As filed with the Securities and Exchange Commission on May 10, 2010

Registration No. 333-165480

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

PRE-EFFECTIVE AMENDMENT NO. 2

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Fairfield County Bank Corp.

and

Fairfield County Bank Incentive Retirement Plan

(Exact name of registrant as specified in its charter)

United States

6035

To be Applied For

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(IRS Employer

Identification No.)

150 Danbury Road

Ridgefield, Connecticut

(203) 438-6518

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Gary C. Smith

Chief Executive Officer

Fairfield County Bank Corp.

150 Danbury Road

Ridgefield, Connecticut 06877

(203) 438-6518

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Paul M. Aguggia, Esquire

Lori M. Beresford, Esquire

Kilpatrick Stockton LLP

607 14^th Street, NW, Suite 900

Washington, DC 20005

(202) 508-5800

William W. Bouton, III, Esquire

Hinckley, Allen & Snyder LLP

20 Church Street

Hartford, Connecticut 06103

(860) 725-6200

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

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

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

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

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

Calculation of Registration Fee



Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit	Proposed maximum Aggregate offering price (1)	Amount of Registration fee
Common Stock $0.01 par value	6,837,325 (2)	$10.00	$68,373,250	$ — (3)
Participation Interests	— (4)	—	$ — (4)	$ — (4)

(1)	Estimated solely for the purpose of calculating the registration fee.

(2)	In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.

(3)	The registration fee of $4,876 was previously paid upon the initial filing of the Form S-1 on March 15, 2010.

(4)

The securities of Fairfield County Bank Corp. to be purchased by the Registrant’s 401(k) Plan are included in the amount shown for the common stock. Accordingly, no separate fee is required for the participation interests. In accordance with Rule 457(h) of the Securities Act of 1933, as amended, the registration fee has been calculated on the basis of the number of shares of common stock that may be purchased with the current assets of such Plan.

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

PARTICIPATION INTERESTS IN

FAIRFIELD COUNTY BANK

INCENTIVE RETIREMENT PLAN

AND

OFFERING OF 2,752,215 SHARES OF

FAIRFIELD COUNTY BANK CORP.

COMMON STOCK ($.01 PAR VALUE)

This prospectus supplement relates to the offer and sale to participants in the Fairfield County Bank Incentive Retirement Plan (the “401(k) Plan”) of participation interests and shares of common stock of Fairfield County Bank Corp. (“Fairfield County”) in connection with the initial public offering of Fairfield County.

401(k) Plan participants may direct Countybank, as the trustee for the Fairfield County Stock Fund, to use all or a portion of their account balances to subscribe for and purchase shares of Fairfield County common stock through the Fairfield County Stock Fund. Based on the value of the 401(k) Plan assets as of March 1, 2010, the trustee may purchase up to 2,752,215 shares of Fairfield County common stock at a purchase price of $10.00 per share. This prospectus supplement relates to the election of 401(k) Plan participants to direct the trustee to invest their 401(k) Plan account funds in Fairfield County common stock.

The Fairfield County prospectus dated , 2010, which is attached to this prospectus supplement, includes detailed information regarding the offering of shares of Fairfield County common stock and the financial condition, results of operations and business of Fairfield County Bank (the “Bank”). This prospectus supplement provides information regarding the 401(k) Plan. You should read this prospectus supplement together with the prospectus and keep both for future reference.

Please refer to “Risk Factors” beginning on page of the prospectus.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, nor any other state or federal agency or any state securities commission, has approved or disapproved these securities. Any representation to the contrary is a criminal offense.

These securities are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This prospectus supplement may be used only in connection with offers and sales by Fairfield County of participation interests or shares of common stock under the 401(k) Plan in the offering. No one may use this prospectus supplement to re-offer or resell interests or shares of common stock acquired through the 401(k) Plan.

You should rely only on the information contained in this prospectus supplement and the attached prospectus. Neither Fairfield County, the Bank nor the 401(k) Plan has authorized anyone to provide you with different information.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the prospectus nor any sale of common stock shall under any circumstances imply that there has been no change in the affairs of the Bank or the 401(k) Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this Prospectus Supplement is , 2010.

TABLE OF CONTENTS


		Page
THE STOCK OFFERING
Securities Offered		1
Election to Purchase Fairfield County Common Stock in the Stock Offering		1
Value of Participation Interests		2
Method of Directing Transfer		2
Purchases After the Close of the Stock Offering		2
Time for Directing Transfer		2
Irrevocability of Transfer Direction		2
Purchase Price of Fairfield County Common Stock		2
Nature of a Participant’s Interest in Fairfield County Common Stock		3
Voting and Tender Rights of Fairfield County Common Stock		3

DESCRIPTION OF THE 401(k) PLAN
Introduction		3
Eligibility and Participation		3
Contributions Under the 401(k) Plan		4
Limitations on Contributions		4
401(k) Plan Investments		5
Investment Descriptions		6
Benefits Under the 401(k) Plan		8
Withdrawals and Distributions from the 401(k) Plan		8

ADMINISTRATION OF THE 401(k) PLAN
Trustees		8
Reports to 401(k) Plan Participants		8
Plan Administrator		9
Amendment and Termination		9
Merger, Consolidation or Transfer		9
Federal Income Tax Consequences		9
Restrictions on Resale		10
SEC Reporting and Short-Swing Profit Liability		11

LEGAL OPINION		11

THE STOCK OFFERING

Securities Offered

The securities offered in connection with this prospectus supplement are participation interests in the 401(k) Plan. At a purchase price of $10.00 per share, the trustee may acquire up to 2,752,215 shares of Fairfield County common stock in the initial public offering (the “Stock Offering”) on behalf of the plan participants. The interests offered by means of this prospectus supplement are conditioned on the close of the Stock Offering. Certain subscription rights and purchase limitations also govern your investment in the Fairfield County Stock Fund in connection with the Stock Offering. See “The Conversion and Stock Offering – Subscription Offering and Subscription Rights” and “– Limitations on Purchases of Shares” in the prospectus attached to this prospectus supplement for further discussion of these subscription rights and purchase limitations.

This prospectus supplement contains information regarding the 401(k) Plan. The attached prospectus contains information regarding the Stock Offering and the financial condition, results of operations and business of the Bank and its affiliates. The address of the principal executive office of Fairfield County Bank is 150 Danbury Road, Ridgefield, Connecticut 06877. The telephone number of the Bank is (203) 438-6518.

Election to Purchase Fairfield County Common Stock in the Stock Offering

In connection with the Stock Offering, you may direct the trustee to use your 401(k) Plan funds to subscribe for Fairfield County common stock through the Fairfield County Stock Fund. In order to use your 401(k) Plan funds to subscribe for shares in the Stock Offering, you must first transfer funds from your current 401(k) Plan investments into the Fairfield County Stock Cash Account (“FCS Cash Account”). The funds you transfer to FCS Cash Account must be divisible by $10.00 (the per share price of common stock in the Stock Offering). Once you transfer funds into the FCS Cash Account you will not be able to move those funds out of the FCS Cash Account until after the close of the Stock Offering. If there is not enough Fairfield County common stock available in the Stock Offering to fill all subscriptions, the common stock will be apportioned and the trustee may not be able to purchase all of the common stock you requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are not invested in Fairfield County Stock Fund) will be held in the FCS Cash Account, earning a market rate of interest, until after the close of the Stock Offering at which time you can then reinvest your funds in any of the 401(k) Plan investments. If you do not reinvest your funds held in the FCS Cash Account within 30 days after the close of the Stock Offering, your funds will be automatically transferred to the Morley Stable Value Fund.

All plan participants can direct the trustee to subscribe for shares of Fairfield County common stock through the Fairfield County Stock Fund. However, your directions are subject to your subscription rights, purchase limitations and purchase priorities. See “Summary – Persons Who Can Order Stock in the Offering” in the attached prospectus. Fairfield County has granted rights to subscribe for shares of Fairfield County common stock to the following persons in the following order of priority: (1) persons with $50 or more on deposit at the Bank as of the close of business on December 31, 2008; (2) the Fairfield County Bank Employee Stock Ownership Plan; (3) persons with $50 or more on deposit at the Bank as of the close of business on March 31, 2010; and (4) depositors of the Bank as of the close of business on , 20 , who are not eligible under categories 1 and 3 above. If you fall into one of the above subscription offering categories, you have subscription rights to purchase shares of Fairfield County common stock in the Stock Offering and you may use your account balance in the 401(k) Plan to subscribe for shares of Fairfield County common stock.

The limitations on the total amount of Fairfield County common stock that you may purchase in the Stock Offering, as described in the prospectus (see “The Conversion and Stock Offering – Limitations on Purchases of Shares”), will be calculated based on the aggregate amount that you subscribed for: (a) through your 401(k) Plan account and (b) through your sources of funds outside of the 401(k) Plan. Whether you place an order through the 401(k) Plan, outside the 401(k) Plan, or both, the number of shares of Fairfield County common stock, if any, that you receive will be determined based on the total number of subscriptions, your purchase priority and the allocation priorities described in the prospectus. If, as a result of the calculation, you are allocated insufficient shares to fill all of your orders, available shares will be allocated between orders on a pro rata basis.

Value of Participation Interests

As of March 1, 2010, the market value of the 401(k) Plan assets equaled approximately $27.0 million. The plan administrator distributed quarterly benefit statements to each participant reflecting the value of his or her beneficial interest in the 401(k) Plan as of March 31, 2010. The value of the 401(k) Plan assets represents past contributions made to the 401(k) Plan on your behalf, plus or minus earnings or losses on the contributions, less previous withdrawals.

Method of Directing Transfer

In order to facilitate your investment in the Fairfield County Stock Fund in connection with the Stock Offering, you must complete, sign and submit the blue form included with this prospectus supplement (the “Investment Form”). In addition to the general purchaser information required on the Investment Form, you must indicate the following information: (1) the exact dollar amount that you would like to invest in the Fairfield County Stock Fund; (2) the type of subscription rights you have in the Stock Offering (if any); and (3) that the funds to be used to subscribe for shares of Fairfield County common stock, through the Fairfield County Stock Fund, will be debited from your interest in the FCS Cash Account as of June , 2010. You must transfer a sufficient amount of your 401(k) Plan assets to the FCS Cash Account before you submit the Investment Form to Tim Kidman in the Human Resources Department. You can facilitate the transfer of funds by accessing the USI Consulting website at www.usicg.com or calling the toll free benefits hotline at 1-866-305-8846. If you have never accessed your account through the USI Consulting website or if you forgot your login or password information, please call USI Consulting at 1-866-305-8846. If you have insufficient funds in the FCS Cash Account when you submit your Investment Form, your subscription order will be pro-rated based on the funds you have in the FCS Cash Account as of , 2010.

If you do not wish to invest in the Fairfield County Stock Fund at this time, you do not need to take any action. The minimum investment in the Fairfield County Stock Fund during the offering is $250 and the maximum individual investment is $1,000,000. All funds transferred into the FCS Cash Account during the Stock Offering cannot be transferred out of the FCS Cash Account until after the close of the Stock Offering.

Purchases After the Close of the Stock Offering

Following the close of the Stock Offering, you will be able to direct the investment of your 401(k) Plan funds and future deferrals into the Fairfield County Stock Fund through the internet or by phone. You will receive a separate prospectus after the close of the Stock Offering which will explain the terms and conditions of all future purchases of Fairfield County common stock through the Fairfield County Stock Fund.

Time for Directing Transfer

The deadline to submit your Investment Form to Tim Kidman, in the Human Resources Department, is 5:00 pm local time, on June , 2010, unless extended by the Bank. If you have any questions regarding the Fairfield County Stock Fund, you can call Tim Kidman at (203) 431-7525.

Irrevocability of Transfer Direction

Once you have submitted your Investment Form, you cannot change your investment direction. Following the closing of the Stock Offering and the initial purchase of shares in the Fairfield County Stock Fund, you will again have complete access to any funds you directed towards the purchase of shares of Fairfield County common stock in the Stock Offering. Special restrictions may apply to transfers directed to and from the Fairfield County Stock Fund by participants who are subject to Section 16(b) of the Securities Exchange Act of 1934, as amended. See “SEC Reporting and Short-Swing Profit Liability.”

Purchase Price of Fairfield County Common Stock

The trustee will pay the same price for shares of Fairfield County common stock ($10.00 per share) as all other persons who purchase shares of Fairfield County common stock in the Stock Offering. If there is not enough

common stock available in the Stock Offering to fill all subscriptions, the common stock will be apportioned and the trustee may not be able to purchase all of the common stock you requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are not invested in Fairfield County common stock) remain in the FCS Cash Account earning market rates of interest until the close of the Stock Offering at which time you will be able to re-invest the funds in any of the 401(k) Plan investments.

Nature of a Participant’s Interest in Fairfield County Common Stock

Countybank, as the Fairfield County Stock Fund trustee, will hold Fairfield County common stock in the name of the 401(k) Plan. The trustee will credit shares of Fairfield County common stock acquired at your direction to your account under the 401(k) Plan. Your interest in the Fairfield County Stock Fund will be recorded in stock units. Immediately following the close of the Stock Offering, each stock unit will have the same value as a share of Fairfield County common stock. As future deferrals are invested in the Fairfield County Stock Fund, each stock unit will be comprised of a cash and stock component based on an overall liquidity target for the Fairfield County Stock Fund of 5.0%.

Voting and Tender Rights of Fairfield County Common Stock

The trustee will exercise voting and tender rights attributable to all Fairfield County common stock held in the Fairfield County Stock Fund, as directed by participants with interests in the Fairfield County Stock Fund. With respect to each matter as to which holders of Fairfield County common stock have a right to vote, you will have voting instruction rights that reflect your proportionate interest in the Fairfield County Stock Fund. The number of shares of Fairfield County common stock held in the Fairfield County Stock Fund voted for and against each matter will be proportionate to the number of voting instruction rights exercised. If there is a tender offer for Fairfield County common stock, the 401(k) Plan allots each participant a number of tender instruction rights reflecting each participant’s proportionate interest in the Fairfield County Stock Fund. The percentage of shares of Fairfield County common stock held in the Fairfield County Stock Fund that will be tendered will be the same as the percentage of the total number of tender instruction rights exercised in favor of the tender offer. The remaining shares of Fairfield County common stock held in the Fairfield County Stock Fund will not be tendered. The 401(k) Plan provides that participants will exercise their voting instruction rights and tender instruction rights on a confidential basis.

