UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 000-52477

MAYFLOWER BANCORP, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	20-8448499
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
30 South Main Street, Middleboro, Massachusetts	02346
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (508) 947-4343

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

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

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

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	x

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

The number of shares outstanding of each of the registrant’s classes of common stock as of January 24, 2013

Common Stock $1.00 par value	2,064,106
(Title of class)	(Shares outstanding)

PART I - FINANCIAL INFORMATION

ITEM I - Financial Statements

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

	December 31, 2012		March 31, 2012
	(unaudited)		(audited)
	(In Thousands)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	3,882	$	3,764
Interest-bearing deposits in banks		9,372		8,602
Total cash and cash equivalents		13,254		12,366
Investment securities:
Securities available-for-sale, at fair value		41,577		44,295
Securities held-to-maturity (fair value of $43,395 and $45,379, respectively		42,064		43,969
Total investment securities		83,641		88,264
Loans receivable, net		142,108		134,331
Accrued interest receivable		779		867
Real estate held for investment		611		628
Real estate acquired by foreclosure		380		194
Premises and equipment, net		10,601		10,717
Deposits with The Co-operative Central Bank		449		449
Stock in Federal Home Loan Bank of Boston, at cost		1,449		1,449
Refundable income taxes		604		596
Deferred income taxes		0		377
Other assets		1,218		1,317
Total assets	$	255,094	$	251,555
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	229,464	$	226,562
Advances and borrowings		1,000		1,000
Advances from borrowers for taxes and insurance		684		655
Deferred income taxes		184		0
Accrued expenses and other liabilities		1,162		1,454
Total liabilities		232,494		229,671
STOCKHOLDERS’ EQUITY
Preferred stock $1.00 par value; authorized 5,000,000 shares; issued - none		0		0
Common stock $1.00 par value; authorized 15,000,000 shares; issued 2,058,422 at December 31, 2012 and 2,063,067 at March 31, 2012		2,058		2,063
Additional paid-in capital		4,383		4,321
Retained earnings		15,462		14,710
Accumulated other comprehensive income		697		790
Total stockholders’ equity		22,600		21,884
Total liabilities and stockholders’ equity	$	255,094	$	251,555

See accompanying notes to consolidated financial statements

2

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Income

Unaudited

	Three months ended				Nine months ended
	December 31, 2012		January 31, 2012		December 31, 2012		January 31, 2012
	(In Thousands, Except Per Share Data)				(In Thousands, Except Per Share Data)
Interest income:
Loans receivable	$	1,772	$	1,730	$	5,290	$	5,198
Securities held-to-maturity		246		332		814		1,058
Securities available-for-sale		226		344		773		1,125
Interest-bearing deposits in banks		5		6		16		24
Total interest income		2,249		2,412		6,893		7,405
Interest expense:
Deposits		235		304		768		1,018
Borrowed funds		11		30		34		91
Total interest expense		246		334		802		1,109
Net interest income		2,003		2,078		6,091		6,296
Provision for loan losses		10		90		40		197
Net interest income after provision for loan losses		1,993		1,988		6,051		6,099
Noninterest income:
Loan origination and other loan fees		21		24		81		75
Customer service fees		134		161		433		492
Gain on sales of mortgage loans		219		133		596		267
Gain on sales of investment securities		136		107		255		241
Interchange income		64		57		188		170
Other		30		76		89		120
Total noninterest income		604		558		1,642		1,365
Noninterest expense:
Compensation and fringe benefits		1,093		1,093		3,276		3,251
Occupancy and equipment		256		262		778		796
FDIC assessment		33		42		102		125
Losses and expenses of other real estate owned		5		75		14		96
Other		564		551		1,722		1,702
Total noninterest expense		1,951		2,023		5,892		5,970
Income before income taxes		646		523		1,801		1,494
Provision for income taxes		239		182		630		501
Net income	$	407	$	341	$	1,171	$	993
Earnings per share (basic)	$	0.20	$	0.17	$	0.57	$	0.48
Earnings per share (diluted)	$	0.20	$	0.17	$	0.57	$	0.48
Weighted average basic shares outstanding		2,058		2,067		2,060		2,071
Diluted effect of outstanding stock options		5		3		5		3
Weighted average diluted shares outstanding		2,063		2,070		2,065		2,074

See accompanying notes to consolidated financial statements.

3

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

Unaudited

	Nine months ended
	December 31, 2012			January 31, 2012
	(In thousands)
Net Income	$	1,171		$	993
Other comprehensive income (expense):
Unrealized holding gains on available-for-sale securities		95			539
Reclassification adjustment for gains realized in income		(255	)		(241	)
Net unrealized gains (losses)		(160	)		298
Tax effect		67			(108	)
Total other comprehensive income (expense)		(93	)		190
Comprehensive income	$	1,078		$	1,183

See accompanying notes to consolidated financial statements.

4

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

Unaudited

	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	(In Thousands)
BALANCE, April 30, 2011	$	2,075		$	4,326		$	14,062		$	714		$	21,177
Net income for the nine months ended January 31, 2012		0			0			993			0			993
Other comprehensive income		0			0			0			190			190
Grants of restricted common stock		1			5			0			0			6
Stock-based compensation		0			11			0			0			11
Purchase of 12,336 shares of Company stock		(13	)		(20	)		(69	)		0			(102	)
Cash dividends ($0.18 per share)		0			0			(373	)		0			(373	)
BALANCE, January 31, 2012	$	2,063		$	4,322		$	14,613		$	904		$	21,902
BALANCE, March 31, 2012	$	2,063		$	4,321		$	14,710		$	790		$	21,884
Net income for the nine months ended December 31, 2012		0			0			1,171			0			1,171
Other comprehensive income (expense)		0			0			0			(93	)		(93	)
Grants of restricted common stock		1			15			0			0			16
Stock-based compensation		0			58			0			0			58
Purchase of 6,252 shares of Company stock		(6	)		(11	)		(48	)		0			(65	)
Cash dividends ($0.18 per share)		0			0			(371	)		0			(371	)
BALANCE, December 31, 2012	$	2,058		$	4,383		$	15,462		$	697		$	22,600

See accompanying notes to consolidated financial statements.

