SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule14a-12

WESTBOROUGH FINANCIAL SERVICES, Inc.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1)
and 0-11.

(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined.):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a) (2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.

(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

[Westborough Financial Services, Inc. LETTERHEAD]

December 27, 2004

Dear Shareholder:

You are cordially invited to attend the 2005 Annual Meeting of
Shareholders of Westborough Financial Services, Inc., the holding company
for The Westborough Bank, which will be held on January 27, 2005 at 3:00
p.m., local time, at the Wyndham Westborough Hotel located at 5400 Computer
Drive, Westborough, Massachusetts 01581 (the "Annual Meeting").

The attached Notice of Annual Meeting and proxy statement describe
the formal business that we will transact at the Annual Meeting. In
addition to the formal items of business, management will report on the
operations and activities of Westborough Financial Services and Westborough
Bank and you will have an opportunity to ask questions. Directors and
officers of the Westborough Financial Services as well as a representative
from our independent auditors, Wolf & Company, P.C., will be present to
respond to any questions shareholders may have.

The Board of Directors of Westborough Financial Services has
determined that an affirmative vote on each matter to be considered at the
Annual Meeting is in the best interests of Westborough Financial Services
and its shareholders and unanimously recommends a vote "FOR" each of these
matters.

Please complete, sign and return the enclosed proxy card promptly,
whether or not you plan to attend the Annual Meeting. Your vote is
important regardless of the number of shares you own. Voting by proxy will
not prevent you from voting in person at the Annual Meeting but will assure
that your vote is counted if you cannot attend.

On behalf of the Board of Directors and the employees of Westborough
Financial Services and Westborough Bank, we thank you for your continued
support and look forward to seeing you at the Annual Meeting.

Sincerely yours,

/s/ Joseph F. MacDonough

Joseph F. MacDonough
President and Chief Executive Officer

[LOGO] Westborough Financial Services, Inc.

Notice of Annual Meeting of Shareholders

Date: Thursday, January 27, 2005

Time: 3:00 p.m., local time

Place: Wyndham Westborough Hotel
5400 Computer Drive
Westborough, Massachusetts 01581

At our 2005 Annual Meeting, we will ask you to:

1. Elect five directors to serve for a three-year term to expire
at the 2008 Annual Meeting and one director to serve for a two-
year term to expire at the 2007 Annual Meeting. The following
six directors are the Board of Directors' nominees:

* Edward S. Bilzerian * Charlotte C. Spinney
* Jeffrey B. Leland (2007) * Phyllis A. Stone
* Paul F. McGrath * James E. Tashjian

2. Transact any other business as may properly come before the
Annual Meeting.

You may vote at the Annual Meeting if you were a shareholder of
Westborough Financial Services at the close of business on December 17,
2004, the record date.

By Order of the Board of Directors,

/s/ John L. Casagrande

John L. Casagrande
Clerk

Westborough, Massachusetts
December 27, 2004

===========================================================================
You are cordially invited to attend the Annual Meeting. It is important
that your shares be represented regardless of the number of shares you own.
The Board of Directors urges you to sign, date and mark the enclosed proxy
card promptly and return it in the enclosed envelope. Returning the proxy
card will not prevent you from voting in person if you attend the Annual
Meeting.
===========================================================================

GENERAL INFORMATION

GENERAL

Westborough Financial Services, Inc. is a Massachusetts-chartered
stock holding company, which owns all the capital stock of The Westborough
Bank. As used in this proxy statement, "we," "us" and "our" refer to
Westborough Financial Services and/or its subsidiaries, depending on the
context. The term "Annual Meeting," as used in this proxy statement,
includes any adjournment or postponement of such meeting.

We have sent you this proxy statement and enclosed proxy card because
the Board of Directors is soliciting your proxy to vote at the Annual
Meeting. This proxy statement summarizes the information you will need to
know to cast an informed vote at the Annual Meeting. You do not need to
attend the Annual Meeting to vote your shares. You may simply complete,
sign and return the enclosed proxy card and your votes will be cast for you
at the Annual Meeting. This process is described below in the section
entitled "Voting Rights."

We began mailing this proxy statement, the Notice of Annual Meeting
and the enclosed proxy card on or about December 27, 2004 to all
shareholders entitled to vote. If you owned common stock of Westborough
Financial Services at the close of business on December 17, 2004, the
record date, you are entitled to vote at the Annual Meeting. On the record
date, there were 1,591,174 shares of common stock outstanding.

QUORUM

A quorum of shareholders is necessary to hold a valid meeting. If the
holders of at least a majority of the total number of the outstanding
shares of common stock entitled to vote are represented in person or by
proxy at the Annual Meeting, a quorum will exist. We will include proxies
marked as abstentions and broker non-votes to determine the number of
shares present at the Annual Meeting.

VOTING RIGHTS

You are entitled to one vote at the Annual Meeting for each share of
the common stock of Westborough Financial Services that you owned as of
record at the close of business on December 17, 2004. The number of shares
you own (and may vote) is listed at the top of the back of the proxy card.

You may vote your shares at the Annual Meeting in person or by proxy.
To vote in person, you must attend the Annual Meeting and obtain and submit
a ballot, which we will provide to you at the Annual Meeting. To vote by
proxy, you must complete, sign and return the enclosed proxy card. If you
properly complete your proxy card and send it to us in time to vote, your
"proxy" (one of the individuals named on your proxy card) will vote your
shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares FOR each of the
proposals identified in the Notice of the Annual Meeting.

If any other matter is presented, your proxy will vote the shares
represented by all properly executed proxies on such matters as a majority
of the Board of Directors determines. As of the date of this proxy
statement, we know of no other matters that may be presented at the Annual
Meeting, other than those listed in the Notice of the Annual Meeting.

VOTE BY WESTBOROUGH BANCORP, MHC

Westborough Bancorp, MHC is the holding company of Westborough
Financial Services and was formed pursuant to the reorganization of
Westborough Bank to a mutual holding company structure on February 15,
2000. As indicated under "Security Ownership of Certain Beneficial Owners
and Management," Westborough Bancorp, MHC owns 64.6% or 1,027,893 shares,
of the outstanding common stock of Westborough Financial Services.

All shares of common stock owned by Westborough Bancorp, MHC will be
voted in accordance with the instructions of the Board of Trustees of
Westborough Bancorp, MHC. Westborough Bancorp, MHC is expected to vote such
shares "FOR" Proposal 1.

VOTE REQUIRED

Proposal 1: Election of Directors The nominees for director who receive
the most votes will be elected. So, if
you do not vote for a nominee, or you
indicate "withhold authority" for any
nominee on your proxy card, your vote
will not count "for" or "against" the
nominee. You may not vote your shares
cumulatively for the election of
directors.

EFFECT OF BROKER NON-VOTES

If your broker holds shares that you own in "street name," the broker
may vote your shares on the proposals listed above even if the broker does
not receive instructions from you. If your broker does not vote on a
proposal, this will constitute a "broker non-vote." A broker non-vote would
have no effect on the outcome of Proposal 1 because only a plurality of
votes cast is required to elect a director.

CONFIDENTIAL VOTING POLICY

Westborough Financial Services maintains a policy of keeping
shareholder votes confidential. We only let our Inspector of Election
examine the voting materials. We will not disclose your vote to management
unless it is necessary to meet legal requirements. We will, however,
forward any written comments that you may have to management.

REVOKING YOUR PROXY

You may revoke your proxy at any time before it is exercised by:

* filing with the Clerk a letter revoking the proxy;
* submitting another signed proxy with a later date; or
* attending the Annual Meeting and voting in person, provided you
file a written revocation with the Secretary of the Annual
Meeting prior to the voting of such proxy.

If your shares are not registered in your own name, you will need
appropriate documentation from your shareholder of record to vote
personally at the Annual Meeting. Examples of such documentation include a
broker's statement, letter or other document that will confirm your
ownership of shares of Westborough Financial Services.

SOLICITATION OF PROXIES

Westborough Financial Services will pay the costs of soliciting
proxies from its shareholders. Directors, officers or employees of
Westborough Financial Services and Westborough Bank may solicit proxies by:

* mail;
* telephone; or
* other forms of communication.

We will also reimburse banks, brokers, nominees and other fiduciaries
for the expenses they incur in forwarding the proxy materials to you.

OBTAINING AN ANNUAL REPORT ON FORM 10-KSB

If you would like a copy of our Annual Report on Form 10-KSB and
audited financials for the year ended September 30, 2004, which will be
filed with the Securities and Exchange Commission ("SEC"), we will send you
one (without exhibits) free of charge. Please write to:

John L. Casagrande, Clerk
Westborough Financial Services, Inc.
100 East Main Street
Westborough, Massachusetts 01581

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS OF WESTBOROUGH FINANCIAL SERVICES

The following table contains common stock ownership information for
persons known to Westborough Financial Services to "beneficially own" 5% or
more of Westborough Financial Services' common stock as of December 6,
2004. In general, beneficial ownership includes those shares that a person
has the power to vote, sell or otherwise dispose. Beneficial ownership also
includes the number of shares that an individual has the right to acquire
within 60 days (such as stock options) after December 6, 2004. Two or more
persons may be considered the beneficial owner of the same shares. We
obtained the information provided in the following table from filings with
the SEC and with Westborough Financial Services. In this proxy statement,
"voting power" is the power to vote or direct the voting of shares, and
"investment power" includes the power to dispose or direct the disposition
of shares.

Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership(1) Percent
- --------------- -------------------------------- ----------------------- -------

<s> <c> <c> <c>
Common Stock Westborough Bancorp, MHC 1,027,893 64.6%
$0.01 par value 100 East Main Street
Westborough, Massachusetts 01581

<FN>
- --------------------
<F1> As reported by Westborough Bancorp, MHC in a Schedule 13D dated
February 15, 2000, which reported sole voting and dispositive power
with respect to 1,027,893 shares.
</FN>

SECURITY OWNERSHIP OF MANAGEMENT

The following table shows the number of shares of Westborough
Financial Services' common stock, par value $0.01 per share, beneficially
owned by each director, and all directors and executive officers of
Westborough Financial Services as a group, as of December 6, 2004. The
percent of common stock outstanding was based on a total of 1,591,174
shares of Westborough Financial Services' common stock outstanding as of
December 6, 2004, plus shares of common stock that such person or group has
the right to acquire within 60 days after December 6, 2004 by the exercise
of stock options. Except as otherwise indicated, each person and each group
shown in the table has sole voting and investment power with respect to the
shares of common stock listed next to their name.

Position with Amount and
Westborough Financial Nature Percent of
Services and Westborough of Beneficial Common Stock
Name Bank Ownership(1) Outstanding
- ------------------------- ----------------------------- ------------- ------------

<s> <c> <c> <c>
James N. Ball Director 700(2) *
Nelson P. Ball Director 1,250(3) *
Edward S. Bilzerian Director 4,250(4) *
Nancy M. Carlson Director 200 *
David E. Carlstrom Director 3,750(5) *
John L. Casagrande Senior Vice President, 5,107(6) *
Treasurer, Clerk and Director
Benjamin H. Colonero, Jr. Director 40 *
William W. Cotting, Jr. Director 2,250(7) *
Robert A. Klugman Director 4,650(8) *
Jeffrey B. Leland Nominee to Board of Directors 600 *
Roger B. Leland Director 7,950(9) *

<s> <c> <c> <c>
Joseph F. MacDonough President, Chief Executive 20,810(10) 1.3%
Officer and Director
Paul F. McGrath Director 5,650(11) *
Charlotte C. Spinney Director 2,840(12) *
Phyllis A. Stone Director 2,900(13) *
James E. Tashjian Director 4,250(14) *
All directors and executive
officers as a group
(19 persons)(15) 111,168 6.89%

<FN>
- --------------------
* Less than one percent of the total outstanding shares of common
stock.
<F1> Includes stock options that may be acquired by executive officers and
directors of Westborough Financial Services under the Westborough
Financial Services Inc. 2001 Stock Option Plan within 60 days after
December 6, 2004.
These amounts also include unvested restricted stock awards of 1,620
shares in the aggregate held by outside directors under the
Westborough Financial Services, Inc. 2001 Recognition and Retention
Plan. Under the plan, Messrs. Casagrande and MacDonough hold unvested
restricted stock awards of 800 and 1,520 shares of common stock,
respectively. Each holder of an unvested restricted stock award has
sole voting power but no investment power, except in limited
circumstances, over the common stock covered by the award. The
restricted stock awards will vest at the rate of 20% per year on each
April 30th following the date of grant, the first installment of
which vested on April 30, 2002.
<F2> Includes 700 shares held jointly with his spouse.
<F3> Includes options to purchase 800 shares vested and exercisable within
60 days of December 6, 2004. Excludes 3,500 shares held by his spouse
for which Mr. Ball disclaims beneficial ownership.
<F4> Includes options to purchase 800 shares vested and exercisable within
60 days of December 6, 2004.
<F5> Includes options to purchase 400 shares vested and exercisable within
60 days of December 6, 2004.
<F6> Includes 1,781 shares held in Westborough Bank's 401(k) plan and
options to purchase 1,800 shares vested and exercisable within 60
days of December 6, 2004.
<F7> Includes options to purchase 600 shares vested and exercisable within
60 days of December 6, 2004.
<F8> Includes 3,400 shares held in Mr. Klugman's individual retirement
account and options to purchase 800 shares vested and exercisable
within 60 days of December 6, 2004.
<F9> Includes 2,000 shares held in his spouse's individual retirement
account and options to purchase 1,000 shares vested and exercisable
within 60 days of December 6, 2004.
<F10> Includes: 1,741 shares held in Mr. MacDonough's individual retirement
account; 1,314 shares held in his spouse's individual retirement
account; 1,679 shares held in Westborough Bank's 401(k) plan; 3,500
shares held jointly with his spouse; and options to purchase 7,680
shares vested and exercisable within 60 days of December 6, 2004.
<F11> Includes 5,000 shares held in Mr. McGrath's individual retirement
account and options to purchase 200 shares vested and exercisable
within 60 days of December 6, 2004.
<F12> Includes: 1,500 shares held in Ms. Spinney's individual retirement
account; 90 shares held as custodian for a minor child under the
Uniform Transfer to Minors Act ("UTMA"); and options to purchase 800
shares vested and exercisable within 60 days of December 6, 2004.
<F13> Includes: 75 shares held by Ms. Stone as custodian under the UTMA;
1,500 shares held jointly with her spouse and options to purchase 800
shares vested and exercisable within 60 days of December 6, 2004.
<F14> Includes 3,000 shares held jointly with his spouse and options to
purchase 800 shares vested and exercisable within 60 days of December
6, 2004.

(Footnotes continued on next page.)

<F15> The Westborough Financial Services, Inc. Employee Stock Ownership
Plan ("ESOP") is administered by the ESOP committee of Westborough
Financial Services (the "ESOP Committee"). The ESOP's assets are held
in a trust (the "ESOP Trust"), for which First Bankers Trust serves
as trustee (the "ESOP Trustee"). The ESOP Trust purchased these
shares with funds borrowed from Westborough Financial Services,
initially placed these shares in a suspense account for future
allocation to be allocated to employees participating in the ESOP
over a period of years as its acquisition debt is retired. The ESOP
Trustee is the beneficial owner of the shares held in the ESOP Trust.
The terms of the ESOP Trust Agreement provide that, subject to the
ESOP Trustee's fiduciary responsibilities under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the
ESOP Trustee will vote, tender or exchange shares of common stock
held in the ESOP Trust in accordance with instructions received from
the participants. As of December 6, 2004, 11,788 shares held by the
ESOP Trust have been released for allocation. The ESOP Trustee will
vote allocated shares as to which no instructions are received and
any shares that have not been allocated to participants' accounts in
the same proportion as allocated shares with respect to which the
ESOP trustee receives instructions are voted. The ESOP Trustee will
tender or exchange any shares in the suspense account or that
otherwise have not been allocated to participants' accounts in the
same proportion as allocated shares with respect to which the ESOP
Trustee receives instructions are tendered or exchanged, but
otherwise has no disposition power.
This amount also includes shares held in trust pursuant to the
ESOP that have been allocated to individual accounts as follows: 726
shares to Mr. Casagrande and 1,096 shares to Mr. MacDonough. The
amount of shares for all directors and executive officers as a group
also includes 32,412 shares held by the ESOP Trust that have not been
allocated to eligible employees as of December 6, 2004, over which
the ESOP Committee (consisting of Ms. Carlson and Messrs. Carlstrom,
Klugman and Leland) may be deemed to have sole investment power,
except in limited circumstances, thereby causing each committee
member to be a beneficial owner of such shares. Each of the members
of the ESOP Committee disclaims beneficial ownership of such shares
and accordingly, such shares are not attributed to the members of the
ESOP Committee individually.
This amount does not include those shares held by Jeffrey B.
Leland, nominee to the Board of Directors.
</FN>

DISCUSSION OF PROPOSALS RECOMMENDED BY BOARD

___________________________________

PROPOSAL 1

ELECTION OF DIRECTORS

___________________________________

GENERAL

The Nominating Committee has nominated six persons for election as
directors at the Annual Meeting. If you elect the nominees, they will hold
office for the term set forth opposite their names or until their
successors have been elected.

We know of no reason why any nominee may be unable to serve as a
director. If any nominee is unable to serve, your proxy may vote for
another nominee proposed by the Board. If for any reason these nominees
prove unable or unwilling to stand for election, the Board will nominate
alternates or reduce the size of the Board of Directors to eliminate the
vacancy. The Board has no reason to believe that its nominees would prove
unable to serve if elected.

NOMINEES AND CONTINUING DIRECTORS

Position(s) Held
with Westborough
Nominees Age(1) Term Expires Financial Services Director Since(2)
- ------------------------- ------ ---------------- ---------------------------- -----------------

<s> <c> <c> <c> <c>
Edward S. Bilzerian 71 2008 Director 1993
Jeffrey B. Leland 39 2007(3) Director n/a
Paul F. McGrath 58 2008 Director 1993
Charlotte C. Spinney 68 2008 Director 1991
Phyllis A. Stone 61 2008 Director 1999
James E. Tashjian 63 2008 Director 1973

Continuing Directors
- --------------------

James N. Ball 42 2006 Director 2003
Nelson P. Ball 73 2007 Director 1980
Nancy M. Carlson 58 2007 Director 2003
Benjamin H. Colonero, Jr. 56 2007 Director 2003
Joseph F. MacDonough 58 2007 President, Chief Executive
Officer and Director 1982
David E. Carlstrom 70 2006 Director 1976
John L. Casagrande 58 2006 Senior Vice President, Chief 1994
Financial Officer, Clerk and
Director
William W. Cotting, Jr. 58 2006 Director 1988
Robert A. Klugman 53 2006 Director 1991

Retiring Directors(4)
- ---------------------
Roger B. Leland 75 2007 Director 1974

<FN>
- --------------------
<F1> As of September 30, 2004.

(Footnotes continued on next page.)

<F2> Includes service as a trustee of Westborough Bank prior to the
formation of Westborough Financial Services in 2000.
<F3> As permitted by the Company's Bylaws, Jeffrey B. Leland is being
elected for a two-year term to fill a vacancy created by the
retirement of Director Roger B. Leland.
<F4> Director Roger B. Leland is retiring effective as of the 2005 Annual
Meeting due to a director age limitation clause under the Company's
Bylaws, which provides for mandatory retirement of a director,
effective at the Annual Meeting following the director's 75th
birthday.
</FN>

The principal occupation and business experience of each nominee for
election as director and each continuing director are set forth below.
Unless otherwise indicated, each of the following persons has held his or
her present position for the last five years.

