 2007, due to continuing, increased volume of transactions. This increase was offset by increased revenues

• Amortization of mortgage servicing rights in excess of mortgage servicing income decreased by $2,881, or 6.27%, from $45,941 for the three months ended September 30, 2006 to $43,060 for the three months ended September 30, 2007.

• Other expenses increased by $337,891, or 55.64%, from $607,330 for the three months ended September 30, 2006 to $945,221 for the three months ended September 30, 2007, primarily due to expenses associated with the Bank’s overdraft protection program, the amortization of the Core Deposit Intangible in the amount of $101,227, and three months of operations of the First Brandon division.

18

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest Rate Sensitivity

The principal objective of the Bank’s interest rate risk management function is to evaluate the interest rate risk inherent in certain balance sheet accounts and determine the appropriate level of risk given the Bank’s business strategies, operating environment, capital and liquidity requirements and performance objectives and to manage the risk consistent with the Board of Directors’ approved guidelines. The Bank’s Board of Directors has established an Asset/Liability Committee (ALCO) to review its asset/liability policies and interest rate position monthly. Trends and interest rate positions are reported to the Board of Directors quarterly.

Gap analysis is used to examine the extent to which assets and liabilities are “rate 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. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specified period of time and the amount of interest-bearing liabilities maturing or repricing within the same specified period of time. The strategy of matching rate sensitive assets with similar liabilities stabilizes profitability during periods of interest rate fluctuations.

The Bank’s one-year gap as of September 30, 2007, was negative 16%, compared to the December 31, 2006 gap of negative 21%. The Bank continues to hold in portfolio adjustable rate mortgages, which reprice at one, three, and five-year intervals. The Bank sells certain fixed-rate mortgages into the secondary market in order to minimize interest rate risk. The Bank’s gap, of negative 16%, as of September 30, 2007, means net interest income would increase if interest rates trended downward. The opposite would occur if interest rates were to rise.

As another part of its interest rate risk analysis, the Bank uses an interest rate sensitivity model, which generates estimates of the change in the Bank’s net portfolio value (NPV) over a range of interest rate scenarios. The OTS produces the data quarterly using its own model and data submitted by the Bank.

NPV is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The NPV ratio, under any rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. Modeling changes require making certain assumptions, which may or may not reflect the manner in which actual yields and costs respond to the changes in market interest rates. In this regard, the NPV model assumes that the composition of the Bank’s interest sensitive assets and liabilities existing at the beginning of a period remain constant over the period being measured and that a particular change in interest rates is reflected uniformly across the yield curve. Accordingly, although the NPV measurements and net interest income models provide an indication of the Bank’s interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market rates on the Bank’s net interest income and will likely differ from actual results.

19

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table sets forth the Bank’s NPV as of June 30, 2007 (the latest NPV analysis prepared by the OTS), as calculated by the OTS.

	Net Portfolio Value				NPV as % of PV Assets
In Rates	$ Amount	$ Change	% Change		NPV Ratio		Change
-200 bp	95,659	8,257	+9	%	12.34	%	+92 bp
-100 bp	92,888	5,486	+6	%	12.04	%	+62 bp
-50 bp	90,541	3,139	+4	%	11.78	%	+36 bp
0 bp	87,402	—	—		11.42	%	—
+50 bp	83,679	-3,723	-4	%	10.99	%	-43 bp
+100 bp	79,530	-7,872	-9	%	10.51	%	-91 bp
+200 bp	70,090	-17,312	-20	%	9.38	%	-204 bp
+300 bp	59,123	-28,279	-32	%	8.03	%	-338 bp

Liquidity and Capital Resources

The Bank is required to maintain sufficient liquidity for safe and sound operations. The Bank’s source of funds comes primarily from net deposit inflows, loan amortizations, principal pay downs from loans, sold loan proceeds, and advances from the FHLB. At September 30, 2007, the Bank had approximately $150,000,000 in additional borrowing capacity from the FHLB.