5

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Unaudited

	Nine months ended
	December 31, 2012			January 31, 2012
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received	$	7,463		$	7,845
Fees and other income received		1,367			1,162
Interest paid		(803	)		(1,113	)
Cash paid to suppliers and employees		(5,422	)		(5,446	)
Income taxes paid		(9	)		(641	)
Net cash provided by operating activities		2,596			1,807
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in loans receivable		(7,797	)		(3,177	)
Purchases of available-for-sale securities		(17,794	)		(23,662	)
Proceeds from sales, calls and maturities of available-for-sale securities		20,305			24,578
Purchases of held-to-maturity securities		(20,817	)		(24,169	)
Proceeds from maturities and calls of held-to-maturity securities		22,541			26,022
Proceeds from sales of real estate acquired by foreclosure		0			125
Capital additions to real estate acquired by foreclosure		(186	)		0
Purchases of premises and equipment		(236	)		(69	)
Other - net		(219	)		327
Net cash used in investing activities		(4,203	)		(25	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		2,902			589
Payments on advances and borrowings		0			(1,000	)
Net increase in advances from borrowers for taxes and insurance		29			186
Repurchase of Company stock		(65	)		(102	)
Dividends paid on common stock		(371	)		(373	)
Net cash provided by (used in) financing activities		2,495			(700	)
Net increase in cash and cash equivalents		888			1,082
Cash and cash equivalents - beginning of period		12,366			11,790
Cash and cash equivalents - end of period	$	13,254		$	12,872

See accompanying notes to consolidated financial statements

6

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Continued)

Reconciliation of Net Income to Net Cash

Provided by Operating Activities

Unaudited

	Nine months ended
	December 31, 2012			January 31, 2012
	(In Thousands)
Net income	$	1,171		$	993
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		367			369
Provision for loan losses		40			197
Loss on other real estate owned		0			65
Premium amortization		482			404
Deferred income taxes		628			(26	)
Gain on sales of investments		(255	)		(241	)
Grants of restricted stock		16			6
Stock based compensation		58			11
Decrease (increase) in accrued interest receivable		88			36
Decrease (increase) in prepaid expenses		140			49
Decrease (increase) in mortgage servicing rights		(17	)		14
Decrease (increase) in refundable income taxes		(8	)		(114	)
Increase (decrease) in accrued expenses		(94	)		11
Increase (decrease) in accrued interest payable		(1	)		(5	)
Increase (decrease) in deferred loan origination fees		(19	)		38
Total adjustments		1,425			814
Net cash provided by operating activities	$	2,596		$	1,807
SUPPLEMENTAL DISCLOSURES:
Total (decrease) increase in unrealized gain on securities available-for-sale	$	(160	)	$	298
Loans transferred to real estate acquired by foreclosure	$	0		$	168
Proceeds from sales of real estate acquired by foreclosure financed through loans	$	0		$	831

See accompanying notes to consolidated financial statements

7

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

A. Basis of presentation:

The consolidated financial statements of Mayflower Bancorp, Inc. and Subsidiary presented herein should be read in conjunction with the consolidated financial statements of Mayflower Bancorp, Inc. and Subsidiary as of and for the 11-month transition period ended March 31, 2012. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation. Interim results are not necessarily indicative of results to be expected for the entire year.

Effective February 2012, Mayflower Bancorp, Inc. changed its fiscal year-end from April 30 to March 31. As such, the accompanying consolidated financial statements are for the three and nine month periods ended December 31, 2012 as compared to three and nine month periods ended January 31, 2012.

B. Reclassification:

Certain amounts in the prior period’s consolidated financial statements were reclassified to facilitate comparison with the current period.

C. Recent Accounting Pronouncements:

In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income (Topic 220). This Update states that an entity has the option to present total comprehensive income, the components of net income, and the components of other comprehensive income in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in this Update should be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this Update did not have a material impact on the Company’s consolidated financial position.

8

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

D. Investment Securities

Investment securities have been classified according to management’s intent. The amortized cost of securities and their respective fair values at December 31, 2012 and March 31, 2012 follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	December 31, 2012
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. Government Agency obligations	$	15,998	$	26	$	(2	)	$	16,022
Municipal obligations		2,568		168		0			2,736
Mortgage-backed and related securities		21,126		952		(1	)		22,077
Trust preferred securities		750		0		(8	)		742
	$	40,442	$	1,146	$	(11	)	$	41,577
HELD-TO-MATURITY SECURITIES:
U.S. Government Agency obligations	$	13,995	$	23	$	(1	)	$	14,017
Municipal obligations		3,223		237		0			3,460
Mortgage-backed and related securities		24,846		1,093		(21	)		25,918
	$	42,064	$	1,353	$	(22	)	$	43,395

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	March 31, 2012
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. Government Agency obligations	$	9,004	$	16	$	(6	)	$	9,014
Municipal obligations		2,832		171		0			3,003
Mortgage-backed and related securities		30,414		1,079		(6	)		31,487
Trust preferred securities		750		0		(33	)		717
Equity securities		0		74		0			74
	$	43,000	$	1,340	$	(45	)	$	44,295
HELD-TO-MATURITY SECURITIES:
U.S. Government Agency obligations	$	13,394	$	38	$	(12	)	$	13,420
Municipal obligations		3,037		240		0			3,277
Mortgage-backed and related securities		27,538		1,173		(29	)		28,682
	$	43,969	$	1,451	$	(41	)	$	45,379

There was no impairment charge recognized against investment securities during the nine months ended December 31, 2012 or January 31, 2012.

9

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

E. Loans Receivable

Loans receivable at December 31, 2012 and March 31, 2012 are summarized as follows:

(In Thousands)	December 31, 2012			March 31, 2012
Mortgage loans on real estate
Residential	$	70,420		$	60,691
Commercial		43,159			44,273
Construction		7,534			6,605
Home equity loans		2,750			2,821
Home equity lines of credit		15,716			17,271
Total mortgage loans		139,579			131,661
Consumer loans		1,577			1,745
Commercial loans		4,706			4,578
Total loans		145,862			137,984
Less:
Due borrowers on construction and other loans		2,618			2,487
Net deferred loan origination costs		(70	)		(51	)
Allowance for loan losses		1,206			1,217
		3,754			3,653
Loans receivable, net	$	142,108		$	134,331

Included in the above table are fixed-rate residential mortgages purchased by the Company with total balances of $15,944,000 and $10,926,000, at December 31, 2012 and March 31, 2012, respectively. The unamortized premium included in these balances was $322,000 at December 31, 2012 and $236,000 at March 31, 2012.