DESCRIPTION OF THE 401(k) PLAN

Introduction

The Bank adopted the amended and restated 401(k) Plan effective January 1, 2010. The Bank intends for the 401(k) Plan to comply, in form and in operation, with all applicable provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Bank may amend the 401(k) Plan from time to time in the future to ensure continued compliance with these laws. The Bank may also amend the 401(k) Plan from time to time in the future to add, modify, or eliminate certain features of the plan, as it sees fit. Federal law provides you with various rights and protections as a participant in the 401(k) Plan, which is governed by ERISA. However, the Pension Benefit Guaranty Corporation does not guarantee your benefits under the 401(k) Plan.

Reference to Full Text of the Plan. The following portions of this prospectus supplement summarize the material provisions of the 401(k) Plan. The Bank qualifies this summary in its entirety by reference to the full text of the 401(k) Plan. You may obtain copies of the 401(k) Plan document, including any amendments to the plan and a summary plan description, by contacting Tim Kidman at (203) 431-7525. You should carefully read the 401(k) Plan documents to understand your rights and obligations under the 401(k) Plan.

Eligibility and Participation

You are eligible to participate in the 401(k) Plan for all plan purposes if you are 19 years of age or older and have completed 30 days of service with the Bank. Once you have satisfied the eligibility requirements, you will be automatically enrolled in the 401(k) Plan and 3% of your pay will be withheld from your paycheck, unless you affirmatively opt out of the Plan or elect to increase or decrease your deferral percentages.

As of March 1, 2010, 322 of the 331 active eligible employees of the Bank participated in the 401(k) Plan.

Contributions Under the 401(k) Plan

Employee Pre-Tax Salary Deferrals. Subject to certain Internal Revenue Service limitations, the 401(k) Plan currently permits you to make pre-tax salary deferrals each payroll period of up to 100% of your compensation. For purposes of the plan, compensation is defined as your wages, bonus, commissions or other cash compensation paid to you by the Bank that is subject to tax withholding. In addition to pre-tax salary deferrals, you may make “catch up” contributions if you are currently age 50 or will be 50 before the end of the calendar year. You are always 100% vested in your elective deferrals.

Matching Contributions. The 401(k) Plan currently provides that the Bank will make matching contributions on behalf of each eligible participant with respect to each eligible participant’s elective deferrals. If you elect to defer funds into the 401(k) Plan, the Bank will match 50% of your elective deferrals up to 6% of your compensation. The Bank makes matching contributions only to those participants who actively defer a percentage of their compensation into the 401(k) Plan. Participants vest in their matching contributions at a rate of 25% after two years of service and 25% each year thereafter.

Discretionary Contributions. The 401(k) Plan provides that the Bank may make a discretionary contribution under the 401(k) Plan at the end of the plan year. The amount of the contribution is determined at the end of the plan year. In order to be eligible for the contribution you must be employed by the Bank on the last day of the plan year or terminate employment due to death, disability or retirement at age 65. In 2009, the Bank made a discretionary contribution to eligible participants equal to 3% of compensation. Participant’s vest in their discretionary contributions at a rate of 25% after two years of service and 25% each year thereafter.

Rollover Contributions. The Bank allows employees who receive a distribution from a previous employer’s tax-qualified employee benefit plan to deposit that distribution into a Rollover Contribution account under the 401(k) Plan, provided the rollover contribution satisfies IRS requirements. For additional information on Rollover Contributions see the Summary Plan Description for the 401(k) Plan.

Limitations on Contributions

Limitation on Employee Salary Deferrals. By law, your total deferrals under the 401(k) Plan, together with similar plans, may not exceed $16,500 for 2010. Eligible employees who are age 50 and over may also make additional “catch-up” contributions to the plan, up to a maximum of $5,500 for 2010. The Internal Revenue Service periodically increases these limitations. An eligible participant who exceeds these limitations must include any excess deferrals in gross income for federal income tax purposes in the year of deferral. In addition, the participant must pay federal income taxes on any excess deferrals when distributed by the 401(k) Plan to the participant, unless the plan distributes the excess deferrals and any related income no later than the first April 15th following the close of the taxable year in which the participant made the excess deferrals. Any income on excess deferrals distributed before such date is treated, for federal income tax purposes, as earned and received by the participant in the taxable year of the distribution.

Limitation on Annual Additions and Benefits. As required by the Internal Revenue Code, the 401(k) Plan provides that the total amount of contributions and forfeitures (annual additions) credited to a participant during any year under all defined contribution plans of the Bank (including the 401(k) Plan and the proposed the Fairfield County Community Bank Employee Stock Ownership Plan) may not exceed the lesser of 100% of the participant’s annual compensation or $49,000 for 2010.

Limitation on Plan Contributions for Highly Compensated Employees. Special provisions of the Internal Revenue Code limit the amount of pre-tax and matching contributions that may be made to the 401(k) Plan in any year on behalf of highly compensated employees, in relation to the amount of pre-tax and matching contributions made by or on behalf of all other employees eligible to participate in the 401(k) Plan. If pre-tax and matching contributions exceed these limitations, the plan must adjust the contribution levels for highly compensated employees.

In general, a highly compensated employee includes any employee who (1) was a 5% owner of the sponsoring employer at any time during the year or the preceding year, or (2) had compensation for the preceding year in excess of $110,000 and, if the sponsoring employer so elects, was in the top 20% of employees by compensation for that year. The preceding dollar amount applies for 2010 and may be adjusted periodically by the Internal Revenue Service.

Top-Heavy Plan Requirements. If the 401(k) Plan is a “Top-Heavy Plan” for any calendar year, the Bank may be required to make certain minimum contributions to the 401(k) Plan on behalf of non-key employees. In general, the 401(k) Plan will be treated as a Top-Heavy Plan for any calendar year if, as of the last day of the preceding calendar year, the aggregate balance of the accounts of “Key Employees” exceeds 60% of the aggregate balance of the accounts of all employees under the plan. A Key Employee is generally any employee who, at any time during the calendar year or any of the four preceding years, is:

(1)

an officer of the Bank whose annual compensation exceeds $160,000;

(2)

a 5% owner of the employer, meaning an employee who owns more than 5% of the outstanding stock of Fairfield County, or who owns stock that possesses more than 5% of the total combined voting power of all stock of Fairfield County; or

(3)

a 1% owner of the employer, meaning an employee who owns more than 1% of the outstanding stock of Fairfield County, or who owns stock that possesses more than 1% of the total combined voting power of all stock of Fairfield County, and whose annual compensation exceeds $150,000.

The foregoing dollar amounts are for 2010.

401(k) Plan Investments

Effective March 1, 2010, the 401(k) Plan offers the following investment choices:


	Annual Rates of Return as of December 31,
Fund Name	2009		2008		2007
Morley Stable Value	1.65	%	3.43	%	3.61
PIMCO Real Return Admin	18.67		(6.66	)	11.31
American Funds Bond Fund of America	14.91		(12.33	)	3.37
American Funds Income Fund of America	24.51		(28.85	)	3.77
Russell LifePoints 2010 Strategy R3	22.75		(21.88	)	6.18
Russell LifePoints 2020 Strategy R3	26.02		(29.22	)	6.55
Russell LifePoints 2030 Strategy R3	29.87		(39.32	)	6.88
Russell LifePoints 2040 Strategy R3	30.01		(39.72	)	6.73
American Funds Investment Company of America	27.18		(34.73	)	5.94
Vanguard 500 Index Investor	26.49		(37.02	)	5.39
American Funds Growth Fund of America	34.48		(39.07	)	10.95
American Funds New Economy A	45.16		(41.86	)	11.39
Goldman Sachs Mid Cap Value A	32.70		(36.73	)	2.91
T. Rowe Price Mid-Cap Growth	45.46		(39.69	)	17.65
Oppenheimer Main Street Small Cap N	36.55		(38.41	)	(1.86	)
American Funds Euro Pacific Growth A	39.10		(40.53	)	18.96
American Funds New Perspective A	37.43		(37.83	)	16.04

Investment Descriptions

The Morley Stable Value fund is a collective investment fund consisting of a diversified portfolio of high quality stable value investment contracts issued by life insurance companies, banks and other financial institutions. The principal value of these assets remain stable regardless of stock and bond market fluctuations. The return is a blend of all the rates of the various investments purchased by the fund.

The PIMCO Real Return Admin seeks maximum real return. The fund normally invests at least 80% of net assets in inflation-indexed bonds of varying maturities. It invests primarily in investment-grade securities, but may invest up to 10% of total assets in high-yield securities (“junk bonds”). The fund may invest all of assets in derivative instruments. It is nondiversified.

The American Funds Bond Fund of America seeks current income consistent with preservation of capital. The fund normally invests at least 80% of assets in bonds. It normally invests at least 60% of assets in bonds and debt securities rated A or better at the time of purchase. The fund will not invest more than 40% of assets in other debt obligations, including lower rated bonds.

The American Funds Income Fund of America seeks current income; capital appreciation is secondary. The fund allocates among common and preferred stock, straight debt securities, convertibles, and cash equivalents. It normally maintains 60% of assets in equity-type securities. It may invest up to 20% of assets in debt securities rated Ba or below. The fund may invest up to 20% of assets in equity securities domiciled outside of the U.S. and 10% of assets in debt securities of non-U.S. issuers.

The Russell LifePoints 2010 Strategy fund seeks to provide capital growth and income consistent with its current asset allocation. The fund pursues this objective by investing in a diversified portfolio initially consisting of approximately 45% stock funds and 55% fixed income funds, with an increasing allocation to fixed income funds over time. Its allocation to fixed income funds will be fixed at 80% approximately 20 years after the year 2010.

The Russell LifePoints 2020 Strategy fund seeks to provide capital growth and income consistent with its current asset allocation. The fund pursues this objective by investing in a diversified portfolio initially consisting of approximately 55% stock funds and 45% fixed income funds, with an increasing allocation to fixed income funds over time. Its allocation to fixed income funds will be fixed at 80% approximately 20 years after the year 2020.

The Russell LifePoints 2030 Strategy fund seeks to provide capital growth and income consistent with its current asset allocation. The fund pursues this objective by investing in a diversified portfolio initially consisting of approximately 64% stock funds and 36% fixed income funds, with an increasing allocation to fixed income funds over time. Its allocation to fixed income funds will be fixed at 80% approximately 20 years after the year 2030.

The Russell LifePoints 2040 Strategy fund seeks to provide capital growth and income consistent with its current asset allocation. The fund pursues this objective by investing in a diversified portfolio initially consisting of approximately 72% stock funds and 28% fixed income funds, with an increasing allocation to fixed income funds over time. Its allocation to fixed income funds will be fixed at 80% approximately 20 years after the year 2040.

The American Funds Investment Company of America seeks long-term growth of capital and income. The fund invests primarily in common stocks. It may invest up to 15% of assets, at the time of purchase, in securities of issuers domiciled outside the United States and not included in Standard & Poor’s 500 Composite Index. The fund may also hold cash or money market instruments. There is no guarantee that the fund’s investment objective will be met.

The Vanguard 500 Index fund seeks investment results that correspond with the price and yield performance of the S&P 500 Index. The fund employs a passive management strategy designed to track the performance of the S&P 500 Index, which is dominated by the stocks of large U.S. companies. It attempts to replicate the target index by investing all or substantially all of its assets in the stocks that make up the index.

The American Funds Growth Fund of America seeks capital growth. The fund invests primarily in common stocks. Management selects securities that it believes are reasonably priced and represent solid long-term

investment opportunities. The fund may invest up to 15% of assets in securities of issuers domiciled outside of the U.S. and Canada, and not included in the S&P 500 Index. It may also invest up to 10% of assets in debt securities rated below investment-grade.

The American Funds New Economy fund seeks long-term growth of capital; current income is secondary. The fund normally invests in equity securities of companies involved in the services sector. It primarily invests in common and preferred stocks, securities convertible into common stocks, and cash and equivalents. The fund may invest up to 40% of assets in securities of foreign issuers.

The Goldman Sachs Mid Cap fund is a core mid cap value fund that seeks long-term capital appreciation. The fund normally invests at least 80% of assets in equity securities, typically with market capitalizations within the range of the market capitalization of companies in the Russell MidCap Value Index.

The Fidelity Advisor Mid Cap fund seeks long-term growth of capital. The fund normally invests at least 80% of assets in companies with medium market capitalizations. These companies generally have market capitalizations that fall within the range of the S&P MidCap 400 Index. The fund will potentially invest in companies with smaller or larger market capitalizations. It may invest in domestic and foreign issuers, as well as growth stocks, value stocks, or both.

The T. Rowe Price Mid-Cap Growth fund seeks long-term capital appreciation. The fund normally invests at least 80% of assets in a diversified portfolio of common stocks of mid-cap companies whose earnings T. Rowe Price expects to grow at a faster rate than the average company. While it invests most assets in U.S. common stocks, the fund may also purchase other securities including foreign stocks, futures, and options.

The Oppenheimer Main Street Small Cap fund is a small cap blend fund that seeks capital appreciation. The fund normally invests at least 80% of assets in common stocks and other equity securities of small cap companies, defined by management as companies with market capitalization of $2.5 billion or less. It can invest in companies that have been in operation less than three years. However, management does not intend to invest more than 20% of assets in such companies.

The American Funds EuroPacific Growth fund is a foreign large blend fund that seeks long-term growth of capital. The fund normally invests at least 80% of assets in equity securities of issuers domiciled in Europe and the Pacific Basin. It may also hold cash or money market instruments.