NOMINEES

Edward S. Bilzerian is retired from Bilzerian Consulting Group, Inc.,
a privately held company located in Worcester, Massachusetts, specializing
in small business turnarounds, where he served as president. Prior to that,
he was Vice President of Marketing and Finance at Bay State Abrasive's
Division of Dresser Industries. He has been self-employed for over 18
years. Mr. Bilzerian also serves as a member of the Worcester Airport
Commission and Chairman of the Worcester Health and Hospital Authority.

Jeffrey B. Leland has practiced estate administration, elder law and
real estate law and other general practices of law at Leland Law
Associates, P.C. for 13 years. At the same time, he has also served as an
insurance broker selling property and casualty insurance through Leland
Insurance Agency, Inc. Both Leland Law Associates, P.C. and Leland
Insurance Agency, Inc. are located in Northborough, Massachusetts. Mr.
Leland is an officer and director of both of the corporations. He is also
the son of Roger B. Leland, a member of the Board of Directors of
Westborough Bank. Mr. Leland was recommended to the Nominating Committee by
a non-management director.

Paul F. McGrath is a certified public accountant and has served as
President of Mottle McGrath Braney & Flynn, P.C. for over ten years. Mottle
McGrath is a certified public accounting firm, located in Worcester,
Massachusetts, that provides accounting, tax and business advisory services
throughout central New England.

Charlotte C. Spinney is a retired social studies teacher. Ms. Spinney
taught at Westborough High School for 41 years and, during that time, she
created the curriculum for the community service component of the school's
Sociology course.

Phyllis A. Stone served as Vice President and Treasurer of Comey Oil
Co., Inc., located in Westborough, Massachusetts, for 13 years prior to her
retirement in 2001. Ms. Stone served in various other capacities within
Comey Oil for over 30 years. Ms. Stone is currently President of Schenker
Properties, Inc., a real estate holding company based in Westborough,
Massachusetts. She is past Treasurer of the Regatta Point Community Sailing
Inc. of Worcester, Massachusetts.

James E. Tashjian is a partner in the law firm of Tashjian, Simsarian
& Wickstrom, located in Worcester, Massachusetts. He has engaged in the
general practice of law for over 30 years.

CONTINUING DIRECTORS

James N. Ball is the sole owner of Secure Futures, Inc., which has
operated in Westborough for nearly 20 years (as a sole proprietor prior to
1999). Mr. Ball is a financial services specialist and a

member of the National Association of Securities Dealers. Mr. Ball assists
individuals and small business owners in a broad range of financial
decision-making. Mr. Ball is the son of Nelson P. Ball, also a member of
the Board of Directors.

Nelson P. Ball is the owner of Ball Financial Services, Co., located
in Westborough, Massachusetts. He has served as a financial services
consultant for over 39 years. Mr. Ball is the father of James N. Ball, also
a member of the Board of Directors.

Nancy M. Carlson is the owner and president of Suburban Staffing,
Inc., a full-service staffing firm located in Westborough, Massachusetts
since 1968. She purchased the company in 1994 and has grown in size and
services to include consulting services, automated data management and
conversions. Ms. Carlson is a past president of the Corridor Nine Area
Chamber of Commerce where she continues to serve on the Board of Directors.
She is a former member of the board of Directors for the Better Business
Bureau and is currently a Corporator for the Greater Worcester Community
Foundation.

David E. Carlstrom is the former President of Carlstrom Pressed Metal
Company, Inc. and now serves as a consultant to the family owned company.
Carlstrom Pressed Metal is a contract manufacturer of metal stamps located
in Westborough for 54 years.

John L. Casagrande has served as the Senior Vice President and Chief
Financial Officer of Westborough Bank since 1993 and of Westborough
Financial Services since its inception in 2000. He joined Westborough Bank
after having been employed as a senior bank officer and certified public
accountant for over 15 years at various times by several financial
institutions (including mutual and stock institutions) and the accounting
firm of Peat Marwick. Mr. Casagrande has been serving as Clerk of
Westborough Financial Services since 2001. Mr. Casagrande serves as a
director of the Massachusetts Bank Insurance Association, a division of the
Massachusetts Bankers Association.

Benjamin H. Colonero, Jr. has served as chief financial officer and
executive director in the healthcare industry for over 20 years. Mr.
Colonero is currently the executive director of the Westborough campus of
the Salmons Family of Services, which serves the health and social needs of
over 400 seniors.

William W. Cotting, Jr. has been an attorney in private practice for
over 20 years. His practice is primarily devoted to tax law, trusts, and
real estate. His practice is located in Shrewsbury, Massachusetts.

Robert A. Klugman, M.D., F.A.C.P. has practiced general medicine in
Westborough, Massachusetts for over 20 years. Dr. Klugman is currently an
Associate Professor of Clinical Medicine at the University of Massachusetts
Medical School as well as Division Chief of Community Internal Medicine at
the UMASS/Memorial.

Joseph F. MacDonough has served as President and Chief Executive
Officer of Westborough Bank since 1994 and of Westborough Financial
Services since its inception in 2000. He joined Westborough Bank in 1981
and served as Vice President and Treasurer until his appointment as
President. Mr. MacDonough serves on the Board of Directors of the
Massachusetts Bankers Association.

RETIRING DIRECTORS

Roger B. Leland has practiced estate, tax and real estate law at
Leland Law Associates for over 30 years. During that time, he also served
as an insurance broker, selling life and casualty insurance products,
through Leland Insurance Agency, Inc. Leland Law Associates and Leland
Insurance Agency are located in Northborough, Massachusetts. Mr. Leland is
the father of Jeffrey B. Leland who has been nominated to serve as a member
of the Board of Directors.

===========================================================================
The Board of Directors unanimously recommends a vote "FOR" all of the
nominees for election as directors.
===========================================================================

INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT

BOARD OF DIRECTORS

Westborough Financial Services's Board of Directors currently
consists of 15 members. Westborough Financial Services's Articles of
Organization provides that the Board shall be divided into three classes.
The Board of Directors has nominated six directors for election at the 2005
Annual Meeting.

The Board of Directors oversees our business and monitors the
performance of our management. In accordance with our corporate governance
procedures, the Board of Directors does not involve itself in the day-to-
day operations of Westborough Financial Services. Westborough Financial
Services's executive officers and management oversee the day-to-day
operations of Westborough Financial Services. Our directors fulfill their
duties and responsibilities by attending regular meetings of the Board,
which are held on a monthly basis. Our directors also discuss business and
other matters with the Chairman, other key executives and our principal
external advisers (legal counsel, auditors, financial advisors and other
consultants).

The Board of Directors held 12 regular meetings and no special
meetings during the fiscal year ended September 30, 2004. Each incumbent
director, with the exception of Edward R. Bilzarian whose absences were
excused by the Board, attended at least 75% of the meetings of the Board of
Directors, plus meetings of committees on which that particular director
served during this period.

CORPORATE GOVERNANCE

Westborough Financial Services and Westborough Bank are committed to
establishing and maintaining high standards of corporate governance. Our
executive officers and the Board have worked together to construct a
comprehensive set of corporate governance initiatives that we believe will
serve the long-term interests of our stockholders and employees. As
discussed in more detail below, we believe these initiatives comply fully
with the Sarbanes-Oxley Act of 2002 and the rules and regulations of the
SEC adopted thereunder. In addition, we believe our corporate governance
initiatives fully comply with the reform proposals made by The Nasdaq Stock
Market. The Board will continue to evaluate, and improve upon as
appropriate, our corporate governance principles and policies.

CODE OF ETHICS

The Board has adopted a Code of Ethics and Conflicts of Interest
Policy that applies to each of our directors, officers and employees. The
Code of Ethics sets forth our policies and expectations on a number of
topics, including:

* acceptance of gifts;

* financial responsibility regarding both personal and business
affairs, including loans or other transactions with Westborough
Bank;

* personal conduct, including ethical behavior and outside
employment and other activities;

* affiliated transactions, including separate identities and
usurpation of corporate opportunities;

* preservation and accuracy of Westborough Financial Service's
and Westborough Bank's records;

* compliance with laws, including insider trading compliance;

* preservation of confidential information relating to our
business and that of our clients;

* conflicts of interest;

* the safeguarding and proper use of our assets and institutional
property;

* code administration and enforcement;

* reporting, investigating and resolving of all code violations;
and

* code-related training, certification of compliance and
maintenance of code-related records.

The Audit Committee will review the Code of Ethics on a regular basis, and
propose or adopt additions or amendments to the Code of Ethics as
appropriate. The Code of Ethics is posted on our website.

CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

The Board has adopted a Code of Ethics for Senior Financial Officers
that applies to each of our senior financial officers, including our
principal executive officer, principal financial officer and principal
accounting officer. The Code of Ethics for Senior Financial Officers sets
forth our policies and expectations on a number of topics, including:

* personal conduct, including ethical behavior and personal
integrity;

* conflicts of interest;

* compliance with laws, rules and regulations;

* preservation of confidential information;

* proper use of corporate assets and opportunities; and

* compliance and compliance monitoring.

The Audit Committee will review the Code of Ethics for Senior Financial
Officers on a regular basis, and propose or adopt additions or amendments
to the Code of Ethics for Senior Financial Officers as appropriate. The
Code of Ethics for Senior Financial Officers is posted on our website.