10

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based upon impairment method as of December 31, 2012 and March 31, 2012:

	Residential Mortgages			Commercial Mortgages			Construction Mortgages			Home Equity Loans and Lines of Credit			Commercial Loans			Consumer Loans			Unallocated		Total
(In Thousands)	December 31, 2012
Allowance for loan losses:
Beginning balance	$	182		$	585		$	65		$	246		$	114		$	25		$	0	$	1,217
Loans charged off		0			0			0			(57	)		0			0			0		(57	)
Recoveries		0			0			0			1			5			0			0		6
Provision for loan losses		(6	)		(35	)		(4	)		95			(4	)		(6	)		0		40
Ending Balance	$	176		$	550		$	61		$	285		$	115		$	19		$	0	$	1,206
Ending balance: individually evaluated for impairment	$	0		$	0		$	0		$	30		$	0		$	0		$	0	$	30
Ending balance: collectively evaluated for impairment	$	176		$	550		$	61		$	255		$	115		$	19		$	0	$	1,176
Loans Receivable:
Ending balance	$	70,420		$	43,159		$	4,916		$	18,466		$	4,706		$	1,577		$	0	$	143,244
Ending balance: individually evaluated for impairment	$	0		$	1,818		$	0		$	149		$	93		$	0		$	0	$	2,060
Ending balance: collectively evaluated for impairment	$	70,420		$	41,341		$	4,916		$	18,317		$	4,613		$	1,577		$	0	$	141,184

11

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

	Residential Mortgages			Commercial Mortgages			Construction Mortgages			Home Equity Loans and Lines of Credit			Commercial Loans			Consumer Loans			Unallocated		Total
(In Thousands)	March 31, 2012
Allowance for loan losses:
Beginning balance	$	173		$	635		$	95		$	182		$	112		$	17		$	0	$	1,214
Loans charged off		(110	)		(14	)		0			(104	)		0			(3	)		0		(231	)
Recoveries		0			0			0			0			6			0			0		6
Provision for loan losses		119			(36	)		(30	)		168			(4	)		11			0		228
Ending Balance	$	182		$	585		$	65		$	246		$	114		$	25		$	0	$	1,217
Ending balance: individually evaluated for impairment	$	0		$	0		$	0		$	60		$	0		$	2		$	0	$	62
Ending balance: collectively evaluated for impairment	$	182		$	585		$	65		$	186		$	114		$	23		$	0	$	1,155
Loans Receivable:
Ending balance	$	60,691		$	44,073		$	4,318		$	20,092		$	4,578		$	1,745		$	0	$	135,497
Ending balance: individually evaluated for impairment	$	0		$	0		$	0		$	60		$	0		$	2		$	0	$	62
Ending balance: collectively evaluated for impairment	$	60,691		$	44,073		$	4,318		$	20,032		$	4,578		$	1,743		$	0	$	135,435

12

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

Impaired loans at December 31, 2012 and March 31, 2012 were as follows:

	December 31, 2012						Nine Months Ended   December 31, 2012
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Home equity loans and lines of credit	$	119	$	119	$	0	$	119	$	2
Commercial mortgages		649		649		0		657		25
Commercial loans		93		93		0		93		0
With an allowance recorded:
Home equity loans and lines of credit		30		30		30		30		0
Consumer loans		0		0		0		0		0
Totals:
Commercial mortgages		649		649		0		657		25
Commercial loans		93		93		0		93		0
Home equity loans and lines of credit		149		149		30		149		2
Consumer loans		0		0		0		0		0
Total impaired loans	$	891	$	891	$	30	$	899	$	27

	March 31, 2012						Eleven Months Ended March 31, 2012
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Home equity loans and lines of credit	$	0	$	0	$	0	$	0	$	0
Commercial mortgages		0		0		0		0		0
Commercial loans		0		0		0		0		0
With an allowance recorded:
Home equity loans and lines of credit		60		60		60		60		2
Consumer loans		2		2		2		3		0
Totals:
Commercial mortgages		0		0		0		0		0
Commercial loans		0		0		0		0		0
Home equity loans and lines of credit		60		60		60		60		2
Consumer loans		2		2		2		3		0
Total impaired loans	$	62	$	62	$	62	$	63	$	2

13

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days and still accruing by portfolio segment as of December 31, 2012 and March 31, 2012:

	Non accrual		Loans Past Due Over 90 Days and Still Accruing		Non accrual		Loans Past Due Over 90 Days and Still Accruing
(In Thousands)	December 31, 2012				March 31, 2012
Residential mortgages	$	0	$	0	$	282	$	0
Commercial mortgages		93		0		0		250
Home equity loans and lines of credit		149		0		30		0
Total	$	242	$	0	$	312	$	250

The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 and March 31, 2012 follows:

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans Receivable
(In Thousands)	December 31, 2012
Residential Mortgages	$	35	$	0	$	0	$	35	$	70,385	$	70,420
Commercial Mortgages		534		0		0		534		42,625		43,159
Construction Mortgages		0		0		0		0		4,916		4,916
Home Equity Loans and Lines of Credit		0		119		30		149		18,317		18,466
Commercial Loans		5		0		93		98		4,608		4,706
Consumer Loans		1		0		0		1		1,576		1,577
	$	575	$	119	$	123	$	817	$	142,427	$	143,244

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans Receivable
(In Thousands)	March 31, 2012
Residential Mortgages	$	176	$	16	$	0	$	192	$	60,499	$	60,691
Commercial Mortgages		0		125		250		375		43,698		44,073
Construction Mortgages		0		250		0		250		4,068		4,318
Home Equity Loans and Lines of Credit		0		67		30		97		19,995		20,092
Commercial Loans		0		0		0		0		4,578		4,578
Consumer Loans		0		2		0		2		1,743		1,745
	$	176	$	460	$	280	$	916	$	134,581	$	135,497

As of December 31, 2012, the Company had one commercial mortgage that has been classified as a troubled debt restructure. The pre-modification and post-modification recorded investment of this loan was $303,000. A rate reduction of 2.0% and a maturity extension of 4 years was granted. Because ultimate repayment of the mortgage is expected to be provided solely by the operation of the underlying collateral, management used the fair value of the collateral to measure impairment. As of December 31, 2012, the current balance of this loan is $298,000 and the loan is in compliance with its modified terms.

14

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

Losses on loans modified as troubled debt restructures, if any, are charged against the allowance for loan losses when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses.

Credit Quality Information

The Company utilizes the following indicators to assess credit quality:

Loans rated Pass: Loans in this category have low to average risk.

Loans rated Special Mention: Loans in this category are currently protected, but exhibit conditions that have the potential for weakness. The borrower may be affected by unfavorable economic, market or other external conditions that may affect their ability to repay the debt. These may also include credits where there is deterioration of the collateral or have deficiencies which may affect the Company’s ability to collect on the collateral.

Loans rated Substandard: Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

Loans rated Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable.

On a quarterly basis, or more often if needed, the Company reviews the ratings on commercial mortgages, construction mortgages, and commercial loans.