The American Funds New Perspective seeks long-term growth of capital; income is a secondary consideration. The fund primarily invests in common stocks of foreign and U.S. companies. The advisor looks for worldwide changes in international trade patterns and economic and political relationships. It then searches for companies that may benefit from the new opportunities created by such changes. The advisor closely follows securities, industries, governments, and currency exchange markets worldwide.

The Fairfield County Stock Fund invests primarily in the common stock of Fairfield County. Participants in the 401(k) Plan may direct the trustee to invest all or a portion of their 401(k) Plan account balances in the Fairfield County Stock Fund during the Stock Offering.

The Fairfield County Stock Fund consists of investments in the common stock of Fairfield County made on the closing date of the Stock Offering. Your investment in the Fairfield County Stock Fund will be recorded using the unitized accounting method. If cash dividends are paid on Fairfield County common stock, the trustee will, to the extent practicable, use the dividends held in the Fairfield County Stock Fund to purchase shares of the common stock. Pending investment in the common stock, assets held in the Fairfield County Stock Fund will be placed in the short term investment component of the Fairfield County Stock Fund. The Stock Fund will maintain a 5% cash ratio target following the Stock Offering.

As of the date of this prospectus supplement, no shares of Fairfield County common stock have been issued or are outstanding, and there is no established market for Fairfield County common stock. Accordingly, there is no record of the historical performance of the Fairfield County Stock Fund. Performance of the Fairfield County Stock

Fund depends on a number of factors, including the financial condition and profitability of the Bank and general stock market conditions. See “Risk Factors” in the attached prospectus.

Once you have submitted your Investment Form, you may not change your investment directions in the Stock Offering.

Benefits Under the 401(k) Plan

Vesting. All participants are 100% vested in their pre-tax elective deferrals. This means that participants have a non-forfeitable right to these funds and any earnings on the funds at all times. Participants vest in their matching and discretionary contributions at a rate of 25% after the second year of employment with the Bank and 25% each year thereafter.

Withdrawals and Distributions from the 401(k) Plan

Withdrawals Before Termination of Employment. While in active service, participants may take loans and in-service withdrawals from the 401(k) Plan (subject to the restrictions set forth in the 401(k) Plan and the Bank loan policy). Participants may have no more then three (3) loans outstanding at anytime, other than those grandfathered pursuant to the terms of the loan policy.

Distribution Upon Termination for Any Other Reason. If a participant’s accounts are $1,000 or less upon termination of employment, payment will be in the form of a lump sum as of a valuation date as soon thereafter as administratively possible.

Nonalienation of Benefits. Except with respect to federal income tax withholding, and as provided for under a qualified domestic relations order, benefits payable under the 401(k) Plan will not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any rights to benefits payable under the 401(k) Plan will be void.

Applicable federal tax law requires the 401(k) Plan to impose substantial restrictions on your right to withdraw amounts held under the 401(k) Plan before your termination of employment with the Bank. Federal law may also impose an excise tax on withdrawals from the 401(k) Plan before you attain 59¹/2 years of age, regardless of whether the withdrawal occurs during your employment with the Bank or after termination of employment.

ADMINISTRATION OF THE 401(k) PLAN

Trustees

The board of directors of the Bank has appointed Countybank to serve as trustee for the Fairfield County Stock Fund. The Personnel and Compensation Committee of the Board of Directors of the Company serves as the trustee for all other 401(k) Plan assets. The trustees receive, hold and invest the contributions to the 401(k) Plan in trust and distribute them to participants and beneficiaries in accordance with the terms of the 401(k) Plan and the directions of the Plan Administrator. The trustees are responsible for the investment of the trust assets, as directed by the Plan Administrator and the participants.

Reports to 401(k) Plan Participants

The Plan Administrator furnishes participants quarterly statements that show the balance in their accounts as of the statement date, contributions made to their accounts during that period and any additional adjustments required to reflect earnings or losses.

Plan Administrator

The Bank acts as Plan Administrator for the 401(k) Plan. The Plan Administrator handles the following administrative functions: interpreting the provisions of the plan, prescribing procedures for filing applications for benefits, preparing and distributing information explaining the plan, maintaining plan records, books of account and all other data necessary for the proper administration of the plan, preparing and filing all returns and reports required by the U.S. Department of Labor and the IRS and making all required disclosures to participants, beneficiaries and others under ERISA.

Amendment and Termination

The Bank expects to continue the 401(k) Plan indefinitely. Nevertheless, the Bank may terminate the 401(k) Plan at any time. If the Bank terminates the 401(k) Plan in whole or in part, all affected participants become fully vested in their accounts, regardless of other provisions of the 401(k) Plan. The Bank reserves the right to make, from time to time, changes which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries. The Bank may amend the plan, however, as necessary or desirable, in order to comply with ERISA or the Internal Revenue Code.

Merger, Consolidation or Transfer

If the 401(k) Plan merges or consolidates with another plan or transfers the trust assets to another plan, and either the 401(k) Plan or the other plan is subsequently terminated, the 401(k) Plan requires that you receive a benefit immediately after the merger, consolidation or transfer that would equal or exceed the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer, if the 401(k) Plan had terminated at that time.

Federal Income Tax Consequences

The following briefly summarizes the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences of the 401(k) Plan. Statutory provisions change, as do their interpretation, and their application may vary in individual circumstances. Finally, applicable state and local income tax laws may have different tax consequences than the federal income tax laws. 401(k) Plan participants should consult a tax advisor with respect to any transaction involving the 401(k) Plan, including any distribution from the 401(k) Plan.

As a “tax-qualified retirement plan,” the Internal Revenue Code affords the 401(k) Plan certain tax advantages, including the following:

(1)

the sponsoring employer may take an immediate tax deduction for the amount contributed to the plan each year;

(2)

participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3)

earnings of the plan are tax-deferred, thereby permitting the tax-deferred accumulation of income and gains on investments.

The Bank administers the 401(k) Plan to comply in operation with the requirements of the Internal Revenue Code as of the applicable effective date of any change in the law. If the Bank should receive an adverse determination letter from the Internal Revenue Service regarding the 401(k) Plan’s tax exempt status, all participants would generally recognize income equal to their vested interests in the 401(k) Plan, the participants would not be permitted to transfer amounts distributed from the 401(k) Plan to an Individual Retirement Account or to another qualified retirement plan, and the Bank would be denied certain tax deductions taken in connection with the 401(k) Plan.

Lump Sum Distribution. A distribution from the 401(k) Plan to a participant or the beneficiary of a participant qualifies as a lump sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59¹/2; and consists of the balance credited to the participant under this plan and all other profit sharing plans, if any, maintained by the Bank. The portion of any lump sum distribution included in taxable income for federal income tax purposes consists of the entire amount of the lump sum distribution, less the amount of after-tax contributions, if any, made to any other profit-sharing plans maintained by the Bank, if the distribution includes those amounts.

Fairfield County Common Stock Included in Lump Sum Distribution. If a lump sum distribution includes Fairfield County common stock, the distribution generally is taxed in the manner described above. The total taxable amount is reduced, however, by the amount of any net unrealized appreciation on Fairfield County common stock; that is, the excess of the value of Fairfield County common stock at the time of the distribution over the cost or other basis of the securities to the trust. The tax basis of Fairfield County common stock, for purposes of computing gain or loss on a subsequent sale, equals the value of Fairfield County common stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of Fairfield County common stock, to the extent of the net unrealized appreciation at the time of distribution, is long-term capital gain, regardless of how long you hold the Fairfield County common stock, or the “holding period.” Any gain on a subsequent sale or other taxable disposition of Fairfield County common stock that exceeds the amount of net unrealized appreciation upon distribution is considered long-term capital gain, regardless of the holding period. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed under IRS regulations.

We have provided you with a brief description of the material federal income tax aspects of the 401(k) Plan that are generally applicable under the Internal Revenue Code. We do not intend this description to be a complete or definitive description of the federal income tax consequences of participating in or receiving distributions from the 401(k) Plan. Accordingly, you should consult a tax advisor concerning the federal, state and local tax consequences of participating in and receiving distributions from the 401(k) Plan.

Restrictions on Resale

Any “affiliate” of Fairfield County under Rules 144 and 405 of the Securities Act of 1933, as amended, who receives a distribution of common stock under the 401(k) Plan, may re-offer or resell such shares only under a registration statement filed under the Securities Act of 1933, as amended, assuming the availability of a registration statement, or under Rule 144 or some other exemption from these registration requirements. An “affiliate” of Fairfield County is someone who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, Fairfield County. Generally, a director, principal officer or major shareholder of a corporation is deemed to be an “affiliate” of that corporation.

Any person who may be an “affiliate” of Fairfield County may wish to consult with counsel before transferring any common stock they own. In addition, participants should consult with counsel regarding the applicability to them of Section 16 of the Securities Exchange Act of 1934, as amended, which may restrict the sale of Fairfield County common stock acquired under the 401(k) Plan or other sales of Fairfield County common stock.

Persons who are not deemed to be “affiliates” of Fairfield County at the time of resale may resell freely any shares of Fairfield County common stock distributed to them under the 401(k) Plan, either publicly or privately, without regard to the registration and prospectus delivery requirements of the Securities Act of 1933, as amended, or compliance with the restrictions and conditions contained in the exemptions available under federal law. A person deemed an “affiliate” of Fairfield County at the time of a proposed resale may publicly resell common stock only under a “re-offer” prospectus or in accordance with the restrictions and conditions contained in Rule 144 of the Securities Act of 1933, as amended, or some other exemption from registration, and may not use this prospectus supplement or the accompanying prospectus in connection with any such resale. In general, Rule 144 restricts the amount of common stock which an affiliate may publicly resell in any three-month period to the greater of one percent of Fairfield County common stock then outstanding or the average weekly trading volume reported on the Nasdaq Capital Market during the four calendar weeks before the sale. Affiliates may sell only through brokers

without solicitation and only at a time when Fairfield County is current in filing all required reports under the Securities Exchange Act of 1934, as amended.

SEC Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability requirements on officers, directors and persons who beneficially own more than 10% of public companies such as Fairfield County. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the filing of reports of beneficial ownership. Within ten days of becoming a person required to file reports under Section 16(a), such person must file a Form 3 reporting initial beneficial ownership with the Securities and Exchange Commission (“SEC”). Such persons must also report periodically certain changes in beneficial ownership involving the allocation or reallocation of assets held in their 401(k) Plan accounts, either on a Form 4 within two business days after a transaction, or annually on a Form 5 within 45 days after the close of a company’s fiscal year.

In addition to the reporting requirements described above, Section 16(b) of the Securities Exchange Act of 1934, as amended, provides for the recovery by Fairfield County of profits realized from the purchase and sale or sale and purchase of its common stock within any six-month period by any officer, director or person who beneficially owns more than 10% of the common stock.

The SEC has adopted rules that exempt many transactions involving the 401(k) Plan from the “short-swing” profit recovery provisions of Section 16(b). The exemptions generally involve restrictions upon the timing of elections to buy or sell employer securities for the accounts of any officer, director or person who beneficially owns more than 10% of the common stock of a company.

Except for distributions of the common stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons who are subject to Section 16(b) may be required, under limited circumstances involving the purchase of common stock within six months of the distribution, to hold the shares of common stock distributed from the 401(k) Plan for six months after the distribution date.

LEGAL OPINION

The validity of the issuance of the common stock of Fairfield County will be passed upon by Kilpatrick Stockton LLP, Washington, DC. Kilpatrick Stockton LLP is acting as special counsel for Fairfield County in connection with the Stock Offering.

FAIRFIELD COUNTY BANK INCENTIVE RETIREMENT PLAN (“401(k) PLAN”)

INVESTMENT FORM


Name of Plan Participant:

Social Security Number:

1. Instructions. If you would like to use your 401(k) Plan funds to subscribe for shares of Fairfield County Bank Corp. common stock in the Fairfield County Bank Corp. initial public offering (“Stock Offering”), you must complete, sign and submit this form to the Human Resources Department no later than 5:00 p.m. on June , 2010. A representative for the Plan Administrator will retain a copy of this form and return a copy to you. If you need any assistance in completing this form, please contact Tim Kidman in Human Resources. If you do not complete and return this form to the Human Resources Department by 5:00 p.m. on , , 2010, you will not be able to subscribe for shares of Fairfield County Bank Corp. common stock (“Common Stock”) in the Stock Offering through the 401(k) Plan.

2. Investment Directions. I hereby direct the trustee to debit $ from the dollars I have transferred to the Fairfield County Stock Cash Account (“FCS Cash Account”) to subscribe for and purchase shares of Common Stock through the Fairfield County Stock Fund. I understand that the amount I direct the trustee to debit from the FCS Cash Account must be divisible by $10.00. I further understand that all funds I wish to use to subscribe for shares of Fairfield County common stock through the Fairfield County Stock Fund must be transferred to the FCS Cash Account in the 401(k) Plan by June , 2010 and that I may not transfer funds out of FCS Cash Account until after the close of the Stock Offering.

The minimum investment in the Stock Offering is $250 and the maximum investment is $1,000,000.

3. Purchaser Information. The ability of a 401(k) Plan participant to purchase common stock through the Fairfield County Stock Fund is based on the participant’s subscription rights and purchase limitations. Please indicate your status by checking the appropriate boxes below.

Check here if you had $50.00 or more on deposit with Fairfield County Bank as of the close of business on December 31, 2008.

Check here if you had $50.00 or more on deposit with Fairfield County Bank as of the close of business on March 31, 2010.

Check here if you are a depositor of Fairfield County Bank as of the close of business on , 20 , who are not eligible under the categories listed above.

Check here if none of the above apply.

4. Acknowledgment of Plan Participant. I understand that this Investment Form shall be subject to all of the terms and conditions of the Plan. I acknowledge that I have received a copy of the Prospectus and the Prospectus Supplement.



Signature of Participant				Date

THE PARTICIPATION INTERESTS REPRESENTED BY THE COMMON STOCK OFFERED HEREBY ARE NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE BANK INSURANCE FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY FAIRFIELD COUNTY BANK OR FAIRFIELD COUNTY BANK CORP. THE COMMON STOCK IS SUBJECT TO AN INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL INVESTED.