Independent Directors

The Nasdaq Stock Market's rules include a requirement that a majority
of directors of Nasdaq Stock Market-listed companies be "independent." For
a director to be "independent" under The Nasdaq Stock Market's rules, the
director must not be an officer or employee of Westborough Financial
Services, Inc. or any of its subsidiaries, and must not have a relationship
that, in the opinion of the Board of

Directors, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. The Nasdaq Stock Market's
rules also expressly provide that the following persons cannot be
considered independent:

* a director who is, or during the past three years was, employed
by Westborough Financial Services or by any subsidiary of
Westborough Financial Services;

* a director who accepts or who has a family member who accepts
any payments from Westborough Financial Services or any
subsidiary of Westborough Financial Services in excess of
$60,000 during the current fiscal year or any of the past three
fiscal years, other than (a) payments for board service, (b)
payments arising solely from investments in Westborough
Financial Services' securities, (c) compensation paid to a
family member who is a non-executive employee of Westborough
Financial Services, (d) benefits under a tax-qualified
retirement plan, or non-discretionary compensation or (e) loans
to directors and executive officers permitted under Section
13(k) of the Exchange Act;

* a director who is a family member of an individual who is, or
during the past three years was, employed by Westborough
Financial Services or by any subsidiary of Westborough
Financial Services as an executive officer;

* a director who is, or has a family member who is, a partner in,
or a controlling stockholder or an executive officer of, any
organization to which Westborough Financial Services made, or
from which Westborough Financial Services received, payments
for property or services (other than those arising solely from
investments in Westborough Financial Services' securities or
payments under non-discretionary charitable contribution
matching schemes) that exceed 5% of the recipient's
consolidated gross revenues for that year, or $200,000,
whichever is more, in the current fiscal year or any of the
past three fiscal years;

* a director of Westborough Financial Services who is employed,
or has a family member who is employed, as an executive officer
of another entity where any of the officers of Westborough
Financial Services serve on the compensation committee of such
other entity, or if such relationship existed during the past
three years; or

* a director who is, or has a family member who is, a current
partner of Westborough Financial Services' outside auditor, or
was a partner or employee of Westborough Financial Services'
outside auditor, and worked on Westborough Financial Services'
audit during the past three years.

The Board of Directors has determined that all of the Board's current
non-management members, a majority of the board, are "independent"
directors for the purposes of The Nasdaq Stock Market's rules.

Consistent with The Nasdaq Stock Market's rules, independent
directors meet in regularly scheduled executive sessions without non-
independent directors. The independent directors have selected James E.
Tashjian to serve as the presiding director at the executive sessions for
the 2005 fiscal year. The presiding director will take a lead role in the
Board's self-evaluation process.

The Nasdaq Stock Market's rules, as well as recently adopted SEC
rules, impose additional independence requirements for all members of the
Audit Committee. The Nasdaq Stock Market's rules add to the "independence"
requirement for audit committee membership the requirement that directors
(1) be able to read and understand fundamental financial statements,
including Westborough Financial Services' balance sheet, income statement,
and cash flow statement, and (2) not have participated in the preparation
of the financial statements of Westborough Financial

Services or any of its subsidiaries at any time during the past three
years. The Board of Directors believes that the current members of the
Audit Committee meet these additional standards for independence.
Furthermore, the Securities and Exchange Commission requires that
Westborough Financial Services certify that the Audit Committee has, and
will continue to have, at least one member as a "financial expert" who has
past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background that results in the individual's financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities.
The Board of Directors has determined that Paul F. McGrath meets the
definition of an audit committee financial expert.

In addition, SEC rules for determining whether an audit committee
member is "independent" set forth two basic criteria. First, audit
committee members would be barred from accepting - directly or indirectly -
any consulting, advisory or other compensatory fee from the issuer or an
affiliate of the issuer, other than in the member's capacity as a member of
the board of directors and any board committee. The SEC indicated that
payments for services to law firms, accounting firms, consulting firms,
investment banks or similar entities in which audit committee members are
partners or hold similar positions are the kinds of compensatory payments
that were intended to be precluded. The second basic criterion for
determining independence provides that a member of an audit committee of a
company may not be an affiliated person of the issuer or any subsidiary of
the issuer apart from his or her capacity as a member of the board and any
board committee. For this purpose, designees of affiliated persons are also
disqualified.

COMMITTEES OF THE BOARD

The Board of Directors of Westborough Financial Services has
established the following committees:

EXECUTIVE The Executive Committee exercises the powers of the Board
COMMITTEE of Directors in between Board meetings.

Directors Carlstrom, Klugman, Leland, MacDonough, McGrath
and Tashjian currently serve as members of the committee.
Mr. MacDonough is the Chairman of the Committee. The
Executive Committee met 25 times in the 2004 fiscal year.

COMPENSATION The Compensation Committee provides advice and
COMMITTEE recommendations to the Board of Directors in the areas of
employee salaries and benefit programs.

Directors Carlson, Carlstrom, Klugman and Leland currently
serve on the committee. Mr. Carlstrom is the Chairman of
the Committee. The Compensation Committee met 5 times in
the 2004 fiscal year.

LONG RANGE The Long Range Planning Committee sets long-range goals
PLANNING and objectives and develops plans for their achievement.
COMMITTEE
Directors Carlson, Carlstrom, Klugman, Leland, MacDonough,
McGrath, Casagrande and Tashjian currently serve on the
committee. Dr. Klugman is the Chairman of the Committee.
The Long Range Planning Committee met 7 times in the 2004
fiscal year.

NOMINATING The Nominating and Corporate Governance Committee (the
AND CORPORATE "Nominating Committee") reviews and recommends nominees
GOVERNANCE for election as directors and develops and recommends to
COMMITTEE the Board of Directors corporate governance guidelines.

Directors Carlstrom, Leland and McGrath currently serve on
the Nominating Committee. Each of the members is
independent as defined by the Nasdaq rules. Mr. McGrath is
the Chairman of the Committee. The Board of Directors has
adopted a Charter for the Nominating Committee, a copy of
which is attached hereto as Appendix A. The Nominating
Committee met three times in the 2004 fiscal year.

As set forth in Westborough Financial Services's Bylaws,
it is the policy of the Nominating Committee to consider
director candidate recommended by shareholders.
Recommendations for the 2006 annual meeting should be
submitted no later than August 29, 2005 to the Nominating
Committee in care of the Clerk of Westborough Financial
Services, Inc., 100 East Main Street, Westborough,
Massachusetts 01581. Each recommendation should include a
personal biography of the suggested nominee, an indication
of the background or experience that the shareholder
believes qualifies the person for consideration, a
statement that the person has agreed to serve if nominated
and elected, and any other information required under the
Company's Bylaws.

The Nominating Committee has used an informal process to
identify potential candidates for nomination as directors.
Candidates for nomination have been recommended by the
Long Range Planning Committee, and considered by the
Nominating Committee and the Board of Directors. In
evaluating candidates for nomination, the Committee will
consider the factors it believes to be appropriate, which
include the candidate's personal and professional
integrity, knowledge of the banking business, business
judgment, relevant experience and skills, involvement in
community, business and civic affairs, and potential to be
an effective director in conjunction with the rest of the
Board of Directors in collectively serving the long-term
interests of the Company's shareholders. Although the
Nominating Committee has the authority to retain a search
firm to assist it identify director candidates, there has
to date been no need to employ a search firm. The
Nominating Committee does not evaluate potential nominees
for director differently based on whether they are
recommended to the Committee by a security holder, an
officer, a director or any other person.

AUDIT The Audit Committee reviews the annual audit prepared by
COMMITTEE the independent accountants and recommends the appointment
of accountants. The board of directors of Westborough
Financial Services has adopted a written charter for the
Audit Committee, which is attached hereto as Appendix B.

Directors Bilzerian, Colonero, Cotting and McGrath
currently serve as members of the committee. Mr. Cotting
is the Chairman of the Committee. Mr. McGrath has been
determined by the Board of Directors to meet the
definition of an "audit committee financial expert" as
such term is defined in Section 401(e) of Regulation S-B
as promulgated by the U.S. Securities and Exchange
Commission. In addition, all members of the Audit
Committee are independent directors as defined under The
Nasdaq Stock Market listing standards.

The Audit Committee met 5 times in the 2004 fiscal year.

AUDIT COMMITTEE REPORT

WESTBOROUGH FINANCIAL SERVICES, INC. AUDIT COMMITTEE REPORT

The following Audit Committee Report is provided in accordance with
the rules and regulations of the Securities and Exchange Commission (the
"SEC"). Pursuant to such rules and regulations, this report shall not be
deemed "soliciting materials," filed with the SEC, subject to Regulation
14A or 14C of the SEC or subject to the liabilities of section 18 of the
Securities Exchange Act of 1934, as amended.

The Audit Committee has reviewed and discussed the audited financial
statements with management. The committee has also reviewed and discussed
with Wolf & Company, P.C., their independent auditors the matters required
to be discussed by SAS 61, as may be modified or supplemented.

The Audit Committee also has received the written disclosures and the
letter from the independent accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board Standard No.1,
Independence Discussions with Audit Committee), as may be modified or
supplemented, and has discussed with Wolf & Company, P.C. its independence.

Based on the foregoing discussions, the Audit Committee recommended
to the Board of Directors of Westborough Financial Services that the
audited financial statements be included in Westborough Financial
Services's Annual Report on Form 10-KSB for the year ended September 30,
2004.

Audit Committee of Westborough

Financial Services, Inc.

William W. Cotting, Jr. (Chairman)
Edward S. Bilzerian
Benjamin H. Colonero, Jr.
Paul F. McGrath

SHAREHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS AND ATTENDANCE AT
ANNUAL MEETINGS

The Board of Directors maintains a process for shareholders to
communicate with the Board and its committees. Shareholders of Westborough
Financial Services and other interested persons may communicate with the
Board or the Chairperson of the Nominating Committee, Audit Committee or
Compensation Committee or Executive Committee by writing to the Clerk of
Westborough Financial Services, Inc., 100 East Main Street, Westborough,
Massachusetts 01581. All communications that relate to matters that are
within the scope of the responsibilities of the Board will be presented to
the Board no later than the next regularly scheduled meeting.
Communications that relate to matters that are within the responsibility of
one of the Board committees will be forwarded to the Chairperson of the
appropriate committee. Communications that relate to ordinary business
matters that are not within the scope of the Board's responsibilities, such
as customer complaints, will be forwarded to the appropriate officer.
Solicitations, junk mail and obviously frivolous or inappropriate
communications are not forwarded, but will be made available to any
director who wishes to review them.