The following table displays the loan portfolio by credit quality indicators as of December 31, 2012 and March 31, 2012:

	Residential Mortgages		Commercial Mortgages		Construction Mortgages		Home Equity Loans and Lines of Credit		Commercial Loans		Consumer Loans		Total
(In Thousands)	December 31, 2012
Pass	$	70,420	$	39,628	$	4,916	$	18,317	$	4,613	$	1,577	$	139,471
Special mention		0		2,012		0		0		93		0		2,105
Substandard		0		1,519		0		119		0		0		1,638
Doubtful		0		0		0		30		0		0		30
	$	70,420	$	43,159	$	4,916	$	18,466	$	4,706	$	1,577	$	143,244

	Residential Mortgages		Commercial Mortgages		Construction Mortgages		Home Equity Loans and Lines of Credit		Commercial Loans		Consumer Loans		Total
(In Thousands)	March 31, 2012
Pass	$	60,058	$	42,184	$	4,068	$	20,032	$	4,578	$	1,743	$	132,663
Special mention		351		695		250		0		0		0		1,296
Substandard		282		1,194		0		0		0		0		1,476
Doubtful		0		0		0		60		0		2		62
	$	60,691	$	44,073	$	4,318	$	20,092	$	4,578	$	1,745	$	135,497

15

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

F. Fair Value Measurements

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

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

Cash, due from banks, federal funds sold and interest-bearing deposits: The carrying amounts reported in the consolidated statements of financial condition for cash, due from banks, federal funds sold and interest-bearing deposits, approximate those assets’ fair values.

Investment Securities: Fair values of investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, such as commercial real estate, residential mortgage, and other consumer. Each loan category is further segmented into fixed and adjustable rate interest terms, and by performing and non-performing categories.

The fair value of performing loans, except residential mortgage loans, is calculated by discounting contractual cash flows using estimated market discount rates which reflect the credit and interest rate risk inherent in the loan. For performing residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs.

Fair value for significant non-performing loans is based on recent internal or external appraisals. If appraisals are not available, estimated cash flows are discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information.

The carrying amount of accrued interest receivable approximates its fair value.

Deposits with The Co-operative Central Bank and Stock in Federal Home Loan Bank: The carrying amount of the deposits with The Co-operative Central Bank approximates its fair value. The carrying amount of the stock in Federal Home Loan Bank is at cost, since it is not practicable to estimate the fair value because the stock is not marketable.

Deposit Liabilities: The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings and NOW accounts, and money market and checking accounts, is equal to the amount payable on demand (that is, their carrying amounts). The fair value of certificates of deposit is based on the discounted value of contractual cash flows.

16

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

Advances and Borrowings: Fair values of advances and borrowings are estimated by discounting the future cash payment using rates currently available to the Company for borrowings with similar terms and maturities.

Commitments to Extend Credit: Commitments to extend credit were evaluated and fair value was estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

Limitations: The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and such other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

In addition, the fair value estimates are based on existing on-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include the deferred tax assets or liabilities, and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

17

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

The estimated fair values of the Company’s financial instruments at December 31, 2012 and March 31, 2012 were as follows:

	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
(In Thousands)	December 31, 2012
Financial assets:
Cash and due from banks	$	3,882	$	3,882	$	0	$	0
Interest-bearing deposits in banks		9,372		9,372		0		0
Investment securities		83,641		0		84,972		0
Loans, net		142,108		0		0		146,731
Accrued interest receivable		779		0		0		779
Deposits with The Co-operative Central Bank		449		N/A		N/A		N/A
Stock in Federal Home Loan Bank of Boston		1,449		N/A		N/A		N/A
Financial liabilities:
Deposits:
Checking, savings and money market accounts		149,218		149,218		0		0
Certificates of deposit		80,246		0		80,658		0
Advances and borrowings		1,000		0		1,187		0

	Carrying Amount		Fair Value
(In Thousands)	March 31, 2012
Financial assets:
Cash and due from banks	$	3,764	$	3,764
Interest-bearing deposits in banks		8,602		8,602
Investment securities		88,264		89,674
Loans, net		134,331		137,875
Accrued interest receivable		867		867
Deposits with The Co-operative Central Bank		449		449
Stock in Federal Home Loan Bank of Boston		1,449		1,449
Financial liabilities:
Deposits:
Checking, savings and money market accounts		140,020		140,020
Certificates of deposit		86,542		87,048
Advances and borrowings		1,000		1,219

G. Fair Value of Financial Instruments

The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

18

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

Level 2: Significant other observable inputs as of the measurement date other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be derived from or corroborated by observable market data by correlation or other means for substantially the full term of the asset.

Level 3: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability as of the measurement date. These financial instruments do not have two way markets and are measured using management’s best estimate of fair value.

The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial assets and liabilities on a recurring or nonrecurring basis:

Securities available-for-sale: Securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based on quoted prices, when available. If quoted prices are not available, fair values are measured using pricing models.

The Company utilizes a third party pricing service to obtain fair values for investment securities. The pricing service utilizes the following method to value the security portfolio.

The securities measured at fair value utilizing Level 1 inputs are marketable equity securities and utilizing Level 2 inputs are corporate debt securities, municipal obligations, U.S. Government and Agency obligations, including mortgage-backed and related securities, trust preferred securities, and equity securities. The fair values represent either quoted market prices for the identical securities (Level 1 inputs) or fair values determined by pricing models that consider standard input factors such as observable market data, benchmark yields, reported trades, broker/dealer quotes, credit spreads, benchmark securities, as well as new issue data, monthly payment information, and collateral performance, among others. The Company does not currently have any Level 3 securities in its portfolio.

Loans: The Company does not record loans at fair value on a recurring basis. However, from time to time, non-recurring fair value adjustments to collateral dependent loans are recorded to reflect partial write-downs based on the observable market price or current appraised value of the collateral.

Real estate acquired by foreclosure: From time to time, the Company records non-recurring fair value adjustments to foreclosed real estate to reflect partial write-downs based on observable market prices or current appraised values.

19

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

The balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2012, were as follows:

	Assets at Fair Value		Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
(In thousands)
Securities available-for-sale:
U.S. Government Agency obligations	$	16,022	$	0	$	16,022	$	0
Municipal obligations		2,736		0		2,736		0
Mortgage-backed and related securities		22,077		0		22,077		0
Trust preferred securities		742		0		742		0
Securities available-for-sale	$	41,577	$	0	$	41,577	$	0

The balances of assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2012, were as follows:

	Assets at Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Losses
(In thousands)
Impaired loans	$	891	$	0	$	891	$	0	$	0
Real estate acquired by foreclosure	$	380	$	0	$	380	$	0	$	0

H. Stock-Based Compensation

The Company accounts for stock-based compensation pursuant to ASC 718 Compensation - Stock Compensation (“ASC 718”). The Company uses the Black-Scholes option pricing model as its method for determining the fair value of stock option grants. In 1999, the Company adopted a Stock Option and Incentive Plan for the benefit of officer and non-officer employees and directors of the Company. Shares reserved under this plan totaled 99,750 shares of authorized but unissued common stock. This plan expired in 2009. All remaining awards outstanding under this plan were granted in December 2005. However, awards outstanding at the time the plan expired continue to remain outstanding according to their terms.