PLEASE COMPLETE AND RETURN TO

TIM KIDMAN IN

THE HUMAN RESOURCES DEPARTMENT

AT FAIRFIELD COUNTY BANK

BY 5:00 P.M. ON JUNE , 2010.


PROSPECTUS		[LOGO]

Fairfield County Bank Corp.

(Holding Company for Fairfield County Bank)

Up to 5,945,500 Shares of Common Stock

This is the initial public offering of shares of common stock of Fairfield County Bank Corp. The shares we are offering will represent 47.0% of our outstanding common stock. Fairfield County Bank, MHC, our federally chartered mutual holding company parent, will own 53.0% of our outstanding common stock. Upon completion of the offering, we expect that shares of our common stock will be quoted on the Nasdaq Global Market under the symbol “FFBK.”

If you are or were a depositor of Fairfield County Bank:

•

You may have priority rights to purchase shares of common stock.

If you are a participant in the Fairfield County Bank Incentive Retirement Plan (the “401(k) Plan”):

•

You may direct that all or part of your 401(k) Plan account balance be invested in shares of Fairfield County Bank Corp. common stock.

•

You will receive a separate supplement to this prospectus that describes your rights under the 401(k) Plan.

If you fit none of the categories above, but are interested in purchasing shares of our common stock:

•

You may have an opportunity to purchase shares of common stock after priority orders are filled.

We are offering up to 5,945,500 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must issue a minimum of 4,394,500 shares to complete the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, the independent appraiser determines our market value has increased, we may sell up to 6,837,325 shares without giving you further notice or the opportunity to change or cancel your order.

The offering is scheduled to terminate at 4:00 p.m., Eastern time, on , 2010. We may extend this termination date without notice to you until , 2010, unless the Office of Thrift Supervision approves a later date. Funds received before completion of the offering will be maintained at Fairfield County Bank or, at our discretion, in an escrow account at an independent insured depository institution. All subscriptions received will earn interest at our passbook savings rate, which is currently 0.35% per annum but which is subject to change at any time.

The minimum purchase is 25 shares. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond , 2010. If we extend the offering beyond , 2010, we will promptly return the funds of all subscribers who do not reconfirm their subscriptions. If we terminate the offering because we fail to sell the minimum number of shares or for any other reason, we will promptly return your funds with interest.

Sandler O’Neill & Partners, L.P. will use its best efforts to assist us in our selling efforts, but is not required to purchase any of the common stock that is offered for sale. Purchasers will not pay a commission to purchase shares of common stock in the offering. All shares offered for sale are offered at a price of $10.00 per share.

We expect our current directors and executive officers, together with their associates, to subscribe for 731,000 shares, which equals an aggregate 12.3% of the shares offered for sale at the maximum of the offering range.

The Office of Thrift Supervision conditionally approved our plan of stock issuance on , 2010. However, such approval does not constitute a recommendation or endorsement of this offering.

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

Please read “Risk Factors” beginning on page 15.

OFFERING SUMMARY

Price Per Share: $10.00


	Minimum		Maximum		Maximum As Adjusted
Number of shares		4,394,500		5,945,500		6,837,325
Gross cash offering proceeds	$	43,945,000	$	59,455,000	$	68,373,250
Estimated offering expenses, excluding selling agent fees	$	1,416,400	$	1,416,400	$	1,416,400
Estimated selling agent fees ⁽¹⁾	$	340,000	$	482,000	$	564,000
Estimated net cash proceeds	$	42,188,600	$	57,556,600	$	66,392,850
Estimated net cash proceeds per share	$	9.60	$	9.68	$	9.71

(1)	Does not include fees to be paid to broker-dealers in the event a syndicated offering is conducted. See “The Stock Offering—Marketing Arrangements” on page .

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision nor any state securities regulator has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Sandler O’Neill + Partners, L.P.

The date of this prospectus is , 2010

LOGO

Table of Contents


		*Page*
Summary		1
Risk Factors		15
A Warning About Forward-Looking Statements		24
Selected Consolidated Financial and Other Data		25
Recent Developments		27
Use of Proceeds		35
Our Dividend Policy		37
Market for Common Stock		37
Capitalization		38
Regulatory Capital Compliance		39
Pro Forma Data		40
Our Business		45
Management’s Discussion and Analysis of Results of Operations and Financial Condition		57
Our Management		88
Subscriptions by Executive Officers and Directors		104
Regulation and Supervision		105
Federal and State Taxation		114
The Stock Offering		116
Restrictions on Acquisition of Fairfield County Bank Corp., Fairfield County Bank, MHC and Fairfield County Bank		132
Description of Fairfield County Bank Corp. Common Stock		136
Transfer Agent and Registrar		137
Registration Requirements		137
Legal and Tax Opinions		137
Experts		137
Where You Can Find More Information		137
Index to Consolidated Financial Statements		139

Summary

This summary highlights material information from this document and may not contain all the information that is important to you. To understand the stock offering fully, you should read this entire document carefully. For assistance, please call our Stock Information Center at .

The Companies

Fairfield County Bank, MHC

Fairfield County Bank Corp.

Fairfield County Bank

Fairfield County Bank, MHC is our federally chartered mutual holding company parent. On January 1, 2007, Fairfield County Bank reorganized into the mutual holding company structure and became the wholly owned subsidiary of Fairfield County Bank, MHC. As a mutual holding company, Fairfield County Bank, MHC is a non-stock company. Upon completion of the offering, Fairfield County Bank, MHC will own 53.0% of Fairfield County Bank Corp.’s common stock. So long as Fairfield County Bank, MHC exists, it will own a majority of the voting stock of Fairfield County Bank Corp. and, through its board of directors, will be able to exercise voting control over most matters put to a vote of stockholders. Following the offering, Fairfield County Bank, MHC is not expected to engage in any business activity other than owning a majority of the common stock of Fairfield County Bank Corp. The officers of Fairfield County Bank, MHC are also the officers of Fairfield County Bank Corp. The directors of Fairfield County Bank, MHC are the directors of Fairfield County Bank Corp. and Fairfield County Bank.

Fairfield County Bank Corp. is being organized as our federally chartered mid-tier stock holding company in connection with the minority stock issuance. This offering is made by Fairfield County Bank Corp. Fairfield County Bank Corp. will own all of Fairfield County Bank’s capital stock and will direct, plan and coordinate Fairfield County Bank’s business activities.

Fairfield County Bank is a Connecticut chartered savings bank that operates from 23 full-service locations in Fairfield County, Connecticut and has served the needs of its local community since 1871. We offer a variety of deposit and loan products to individuals, businesses and local real estate developers, most of which are located in our primary market of Fairfield County. At December 31, 2009, Fairfield County Bank had assets of $1.6 billion, deposits of $1.3 billion and total equity of $138.2 million.

Our executive offices are located at 150 Danbury Road, Ridgefield, Connecticut 06877, and our telephone number there is (203) 438-6518. Our website address is www.fairfieldcountybank.com. Information on our website should not be considered a part of this prospectus.

Our Corporate Structure

Our corporate structure after the offering is illustrated below:

LOGO

Our Business Strategy (page )

Our current management team has largely been in place for many years, and our Chairman of the Board and Chief Executive Officer have served in their respective roles for over 20 years. During that time, we have focused on building a profitable, community-oriented financial institution offering outstanding service, added convenience and the products and services our customers require to meet their dynamic financial needs. Our objective is to continue this focus, and our strategies for achieving the objective include the following:

•

continued growth of our diversified lending portfolio;

•

maintaining a strong emphasis on asset quality;

•

capturing our customers’ financial relationship;

•

leveraging our existing operating structure; and

•

managing our balance sheet risk.

Regulation and Supervision (page )

Fairfield County Bank, MHC and Fairfield County Bank Corp. are subject to regulation, supervision and examination by the Office of Thrift Supervision. Fairfield County Bank is subject to regulation by the Connecticut Department of Banking and the Federal Deposit Insurance Corporation.

The Offering

Offering Range

We are offering shares of Fairfield County Bank Corp. common stock for sale pursuant to an offering range that is based upon an independent appraisal of our pro forma market value and that has been approved by our board of directors. We are offering 4,394,500 shares of common stock for sale at the minimum of the offering range, 5,170,000 shares of common stock for sale at the midpoint of the offering range and 5,945,500 shares of common stock for sale at the maximum of the offering range. We must issue a minimum of 4,394,500 shares to complete the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, our independent appraiser determines that our pro forma market value has increased, we may increase the maximum of the offering range by 15% and sell up to 6,837,325 shares of common stock in the offering.

Purchase Price

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

Number of Shares to be Sold

We are offering for sale between 4,394,500 and 5,945,500 shares of Fairfield County Bank Corp. common stock in this offering. The amount of capital being raised is based on an independent appraisal of Fairfield County Bank Corp. Most of the terms of this offering are required by Office of Thrift Supervision regulations. With regulatory approval, we may increase the number of shares to be issued to 6,837,325 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Office of Thrift Supervision will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations and changes in market conditions.

How We Determined the Offering Range (page )

We decided to offer between 4,394,500 and 5,945,500 shares, which is our offering range, based on an independent appraisal of our pro forma market value prepared by FinPro, Inc., an appraisal firm experienced in appraisals of financial institutions. FinPro will receive fees totaling $70,000 for the preparation and delivery of the original appraisal report, plus reimbursement of out-of-pocket expenses and $6,500 for the preparation and delivery of each required updated appraisal report. FinPro estimates that as of March 2, 2010, our pro forma market value on a fully converted basis, which includes the total number of shares that will be issued by Fairfield County Bank Corp. to Fairfield County Bank, MHC and the total number of shares that will be sold in the offering, was between $93.5 million and $126.5 million, with a midpoint of $110.0 million. The term “fully converted” means that FinPro assumed that 100% of our common stock had been sold to the public, rather than the 47.0% of the total outstanding stock that will be sold to the public in the offering. The percentage of stock that will be held publicly by individuals and entities other than Fairfield County Bank, MHC will be 47.0%, regardless of whether the shares in the offering are sold at the minimum, midpoint, maximum or maximum, as adjusted, of the offering range.

Office of Thrift Supervision regulations require that Fairfield County Bank, MHC own at least 50.1% of Fairfield County Bank Corp.’s outstanding common stock after the completion of the offering. Based upon our pro forma market value, and taking into consideration the need to ensure that less than 49.9% of the total shares that will be issued by us will be issued to individuals and entities other than Fairfield County Bank, MHC, the board of directors determined how many shares would be issued in the offering. For a more detailed discussion of how many shares will be issued in connection with the offering, see “Pro Forma Data—Analysis of Pro Forma Outstanding Shares of Fairfield County Bank Corp. Common Stock.”

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

•

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

•

a comparative evaluation of the operating and financial statistics of Fairfield County Bank with those of other similarly-situated, publicly-traded savings associations and savings association holding companies;

•

the effect of the capital raised in this offering on our stockholders’ equity and earnings potential; and

•

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

Our board of directors determined that the common stock should be sold at $10.00 per share and that a maximum of 5,945,500 shares of our common stock should be issued through the sale of common stock to the public through the offering.

Two measures that some investors use to analyze whether a stock might be a good investment are the ratio of the offering price to the issuer’s “tangible book value” and the ratio of the offering price to the issuer’s annual core earnings. FinPro considered these ratios in preparing its appraisal, among other factors. Tangible book value is the same as total equity, less intangibles, and represents the difference between the issuer’s tangible assets and liabilities. Core earnings, for purposes of the appraisal, was defined as net earnings after taxes, excluding the after-tax portion of income from nonrecurring items. FinPro’s appraisal also incorporates an analysis of a peer group consisting of the following publicly-traded mutual holding companies that FinPro considered to be comparable to us.


Ticker	Name	Exchange	City	State
BFSB	Brooklyn Federal Bancorp, Inc. (MHC)	NASDAQ	Brooklyn	NY
CSBK	Clifton Savings Bancorp, Inc. (MHC)	NASDAQ	Clifton	NJ
MGYR	Magyar Bancorp, Inc. (MHC)	NASDAQ	New Brunswick	NJ
MLVF	Malvern Federal Bancorp, Inc. (MHC)	NASDAQ	Paoli	PA
EBSB	Meridian Interstate Bancorp, Inc. (MHC)	NASDAQ	East Boston	MA
NECB	Northeast Community Bancorp, Inc. (MHC)	NASDAQ	White Plains	NY
NFBK	Northfield Bancorp, Inc. (MHC)	NASDAQ	Avenel	NJ
PBIP	Prudential Bancorp, Inc. of Pennsylvania (MHC)	NASDAQ	Philadelphia	PA
RCKB	Rockville Financial, Inc. (MHC)	NASDAQ	Vernon Rockville	CT
SIFI	SI Financial Group, Inc. (MHC)	NASDAQ	Willimantic	CT

In selecting the peer group companies, FinPro limited the group to mutual holding companies located in the Mid-Atlantic and Northeastern regions of the United States whose common stock is traded on a national securities exchange. The group was further limited by asset size and percentage of publicly-held outstanding shares. Mutual holding companies that were in the process of a second step conversion were excluded from the group.

The following table presents a summary of selected pricing ratios for us and the peer group companies, which were all “first step” mutual holding companies, utilized by FinPro in its appraisal. These ratios are based on core earnings for the 12 months ended December 31, 2009 and book value as of December 31, 2009 and are shown on a fully-converted equivalent basis.


	Price to Core Earnings Multiple	Price to Book Value Ratio		Price to Tangible to Book Value Ratio
Fairfield County Bank Corp. (pro forma):
Minimum	38.46x	42.83	%	44.48	%
Midpoint	43.48x	47.28	%	49.00	%
Maximum	50.00x	51.20	%	52.94	%
Maximum, as adjusted	55.56x	55.19	%	56.95	%
Peer group companies as of March 2, 2010:
Average	67.58x	70.46	%	71.09	%
Median	51.63x	69.27	%	69.27	%

Compared to the median pricing ratios of the peer group at the maximum of the offering range, our stock would be priced at a premium of 1.94% to the peer group on a price-to-earnings basis, a discount of 26.09% to the peer group on a price-to-book basis and a discount of 23.57% to the peer group on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be more expensive than the peer group based on an earnings per share basis and less expensive than the peer group based on a book value per share basis and a tangible book value per share basis.