Directors are expected to prepare themselves for and attend all Board
meetings, the Annual Meeting of Shareholders and the meetings of the
committees on which they serve, with the understanding that on occasion a
director may be unable to attend a meeting. All of our directors attended
our 2004 Annual Meeting.

DIRECTORS' COMPENSATION

Meeting Fees. Currently, each non-employee director of Westborough
Bank receives the following fees:

* $250 per Board of Directors meeting attended; and

* $250 per committee meeting attended, with the Chairman of each
committee receiving a fee of $275.

In addition, Directors Carlstrom, Klugman, Leland (Roger), McGrath
and Tashjian receive an annual retainer of $5,000 as members of the
Executive Committee. Directors Bilzerian, Colonero and Cotting receive an
annual retainer of $3,500 as members of the Audit Committee. Directors Ball
(James), Ball (Nelson), Carlson, Spinney and Stone receive an annual
retainer of $2,500.

Total directors' meeting and committee fees for fiscal year 2004 were
$164,250. We do not compensate our employee-directors for service as
directors. Directors are also entitled to the protection of certain
indemnification provisions in our Articles of Organization.

Stock Option Plan and Recognition and Retention Plan. Our directors
(except Ball (J.), Carlson and Colonero) are eligible to participate in the
Westborough Financial Services, Inc. 2001 Stock Option Plan and the
Westborough Financial Services, Inc. 2001 Recognition and Retention Plan.
These stock benefit plans are discussed under "- Benefit Plans - 2001 Stock
Option Plan" and "- 2001 Recognition and Retention Plan."

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

Biographical information and the business experience of each non-
director executive officer of Westborough Financial Services and
Westborough Bank are set forth below.

In addition to Messrs. Casagrande and MacDonough, Westborough
Financial Services and Westborough Bank have the following executive
officers:

Michael D. Allard, age 42, is Vice President of Marketing and Retail
Sales of Westborough Bank, a position he has held since 2001. Prior to
joining Westborough Bank in 2001, he served as Senior Vice President of
Sales, Marketing and Branch Administration at Ipswich Bank, a position he
held from 2000 to 2001. Prior to that, from 1996 to 2000, he served as Vice
President and Regional Sales and Marketing Coordinator of US Trust Bank.
Mr. Allard has over 17 years retail banking experience.

Vickie A. Bouvier, age 47, currently serves as Senior Vice President
and Senior Operations Officer of Westborough Bank. She has worked for
Westborough Bank in various capacities since 1976. In 2001, she was named
Senior Vice President and Senior Operations Officer. Prior to that, she
served as Vice President and Senior Operations Officer.

Margaret I. Duquette, age 52, has worked for Westborough Bank as its
Vice President - Director of Human Resources since 1997. Prior to 1997, she
held the position of Director of Human Resources at Bay State Savings Bank
in Worcester, Massachusetts where she worked for 19 years.

Robert K. McCann, age 47, currently serves as the Senior Vice
President and Senior Lender of Westborough Bank. Mr. McCann joined
Westborough Bank in 1999 as Assistant Vice President, Commercial Lending.
Prior to joining Westborough Bank, he worked in a similar capacity at
Citizens-Union Savings Bank, located in Massachusetts. Mr. McCann has over
23 years of finance and banking experience.

EXECUTIVE COMPENSATION

The following table sets forth compensation paid during the fiscal
year ended September 30, 2004 to the Chief Executive Officer of Westborough
Financial Services and Westborough Bank and to the other most highly
compensated executive officers of Westborough Financial Services and
Westborough Bank whose salary and bonus for 2004 was at least $100,000. We
refer to these individuals as "named executive officers" in this proxy
statement. During the most recent year, ownership of split dollar life
insurance policies was transferred from individual executives to the Bank
resulting in a significant decrease in reported income to the executives.

Summary Compensation Table

Long Term Compensation
------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------ --------------------- -----------------------
Other Restricted
Annual Stock LTIP All Other
Name and Principal Bonus Compensation Awards Options Payouts Compensation
Positions Year Salary($) ($) ($)(1) ($) (#) ($) ($)(2)
- ------------------------ ---- --------- ------ ----------- ---------- ------- ------- ------------

<s> <c> <c> <c> <c> <c> <c> <c> <c>
Joseph F. MacDonough 2004 $216,827 - - - - - $23,682
President and Chief 2003 $209,386 $6,500 - - - - $98,185
Executive Officer 2002 $206,259 - - - - - $96,769

John L. Casagrande 2004 $120,600 $ - - - - - $14,404
Senior Vice President, 2003 $108,306 $4,000 - - - - $52,071
Treasurer and Clerk 2002 $110,276 - - - - - $53,636

<FN>
- --------------------
<F1> Westborough Bank provides Mr. MacDonough with certain non-cash
benefits and perquisites, such as the use of an automobile, club
membership dues and certain other personal benefits, the aggregate
value of which did not exceed the lesser of $50,000 or 10% of the
total annual salary and annual bonus reported for him in the Summary
Compensation Table.
<F2> Includes the dollar value of the benefit of the following components:
(1) premiums paid by Westborough Bank under their split dollar life
and group term life insurance arrangements during 2004: Mr.
MacDonough, $6,857 and Mr. Casagrande, $3,580; (2) contributions on
behalf of Westborough Bank's 401(k) plan during 2004: Mr. MacDonough,
$5,919 and Mr. Casagrande, $3,625; (3) allocations of common stock
under the ESOP during 2004: Mr. MacDonough, $9,004 and Mr.
Casagrande, $7,199; and (4) accruals under the benefit restoration
plan for Mr. MacDonough during 2004 were $1,902.
</FN>

Employment Agreements. Westborough Financial Services had entered
into separate employment agreements with Messrs. MacDonough and Casagrande
to secure their services as President and Chief Executive Officer, and
Senior Vice President and Treasurer, respectively. The employment
agreements provide for an initial term of three years in the case of Mr.
MacDonough, and two years in the case of Mr. Casagrande. Commencing on the
first anniversary of the effective date of each agreement, and continuing
on each anniversary date thereafter, the employment agreements may be
extended, after review by the Compensation Committee of the Board of the
executive's performance, for an additional one-year period, so that the
remaining term will be three years in the case of Mr. MacDonough, and two
years in the case of Mr. Casagrande.

The employment agreements provide for each executive's base salary to
be reviewed annually by the Board. Each executive's base salary may be
adjusted based on his job performance and the overall performance of
Westborough Financial Services and Westborough Bank. In addition to base
salary, each employment agreement provides for participation in stock,
retirement and welfare benefit plans, and eligibility for fringe benefits
applicable to executive personnel. Mr. MacDonough's agreement provides for
the reimbursement of his ordinary and necessary business expenses, which
specifically include travel and entertainment expenses, expenses related to
the use of an automobile, and fees for membership in clubs and
organizations that he and Westborough Financial Services agree are for
business purposes. Mr. Casagrande's agreement provides for the
reimbursement of his ordinary and necessary business expenses, which
specifically include certain travel and entertainment expenses.

Westborough Financial Services may terminate each executive's
employment at any time with or without cause, and each executive may resign
at any time provided he provides 30 days' prior written notice and fully
cooperates in the transition of his duties. In the event an executive's
employment is terminated without cause during the term of the employment
agreement, the executive will be entitled to severance benefits. These
severance benefits include a lump sum payment equal to the present value of
the base salary and bonus payments that would have been made to the
executive for the remaining term of his employment agreement, assuming the
executive would have been awarded a bonus for each year remaining in the
agreement term equal to the highest annual bonus paid to him in the
preceding three-year period and paid his base salary during the remaining
agreement term at the annual rate in effect as of the termination. In
addition, the executive would be entitled to continue his participation in
the group life, health, dental, accidental death and long-term disability
plans sponsored by Westborough Bank for the remaining term of his
employment agreement. The same severance benefits would be payable if the
executive resigns during the term of the employment agreement following:
(1) failure of the Board to reappoint the executive to the position
provided for in his employment agreement; (2) failure of Westborough
Financial Services to vest in the executive the duties set forth in the
agreement; and (3) Westborough Financial Services's material breach of the
agreement. The employment agreements also provide certain uninsured
benefits in the event the executive's employment terminates because of
death or disability.

Under his employment agreement, Mr. MacDonough agrees that for the
three-year period following his termination of employment, he will not take
a position with any competitor that would require him to work within a 50
mile radius of the headquarters of Westborough Financial Services or
Westborough Bank. Mr. Casagrande agrees under his employment agreement that
for a period of two years following his termination of employment he will
not take a position with any competitor that would require him to work
within a 30 mile radius of the headquarters of Westborough Financial
Services or Westborough Bank.

Change in Control Provisions. In the event Mr. MacDonough or Mr.
Casagrande resigns for any reason or is terminated without cause following
a change in control of Westborough Financial Services or Westborough Bank,
he will be entitled to certain severance benefits. These severance benefits
include a

lump sum payment equal to the present value of the base salary and bonus
payments that would have been made to the executive for the remaining term
of his employment agreement, assuming the executive would have been awarded
a bonus for each year remaining in the agreement term equal to the highest
annual bonus paid to him in the preceding three-year period and paid his
base salary during the remaining agreement term at the annual rate in
effect as of the termination. However, in no event will the amount of this
lump sum payment be less than 2.99 multiplied by the executive's average
annual compensation for the preceding five years. In addition, the
executive will be entitled to continue his participation in the group life,
health, dental, accidental death and long-term disability plans sponsored
by Westborough Bank for the remaining term of his employment agreement. A
second-step conversion will not trigger additional benefits or accelerate
benefits under the employment agreements or under any other arrangement.