At September 30, 2007, the Company’s shareholders’equity totaled $61,676,085, or 8.11%, of total assets, compared to $48,409,406, or 7.20%, of total assets at December 31, 2006. The Company’s Tier I core capital was 7.66% as of September 30, 2007, compared to 8.12% at year-end December 31, 2006. The increase in shareholders’ equity in the amount of $13,266,679 reflects net income of $3,397,391, the payment of $1,729,907 in common stock dividends, payments in the amount of $5,079,060 to acquire treasury stock, proceeds in the amount of $663,004 for the exercise of stock options, an decrease of $392,580 in accumulated other comprehensive loss, and an increase in paid-in capital in the amount of $15,622,671 resulting from the First Brandon acquisition.

On June 14, 2007, the Company announced a stock repurchase program. Repurchases will be made from time to time at the discretion of management. The stock repurchase program will continue until the repurchase of 243,380 shares is complete. As of November 2, 2007, 64,092 shares of common stock had been repurchased under the June 14, 2007 plan. On January 25, 2007, the Company announced a stock repurchase program. The January 25, 2007 stock repurchase program was completed on July 23, 2007 with an amount of 209,400 shares repurchased. The Board has determined that a share buyback is appropriate to enhance shareholder value; such repurchases generally increase earnings per share, return on average assets and on average equity, three performing benchmarks against which bank and thrift holding companies are often measured. The Company buys stock in the open market whenever the price of the stock is deemed reasonable and the Company has funds available for the purchase.

As of September 30, 2007, the Company had $1,058,723 in cash available, which it plans to use to continue its annual dividend payout of $.52 per share and pay the interest on its subordinated debentures interest. The interest and dividend payments are approximately $3.5 million per year. The Bank pays dividends to the Company as its sole stockholder within guidelines set forth by the OTS. Since the Bank is well-capitalized and has capital in excess of regulatory requirements, funds will be available to cover the Company’s future dividend, interest, stock re-purchase needs, and costs associated with the First Community Bank acquisition.

20

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the nine months ended September 30, 2007, net cash provided by operating activities amounted to $4,628,555 compared to net cash provided by operating activities of $9,176,866 for the same period in 2006, a decrease of $4,548,311. Decreases in net income in the amount of $578,907, loans held for-sale in the amount of $1,081,775, and accrued expenses and other liabilities in the amount of $1,787,762 contributed to the decrease in cash provided by operating activities. In addition, an increase in accrued interest receivable and other assets in the amount of $1,178,002 contributed to the change. The acquisition of First Brandon primarily caused these differences.

Net cash provided by investing activities amounted to $15,725,499 for the nine months ended September 30, 2007, compared to net cash used in investing activities of $23,047,389 for the same period in 2006, a change of $38,772,888. A decrease in loan originations and principal collections, net in the amount of $19,094,296, an increase in maturities of securities available-for-sale in the amount of $9,498,867, and cash and cash equivalents from the First Brandon acquisition in the amount of $12,705,324 contributed to the change in cash provided by investing activities. Cash paid for acquiring First Brandon amounted to $4,399,768.

For the nine months ended September 30, 2007, net cash used in financing activities amounted to $25,564,283 compared to net cash provided by financing activities of $12,905,345 for the same period in 2006, a change of $38,469,628. During the nine months ended September 30, 2007, the Bank paid off advances from the FHLB in the amount of $45,000,000 as compared to obtaining advances from the FHLB in the amount of $20,000,000 during the same period in 2006. The Bank used proceeds from maturing securities available-for-sale, deposit inflows, and cash provided from the First Brandon acquisition to pay off higher costing advances from the FHLB.

The Bank expects to be able to fund loan demand and other investing during 2007 by continuing to use funds provided from customer deposits, loan prepayments, and, if needed, the FHLB’s advance program. Management is not aware of any trends, events, or uncertainties that will have or that are reasonably likely to have a material effect in the Company’s liquidity, capital resources or results of operations.

Banks are required to maintain tangible capital, core leverage capital, and total risk based capital of 1.50%, 4.00%, and 8.00%, respectively. As of September 30, 2007, the Bank’s ratios were 7.66%, 7.66%, and 10.84%, respectively, well in excess of the regulators’ capital requirements.

Book value per share was $12.39 at September 30, 2007, compared to $11.59 per share at September 30, 2006.

Part I. Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In management’s opinion, there has been no material change in market risk since disclosure in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Part I. Item 4.