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

Mutual Holding Company Data

The following table presents a summary of selected pricing ratios for publicly traded mutual holding companies and the pricing ratios for us, without the ratios being adjusted to the hypothetical case of being fully converted.


	Non-Fully Converted Price to Core Earnings Multiple	Non-Fully Converted Price to Book Value Ratio		Non-Fully Converted Price to Tangible Book Value
Fairfield County Bank Corp. (pro forma):
Minimum	45.45x	53.48	%	56.09	%
Midpoint	52.63x	60.61	%	63.41	%
Maximum	58.82x	67.20	%	70.22	%
Maximum, as adjusted	66.67x	74.24	%	77.46	%
Peer group companies as of March 2, 2010 (1):
Average	62.39x	116.10	%	118.08	%
Median	52.90x	120.00	%	120.00	%

(1)

The information for publicly traded mutual holding companies may not be meaningful for investors because it presents average and median information for mutual holding companies that issued a different percentage of their stock in their offerings than the 47.0% that we are selling to the public in the offering. In addition, the effect of stock repurchases also affects the ratios to a greater or lesser degree depending upon repurchase activity.

Possible Change in Offering Range (page )

FinPro will update its appraisal before we complete the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, FinPro determines that our pro forma market value has increased, we may sell up to 6,837,325 shares without further notice to you. If our pro forma market value at that time is either below $93.5 million or above $145.5 million, then, after consulting with the Office of Thrift

Supervision, we may: terminate the stock offering and promptly return all funds; set a new offering range and give all subscribers the opportunity to modify or rescind their purchase orders for shares of Fairfield County Bank Corp.’s common stock; or take such other actions as may be permitted by the Office of Thrift Supervision and the Securities and Exchange Commission.

Possible Termination of the Offering

We must sell a minimum of 4,394,500 shares to complete the offering. If we terminate the offering because we fail to sell the minimum number of shares or for any other reason, we will promptly return your funds with interest at our passbook savings rate.

After-Market Performance of “First-Step” Mutual Holding Company Offerings

Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the company’s market area. Accordingly, the after-market performance of other companies that have undertaken a “first-step” mutual holding company offering may not be similar to that of Fairfield County Bank Corp. In addition, the pricing ratios for those other stock offerings were in some cases different from the pricing ratios for Fairfield County Bank Corp.’s common stock and the market conditions in which those offerings were completed were, in some cases, different from current market conditions. Any or all of these differences may cause our stock to perform differently from these other offerings. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the “Risk Factors” section beginning on page .

You should be aware that, in certain market conditions, stock prices of thrift initial public offerings have decreased. For example, of the six mutual holding company offerings that occurred from January 2008 through October 2009, three of those companies have experienced declines in stock prices. We can give you no assurance that our stock will not trade below the $10.00 purchase price or that our stock will perform similarly to other recent “first-step” mutual holding company offerings.

Conditions to Completing the Offering

We are conducting the offering under the terms of our plan of stock issuance. We cannot complete the offering unless we sell at least the minimum number of shares offered and we receive the final approval of the Office of Thrift Supervision to complete the offering.

Reasons for the Offering (page )

Fairfield County Bank, MHC and Fairfield County Bank currently exceed all requirements to be considered well capitalized under applicable regulatory requirements. As part of our business planning process, our board of directors concluded that additional capital was advisable in order to ensure that our capital levels remain well in excess of our regulatory capital requirements. In reaching this conclusion, the board considered the potential impact of current economic conditions on our financial condition and results of operations as well as the potential for changes in regulatory capital requirements. Our board of directors also concluded that additional capital would help increase our profitability and support asset growth and that the best way to accomplish this would be through a stock offering. Having a publicly traded stock would also enable the board to implement equity compensation plans to retain and attract qualified directors, officers and staff and to enhance our current compensation programs.

The board of directors determined that a minority offering by Fairfield County Bank Corp. was appropriate because engaging in a full mutual-to-stock conversion would raise more capital than we had current plans to deploy. Further, the minority stock issuance permits us to control the amount of capital being raised by selecting the percentage of shares to be sold in the offering. Additionally, the board of directors preferred to remain in the mutual holding company structure because it provides for the continued control of Fairfield County Bank Corp. by Fairfield County Bank, MHC through its majority ownership position. We chose to offer up to 5,945,500 shares, subject to

adjustment up to 6,837,325 shares, rather than a smaller number of shares, because we believe that we are raising the amount of capital we can effectively deploy and because the sale of a smaller number of shares would make it less likely that an active trading market for the shares would develop. We chose not to issue more shares to the public so that we would have the flexibility to issue authorized but unissued shares to fund future stock benefit plans without exceeding the regulatory limit on the percentage of shares that can be owned by persons other than Fairfield County Bank, MHC.

Benefits of the Offering to Management (pages to )

We intend to adopt the benefit plans and employment agreements described below. Our board of directors elected to establish the employee stock ownership plan at the level described below, and is considering the implementation of an equity incentive plan at the levels described below, which are the maximum amounts permissible under Office of Thrift Supervision regulations, and adopted the employee stock ownership plan and will only implement the equity incentive plan after taking into consideration (i) the pro forma cost of maintaining the plans at such levels, (ii) the importance of attracting and retaining highly skilled and qualified employees and directors, (iii) applicable regulatory restrictions imposed by the Office of Thrift Supervision, and (iv) the benefit plan levels previously established by other publicly-traded mutual holding companies in connection with their initial public offerings. Fairfield County Bank Corp. will recognize compensation expense related to the employee stock ownership plan and the equity incentive plan. The actual expense will depend on the market value of Fairfield County Bank Corp.’s common stock and, with respect to the employee stock ownership plan, will fluctuate in response to changes in the trading price of Fairfield County Bank Corp.’s common stock, increasing if the trading price increases. As reflected under “Pro Forma Data,” based upon assumptions set forth therein, the annual tax expense related to the employee stock ownership plan and the equity incentive plan would be $327,000 and $679,000, respectively, assuming shares are sold in the offering at the maximum of the offering range. See “Pro Forma Data” for a detailed analysis of the effects of each of these plans.

Employee Stock Ownership Plan. We intend to establish an employee stock ownership plan that will purchase an amount of shares equal to 3.92% of the shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC. The plan will use the proceeds from a ten-year loan from Fairfield County Bank Corp. to purchase these shares. As the loan is repaid by Fairfield County Bank and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s individual compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the employee stock ownership plan. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan.

Equity Incentive Plan. We intend to implement an equity incentive plan no earlier than six months after completion of the offering. Under current Office of Thrift Supervision regulations, if this plan is adopted more than one year from completion of our offering, it must be approved by a majority of the total votes cast by our stockholders, other than Fairfield County Bank, MHC; if we adopt an equity incentive plan prior to one year from completion of our offering, the equity incentive plan must be approved by a majority of the votes eligible to be cast by our shareholders, other than Fairfield County Bank, MHC. Under this plan, we may grant stock options in an amount up to 4.9% of the number of shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC, and restricted stock awards in an amount equal to 1.96% of the shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC. We currently intend to fund the equity incentive plan through the purchase of common stock in the open market, subject to regulatory restrictions, by a trust established in connection with the plan. However, in the future we may also elect to fund the equity incentive plan through the issuance of authorized but unissued shares of Fairfield County Bank Corp. common stock. See “Risk Factors—Risks Related to the Offering—Issuance of shares for benefit programs may dilute your ownership interest.” Shares of restricted stock will be awarded at no cost to the recipient. Stock options will be granted at an exercise price equal to 100% of the fair market value of our common stock on the option grant date. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan. The equity incentive plan will comply with all applicable Office of Thrift Supervision regulations.

The following table presents the total value of all shares to be available for restricted stock awards under the equity incentive plan, based on a range of market prices from $8.00 per share to $16.00 per share. Ultimately, the value of the grants will depend on the actual trading price of our common stock, which depends on numerous factors.


		Value of
Share Price		183,260 Shares Awarded at Minimum of Range		215,600 Shares Awarded at Midpoint of Range		247,940 Shares Awarded at Maximum of Range		285,131 Shares Awarded at 15% Above Maximum of Range
		(In thousands)
$	8.00	$	1,466	$	1,725	$	1,984	$	2,281
	10.00		1,833		2,156		2,479		2,851
	12.00		2,199		2,587		2,975		3,422
	14.00		2,566		3,018		3,471		3,992
	16.00		2,932		3,450		3,967		4,562

The following table presents the total value of all stock options available for grant under the equity incentive plan, based on a range of market prices from $8.00 per share to $16.00 per share. For purposes of this table, the value of the stock options was determined using the Black-Scholes option-pricing formula. See “Pro Forma Data.” Ultimately, financial gains can be realized on a stock option only if the market price of the common stock increases above the price at which the option is granted. Options must be granted at no less than fair market value at the date of grant.


				Value of
Exercise Price		Option Value		458,150 Options Granted at Minimum of Range		539,000 Options Granted at Midpoint of Range		619,850 Options Granted at Maximum of Range		712,827 Options Granted at 15% Above Maximum of Range
				(In thousands)
$	8.00	$	2.27	$	1,039	$	1,223	$	1,406	$	1,617
	10.00		2.84		1,299		1,529		1,758		2,022
	12.00		3.40		1,559		1,834		2,109		2,426
	14.00		3.97		1,819		2,140		2,461		2,830
	16.00		4.54		2,079		2,446		2,813		3,235

The following tables summarize, at the minimum and maximum of the offering range, the total number and value of the shares of common stock that the employee stock ownership plan expects to acquire and the total value of all restricted stock awards and stock options that are expected to be available under the equity incentive plan. At the minimum of the offering range, we will sell 4,394,500 shares and have 9,350,000 shares outstanding and at the maximum of the offering range, we will sell 5,945,500 shares and have 12,650,000 shares outstanding. The number of shares reflected for the benefit plans in the table below assumes that Fairfield County Bank’s tangible capital will be 10% or more following the completion of the offering and the application of the net proceeds as described under “Use of Proceeds.”


	Number of Shares to be Granted or Purchased					Total Estimated Value of Grants at Minimum of Offering Range
	At Minimum of Offering Range	As a % of Common Stock Issued at Minimum of Offering Range (1)		As a % of Common Stock Outstanding at Minimum of Offering Range (2)
						(In thousands)
Employee stock ownership plan (3)	366,520	8.34	%	3.92	%	$	3,663
Restricted stock awards (3)	183,260	4.17		1.96			1,833
Stock options (4)	458,150	10.43		4.90			1,301

Total	1,007,930	22.94		10.78			6,797


	Number of Shares to be Granted or Purchased					Total Estimated Value of Grants at Maximum of Offering Range
	At Maximum of Offering Range	As a % of Common Stock Issued at Maximum of Offering Range (1)		As a % of Common Stock Outstanding at Maximum of Offering Range (2)
						(In thousands)
Employee stock ownership plan (3)	495,880	8.34	%	3.92	%	$	4,959
Restricted stock awards (3)	247,940	4.17		1.96			2,479
Stock options (4)	619,850	10.43		4.90			1,760

Total	1,363,670	22.94		10.78			9,198

(1)	Reflects the amount of shares in the respective plans as a percentage of total sold in the offering.

(2)	Reflects the amount of shares in the respective plans as a percentage of total issued and outstanding shares immediately subsequent to the offering, including shares sold in the offering and issued to Fairfield County Bank, MHC.

(3)	Assumes the value of Fairfield County Bank Corp. common stock is $10.00 per share for purposes of determining the total estimated value of the grants.

(4)	Assumes the value of a stock option is $2.84, which was determined using the Black-Scholes option-pricing formula assuming a share price of $10.00 at the date of grant. See “Pro Forma Data.”

The Offering Will Not be Taxable to Persons Receiving Subscription Rights (page )

As a general matter, the offering will not be a taxable transaction for purposes of federal or state income taxes to persons who receive or exercise subscription rights. We have received an opinion from our counsel, Kilpatrick Stockton LLP that, for federal income tax purposes:

•

The merger transaction whereby Fairfield County Bank becomes a wholly owned subsidiary of Fairfield County Bank Corp. will be treated as a tax-free exchange of property solely for voting stock pursuant to Section 351 of the Internal Revenue Code;

•

Fairfield County Bank, MHC will not recognize any gain or loss upon the transfer of Fairfield County Bank common stock to Fairfield County Bank Corp.;

•

Fairfield County Bank Corp. will not recognize any gain or loss on its receipt of Fairfield County Bank common stock from Fairfield County Bank, MHC;

•

No gain or loss will be recognized by Fairfield County Bank Corp. upon its receipt of money in exchange for shares of its common stock issued pursuant to the offering;

•

It is more likely than not that the fair market value of the non-transferable subscription rights to purchase shares of common stock of Fairfield County Bank Corp. to be issued to eligible account holders, supplemental eligible account holders and other members is zero and, accordingly, that no income will be realized by eligible account holders, supplemental eligible account holders and other members upon the issuance to them of the subscription rights or upon the exercise of the subscription rights;

•

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

•

The holding period for shares of common stock purchased in the community offering or syndicated community offering will begin on the day after the date of the purchase.

Persons Who Can Order Stock in the Offering (page )

We have granted rights to subscribe for shares of Fairfield County Bank Corp. common stock in a “subscription offering” to the following persons in the following order of priority:

Persons with $50 or more on deposit at Fairfield County Bank as of December 31, 2008.

Our employee stock ownership plan, which provides retirement benefits to our employees.

Persons with $50 or more on deposit at Fairfield County Bank as of March 31, 2010.