If Westborough Financial Services or Westborough Bank experiences a
change in ownership, a change in effective ownership or control or a change
in the ownership of a substantial portion of their assets as contemplated
by section 280G of the Internal Revenue Code of 1986 (the "Code"), a portion
of any severance payments under the employment agreements might constitute an
"excess parachute payment" under current federal tax laws. Any excess
parachute payment would be subject to a 20% federal excise tax payable by the
executive. Neither Westborough Bank nor Westborough Financial Services could
claim a federal income tax deduction for an excess parachute payment. The
employment agreements require Westborough Financial Services to indemnify
each executive against the financial effects of the excise tax.

BENEFIT PLANS

Pension Plans. Westborough Bank maintains a tax-qualified pension
plan that covers substantially all employees who have attained age 21 and
have at least one year of service. The following table shows the estimated
aggregate benefits payable under the pension plan upon retirement at age 65
with various years of service and average compensation combinations.

Years of Service
Average --------------------------------------------------------------
Compensation 10 15 20 25 30 35
- ------------ ------- ------- ------- ------- ------- -------

<s> <c> <c> <c> <c> <c> <c>
$100,000 $15,723 $23,584 $31,446 $39,307 $39,307 $39,307
$120,000 $19,423 $29,134 $38,846 $48,557 $48,557 $48,557
$125,000 $20,348 $30,522 $40,696 $50,870 $50,870 $50,870
$140,000 $23,123 $34,684 $46,246 $57,807 $57,807 $57,807
$150,000 $24,973 $37,459 $49,946 $62,432 $62,432 $62,432
$160,000 $26,823 $40,234 $53,646 $67,057 $67,057 $67,057
$175,000 $29,598 $44,397 $59,196 $73,995 $73,995 $73,995
$200,000 $34,223 $51,334 $68,446 $85,557 $85,557 $85,557
$300,000 $35,148 $52,722 $70,296 $87,870 $87,870 $87,870
$400,000 $35,148 $52,722 $70,296 $87,870 $87,870 $87,870

The benefits shown in the preceding table are annual benefits payable
in the form of a single life annuity and are not subject to any deduction
for Social Security benefits or other offset amounts. At September 30,
2004, Mr. MacDonough's and Mr. Casagrande's average compensation and
estimated years of service were $200,000 and 26.75 years of service and
$138,787 and 10.75 years of service, respectively.

Mr. MacDonough and Mr. Casagrande are entitled to supplemental
retirement benefits under an Executive Supplemental Compensation Agreement
each has entered into with Westborough Bank. Under each agreement, each
executive is entitled to an annual retirement benefit, payable at age 65 in
the form

of a single life annuity, equal to 70% of his benefit computation base, but
reduced by the sum of 2% multiplied by the executive's annual primary
Social Security benefit multiplied by his years of service, plus his annual
retirement benefit under any tax-qualified defined benefit pension plan,
plus the annual annuity payable to the executive under his Split Dollar
Agreement. Under the agreements, the executive's benefit computation base
is his average annual compensation during the twelve consecutive calendar
quarters in which his compensation is the highest.

Employee Stock Ownership Plan. This plan is a tax-qualified plan that
covers substantially all employees of Westborough Bank and Westborough
Financial Services who have at least one year of service and have attained
age 21.

The ESOP purchased 44,200 shares of common stock issued by
Westborough Financial Services in its mutual holding company reorganization
with borrowed funds. This loan is for a term of 15 years and calls for
level annual payments of principal and interest. The plan has pledged the
shares as collateral for the loan and holds them in a suspense account.

The plan will release a portion of the pledged shares annually,
allocating the shares released each year among the accounts of participants
in proportion to their salary for the year. For example, if a participant's
base salary for a year represents 1% of the total base salaries of all
participants for the year, the plan would allocate to that participant 1%
of the shares released for the year. Participants direct the voting of
shares allocated to their accounts. Shares in the suspense account will
usually be voted in a way that mirrors the votes which participants cast
for shares in their individual accounts.

This plan may purchase additional shares in the future, and may do so
using borrowed funds, cash dividends, periodic employer contributions or
other cash flow.

Benefit Restoration Plan. Westborough Financial Services has also
adopted a benefit restoration plan for Mr. MacDonough. This plan is
designed to provide Mr. MacDonough with the benefits that would otherwise
be earned by him as a participant in the 401(k) Plan and the ESOP if such
benefits were not limited by certain provisions of the Code. The benefit
restoration plan provides for a benefit equal in value to the allocations
under the ESOP and the 401(k) Plan that would have been made on Mr.
MacDonough's behalf but for these IRS limits, including employer matching
contributions that would have been made under the 401(k) Plan if Mr.
MacDonough had elected to make pre-tax contributions to the 401(k) Plan up
to the maximum percentage of salary permitted under the terms of the plan
and the annual IRS limit on pre-tax contributions did not apply.

Under the benefit restoration plan, a bookkeeping account has been
established for Mr. MacDonough that will be credited with a number of
"stock units" equal to the number of shares that could not be allocated on
his behalf under the ESOP each year because of the IRS limits. The value of
this supplemental ESOP bookkeeping account at any time is equal to the
number of stock units credited to the account multiplied by the current
fair market value per share. A bookkeeping account also has been
established for Mr. MacDonough which will be credited each year with an
amount equal to the employer matching contributions that could not be
allocated to his account under the 401(k) Plan because of the IRS limits.
Each year, this supplemental employer matching contribution bookkeeping
account will be credited with hypothetical investment earnings as if the
amount credited to the account were invested in certain investment funds
selected by the Compensation Committee.

Unless a different time or form of distribution is elected by Mr.
MacDonough within the 30-day period following the effective date of the
plan, the value of his supplemental employee stock ownership plan and
employer matching contribution bookkeeping accounts will be paid to him in
one lump sum cash payment as soon as possible following the end of the
calendar year in which his employment terminates.

The benefit restoration plan is an unfunded plan, and benefits payable
thereunder will be paid from the general assets of Westborough Financial
Services.

Officers' Deferred Compensation Plan. Westborough Financial Services
also maintains the Officers' Deferred Compensation Plan of Westborough
Financial Services, Inc., a non-qualified plan, in order to offer eligible
executives the opportunity to defer the receipt of a portion of their
income in a manner that defers the taxation of such income.

2001 Stock Option Plan. The Westborough Financial Services, Inc. 2001
Stock Option Plan (the "Stock Option Plan") was adopted by our Board of
Directors and approved by our shareholders at an annual meeting held on
January 25, 2001. Article IX of the Stock Option Plan, which allows for
acceleration of vesting upon retirement of the option holder or a change in
control of Westborough Financial Services, terms that are defined in the
plan, was approved by our shareholders at our 2002 Annual Meeting. No
additional options were granted to the named executive officers during the
2004 fiscal year.

The purpose of the Stock Option Plan is to encourage the retention of
key employees and directors by facilitating their purchase of a stock
interest in Westborough Financial Services. The Stock Option Plan is not
subject to ERISA and is not a tax-qualified plan. Westborough Financial
Services has reserved an aggregate of 55,348 shares of common stock for
issuance upon the exercise of stock options granted under the plan.

Awards typically vest and become distributable at the rate of 20% per
year, over a five year period, subject to automatic full vesting on the
date of the Award holder's death, disability, retirement or upon a change
in control of Westborough Financial Services.

Westborough Financial Services may amend or terminate the Stock
Option Plan, in whole or in part, at any time, subject to the requirements
of all applicable laws.

The following table provides the value for "in-the-money" options,
which represent the positive spread between the exercise price of any such
existing stock options and the closing price per share of the common stock
on September 30, 2004, the last trading day of the 2004 fiscal year for
Westborough Financial Services, which was $30.15 per share.

2004 Fiscal Year-End Option/SAR Values(1)
- ------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Value Underlying Unexercised In-the-Money
Shares Realized Options/SARs at Fiscal Options/SARs at Fiscal
Acquired on Year-End Year-End
on Exercise Exercise (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable(2)
- -------------------- ----------- -------- ------------------------- ----------------------------

<s> <c> <c> <c> <c>
Joseph F. MacDonough - - 5,760/3,840 114,267/76,178
John L. Casagrande - - 900/1,800 17,854/35,708

<FN>
- --------------------
<F1> All options were granted on January 25, 2001, and vest at the rate of
20% per year beginning on January 25, 2002.
<F2> The closing price per share of common stock on September 30, 2004,
the last trading day of the 2004 fiscal year, was $30.15, and all
options have an exercise price of $10.312 per share, which equals a
spread of $19.838 per share.
</FN>

2001 Recognition and Retention Plan. The Westborough Financial
Services, Inc. 2001 Recognition and Retention Plan (the "RRP") was adopted
by our Board of Directors and approved by our shareholders at an annual
meeting held on January 25, 2001. Article X of the RPP, which allows for
acceleration of vesting upon retirement or change in control of Westborough
Financial Services, terms which are defined in the plan, was approved by
our shareholders at our 2002 Annual Meeting.

Similar to the Stock Option Plan, the RRP functions as a long-term
incentive compensation program for eligible officers, employees and
directors of Westborough Financial Services and Westborough Bank. The RRP
is not subject to ERISA and is not a tax-qualified plan. Westborough
Financial Services pays all costs and expenses of administering the RRP.
The maximum number of restricted stock awards ("Awards") that may be
granted under the RRP is 22,139 shares of common stock. Shares of common
stock subject to an Award are held in a trust until the Award vests at
which time the shares of common stock attributable to the portion of the
Award that have vested are distributed to the Award holder. An Award
recipient is entitled to exercise voting rights and receive cash dividends
with respect to the shares of common stock subject to his Award, whether or
not the underlying shares have vested.

Westborough Financial Services may amend or terminate the RRP, in
whole or in part, at any time, subject to the requirements of all
applicable laws.

TRANSACTIONS WITH CERTAIN RELATED PERSONS

In the normal course of business, Westborough Bank makes loans to its
Directors, Officers and employees. These loans bear interest and have the
same underwriting terms that apply to any non-affiliated borrower. The
outstanding principal balance of such loans to Directors and Officers
totaled $1.8 million or 6.27% of Westborough Financial Services' total
equity at September 30, 2004.