On August 24, 2010, the Company’s stockholders approved the Mayflower Bancorp, Inc. 2010 Equity Incentive Plan (the “Incentive Plan”). Under this plan, 156,475 shares have been reserved for issuance as options to purchase stock, restricted stock, or other stock awards, of which a maximum of 104,317 may be granted as restricted shares. The exercise price of an option may not be less than the fair market value of the Company’s common stock on the date of the grant of the option and may not be exercisable more than ten years after the date of the grant. As of December 31, 2012, 124,650 shares remained unissued and available for award under the Incentive Plan, of which 96,282 are available as restricted stock.

Forfeitures of awards granted under the incentive plan are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates in order to derive the Company’s best estimate of awards ultimately expected to vest. Estimated forfeiture rates

20

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

represent only the unvested portion of a surrendered option and are typically estimated based on historical experience. Based on an analysis of the Company’s historical data, the Company applied no forfeiture rate to stock options outstanding in determining stock compensation expense for the nine months ended December 31, 2012 or January 31, 2012.

The fair value of the stock options granted was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	Nine months ended
	December 31, 2012			January 31, 2012
Weighted average fair value	$	2.92		$	2.72
Total options granted		19,855			3,935
Expected dividend yield		3.31	%		2.75	%
Risk-free interest rate		1.69	%		2.75	%
Expected volatility		41.95	%		42.25	%
Expected life in years		5.00			5.00

Stock option compensation expense was $58,000 for the nine months ended December 31, 2012 and $11,000 for the nine months ended January 31, 2012.

Stock option activity was as follows:

	Nine months ended
	December 31, 2012					January 31, 2012
	Number of Shares			Average Exercise Price		Number of Shares			Average Exercise Price
Options outstanding beginning of period		26,885		$	13.20		24,950		$	14.00
Options granted		19,855			10.28		3,935			8.57
Options exercised		0			0.00		0			0.00
Options forfeited		(1,000	)		14.00		(2,000	)		14.00
Options outstanding end of period		45,740		$	11.92		26,885		$	13.20

The Company also granted 4,315 restricted shares in the nine months ended December 31, 2012 and 3,720 restricted shares in the nine months ended January 31, 2012, which vest over a five year period. Total compensation expense related to all grants was $16,000 for the nine months ended December 31, 2012 and $6,000 for the nine months ended January 31, 2012.

As of December 31, 2012, the expected future compensation related to restricted stock is approximately $17,000 for each of the next three years and $9,000 in the fourth year.

21

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2012 and January 31, 2012

A summary of restricted stock activity is as follows:

	Nine months ended
	December 31, 2012					January 31, 2012
	Number of Restricted Shares			Weighted Average Grant Date Fair Value		Number of Restricted Shares			Weighted Average Grant Date Fair Value
Non-vested beginning of period		2,976		$	8.59		0		$	0.00
Granted		4,315			9.88		3,720			8.59
Vested		(1,607	)		9.28		(744	)		8.59
Forfeited		0			0.00		0			0.00
Non-vested end of period		5,684		$	9.37		2,976		$	8.59

22

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements:

This report includes certain forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the economic environment, competition, products and pricing in geographic and business areas in which Mayflower Bancorp, Inc. (“the Company”) and its wholly owned subsidiary, Mayflower Co-operative Bank (the “Bank”) operate, prevailing interest rates, changes in government regulations and policies affecting financial services companies, credit quality and credit risk management, and the other risk factors referred to in item 1A of the Company’s Annual Report on Form 10-K for the 11-month transition period ended March 31, 2012. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report.

Critical Accounting Policies:

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

Allowance for loan losses:

The adequacy of the allowance for loan losses is evaluated on a quarterly basis by management and the Company’s Board of Directors. Factors considered in evaluating the adequacy of the allowance include previous loss experience, current economic conditions and their effect on borrowers, the performance of individual loans in relation to contract terms, and the estimated value of any underlying collateral for those loans. The provision for loan losses charged to operations is based upon management’s judgment of the amount necessary to maintain the allowance at a level adequate to absorb possible losses. Loans are charged off when management believes the collectability of the principal is unlikely.

The allowance consists of general, allocated and unallocated components, as further discussed below.

General and unallocated components:

The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component may be maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows:

Residential mortgages and home equity loans and lines of credit - The Company generally does not generate loans with a loan-to-value ratio greater than 80 percent and does not grant subprime loans. All loans in these segments are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, could have an effect on the credit quality in this segment.

Commercial mortgages - Loans in this segment are primarily income-producing properties such as apartment buildings and properties used for business operations such as office buildings and industrial facilities. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment.

23

Construction mortgages - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property, as well as construction projects in which the property will ultimately be used by the borrower. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial loans - Loans in this segment are made to businesses and are generally secured by the assets of the business. Repayment is expected from the cash flows generated by the business. A weakened economy, and resultant decreased consumer spending, could have an effect on the credit quality in this segment.

Allocated component:

The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for residential mortgages, commercial mortgages, construction mortgages, home equity loans and lines of credit, and commercial loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment disclosures, unless such loans are the subject of a restructuring agreement.

The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession that the Company would not otherwise consider is made because the borrower is experiencing financial difficulty, the modification is considered a troubled debt restructuring (TDR). All TDRs are initially classified as impaired.

Allowance for loan losses on off-balance sheet credit exposures:

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

Other-Than-Temporarily Impaired Investment Securities:

Management judgment is involved in the evaluation of declines in value of individual investment securities held by the Company. Declines in value that are deemed other-than-temporary are recognized in the income statement through a write-down in the recorded value of the affected security. In estimating other-than-temporary impairment losses, management considers whether the Company intends to sell the security or will, more likely than not, have to sell the security before its fair value is recovered. If either of these conditions is met, an other-than-temporary impairment is recognized.

24

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

Liquidity and Capital Resources:

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

The Company believes its capital resources, including deposits, scheduled loan repayments, revenue generated from the sales of loans and investment securities, unused borrowing capacity at the Federal Home Loan Bank of Boston, and cash flows from other sources are adequate to meet its funding commitments and requirements.

At December 31, 2012 and March 31, 2012, the Company’s and the Bank’s capital ratios were in excess of regulatory requirements and the Company and the Bank are considered to be well-capitalized under all regulatory requirements.