Fairfield County Bank’s depositors as of , 2010, who were not able to subscribe for shares under categories 1 and 3.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of stock issuance. Generally, shares first will be allocated so as to permit each eligible subscriber, if possible, to purchase a number of shares sufficient to make the subscriber’s total allocation equal to 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining eligible subscribers whose subscriptions remain unfilled in proportion to the amounts their respective qualifying deposits bear to the total qualifying deposits of all remaining eligible subscribers whose subscriptions remain unfilled. If we increase the number of shares to be sold in the offering above 5,945,500, Fairfield County Bank’s employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. See “The Stock Offering—Subscription Offering and Subscription Rights” for a description of the allocation procedure.

We may offer shares not sold in the subscription offering to the general public in a direct community offering that will begin concurrently with the subscription offering. Orders received in the direct community offering will be subordinate to subscription offering orders. Natural persons who are residents of Fairfield County, Connecticut will have first preference to purchase shares in the direct community offering. Shares of common stock not purchased in the subscription offering or the direct community offering may be offered for sale through a syndicated community offering managed by Sandler O’Neill & Partners, L.P. We have the right to accept or reject, in our sole discretion, orders we receive in the direct community offering and syndicated community offering.

Subscription Rights are Not Transferable

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

How to Purchase Common Stock (page )

In the subscription offering and the community offering, you may pay for your shares by:

personal check, bank check or money order made payable directly to Fairfield County Bank Corp. (third-party checks of any type will not be accepted); or

authorizing us to withdraw money from your Fairfield County Bank deposit account(s) other than checking accounts or individual retirement accounts (“IRAs”). To use funds from accounts with check writing privileges, please submit a check. To use IRA funds, please see the next section.

Fairfield County Bank is not permitted to lend funds (including funds drawn on a Fairfield County Bank line of credit) to anyone for the purpose of purchasing shares of common stock in the offering.

You may submit your order form in one of three ways: by mail, using the reply envelope provided; by overnight courier to the address indicated on the order form; or by hand delivery to the main office of Fairfield County Bank located at 150 Danbury Road, Ridgefield, Connecticut. Stock order forms may not be hand-delivered to our branch offices other than the main office. Once submitted, your order is irrevocable.

Using IRA Funds to Purchase Shares in the Offering (page )

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA, provided that such IRAs are not maintained at Fairfield County Bank. If you wish to use some or all of the funds in your Fairfield County Bank IRA, the applicable funds must first be transferred to a self-directed account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. Whether you may use retirement funds for the purchase of shares in the stock offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Purchase Limitations (page )

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

•

The minimum purchase is 25 shares.

•

The maximum purchase of common stock by an individual is $1,000,000 of common stock (which equals 100,000 shares) in the public offering. The maximum purchase of common stock by a group of persons through a single deposit account is $1,000,000 of common stock (which equals 100,000 shares) in the public offering.

•

No individual, together with any associates, and no group of persons acting in concert may purchase more than $1,000,000 of common stock (which equals 100,000 shares) in the public offering. For purposes of applying this limitation, your associates include:

•

any person who is related by blood or marriage to you, who either lives in your home or who is a director or officer of Fairfield County Bank;

•

companies or other entities in which you are a director, officer or partner or have a 10% or greater beneficial ownership interest; and

•

trusts or other estates in which you have a substantial beneficial interest or as to which you serve as a trustee or in another fiduciary capacity.

Subject to the Office of Thrift Supervision’s approval, we may increase or decrease the purchase limitations at any time. Under Office of Thrift Supervision regulations, our tax-qualified employee benefit plans, including our employee stock ownership plan, are authorized to purchase up to 3.92% of the shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC without regard to these purchase limitations. We expect our employee stock ownership plan to purchase 3.92% of the shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC.

Deadline for Ordering Stock (page )

The subscription offering will end at 4:00 p.m., Eastern time, on . If you wish to purchase shares, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received by us (not postmarked) no later than this time. We expect that the direct community offering will terminate at the same time, although it may continue for up to 45 days after the end of the subscription offering, or longer if regulators approve a later date. No single extension may be for more than 90 days. If we extend the offering beyond , all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest at our passbook rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 4,394,500 shares or more than 6,837,325 shares, we will promptly return all funds, set a new offering range and all subscribers will be notified and given the opportunity to confirm, change or cancel their orders.

How We Will Use the Proceeds of this Offering (page )

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


(In thousands)	Minimum 4,394,500 Shares at $10.00 per Share			Maximum 5,945,500 Shares at $10.00 per Share
Gross offering proceeds	$	43,945		$	59,455
Less: offering expenses		(1,756	)		(1,899	)

Net offering proceeds	$	42,189		$	57,556
Less:
Cash contributed to Fairfield County Bank, MHC		(100	)		(100	)
Proceeds contributed to Fairfield County Bank		(22,993	)		(28,778	)
Proceeds used for loan to employee stock ownership plan		(3,665	)		(4,959	)

Proceeds remaining for Fairfield County Bank Corp.	$	15,431		$	23,719

Initially, Fairfield County Bank Corp. intends to invest the proceeds in short-term liquid investments. In the future, Fairfield County Bank Corp. may use the portion of the proceeds that it retains to, among other things, invest in securities, pay cash dividends or repurchase shares of common stock, subject to regulatory restrictions. In the future, Fairfield County Bank Corp. may also invest the portion of the proceeds that it retains in Fairfield County Bank in order to help fund Fairfield County Bank’s operations.

Fairfield County Bank’s intended use of proceeds is similar to that of Fairfield County Bank Corp. Fairfield County Bank intends to invest the proceeds it receives for investment in short-term liquid investments. In

the future, Fairfield County Bank may use the portion of the proceeds that it receives to fund new business and consumer loans, invest in securities. Fairfield County Bank Corp. and Fairfield County Bank may also use the proceeds of the offering to diversify their businesses and acquire other companies, although we have no specific plans to do so at this time.

Purchases and Stock Elections by Directors and Executive Officers (page )

We expect that our directors and executive officers, together with their associates, will subscribe for 731,000 shares, which equals 5.8% of the shares that would be outstanding assuming shares are sold at the maximum of the offering range. Our directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of stock issuance. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering. Directors and executive officers and their associates may not purchase greater than 25% of the outstanding shares of common stock of Fairfield County Bank Corp., excluding shares held by Fairfield County Bank, MHC.

Market for Fairfield County Bank Corp.’s Common Stock (page )

We intend to have the common stock of Fairfield County Bank Corp. quoted on the Nasdaq Global Market. Sandler O’Neill & Partners, L.P. currently intends to become a market maker in the common stock, but it is under no obligation to do so. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for our common stock will develop or, if developed, will be maintained. After shares of the common stock begin trading, you may contact a stock broker to buy or sell shares. There can be no assurance that persons purchasing the common stock in the offering will be able to sell their shares at or above the $10.00 offering price, and brokerage firms typically charge commissions related to the purchase or sale of securities.

Fairfield County Bank Corp.’s Dividend Policy (page )

We plan to pay dividends on the common stock. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations and our operating results and financial condition. Initially, our ability to pay dividends will be limited to the net proceeds of the offering retained by Fairfield County Bank Corp. and earnings from the investment of such proceeds. At the maximum of the offering range, Fairfield County Bank Corp. will retain approximately $23.7 million of the net proceeds. Additionally, funds could be contributed from Fairfield County Bank through dividends; however, the ability of Fairfield County Bank to dividend funds to Fairfield County Bank Corp. is subject to regulatory limitations described in more detail in “Our Dividend Policy.” We anticipate that Fairfield County Bank, MHC will waive receipt of any dividends that we pay, subject to regulatory approval.

Possible Conversion of Fairfield County Bank, MHC to Stock Form (page )

In the future, we may undertake a transaction commonly known as a “second-step conversion” in which we would sell to the public the shares held by Fairfield County Bank, MHC. In a second-step conversion, depositors of Fairfield County Bank, MHC would have subscription rights to purchase common stock of Fairfield County Bank Corp. or its successor, and the public stockholders of Fairfield County Bank Corp. would be entitled to exchange their shares of common stock for an equal percentage of shares of the new holding company. This percentage may be adjusted to reflect any assets owned by Fairfield County Bank, MHC. Fairfield County Bank Corp.’s public stockholders, therefore, would own approximately the same percentage of the resulting entity as they owned before the second-step conversion.

Delivery of Prospectus

To ensure that each purchaser in the subscription and community offering receives a prospectus at least 48 hours before the offering deadline in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, we will not mail a prospectus any later than five days prior to such date or hand-deliver a prospectus

later than two days prior to that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than United States mail.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at 4:00 p.m., Eastern time, on whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates (page )

Certificates representing shares of common stock issued in the offering will be mailed to purchasers at the address provided on the order form as soon as practicable following completion of the offering and receipt of all necessary regulatory approvals.

Stock Information Center

If you have any questions regarding the offering, please call the Stock Information Center at to speak to a registered representative of Sandler O’Neill & Partners, L.P. The stock information center is open Monday through Friday, except bank holidays, from 10:00 a.m. to 4:00 p.m., Eastern time.

Risk Factors

You should consider carefully the following risk factors before purchasing Fairfield County Bank Corp. common stock.

Risks Related to Our Business

A substantial portion of our construction loan portfolio consists of loans to builders building homes on speculation in our local market area, which exposes us to risk of loss due to the difficulty our borrowers are having selling the completed properties.

A substantial portion of our construction loans are loans to builders for the construction of single-family homes, including condominiums, being built on speculation in our local market area. Specifically, of our $121.1 million in construction loans at December 31, 2009, $84.2 million are construction loans secured by speculative building projects. The average balance of those speculative loans is $1.7 million and 60.8% of such loans are secured by properties built and/or being built in Greenwich, New Canaan, Ridgefield and Westport, Connecticut. These areas have experienced a substantial decline in real estate values as well as a substantial decline in demand by buyers, which has made it difficult for many of our borrowers to sell the homes they have built on speculation. We generally originate construction loans for a period of two years. However, in many instances, we have modified these loans to extend their terms to provide borrowers with more time to sell the homes they have built. Further, in many cases, borrowers are depending upon their existing liquidity to make loan payments, which at some point could be reduced to the point where such borrowers are no longer able to make payments on their loans absent a sale of the property.

A substantial portion of our loan portfolio consists of commercial real estate loans and commercial loans, which exposes us to increased risks.

At December 31, 2009, commercial real estate loans and commercial loans totaled $357.2 million and $164.5 million or 28.8% and 13.2%, respectively of our total loan portfolio. These types of loans generally expose a lender to greater risk of non-payment and loss than one-to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the property and the income stream of the borrowers. Commercial real estate and commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to four-family residential mortgage loans. Also, many of our commercial real estate and commercial loan borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to four-family residential mortgage loan. Further, continued adverse economic conditions, which have contributed to the current high unemployment rates, may adversely affect our borrowers with commercial loans secured by commercial real estate. As businesses fail, vacancy rates will likely increase, which will likely cause rental income to decrease. Both of these factors would adversely affect the cash flows available to our borrowers from their commercial properties and may adversely affect our borrowers’ ability to perform on their loans.

Our emphasis on one- to four-family, construction and home equity loans exposes us to a risk of loss due to a decline in property values and rising unemployment.

At December 31, 2009, $357.2 million or 28.8% of our loan portfolio consisted of one-to four-family mortgage loans, $121.1 million, or 9.8% of our loan portfolio consisted of construction loans, and $211.0 million, or 17.0%, of our portfolio consisted of home equity loans. Recent declines in the housing market have resulted in substantial declines in real estate values in our market area. This, coupled with rising unemployment, has contributed to an increase in delinquencies in our one-to four-family, construction and home equity loan portfolios. Specifically, one-to four-family loans that are non-performing have increased from $2.0 million at December 31, 2007 to $25.2 million at December 31, 2009. Similarly, nonperforming construction loans and home equity loans have increased from $7.5 million and $946,000 at December 31, 2007 to $18.3 million and $4.7 million at December 31, 2009, respectively. The substantial declines in real estate values have caused some of our residential mortgage and home equity loans to be inadequately collateralized, which exposes us to a greater risk of loss when

we seek to recover on defaulted loans by selling the real estate collateral. The substantial declines in real estate values have also adversely affected the collateral securing our construction loans, particularly those loans originated to builders to construct homes on speculation. The decrease in real estate values compounded by the decrease in demand for new construction has adversely affected the ability of many of our borrowers to sell homes built on speculation. Continued high unemployment rates and depressed real estate values will continue to adversely affect our borrowers who have built homes on speculation.

We are subject to credit risks in connection with the concentration of adjustable rate loans in our portfolio.

A substantial portion of our residential mortgage loans held for investment are adjustable rate loans. Specifically, at December 31, 2009, 82.2% of our residential mortgage loans had adjustable interest rates. Borrowers with adjustable rate mortgage loans are exposed to increased monthly payments when the related mortgage interest rate adjusts upward under the terms of the loan from the initial fixed rate or low introductory rate, as applicable, to the rate computed in accordance with the applicable index and margin. Any rise in prevailing market interest rates may result in increased payments for borrowers who have adjustable rate mortgage loans, increasing the possibility of default. Borrowers seeking to avoid these increased monthly payments by refinancing their mortgage loans may no longer be able to find available replacement loans at comparably low interest rates. In addition, a decline in housing prices may also leave borrowers with insufficient equity in their homes to permit them to refinance. Borrowers who intend to sell their homes on or before the expiration of the fixed rate periods on their mortgage loans may also find that they cannot sell their properties for an amount equal to or greater than the unpaid principal balance of their loans. These events, alone or in combination, may contribute to higher delinquency rates and negatively impact our earnings.

Higher loan losses could require us to increase our allowance for loan losses through a charge to earnings.