Westborough Financial Services retains the law firm of Tashjian,
Simsarian & Wickstrom. Mr. James E. Tashjian, a director of Westborough
Financial Services and Westborough Bank, and a trustee of Westborough
Bancorp, MHC, has been a partner of Tashjian, Simsarian & Wickstrom since
1995. The legal fees received by the law firm for professional services
rendered to Westborough Bank during the year ended September 30, 2004 did
not exceed 5% of the firm's gross revenues.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Westborough Financial Services's directors and executive officers,
and persons who own more than 10% of Westborough Financial Services's
common stock, to report to the SEC their initial ownership of Westborough
Financial Services's common stock and any subsequent changes in that
ownership. Specific due dates for these reports have been established by
the SEC and Westborough Financial Services is required to disclose in this
proxy statement any late filings or failures to file.

To Westborough Financial Services's knowledge, based solely on its
review of the copies of such reports furnished to Westborough Financial
Services and written representations that no other reports were required
during the fiscal year ended September 30, 2004, all Section 16(a) filing
requirements applicable to Westborough Financial Services's executive
officers and directors during fiscal year 2004 were met.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the fiscal years ended September 30, 2004 and 2003,
Westborough Financial Services retained and paid Wolf & Company, P.C. to
provide audit and other services as follows:

2004 2003
---- ----

<s> <c> <c>
Audit fees(1) $ 89,600 $ 83,000
Audit related fees - -
Tax fees(2) 20,000 19,750
All other fees(3) 8,400 -
-------- --------
Total $118,000 $102,750
======== ========

<FN>
- --------------------
<F1> Audit fees consisted of work performed in connection with the audit
of the consolidated financial statements as well as work generally
only the independent auditors can reasonably be expected to provide,
such as quarterly reviews and review of the annual form 10-KSB
filings.
<F2> Tax fees consisted of fees related to the preparation of Westborough
Financial Services' income tax returns and reviews of income tax
provisions.
<F3> All other fees were paid for a compliance engagement whereby Wolf and
Company reviewed certain matters concerning Massachusetts mortgage
disclosure issues raised as a result of an internal review of
documents.
</FN>

AUDIT COMMITTEE PRE-APPROVAL POLICY

The Audit Committee, or a designated member of the Audit Committee,
shall preapprove all auditing services and permitted non-audit services
(including the fees and terms) to be performed for the Company by its
independent auditor, subject to the de minimis exceptions for non-audit
services that are approved by the Audit Committee prior to completion of
the audit, provided that: (i) the aggregate amount of all such services
provided constitutes no more than five percent of the total amount of
revenues paid by the Company to its auditor during the fiscal year in which
the services are provided; (ii) such services were not recognized by the
Company at the time of the engagement to be non-audit services; and (iii)
such services are promptly brought to the attention of the Audit Committee
and approved prior to the completion of the audit by the Audit Committee or
by one or more members of the Audit Committee who are members of the board
of directors to whom authority to grant such approvals has been delegated
by the Audit Committee.

ADDITIONAL INFORMATION

INFORMATION ABOUT SHAREHOLDER PROPOSALS

Under the proxy solicitation regulations of the SEC, if you wish to
submit a proposal to be included in our proxy statement for the 2006 Annual
Meeting, we must have received it by August 29, 2005. SEC rules contain
standards as to whether shareholder proposals are required to be included
in the proxy statement. Any such proposal will be subject to 17 C.F.R.
[SECTION] 240.14a-8 of the rules and regulations promulgated by the SEC.

In addition, under Westborough Financial Services's Bylaws, if you
wish to bring other business before an annual meeting (which is not
included in the proxy statement for the 2005 Annual Meeting), you must be a
shareholder of record and have given timely notice in writing to the Clerk
of Westborough Financial Services according to the procedures set forth in
our Bylaws.

By Order of the Board of Directors,

/s/ John L. Casagrande

John L. Casagrande
Clerk

Westborough, Massachusetts
December 27, 2004

===========================================================================
To assure that your shares are represented at the Annual Meeting, please
complete, sign, date and promptly return the accompanying proxy card in the
postage-paid envelope provided.
===========================================================================

APPENDIX A

NOMINATING AND CORPORATE GOVERNANCE CHARTER

Purpose
- -------

The purpose of the Nominating and Corporate Governance Committee
("Committee") shall be to assist the board in nominating qualified
individuals to become board members and in determining the composition of
the board of directors and its committees. In addition, the Committee shall
assist the Board in monitoring a process to assess board effectiveness and
in developing and implementing the company's corporate governance
guidelines. The Committee shall be composed of independent directors.

Committee Membership
- --------------------

The nominating and corporate governance committee of the board of directors
of Westborough Financial Services, Inc. shall consist of a minimum of three
directors. Members of the Committee shall be appointed and may be removed
by the board of directors. All members of the Committee shall satisfy the
proposed Nasdaq Stock Market standards for independence for members of
board of directors.

Committee Authorities and Responsibilities
- ------------------------------------------

In furtherance of this purpose, the Committee shall have the following
authority and responsibilities:

A. Board of Director Nominees and Committees

1. To review and nominate the individuals recommended by the Long Range
Planning Committee as director nominees to be presented for shareholder
approval at the annual meeting.

2. To review the board of directors' committee structure and to
recommend to the board for its approval directors to serve as members of
each committee. The Committee shall review and recommend committee slates
annually and shall recommend additional committee members to fill vacancies
as needed.

3. To develop and recommend to the board of directors for its approval
an annual self-evaluation process of the board and its committees. The
Committee shall oversee the annual self-evaluations.

4. To review on an annual basis director compensation and benefits.

B. Corporate Governance

1. To develop and recommend to the board of directors for its approval a
set of corporate governance guidelines. The Committee shall review the
guidelines on an annual basis, or more frequently if appropriate, and
recommend changes as necessary.

A-1

Subcommittees
- -------------

The Committee shall have the authority to delegate any of its
responsibilities to subcommittees as the Committee may deem appropriate in
its sole discretion.

Consultants
- -----------

The Committee shall have the authority to retain any search firm engaged to
assist in identifying director candidates, and to retain outside counsel
and any other advisors as the Committee may deem appropriate in its sole
discretion. The Committee shall have sole authority to approve related fees
and retention terms.

Board Reports
- -------------

The Committee shall report its actions and recommendations to the board
after each committee meeting and shall conduct and present to the board an
annual performance evaluation of the Committee. The Committee shall review
at least annually the adequacy of this charter and recommend any proposed
changes to the board for approval.

Reliance on Information
- -----------------------

The Committee and each member of the Committee in his or her capacities as
such, shall be entitled to rely, in good faith, on information, opinions,
reports or statements, or other information prepared or presented to them
by (i) officers and other employees of the company, whom such member
believes to be reliable and competent in the matters presented, (ii)
counsel, public accountants or other persons as to matters which the member
believes to be within the professional competence of such person.

A-2

APPENDIX B

AUDIT COMMITTEE CHARTER

I. STATEMENT OF POLICY

The primary function of the Audit Committee of the Board of Directors of
Westborough Financial Services, Inc. ("Company") is to oversee the
accounting and financial reporting processes of the Company and the
Westborough Bank ("Bank") and the audits of the financial statements of the
Company and the Bank, including the qualifications and independence of the
auditors. The Audit Committee will provide assistance to the Company's
Board of Directors in fulfilling its responsibilities to the Company's
shareholders and the investment community relating to the Company's
accounting and reporting practices and the quality and integrity of the
Company's financial reports. In so doing, it is the responsibility of the
Audit Committee to maintain free and open means of communication among the
Company's Board of Directors, outside auditors, internal auditors (whether
contracted or employed by the Company) and senior management.

II. COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee shall consist of at least three "independent" Directors
of the Company and shall serve at the pleasure of the Board of Directors.
An "independent" Director is defined as an individual who (a) is not an
officer or salaried employee of the Company, (b) does not have any
relationship that, in the opinion of the Board of Directors, would
interfere with his or her exercise of independent judgment as an Audit
Committee member, (c) meets the Nasdaq Stock Market's definition of
independent director, (d) meets the requirements of Section 10A(m)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
its implementing regulations, and (e) does not own or control 20% or more
of the Company (or such lower measurement as may be established by the SEC)
Additionally, Audit Committee members should have few or no ties to the
Company other than through their duties as Board members. In selecting the
members of the Audit Committee, the Board of Directors will take into
account the requirements imposed by, and the interpretations of, the
applicable federal and state banking regulators.

Each Audit Committee member must be able to read and understand financial
statements, including a balance sheet, income statement, and cash flow
statement. The Audit Committee, with the assistance of the independent
public auditors, shall develop and implement a skill enhancement plan and
assess member contribution and performance.

At least one member of the Audit Committee shall be an "audit committee
financial expert" as defined by the SEC. The Company must also certify that
it has, and will continue to have, at least one member of the Audit
Committee, who has past employment experience in finance or accounting,
requisite professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication, including being or having been a chief executive officer,
chief financial officer or other senior officer with financial oversight
responsibilities.

The members of the Audit Committee shall be designated by the full Board of
Directors at each annual meeting of the Board. The Board shall designate
one member of the Audit Committee to serve as chairman of the committee.

B-1

III. MEETINGS

The Audit Committee shall meet at least 4 times a year or more frequently
as circumstances require. The Audit Committee shall maintain minutes of
each meeting of the Audit Committee and shall report the actions of the
Audit Committee to the Board of Directors, with such recommendations as the
Audit Committee deems appropriate. The Audit Committee should also meet
periodically with the internal auditor, the outside auditors and the
Company's financial management in separate executive sessions to discuss
any matters that the Audit Committee or these groups believe should be
discussed privately with the Audit Committee. In addition, the Audit
Committee, or at least its chairman, should meet with the outside auditors
and financial management quarterly to review the Company's quarterly report
on Form 10-QSB before it is filed with the Securities and Exchange
Commission and, if possible, before any public announcement of the
Company's financial results.