Financial Condition:

At December 31, 2012, the Company’s total assets were $255.1 million as compared to $251.6 million at March 31, 2012, an increase of $3.5 million. During the nine months ended December 31, 2012, net loans receivable increased by $7.8 million and total investment securities decreased by $4.6 million.

Net loans receivable were $142.1 million at December 31, 2012, compared to $134.3 million at March 31, 2012, an increase of $7.8 million. This increase was primarily due to growth of $9.7 million in residential mortgage loans on real estate. During the nine months ended December 31, 2012, continued historically low interest rates spurred strong residential mortgage refinancing activity. Accordingly, the Company originated $34.9 million in residential mortgages as compared to $21.5 million originated for the nine months ended January 31, 2012. The Company also purchased $5.9 million of newly-originated fixed-rate residential mortgages from a financial institution in eastern Massachusetts, compared to $5.0 million in such purchases one year ago.

Additionally, during the nine months, the Company sold $20.1 million of fixed-rate residential loans in the secondary mortgage market, producing gains of $596,000, compared to sales of $14.2 million for the prior year period, which resulted in gains of $267,000. This activity, combined with other mortgage payoffs and regularly scheduled amortization, resulted in a $9.7 million increase in residential loan balances as compared to March 31, 2012.

Offsetting this increase in residential mortgages was a decrease of $1.6 million in home equity loans and lines of credit, a decrease of $786,000 in commercial loans and mortgages, and a decrease of $168,000 in consumer loans. Finally, net construction loans outstanding increased by $598,000.

25

During the nine months ended December 31, 2012, total investment securities decreased by $4.6 million as the Company redeployed proceeds received from investments to loan growth.

Non-performing assets are comprised of non-performing loans, non-accrual investments and real estate acquired by foreclosure. Non-performing loans consist of loans that are more than 90 days past due and loans less than 90 days past due on which the Company has ceased accruing interest. As of December 31, 2012, non-performing assets totaled $622,000, compared to $506,000 at March 31, 2012. The increase in non-performing assets is comprised of an increase of $186,000 in real estate acquired by foreclosure, as offset by a decrease of $70,000 in non-performing loans. During the period, one residential mortgage was returned to performing status, one home equity line of credit was classified as non-performing, and one commercial loan secured by the borrower’s residence was classified as non-performing. At December 31, 2012, non-performing assets represented 0.24% of total assets compared to 0.20% of total assets at March 31, 2012.

At December 31, 2012, the Company’s allowance for loan losses was $1,206,000, which represented an allowance of 0.85% of net loans receivable and 498.4% of non-performing loans at that date. This compares to a balance of $1,217,000 at March 31, 2012, which represented 0.91% of net loans receivable and 390.1% of non-performing loans. During the nine months ended December 31, 2012, the Company charged off $57,000 in home equity loans and lines of credit, while providing $40,000 to augment the reserve. Recoveries during the nine months ended December 31, 2012 included $5,000 against commercial loans and $1,000 against home equity loans and lines of credit previously charged off. Management and the Board of the Company continue to closely monitor the loan portfolio and will continue to provide for potential losses as they become likely.

The Company’s loan portfolio continues to be dependent on the strength of the local real estate market and further deterioration in that market or other negative economic conditions could have an adverse impact on the Company’s results. In addition, commercial, construction, and commercial real estate financing are generally considered to involve a higher degree of credit risk than long-term financing of residential properties due to their higher potential for default and the possible difficulty of disposing of the underlying collateral. As management continues to monitor the Company’s loan portfolio, higher provisions for loan losses and foreclosed property expense may be required should economic conditions worsen or the levels of non-performing assets increase.

The Company also maintains an allowance for loan losses against off-balance sheet credit exposures (included in other liabilities on the balance sheet). This allowance totaled $110,000 at December 31, 2012 and March 31, 2012. This allowance is intended to protect the Company against potential losses on undrawn or unfunded loan commitments made to customers.

During the nine months ended December 31, 2012, total deposits, after interest credited, increased by $2.9 million, consisting of an increase of $9.2 million in checking and savings accounts, offset by a decrease of $6.3 million in certificate of deposit balances. Additionally, during the nine months ended December 31, 2012, advances and borrowings outstanding remained constant at $1.0 million.

Total stockholders’ equity increased by $716,000 when compared to March 31, 2012. The increase in total equity is due to net income for the nine months of $1,171,000 and stock-based compensation credits totaling $74,000. Those increases in total equity were partially offset during the nine-month period by dividends paid of $0.18 per share totaling $371,000 and Company stock repurchases totaling $65,000. Additionally, total equity decreased by $93,000 due to a reduction in the net unrealized gain on securities classified as available-for-sale.

26

Results of Operations:

Comparison of the three months ended December 31, 2012 and January 31, 2012:

General:

Net income for the three months ended December 31, 2012 was $407,000 compared with net income of $341,000 for the three months ended January 31, 2012, an increase of $66,000 or 19.4%. Net interest income decreased by $75,000, the provision for loan losses decreased by $80,000, total non-interest income increased by $46,000, and total non-interest expense decreased by $72,000.

The Company’s results largely depend upon its net interest margin, which is the difference between the income earned on loans and investments, and the interest paid on deposits and borrowings as a percentage of average interest-earning assets. As compared to the quarter ended January 31, 2012, during the three months ended December 31, 2012, the Company’s net interest margin decreased from 3.62% to 3.42%. This decrease in net interest margin is primarily a result of the decrease in yields on interest-earning assets.

Mayflower Bancorp, Inc. and Subsidiary

Analysis of Interest Rate Spread

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

	Three months ended
	December 31, 2012							January 31, 2012
	Average Balance (1)		Interest		Rate (Annualized)			Average Balance (1)		Interest		Rate (Annualized)
	(Dollars in Thousands)
Interest-earning assets:
Loans	$	141,679	$	1,772		5.00	%	$	125,724	$	1,730		5.50	%
Investment securities		85,589		472		2.21	%		93,894		676		2.88	%
Interest-bearing deposits in banks		6,988		5		0.29	%		9,903		6		0.24	%
All interest-earning assets	$	234,256		2,249		3.84	%	$	229,521		2,412		4.20	%
Interest-bearing liabilities:
Deposits	$	227,407		235		0.41	%	$	223,073		304		0.55	%
Borrowed funds		1,000		11		4.40	%		2,500		30		4.80	%
All interest-bearing liabilities	$	228,407		246		0.43	%	$	225,573		334		0.59	%
Net interest income			$	2,003						$	2,078
Weighted average interest rate spread (2)						3.41	%						3.61	%
Net interest margin						3.42	%						3.62	%

(1) Average balances calculated using daily balances

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

27

The effect on net interest income as a result of changes in interest rates and in the amount of interest-earning assets and interest-bearing liabilities is shown in the following table. Information is provided in the table below on changes for the period indicated attributable to (1) changes in volume (change in average balance multiplied by prior period yield), (2) changes in interest rates (changes in yield multiplied by prior period average balance) and (3) the combined effect of changes in interest rates and volume (change in yield multiplied by change in average balance).