When we loan money we incur the risk that our borrowers do not repay their loans. We reserve for loan losses by establishing an allowance through a charge to earnings. The amount of this allowance is based on our assessment of loan losses inherent in our loan portfolio. The process for determining the amount of the allowance is critical to our financial results and condition. It requires subjective and complex judgments about the future, including forecasts of economic or market conditions that might impair the ability of our borrowers to repay their loans. We might underestimate the loan losses inherent in our loan portfolio and have loan losses in excess of the amount reserved. We might increase the allowance because of changing economic conditions. For example, in a rising interest rate environment, borrowers with adjustable-rate loans could see their payments increase. There may be a significant increase in the number of borrowers who are unable or unwilling to repay their loans, resulting in our charging off more loans and increasing our allowance. In addition, when real estate values decline, the potential severity of loss on a real estate-secured loan can increase significantly, especially in the case of loans with high combined loan-to-value ratios. Our allowance for loan losses amounted to 1.11% of total loans outstanding and 23.37% of non-performing loans at December 31, 2009. Our allowance for loan losses at December 31, 2009, may not be sufficient to cover future loan losses. We may be required to increase our allowance for loan losses, thus reducing earnings and possibly capital.

A continuation of recent turmoil in the financial markets could have an adverse effect on our financial position or results of operations.

Beginning in 2008, United States and global financial markets have experienced severe disruption and volatility, and general economic conditions have declined significantly. Adverse developments in credit quality, asset values and revenue opportunities throughout the financial services industry, as well as general uncertainty regarding the economic, industry and regulatory environment, have had a marked negative impact on the industry. Dramatic declines in the U.S. housing market over the past eighteen months, with falling home prices, increasing foreclosures and increasing unemployment, have negatively affected the credit performance of mortgage loans and resulted in significant write-downs of asset values by many financial institutions. The United States and the governments of other countries have taken steps to try to stabilize the financial system, including investing in financial institutions, and have also been working to design and implement programs to improve general economic conditions. Notwithstanding the actions of the United States and other governments, these efforts may not succeed

in restoring industry, economic or market conditions and may result in adverse unintended consequences. Factors that could continue to pressure financial services companies, including Fairfield County Bank, are numerous and include (i) worsening credit quality, leading among other things to increases in loan losses and allowances, (ii) continued or worsening disruption and volatility in financial markets, leading among other things to continuing reductions in asset values, (iii) capital and liquidity concerns regarding financial institutions generally, (iv) limitations resulting from or imposed in connection with governmental actions intended to stabilize or provide additional regulation of the financial system, or (v) recessionary conditions that are deeper or last longer than currently anticipated.

The current economic recession could result in further increases in our level of non-performing loans and/or reduce demand for our products and services, which would lead to lower revenue, higher loan losses and lower earnings.

Our business activities and earnings are affected by general business conditions in the United States and in our primary market area. These conditions include short-term and long-term interest rates, inflation, unemployment levels, monetary supply, consumer confidence and spending, fluctuations in both debt and equity capital markets and the strength of the economy in the United States generally and in our primary market area in particular. In the current recession, the national economy has experienced general economic downturns, with rising unemployment levels, declines in real estate values and an erosion in consumer confidence. The current economic recession has also had a negative impact on our primary market area, which has experienced a substantial slowdown in the local real estate market and significant reductions in local property values. A prolonged or more severe economic downturn, continued elevated levels of unemployment, further declines in the values of real estate, or other events that affect household and/or corporate incomes could impair the ability of our borrowers to repay their loans in accordance with their terms. The economic downturn could also result in reduced demand for credit or fee-based products and services, which also would decrease our revenues.

If we conclude that the decline in value of any of our investment securities is other than temporary, we are required to write down the value of that security through a charge to earnings or equity.

We review our investment securities portfolio at each quarter-end reporting period to determine whether the fair value is below the current carrying value. When the fair value of any of our investment securities has declined below its carrying value, we are required to assess whether the decline is other than temporary. If we conclude that the decline is other than temporary, we are required to write down the value of that security through a charge to earnings or equity. As of December 31, 2009, our investment portfolio included pooled trust preferred securities with a book value of $12.9 million (after an impairment charge of $3.7 million) and an estimated fair value of $4.4 million and mortgage backed securities with a book value of $17.7 million and an estimated fair value of $17.8 million. Changes in the expected cash flows of these securities and/or prolonged price declines may result in our concluding in future periods that the impairment of these securities is other than temporary, which would require a charge to earnings or equity to write down these securities to their fair value. For more information, see note 4 of the notes to the consolidated financial statements included in this prospectus.

If our investment in the Federal Home Loan Bank of Boston is classified as other than temporarily impaired or as permanently impaired, our earnings and stockholders’ equity could decrease.

We own common stock of the Federal Home Loan Bank of Boston. We hold the Federal Home Loan Bank of Boston common stock to qualify for membership in the Federal Home Loan Bank System and to be eligible to borrow funds under the Federal Home Loan Bank of Boston’s advance program. The aggregate cost and fair value of our Federal Home Loan Bank of Boston common stock as of December 31, 2009 was $10.7 million based on its par value. There is no market for our Federal Home Loan Bank of Boston common stock. In 2009, in an effort to preserve capital, the Federal Home Loan Bank of Boston announced an indefinite moratorium on the repurchase of excess stock held by its members and suspended its dividend on capital stock held by members, both of which have hurt our earnings.

Recent published reports indicate that certain member banks of the Federal Home Loan Bank System may be subject to accounting rules and asset quality risks that could result in materially lower regulatory capital levels.

In an extreme situation, it is possible that the capitalization of a Federal Home Loan Bank, including the Federal Home Loan Bank of Boston, could be substantially diminished or reduced to zero. Consequently, we believe that there is a risk that our investment in Federal Home Loan Bank of Boston common stock could be deemed other-than-temporarily impaired at some time in the future, and if this occurs, it would cause our earnings and stockholders’ equity to decrease by the after-tax amount of the impairment charge.

Changes in interest rates and spreads could adversely impact our results of operations and financial condition.

Our results of operations and financial condition are significantly affected by changes in interest rates. Our results of operations are primarily dependent on our net interest income, which is the difference between the interest income earned on our interest-earning assets and the interest expense paid on our interest-bearing liabilities. Changes in interest rates could have an adverse affect on net interest income because, as a general matter, our interest-bearing liabilities reprice or mature more quickly than our interest-earning assets. This means that an increase in interest rates generally would result in a decrease in our average interest rate spread and net interest income, which would have a negative effect on our profitability. In the event of a 200 basis point increase in interest rates, whereby rates ramp up evenly over a twelve-month period, and assuming management took no actions to mitigate the effect of such change, our models indicate that our net interest income would decrease 0.3% or $161,000.

Changes in interest rates also affect the value of our interest-earning assets, and in particular our securities portfolio. Generally, the value of securities fluctuates inversely with changes in interest rates. At December 31, 2009, our available for sale securities portfolio totaled $57.5 million. Unrealized gains and losses on securities available for sale are reported as a separate component of stockholders’ equity. Decreases in the fair value of securities available for sale resulting from increases in interest rates therefore could have an adverse effect on stockholders’ equity.

We are also subject to prepayment and reinvestment risk related to interest rate movements and spreads. Changes in interest rates can affect the average life of loans and mortgage related securities. Decreases in interest rates can result in increased prepayments of loans and mortgage related securities, as borrowers refinance to reduce borrowing costs. Under these circumstances, we are subject to reinvestment risk to the extent that we are unable to reinvest such prepayments at rates that are comparable to the rates on existing loans or securities.

Special assessments and increased base assessment rates by the Federal Deposit Insurance Corporation will decrease our earnings.

Beginning in late 2008, the economic environment caused higher levels of bank failures, which dramatically increased FDIC resolution costs and led to a significant reduction in the Deposit Insurance Fund. As a result, the Federal Deposit Insurance Corporation has significantly increased the initial base assessment rates paid by financial institutions for deposit insurance. The base assessment rate was increased by seven basis points (7 cents for every $100 of deposits) for the first quarter of 2009. Effective April 1, 2009, initial base assessment rates were changed to range from 12 basis points to 45 basis points across all risk categories with possible adjustments to these rates based on certain debt-related components. These increases in the base assessment rate will increase our deposit insurance costs and negatively impact our earnings. In addition, in May 2009, the Federal Deposit Insurance Corporation imposed a special assessment on all insured institutions due to recent bank and savings association failures. The emergency assessment amounted to 5 basis points on each institution’s assets minus Tier 1 capital as of June 30, 2009, subject to a maximum equal to 10 basis points times the institution’s assessment base. The assessment was collected on September 30, 2009. Based on our assets and Tier 1 capital as of June 30, 2009, our special assessment was approximately $736,000. The special assessment decreased our earnings. In addition, the Federal Deposit Insurance Corporation may impose additional emergency special assessments in the future of up to 5 basis points per quarter on each institution’s assets minus Tier 1 capital if necessary to maintain public confidence in federal deposit insurance or as a result of deterioration in the Deposit Insurance Fund reserve ratio due to institution failures. Any additional emergency special assessment imposed by the Federal Deposit Insurance Corporation will further decrease our earnings.

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

We face competition in making loans, attracting deposits and hiring and retaining experienced employees. This competition has made it more difficult for us to make new loans and attract deposits. Price competition for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits, which reduces our net interest income. Competition also makes it more difficult and costly to attract and retain qualified employees. At June 30, 2009, which is the most recent date for which data is available from the Federal Deposit Insurance Corporation, we held 4.55% of the deposits in the Bridgeport-Stamford-Norwalk, Connecticut metropolitan statistical area. We expect competition to increase in the future as a result of legislative and technological changes and the continuing trend of consolidation in the financial services industry. Our profitability depends upon our continued ability to compete successfully in our market area. For more information about our market area and the competition we face, see “Business of Fairfield County Bank Corp.—Market Area” and “Business of Fairfield County Bank Corp —Competition.”

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

We are subject to extensive regulation, supervision and examination by the Federal Deposit Insurance Corporation, as insurer of our deposits, and by the Connecticut Department of Banking as our primary regulator. Fairfield County Bank, MHC and Fairfield County Bank Corp. are subject to regulation and supervision by the Office of Thrift Supervision. Such regulation and supervision governs the activities in which an institution and its holding company may engage and are intended primarily for the protection of the insurance fund and the depositors and borrowers of Fairfield County Bank rather than for holders of Fairfield County Bank Corp. common stock. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations.

We hold certain intangible assets that could be classified as impaired in the future, which could lead to a decline in earnings.

We record all assets and liabilities acquired by Fairfield County Bank or Fairfield County Bank, MHC in purchase acquisitions, including goodwill and other intangible assets, at fair value, as required by ASC Topic 805, “Business Combinations.” At December 31, 2009, goodwill totaling $7.6 million is not amortized but is subject to impairment tests at least annually, or more often if events or circumstances indicate it may be impaired. Other intangible assets are amortized over their estimated useful lives and are subject to impairment tests if events or circumstances indicate a potential inability to realize the carrying amount. The initial recording and subsequent impairment testing of goodwill and other intangible assets requires subjective judgments about the estimates of the fair value of assets acquired. These fair value measurements are subject to the provisions of ASC Topic 820, “Fair Value Measurement and Disclosures,” which we adopted on January 1, 2008.

Recent legislative and regulatory initiatives may not stabilize the banking system.

The potential exists for additional federal or state laws and regulations regarding lending and funding practices and liquidity standards, and bank regulatory agencies are expected to be more active in responding to concerns and trends identified in examinations, including the expected issuance of many formal enforcement orders. Actions taken to date, as well as potential actions, may not have the beneficial effects that are intended, particularly with respect to the extreme levels of volatility and limited credit availability currently being experienced. In addition, new laws, regulations, and other regulatory changes will increase our Federal Deposit Insurance Corporation insurance premiums and may also increase our costs of regulatory compliance and of doing business, and otherwise affect our operations. New laws, regulations, and other regulatory changes, along with negative developments in the financial industry and the domestic and international credit markets, may significantly affect the markets in which we do business, the markets for and value of our loans and investments, and our ongoing operations, costs and profitability. The current administration has also proposed, and Congress is considering, comprehensive legislation intended to modernize regulation of the United States financial system. The legislation passed by the House of Representatives contains several provisions that would have a direct impact on our

operations. Under that legislation, the Office of Thrift Supervision would be consolidated with the Comptroller of the Currency into a new regulator, the National Bank Supervisor. In addition, the proposed legislation would eliminate the status of “savings and loan holding company” and mandate that all companies that control an insured depository institution register as a bank holding company. Registration as a bank holding company would represent a significant change, as material differences currently exist between savings and loan holding company and bank holding company supervision and regulation. For example, bank holding companies above a specified asset size are subject to consolidated leverage and risk-based capital requirements whereas savings and loan holding companies are not subject to such requirements. The House legislation would also create a new federal agency, the Consumer Financial Protection Agency, that would be dedicated to administering fair lending and consumer compliance laws with respect to financial products and services, which could result in new regulatory requirements and increased regulatory costs for us. The Senate is currently considering legislation that would merge the Office of Thrift Supervision with the Comptroller of the Currency and make the Federal Deposit Insurance Corporation the regulator of savings and loan holding companies with under $50 billion in assets that control state chartered institutions. The Senate bill would also establish a consumer protection agency housed in, but independent from, the Federal Reserve Board. Any such legislation may have a substantial impact on our operations. However, because the contents of any final legislation cannot be provided, the specific effects of the legislation cannot be evaluated at this time.

Future legislative or regulatory actions responding to perceived financial and market problems could impair our rights against delinquent borrowers.

There have been legislative and regulatory proposals made that would reduce the amount distressed borrowers may otherwise be contractually obligated to pay under their mortgage loans and limit an institution’s ability to foreclose on mortgage collateral. Were proposals such as these, or other proposals limiting our rights as a creditor, to be implemented, we could experience increased credit losses or increased expense in pursuing our remedies as a creditor.

Risks Related to This Offering

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

Following the offering, we will recognize additional annual employee compensation expenses stemming from options and shares granted to employees, directors and executives under new benefit plans. These additional expenses will adversely affect our profitability. We cannot determine the actual amount of these new stock-related compensation expenses at this time because applicable accounting practices generally require that they be based on the fair market value of the options or shares of common stock at the date of the grant; however, we expect them to be material. We will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for restricted stock awards and stock options over the vesting period of awards made to recipients. These benefit expenses in the first year following the offering have been estimated to be approximately $1.0 million at the maximum of the offering range, as set forth in the pro forma financial information under “Pro Forma Data” assuming the $10.00 per share purchase price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock, the number of shares awarded under the plans and the timing of the implementation of the plans. For further discussion of these plans, see “Our Management—Benefit Plans.”