CONTROLS AND PROCEDURES

Management, including the Company’s President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e)) as of the end of the period covered by this

21

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

report. Based upon that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to the Company’s management, including its President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation that occurred during the Company’s last fiscal quarter that has materially affected, or that is reasonably likely to materially affect, the Company’s internal control over financial reporting.

22

Part II.

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

OTHER INFORMATION

Item 1. Legal Proceedings

There is no material litigation pending to which the Company or its subsidiaries are a party or to which the property of the Company or its subsidiaries are subject, other than ordinary routine litigation incidental to business.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed by the Company in its Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

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

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended September 30, 2007.

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased under the Plans or Programs
July 1, 2007 through July 31, 2007 (1)	20,000	$	15.955	226,900	257,055
August 1, 2007 through August 31, 2007	40,000		14.743	266,900	217,055
September 1, 2007 through September 30, 2007	37,767		15.650	304,667	179,288
Total	97,767	$	15.341	304,667	179,288

⁽¹⁾ The Company announced a stock repurchase program on June 20, 2007. The program will continue until the repurchase of 253,776 shares is complete.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Common Shareholders

None

Item 5. Other Information

None

Item 6. Exhibits

Exhibit No.

Description

2.1

Agreement and Plan of Reorganization, dated as of July 26, 1996, by and among New Hampshire Thrift Bancshares, Inc. (“NHTB”), Lake Sunapee Bank, fsb (the “Bank”) and Landmark Bank. (“Landmark”), including Annex A, Agreement and Plan of Merger, dated as of July 26, 1996, by and between Landmark and the Bank, and joined in by NHTB (previously filed as Appendix A to the Company’s Form S-4 (No. 333-12645) filed with the Securities and Exchange Commission (the “Commission”) on November 5, 1996 (the “November 5, 1996 S-4”)).

23

2.2	Acquisition Agreement, dated April 12, 1999, by and among Sun Life Assurance Company of Canada (U.S.); New London Trust, FSB, a federally-chartered savings bank in stock form; PM Trust Holding Company, a Connecticut corporation; Cargill Bank, a state-chartered savings and loan association; Mascoma Savings Bank, a federally-chartered savings bank and Lake Sunapee Bank, fsb. (previously filed as an exhibit to the Company’s March 31, 1999 Form 10-Q filed with the Commission on May 14, 1999 (the “March 31, 1999 10-Q”)).
2.3	Purchase and Assumption Agreement, dated April 12, 1999, among PM Trust Holdings, Inc., a Connecticut corporation; PM Trust Holding Company, a Connecticut corporation; Cargill Bank, a state-chartered savings and loan association; Mascoma Savings Bank, a federally-chartered savings bank and Lake Sunapee Bank, fsb. (previously filed as an exhibit to March 31, 1999 10-Q).
2.4	Asset and Liability Allocation Agreement dated April 12, 1999, by and among Cargill Bank, a state-chartered savings and loan association; Mascoma Savings Bank, a federally chartered savings bank and Lake Sunapee Bank, fsb. (previously filed as an exhibit to the March 31, 1999 10-Q).
2.5	Agreement and Plan of Merger by and between NHTB and First Brandon Financial Corporation dated as of December 14, 2006 (previously filed as an Exhibit to NHTB’s Form 8-K filed with the Commission on December 15, 2006).
2.6	Agreement and Plan of Merger by and between NHTB and First Community Bank dated as of April 16, 2007 (previously filed as an Exhibit to NHTB’s Form 8-K filed with the Commission on April 16, 2007).
3.1.1	Amended and Restated Certificate of Incorporation of the Company (previously filed as an exhibit to the November 5, 1996 S-4).
3.1.2	Certificate of Amendment of the Certificate of Incorporation of the Company (previously filed as an exhibit to the Company’s June 30, 2005 Form 10-Q filed with the Commission on August 15, 2005).
3.2.1	Amended and Restated Bylaws of the Company (previously filed as an exhibit to the November 5, 1996 S-4).
3.2.2	Amendment to Bylaws of the Company (previously filed as an exhibit to the Company’s Form 8-K filed with the Commission on October 1, 2007).
4.1	Stock Certificate of the Company (previously filed as an exhibit to the Company’s Form S-4 (file No. 33-27192) filed with the Commission on March 1, 1989 (the “March 1, 1989 S-4”)).
4.2	Indenture by and between New Hampshire Thrift Bancshares, Inc., as Issuer and U.S. Bank National Association, as Trustee, dated March 30, 2004 for Floating Rate Junior Subordinated Deferrable Interest Debentures (previously filed as an exhibit to the Company’s December 31, 2004 Form 10-K filed with the Commission on March 29, 2005 (the “December 31, 2004 10-K”)).
4.3	Form of Floating Rate Junior Subordinated Deferrable Interest Debentures issued by New Hampshire Thrift Bancshares, Inc. to U.S. Bank National Association dated March 30, 2004 (see Exhibit A to Exhibit 4.2).
4.4	Indenture by and between New Hampshire Thrift Bancshares, Inc., as Issuer, and U.S. Bank National Association, as Trustee, dated March 30, 2004 for Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures (previously filed as an exhibit to the December 31, 2004 10-K).
4.5	Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures issued by New Hampshire Thrift Bancshares, Inc. to U.S. Bank National Association dated March 30, 2004 (see Exhibit A to Exhibit 4.4).
10.1	Profit Sharing-Stock Ownership Plan of Lake Sunapee Bank, fsb (previously filed as an exhibit to the November 5, 1996 S-4).
10.2	New Hampshire Thrift Bancshares, Inc. 1996 Stock Option Plan (previously filed as an exhibit to the November 5, 1996 S-4).
10.3	Lake Sunapee Bank, fsb 1987 Incentive Stock Option Plan (previously filed as an exhibit to the March 1, 1989 S-4).