	Three months ended December 31, 2012 vs. Three months ended January 31, 2012
	Changes due to increase (decrease)
	(in thousands)
	Total			Volume			Rate			Rate/ Volume
Interest income:
Loans	$	42		$	220		$	(158	)	$	(20	)
Investment securities		(204	)		(60	)		(158	)		14
Interest-bearing deposits in banks		(1	)		(1	)		0			0
Total		(163	)		159			(316	)		(6	)
Interest expense:
Deposits		(69	)		6			(74	)		(1	)
Borrowed funds		(19	)		(18	)		(3	)		2
Total		(88	)		(12	)		(77	)		1
Increase (decrease) in net interest income	$	(75	)	$	171		$	(239	)	$	(7	)

Interest and Dividend Income:

Total interest and dividend income decreased by $163,000, or 6.8%, to $2.2 million for the three months ended December 31, 2012. Interest income from loans increased by $42,000. This increase was due to an increase of $16.0 million in the average balance of loans outstanding, offset by a reduction in the average rate earned on loans, from 5.50% to 5.00% on an annualized basis. Interest and dividend income on investment securities decreased by $204,000 as a result of a decrease in the average yield earned, from 2.88% in the quarter ended January 31, 2012 to 2.21% in the quarter ended December 31, 2012, coupled with a decrease of $8.3 million in the average balance of investments. Income from interest-bearing deposits in banks decreased by $1,000 due to a decrease of $2.9 million in their average balance.

Interest Expense:

Interest expense decreased by $88,000, or 26.3%, to $246,000 for the three months ended December 31, 2012. Interest expense on deposits decreased by $69,000 as a result of a decrease in the average rate paid, from 0.55% to 0.41%, offset by an increase of $4.3 million in the average balance of deposits. Interest expense on borrowed funds decreased by $19,000, or 63.3%, for the three months ended December 31, 2012. This decrease was due to a reduction of $1.5 million in the average balance of advances outstanding and a decrease in the average rate paid from 4.80% for the quarter ended January 31, 2012 to 4.40% for the quarter ended December 31, 2012.

Provision for Loan Losses:

The provision for loan losses was $10,000 for the quarter ended December 31, 2012, compared to $90,000 for the quarter ended January 31, 2012. The allowance for loan losses is maintained at a level that management and the Board of the Company consider adequate to provide for probable losses based upon evaluation of known and inherent risks in the loan portfolio. In determining the appropriate level

28

for the allowance for loan losses, the Company considers past loss experience, evaluations of underlying collateral, prevailing economic conditions, the nature of the loan portfolio and levels of non-performing and other classified loans. While management uses available information to recognize loan losses, future additions to the allowance may be necessary based on additional increases in non-performing loans, changes in economic conditions, or for other reasons.

Non-interest Income:

Non-interest income increased by $46,000 for the three months ended December 31, 2012 as compared to the three months ended January 31, 2012. This increase was primarily due to an increase of $86,000 in gain on sales of mortgage loans to the secondary market and an increase of $29,000 in gain on sales of investment securities. Additionally, interchange income increased by $7,000. These increases were offset by a decrease of $3,000 in loan origination and other loan fees and a decrease of $27,000 in customer service fees due to reduced overdraft fees. Finally, other non-interest income decreased by $46,000 due to the elimination of the special dividend from The Co-operative Central Bank received in the prior year period.

Non-interest Expense:

Total non-interest expense decreased by $72,000 or 3.6% for the quarter ended December 31, 2012. This decrease was partially a result of a decrease of $70,000 in losses and expenses of other real estate owned, due to reduced levels of other real estate owned, a decrease of $6,000 in occupancy and equipment expense, and a decrease of $9,000 in FDIC assessment expense. These decreases were partially offset by an increase of $13,000 in other expenses.

Provision for Income Taxes:

The provision for income taxes increased by $57,000 for the quarter ended December 31, 2012 when compared to the quarter ended January 31, 2012, due to the increase in net income before taxes. Effective income tax rates were 37.0% and 34.8%, respectively, in the December 2012 and January 2012 periods. The lower effective tax rate in comparison to statutory rates is reflective of income earned by a non-bank investment subsidiary which is taxed, for state tax purposes, at a lower rate and interest earned on tax-exempt municipal obligations.

Results of Operations:

Comparison of the nine months ended December 31, 2012 and January 31, 2012:

General:

Net income for the nine months ended December 31, 2012 was $1,171,000 compared with net income of $993,000 for the nine months ended January 31, 2012, an increase of $178,000 or 17.9%. Net interest income decreased by $205,000 or 3.3%, the provision for loan losses decreased by $157,000, total non-interest income increased by $277,000, and total non-interest expense decreased by $78,000.

The Company’s results largely depend upon its net interest margin, which is the difference between the income earned on loans and investments, and the interest paid on deposits and borrowings as a percentage of average interest-earning assets. During the nine months ended December 31, 2012, the Company’s net interest margin decreased from 3.62% to 3.47%, when compared to the nine months ended January 31, 2012. This decrease in net interest margin is partially the result of a decrease in the yield on interest earning assets, in particular, loans and investments.

29

Mayflower Bancorp, Inc. and Subsidiary

Analysis of Interest Rate Spread

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

	Nine months ended
	December 31, 2012							January 31, 2012
	Average Balance (1)		Interest		Rate (Annualized)			Average Balance (1)		Interest		Rate (Annualized)
	(Dollars in Thousands)
Interest-earning assets:
Loans	$	137,874	$	5,290		5.12	%	$	124,308	$	5,198		5.58	%
Investment securities		87,454		1,587		2.42	%		94,193		2,183		3.09	%
Interest-bearing deposits in banks		8,782		16		0.24	%		13,206		24		0.24	%
All interest-earning assets	$	234,110		6,893		3.93	%	$	231,707		7,405		4.26	%
Interest-bearing liabilities:
Deposits	$	227,524		768		0.45	%	$	226,156		1,018		0.60	%
Borrowed funds		1,000		34		4.53	%		2,555		91		4.75	%
All interest-bearing liabilities	$	228,524		802		0.47	%	$	228,711		1,109		0.65	%
Net interest income			$	6,091						$	6,296
Weighted average interest rate spread (2)						3.46	%						3.61	%
Net interest margin						3.47	%						3.62	%

(1) Average balances calculated using daily balances

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

The effect on net interest income as a result of changes in interest rates and in the amount of interest-earning assets and interest-bearing liabilities is shown in the following table. Information is provided in the table below on changes for the period indicated attributable to (1) changes in volume (change in average balance multiplied by prior period yield), (2) changes in interest rates (changes in yield multiplied by prior period average balance) and (3) the combined effect of changes in interest rates and volume (change in yield multiplied by change in average balance).