IV. RESPONSIBILITIES AND DUTIES OF THE AUDIT COMMITTEE

The primary duties and responsibilities of the Audit Committee are to
oversee and monitor the Company's financial reporting process and internal
control system and review and evaluate the performance of the Company's
outside auditors and internal auditing staff. In fulfilling these duties
and responsibilities, the Audit Committee shall take the following actions,
in addition to performing such functions as may be assigned by law, the
Company's charter or bylaws or the Board of Directors:

1. The Audit Committee shall be directly responsible for the
appointment, compensation, retention and oversight of the work
of any registered public accounting firm employed by the
Company (including resolution of disagreements between
management and the auditor regarding financial reporting) for
the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the
Company, and each such registered public accounting firm must
report directly to the Audit Committee. As part of the audit
process, the Audit Committee shall meet with the outside
auditors to discuss and decide the audit's scope. The Audit
Committee shall determine that the outside audit team engaged
to perform the external audit consists of competent,
experienced, financial institution auditing professionals.

2. The Audit Committee shall require the outside auditors to
submit, on an annual basis, a formal written statement setting
forth all relationships between the outside auditors and the
Company that may affect the objectivity and independence of the
outside auditors, and the Audit Committee shall actively engage
in a dialogue with the outside auditors with respect to any
disclosed relationships or services that may impact the
objectivity and independence of the outside auditor. The Audit
Committee shall take, or recommend that the full Board take,
appropriate action to ensure the independence of the outside
auditors.

3. The Audit Committee shall ensure the rotation of the lead (or
coordinating) audit partner having primary responsibility for
the audit and the audit partner responsible for reviewing the
audit as required by law.

4. The Audit Committee shall require the outside auditors to
advise the Company of any fact or circumstance that might
adversely affect the outside auditors' independence or judgment
with respect to the Company under applicable auditing
standards.

5. The Audit Committee shall require the outside auditors to
advise the Company if it becomes aware that any officer or
employee of the Company, or its direct or indirect subsidiaries
or affiliates, is related to a partner, employee or other
representative of the

B-2

outside auditors, to the extent that such relationship might
adversely affect the Company under applicable auditing
standards.

6. The Audit Committee shall meet with the outside auditors, with
no management in attendance, to openly discuss the quality of
the Company's accounting principles as applied in its financial
reporting, including issues such as (a) the appropriateness,
not just the acceptability, of the accounting principles and
financial disclosure practices used or proposed to be used by
the Company, (b) the clarity of the Company's financial
disclosures and (c) the degree of aggressiveness or
conservatism that exists in the Company's accounting
principles and underlying estimates and other significant
decisions made by the Company's management in preparing the
financial disclosure and reviews by the outside auditors. The
Audit Committee shall then meet among themselves, without
operating management or the outside auditors being present, to
discuss the information presented to them.

7. The Audit Committee shall require the outside auditors, in
reviewing the Company's financial reporting and in advising the
Audit Committee, to take into account the requirements imposed
by, and the interpretations of, the applicable federal and
state banking regulators.

8. The Audit Committee shall review and discuss quarterly reports
from the independent auditors on:

* All critical accounting policies and practices to be
used;

* All alternative treatments of financial information
within generally accepted accounting principles that have
been discussed with management, ramifications of the use
of such alternative disclosures and treatments, and the
treatment preferred by the independent auditor; and

* Other written material communications between the auditor
and management.

9. The Audit Committee shall meet with the outside auditors and
management to review the Company's annual report on Form 10-KSB
and discuss any significant adjustments, management judgments
and accounting estimates and any significant new accounting
policies before such form is filed with the Securities and
Exchange Commission.

10. Upon the completion of the annual audit, the Audit Committee
shall review the audit findings, including any comments or
recommendations of the outside auditors, with the entire Board
of Directors.

11. The Audit Committee shall meet at least annually with the
Company's internal auditor to assure itself that the Company
has a strong internal auditing function by reviewing the
internal audit program and assessing (grading) risk areas along
with a proper control environment that promotes accuracy and
efficiency in the Company's operations.

12. The Audit Committee must assure itself that the internal
auditor is free from operational duties, and that the internal
auditor reports directly to the Board of Directors or the Audit
Committee regarding any audit concerns or problems.

B-3

13. The Audit Committee shall receive from the Company's internal
auditor periodic reports, which should include a summary of
findings from completed internal audits and a progress report
on planned and actual hours spent in each audit area, together
with explanations for significant deviations from the original
plan.

14. The Audit Committee shall review the internal audit function of
the Company, including the independence and authority of its
reporting obligations, the proposed audit plans for the coming
year and the coordination of such plans with the independent
auditors.

15. The Audit Committee shall review and concur in the appointment,
replacement, reassignment or dismissal of the Company's
internal auditor.

16. The Audit Committee shall consider and review with management
and the internal auditor: (a) significant findings during the
year and management's responses thereto, including the status
of previous audit recommendations, (b) any difficulties
encountered in the course of their audits, including any
restrictions on the scope of activities or access to required
information, (c) any changes required in the planned scope of
the internal audit plan and (d) the internal auditing
department budget and staffing.

17. The Audit Committee shall consider and approve, if appropriate,
changes to the Company's auditing and accounting principles and
practices, as suggested by the outside auditors, the internal
auditor or management, and the Audit Committee shall review
with the outside auditors, the internal auditor and management
the extent to which such changes have been implemented (to be
done at an appropriate amount of time subsequent to the
implementation of such changes, as decided by the Audit
Committee).

18. Preapproval of Services - The Audit Committee shall preapprove
all auditing services and permitted non-audit services
(including the fees and terms) to be performed for the Company
by its independent auditor, subject to the de minimis
exceptions for non-audit services described below which are
approved by the Audit Committee prior to completion of the
audit.

A) Exception: The preapproval requirement set forth above,
shall not be applicable with respect to non-audit
services if:

(i) The aggregate amount of all such services provided
constitutes no more than five percent of the total
amount of revenues paid by the Company to its
auditor during the fiscal year in which the
services are provided;

(ii) Such services were not recognized by the Company at
the time of the engagement to be non-audit
services; and

(iii) Such services are promptly brought to the attention
of the Audit Committee and approved prior to the
completion of the audit by the Audit Committee or
by one or more members of the Audit Committee who
are members of the board of directors to whom
authority to grant such approvals has been
delegated by the Audit Committee.

B) Delegation - The Audit Committee may delegate to one or
more designated members of the Audit Committee the
authority to grant required preapprovals. The decisions
of any member to whom authority is delegated to
preapprove an

B-4

activity shall be presented to the full Audit Committee
at its next scheduled meeting.

19. The Audit Committee shall establish procedures for the receipt,
retention and treatment of complaints received by the Company
or the Bank regarding accounting, internal accounting controls
or auditing matters, and the confidential, anonymous submission
by employees of concerns regarding questionable accounting or
auditing matters.

20. The Audit Committee shall investigate or consider such other
matters within the scope of its responsibilities and duties as
the Audit Committee may, in its discretion, determine to be
advisable, and the Audit Committee shall retain outside
counsel, accountants or other advisers for this purpose if, in
its judgment, that is appropriate, without the consent of
management or the Board, at the Company's expense.

21. The Audit Committee shall prepare a report for inclusion in the
Company's proxy statement describing the discharge of the Audit
Committee's responsibilities, as applicable.

22. Review and approve related party transactions, as required by
law.

23. Coordinate the investigation of conflicts of interest and
unethical conduct.

B-5

REVOCABLE PROXY

Westborough Financial Services, Inc.

This proxy is solicited on behalf of the Board of Directors of
Westborough Financial Services, Inc.
for the Annual Meeting of Shareholders to be held
on Thursday, January 27, 2005.

The undersigned shareholder of Westborough Financial Services, Inc.
hereby appoints Robert A. Klugman and Benjamin H. Colonero, Jr., or each of
them, with full powers of substitution, to attend and act as proxy for the
undersigned and to vote all shares of common stock of Westborough Financial
Services, Inc. which the undersigned may be entitled to vote at the Annual
Meeting of Shareholders to be held at the Wyndham Westborough Hotel located
at 5400 Computer Drive, Westborough, Massachusetts 01581, on Thursday,
January 27, 2005, at 3:00 p.m., local time, and at any adjournment or
postponement thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF YOU DO NOT GIVE US ANY
DIRECTION, THIS PROXY WILL BE VOTED FOR THE PROPOSAL IN ITEM 1.

(Continued on Reverse Side)

PLEASE COMPLETE, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

The Board of Directors recommends a vote "FOR" the proposal in Item 1.

Please mark your vote as indicated in this example. [X]
I will attend the annual meeting. [ ]
(Please mark box if you plan to attend the annual meeting.) (Important: If
your shares are not registered in your name, you will need additional
documentation to attend the annual meeting.)

1. Election of five directors for terms of FOR WITHHOLD
three years each and one director all nominees for all nominees
for a term of two years. (except as
otherwise
Nominees: Edward S. Bilzerian, indicated)
Jeffrey B. Leland (2007), Paul F. McGrath, [ ] [ ]
Charlotte C. Spinney, Phyllis A. Stone and
James E. Tashjian.

Instruction: TO WITHOLD AUTHORITY to vote for any individual nominee, write
that nominee's name in the space provided:

_____________________________________________________________________________

The undersigned hereby acknowledges
receipt of the Notice of Annual Meeting
of Shareholders and the proxy statement
for the annual meeting.

(Signature(s)) __________________________

Dated: __________________________________
Please sign exactly as your name appears
on this proxy. Joint owners should each
sign personally. If signing as attorney,
executor, administrator, trustee or
guardian, please include your full title.
Corporate or partnership proxies should
be signed by an authorized officer.