24

10.4	New Hampshire Thrift Bancshares, Inc. 1986 Incentive Stock Option Plan (previously filed as an exhibit to the March 1, 1989 S-4).
10.5	Employment Agreement between the Company and Stephen W. Ensign (previously filed as an exhibit to the November 5, 1996 S-4).
10.6	Employment Agreement between the Bank and Stephen R. Theroux (previously filed as an exhibit to the November 5, 1996 S-4).
10.7	Guarantee Agreement by and between New Hampshire Thrift Bancshares, Inc. and U.S. Bank National Association dated March 30, 2004 (previously filed as an Exhibit to the December 31, 2004 10-K).
10.8	Guarantee Agreement by and between New Hampshire Thrift Bancshares, Inc. and U.S. Bank National Association dated March 30, 2004 (previously filed as an Exhibit to the December 31, 2004 10-K).
10.9	New Hampshire Thrift Bancshares, Inc. 1998 Stock Option Plan (previously filed as Appendix A to the Company’s Proxy Statement filed with the Commission on March 6, 1998).
10.10	New Hampshire Thrift Bancshares, Inc. 2004 Stock Incentive Plan (previously filed as Appendix B to the Company’s Proxy Statement filed with the Commission on April 8, 2004).
10.11	Amended and Restated Supplemental Executive Retirement Plan of New Hampshire Thrift Bancshares, Inc. (previously filed as an exhibit to the Company’s Form 8-K filed with the Commission on December 14, 2005).
10.12	Amendment to the Amended and Restated Supplemental Executive Retirement Plan of New Hampshire Thrift Bancshares, Inc. (previously filed as an exhibit to the Company’s form 8-K filed with the Commission on March 14, 2006).
10.13	Amendment to the Supplemental Executive Retirement Plan of New Hampshire Thrift Bancshares, Inc. (previously filed as an Exhibit to NHTB’s Form 8-K filed with the Commission on April 2, 2007).
14	Code of Ethics (previously filed as an exhibit to the Company’s December 31, 2003 Form 10-K filed with the Commission on March 30, 2004).
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32.1	Section 1350 Certification of the Chief Executive Officer
32.2	Section 1350 Certification of the Chief Financial Officer

25

NEW HAMPSHIRE THRIFT BANCSHARES, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NEW HAMPSHIRE THRIFT BANCSHARES, INC.
	(Registrant)
Date: November 14, 2007	/s/ Stephen W. Ensign
	Stephen W. Ensign
	Chairman of the Board, President and Chief Executive Officer
Date: November 14, 2007	/s/ Stephen R. Theroux
	Stephen R. Theroux
	Executive Vice President, Chief Financial Officer
	(Principal Accounting Officer)

26