30

	Nine months ended December 31, 2012 vs. Nine months ended January 31, 2012
	Changes due to increase (decrease)
	(in thousands)
	Total			Volume			Rate			Rate/ Volume
Interest income:
Loans	$	92		$	567		$	(428	)	$	(47	)
Investment securities		(596	)		(156	)		(474	)		34
Interest-bearing deposits in banks		(8	)		(8	)		0			0
Total		(512	)		403			(902	)		(13	)
Interest expense:
Deposits		(250	)		6			(255	)		(1	)
Borrowed funds		(57	)		(55	)		(4	)		2
Total		(307	)		(49	)		(259	)		1
Increase (decrease) in net interest income	$	(205	)	$	452		$	(643	)	$	(14	)

Interest and Dividend Income:

Total interest and dividend income decreased by $512,000, or 6.9%, to $6.9 million for the nine months ended December 31, 2012. Interest income from loans increased by $92,000. This increase was due to growth of $13.6 million in the average balance of loans outstanding, as offset by a reduction in the average rate earned on loans, from 5.58% to 5.12% on an annualized basis. Interest and dividend income on investment securities decreased by $596,000 as a result of a decrease in the average yield earned, from 3.09% for the nine months ended January 31, 2012 to 2.42% for the nine months ended December 31, 2012, coupled with a decrease of $6.7 million in the average balance of investments. Income from interest-bearing deposits in banks decreased by $8,000 due to a decrease of $4.4 million in their average balance.

Interest Expense:

Interest expense decreased by $307,000, or 27.7%, to $802,000 for the nine months ended December 31, 2012. Interest expense on deposits decreased by $250,000, a result of a decrease in the average rate paid, from 0.60% to 0.45%, as offset by an increase of $1.4 million in the average balance of deposits. Interest expense on borrowed funds decreased by $57,000, or 62.6%, for the nine months ended December 31, 2012. This decrease was due to a reduction of $1.6 million in the average balance of advances outstanding, coupled with a decrease in the average rate paid on borrowed funds, from 4.75% in the January 2012 nine-month period to 4.53% in the December 2012 nine-month period.

Provision for Loan Losses:

The provision for loan losses was $40,000 for the nine months ended December 31, 2012, compared to $197,000 for the nine months ended January 31, 2012. The allowance for loan losses is maintained at a level that management and the Company’s Board of Directors consider adequate to provide for probable losses based upon evaluation of known and inherent risks in the loan portfolio. In determining the appropriate level for the allowance for loan losses, the Company considers past loss experience, evaluations of underlying collateral, prevailing economic conditions, the nature of the loan portfolio and levels of non-performing and other classified loans. While management uses available information to recognize loan losses, future additions to the allowance may be necessary based on additional increases in non-performing loans, changes in economic conditions, or for other reasons.

31

Non-interest Income:

Non-interest income increased by $277,000 for the nine months ended December 31, 2012 as compared to the nine months ended January 31, 2012. This increase was due to an increase of $329,000 in gains on sales of residential mortgage loans to the secondary market, coupled with an increase of $14,000 in gains realized upon the on sale of investments. Additionally, loan origination and other loan fees increased by $6,000 and interchange income on debit card transactions increased by $18,000. Finally, customer service fees decreased by $59,000, due to a reduction in return check fees collected, while other income decreased by $31,000.

Non-interest Expense:

Total non-interest expense decreased by $78,000 or 1.3% for the nine months ended December 31, 2012. This decrease was attributable to a decrease of $18,000 in occupancy and equipment expense, a decrease of $23,000 in FDIC assessment expense, and a decrease of $82,000 in losses and expenses of foreclosed real estate. These decreases were partially offset by an increase of $25,000 in compensation and fringe benefit expense and an increase of $20,000 in other expenses.

Provision for Income Taxes:

The provision for income taxes increased by $129,000 for the nine months ended December 31, 2012 when compared to the nine months ended January 31, 2012. Effective income tax rates were 35.0% and 33.5% respectively in the December 2012 and January 2012 periods. The lower effective tax rate in comparison to statutory rates is reflective of income earned by a non-Bank investment subsidiary, which is taxed, for state tax purposes, at a lower rate, and tax exempt interest income from municipal obligations.

Interest Rate Risk Exposure and the Interest Rate Spread:

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

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

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

32

MAYFLOWER BANCORP, INC. AND SUBSIDIARY

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item is not applicable as the Company is a smaller reporting company.

Item 4. Controls and Procedures

As of the end of the period covered by this report, management of the Company carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of both the Securities and Exchange Commission. It should be noted that the design of the Company’s disclosure controls and procedures is based in part upon certain reasonable assumptions about the likelihood of future events, and there can be no reasonable assurance that any design of disclosure controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote, but the Company’s principal executive and financial officers have concluded that the Company’s disclosure controls and procedures are, in fact, effective at a reasonable assurance level.

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required under paragraph (d) of Securities and Exchange Commission Rule 13a-15 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Item 1. Legal Proceedings

None

Item 1.A. Risk Factors

There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the 11-month transition period ended March 31, 2012.

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

Exhibit 3.1	Articles of Organization of Mayflower Bancorp, Inc (1)
Exhibit 3.2	Bylaws of Mayflower Bancorp, Inc., as amended (2)
Exhibit 4	Stock Certificate for Common Stock of Mayflower Bancorp, Inc. (1)
Exhibit 31	Rule 13a-14(a)/15d-14(a) Certifications

33

Exhibit 32

Section 1350 Certifications

Exhibit 101*

The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Changes in Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements.

(1) Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 0-52477), filed with the SEC on February 16, 2007.

(2) Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 0-52477), filed with the SEC on February 14, 2012.

* Furnished, not filed.

34

SIGNATURES

In accordance with the requirements of the Exchange Act the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MAYFLOWER BANCORP, INC.
Date: February 14, 2013
	/s/ Edward M. Pratt
	Edward M. Pratt, President & Chief Executive Officer
	(Duly Authorized Officer)
	/s/ Maria Vafiades
	Maria Vafiades, Chief Financial Officer
	(Principal Financial & Accounting Officer)

35