If new banking legislation were to prohibit the ability of Fairfield County Bank, MHC to waive dividends, the cost of declaring dividends would increase materially and would restrict our ability to pay dividends to stockholders.

If we pay dividends to our stockholders, we will also be required to pay dividends to Fairfield County Bank, MHC unless, subject to regulatory approval by the Office of Thrift Supervision, Fairfield County Bank, MHC elects to waive the receipt of dividends. We currently anticipate that Fairfield County Bank, MHC will waive any dividends we may pay. However, recently proposed banking legislation could prohibit federally chartered thrift mutual holding companies from waiving dividends. The House Banking Committee and the Senate Banking Committee have each released financial regulatory restructuring bills. The House Bill would preserve the ability of federally chartered thrift mutual holding companies to waive dividends, while the Senate Bill would not. If new

legislation were to eliminate Fairfield County Bank, MHC’s ability to waive dividends, the cost of declaring dividends would increase materially for us and would restrict our ability to pay dividends to stockholders.

We may need to implement additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements, which may increase our operating expenses.

As a result of the completion of this offering, we will become a public reporting company. The federal securities laws and the regulations of the Securities and Exchange Commission require that we file annual, quarterly and current reports and that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including substantial public reporting obligations, may require significant expenditures and place additional demands on our management team. Compliance with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify the adequacy of our internal controls and procedures, which may require us to upgrade our accounting systems. These reporting and compliance obligations may increase our operating expenses.

Our return on equity will initially be low compared to other publicly traded financial institutions. A low return on equity may negatively impact the trading price of our common stock.

Net income divided by average equity, known as “return on equity,” is a ratio used by many investors to compare the performance of a financial institution with its peers. For the year ended December 31, 2009, our return on equity was 1.42%. Although we expect that our net income will increase following the offering, we also expect that our return on equity will be reduced as a result of the additional capital that we will raise in the offering. For example, our pro forma return on equity for the year ended December 31, 2009 is 0.87%, assuming the sale of shares at the maximum of the offering range. In comparison, the peer group used by FinPro in its appraisal had an average return on equity of 1.27% for the year ended December 31, 2009. Over time, we intend to use the net proceeds from this offering to increase earnings per share and book value per share, without assuming undue risk, with the goal of achieving a return on equity that is competitive with other publicly held companies. This goal could take a number of years to achieve, and we cannot assure you that it will be attained. Consequently, you should not expect a competitive return on equity in the near future. Failure to achieve a competitive return on equity might make an investment in our common stock unattractive to some investors and might cause our common stock to trade at lower prices than comparable companies with higher returns on equity. See “Pro Forma Data” for an illustration of the financial impact of this offering.

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

We intend to adopt an equity incentive plan following the offering. If stockholders approve the new equity incentive plan, we intend to issue shares to our officers, employees and directors through this plan. We may fund the equity incentive plan through the purchase of common stock in the open market, subject to regulatory restrictions, by a trust established in connection with the plan, or from authorized but unissued shares of Fairfield County Bank Corp. common stock. If the restricted stock awards under the equity incentive plan are funded from authorized but unissued stock, your ownership interest in the shares could be diluted by up to approximately 1.92%, assuming awards of common stock equal to 1.96% of the shares issued in the offering, including shares issued to Fairfield County Bank, MHC, are awarded under the plan. If the shares issued upon the exercise of stock options under the equity incentive plan are issued from authorized but unissued stock, your ownership interest in the shares could be diluted by up to approximately 4.67%, assuming stock option grants equal to 4.9% of the shares issued in the offering, including shares issued to Fairfield County Bank, MHC, are granted under the plan. See “Pro Forma Data” and “Our Management—Benefit Plans.”

Fairfield County Bank, MHC’s majority control of our common stock will enable it to exercise voting control over most matters put to a vote of stockholders and will prevent stockholders from forcing a sale or a second-step conversion transaction you may find advantageous.

Fairfield County Bank, MHC will own a majority of Fairfield County Bank Corp.’s common stock after the offering and, through its board of directors, will be able to exercise voting control over most matters put to a vote of

stockholders. The members of the boards of Fairfield County Bank Corp., Fairfield County Bank, MHC and Fairfield County Bank are the same. As a federally chartered mutual holding company, the board of directors of Fairfield County Bank, MHC must ensure that the interests of depositors of Fairfield County Bank are represented and considered in matters put to a vote of stockholders of Fairfield County Bank Corp. Therefore, the votes cast by Fairfield County Bank, MHC may not be in your personal best interests as a stockholder. For example, Fairfield County Bank, MHC may exercise its voting control to defeat a stockholder nominee for election to the board of directors of Fairfield County Bank Corp. Fairfield County Bank, MHC’s ability to control the outcome of the election of the board of directors of Fairfield County Bank Corp. restricts the ability of minority stockholders to effect a change of management. In addition, stockholders will not be able to force a merger or second-step conversion transaction without the consent of Fairfield County Bank, MHC, as such transactions require the approval of at least two-thirds of all outstanding voting stock, which can only be achieved if Fairfield County Bank, MHC voted to approve such transactions. Some stockholders may desire a sale or merger transaction, since stockholders typically receive a premium for their shares, or a second-step conversion transaction, since fully converted institutions tend to trade at higher multiples than mutual holding companies.

A significant percentage of our common stock held publicly likely will be held by directors and officers of Fairfield County Bank Corp. and our benefit plans.

Assuming we sell our stock at the maximum of the offering range, we will have 5,945,500 shares, or 47.0% of our total outstanding stock, publicly issued to individuals and entities other than Fairfield County Bank, MHC. We expect our current directors and executive officers, together with their associates, to subscribe for 731,000 shares. In addition, we intend to establish an employee stock ownership plan that will purchase an amount of shares equal to 3.92% of the shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC, which would total 495,880 shares at the maximum of the offering range. As a result, a total of up to 1,301,262 and 1,097,520 shares, or 19.0% or 25.0% of our publicly held shares at the maximum, as adjusted, or minimum of the offering range, respectively, will be held by our officers and directors and our employee stock ownership plan immediately following the offering. Further shares will be held by management following the implementation of an equity incentive plan, which we intend to implement no earlier than six months following completion of the offering. Additionally, we intend to adopt an equity incentive plan following the offering. If approved by shareholders, directors and officers will be issued stock pursuant to this plan. Although there can be no assurance how much stock would be issued to officers and directors, it is intended that an amount of stock equal to 4.9% and 1.96% of the number of shares issued in connection with the offering, including shares issued to Fairfield County Bank, MHC, would be available for stock option and restricted stock grants.

Office of Thrift Supervision policy on remutualization transactions could prevent acquisition of Fairfield County Bank Corp., which may adversely affect our stock price.

Current Office of Thrift Supervision regulations permit a mutual holding company to be acquired by a mutual institution in what is commonly called a “remutualization” transaction. In the past, remutualization transactions often resulted in minority stockholders receiving a premium for their shares. However, in 2003, the Office of Thrift Supervision issued a policy statement indicating that it views remutualization transactions as raising significant issues concerning disparate treatment of minority stockholders and mutual members of the target entity and raising issues concerning the effect on the mutual members of the acquiring entity. Under certain circumstances, including when certain pricing parameters exist, the Office of Thrift Supervision tends to give these issues special scrutiny and reject applications providing for the remutualization of a mutual holding company unless the applicant can clearly demonstrate that the Office of Thrift Supervision’s concerns are not warranted in the particular case. Should the Office of Thrift Supervision prohibit or further restrict these transactions in the future, our per share stock price may be adversely affected. For further information, see “Restrictions on Acquisition of Fairfield County Bank Corp., Fairfield County Bank, MHC and Fairfield County Bank—Regulatory Restrictions.”

Office of Thrift Supervision regulations and anti-takeover provisions in our charter restrict the accumulation of our common stock, which may adversely affect our stock price.

Office of Thrift Supervision regulations provide that for a period of three years following the date of the completion of the stock offering, no person, acting alone, together with associates or in a group of persons acting in concert, will directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of our

common stock without the prior written approval of the Office of Thrift Supervision. In addition, Fairfield County Bank Corp.’s charter provides that, for a period of five years from the date of the stock offering, no person, other than Fairfield County Bank, MHC may acquire directly or indirectly the beneficial ownership of more than 10% of any class of any equity security of Fairfield County Bank Corp. In the event a person acquires shares in violation of this charter provision, all shares beneficially owned by such person in excess of 10% will be considered “excess shares” and will not be counted as shares entitled to vote or counted as voting shares in connection with any matters submitted to the stockholders for a vote. These restrictions make it more difficult and less attractive for stockholders to acquire a significant amount of our common stock, which may adversely affect our stock price.

Our stock price may decline when trading commences.

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

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

We have applied to have our shares of common stock listed for trading on the Nasdaq Global Market under the symbol “FFBK.” Sandler O’Neill & Partners, L.P. currently intends to become a market maker in the common stock, but is under no obligation to do so. There is no way of determining at this time whether other market makers will be obtained or that an active and liquid trading market for the shares of common stock will develop or if developed, will be maintained. After shares of the common stock begin trading, you may contact a stock broker to buy or sell shares.

A Warning About Forward-Looking Statements

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

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statements of goals, intentions and expectations;

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

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statements regarding the quality of loan and investment portfolios; and

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estimates of risks and future costs and benefits.

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

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general economic conditions, either nationally or locally, that are worse than expected;

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

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increased competitive pressures among financial services companies;

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changes in consumer spending, borrowing and savings habits;

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legislative or regulatory changes that adversely affect business;

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adverse changes in the securities markets; and

•

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board.

Any of the forward-looking statements made in this prospectus and in other public statements may later prove incorrect because of inaccurate assumptions, the factors illustrated above or other factors that cannot be foreseen. Consequently, no forward-looking statement can be guaranteed.

Selected Consolidated Financial and Other Data of

Fairfield County Bank, MHC

The summary information presented below at or for each of the periods presented is derived in part from our consolidated financial statements. The following information is only a summary, and should be read in conjunction with our consolidated financial statements and notes beginning on page F-1 of this prospectus. The information at December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008 and 2007 is derived in part from the audited consolidated financial statements that appear in this prospectus. The operating data for the years ended December 31, 2006 and 2005 and the financial condition data at December 31, 2007, 2006 and 2005 were derived in part from our audited consolidated financial statements that do not appear in this prospectus.


At and For the Year Ended December 31, (Dollars in thousands)	2009			2008		2007		2006		2005
Financial Condition Data:
Total assets	$	1,560,516		$	1,568,164	$	1,443,516	$	1,351,816	$	1,232,452
Cash and cash equivalents		75,257			20,992		26,169		36,249		22,610
Securities available-for-sale		57,508			11,131		19,987		18,380		25,639
Securities held-to-maturity		36,558			44,865		49,966		51,417		45,807
Loans receivable, net		1,226,576			1,360,902		1,241,051		1,142,725		1,050,567
Deposits		1,251,400			1,200,180		1,123,753		1,053,468		962,472
Federal Home Loan Bank advances		134,199			201,898		164,278		153,441		137,676
Mortgage escrow		3,269			3,438		3,135		3,146		2,946
Subordinated debt		8,000			8,000		—		—		—
Stockholders’ equity		138,221			135,304		133,441		126,573		114,805
Operating Data:
Interest and dividend income	$	78,962		$	89,646	$	89,430	$	82,192	$	66,980
Interest expense		25,197			33,536		40,087		34,717		22,405

Net interest income		53,765			56,110		49,343		47,475		44,575
Provision for loan losses (1)		8,700			4,000		1,000		700		1,275

Net interest income after provision for loan losses		45,065			52,110		48,343		46,775		43,300
Non-interest income (2)		15,036			9,624		15,023		13,557		13,228
Non-interest expenses		58,350			54,786		50,299		43,445		39,366

Income before income taxes		1,751			6,948		13,067		16,887		17,162
Income tax (benefit) expense (3)		(227	)		1,678		3,996		5,154		5,260

Net income	$	1,978		$	5,270	$	9,071	$	11,733	$	11,902

(1)

The provision for loan losses increased by $4.7 million from $4.0 million for the year ended December 31, 2008 to $8.7 million for the year ended December 31, 2009 due to a number of factors discussed in more detail in “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Allowance for Loan Losses, and Results of Operations for the Years Ended December 31, 2009, 2008 and 2007 — Provision for Loan Losses,” including substantial increase in non-performing assets and net charge-offs. In 2009, there were $7.9 million in net charge-offs compared to $2.1 million in 2008.

(2)

Non-interest income includes a total other-than-temporary impairment loss on securities of $10.1 million, of which $6.6 million is included in other comprehensive income, related to write-downs of pooled trust preferred securities. In 2008, Fairfield County Bank recognized an initial $3.5 million other-than temporary impairment loss on these same securities and a $1.6 million other-than temporary impairment on mutual funds. There was a $5.4 million decrease in non-interest income from 2007 to 2008 due to other-than temporary impairment loss.

(3)	An income tax benefit was recorded for the year ended December 31, 2009 as a result of reduced income and the increased relationship of tax exempt income to pre-tax income. See note 13 to the notes to consolidated financial statements for an analysis of income tax credit (expense).


	At or for the Year Ended December 31,
Selected Financial Ratios and Other Data	2009		2008		2007		2006		2005
Performance Ratios:
Return on average assets	0.12	%	0.35	%	0.66	%	0.90	%	0.99	%
Return on average equity	1.42		3.93		6.84		9.57		10.76
Interest rate spread (1)	3.44		3.66		3.39		3.49		3.66
Net interest margin (2)	3.68		4.03		3.91		3.98		4.03
Non-interest expenses to average assets	3.65		3.58		3.63		3.34		3.29
Efficiency ratio (3)	84.81		83.17		78.15		71.18		68.10
Average interest-earning assets to average interest-bearing liabilities	113.41		116.64		116.65		116.81		118.61
Average equity to average assets	8.69		9.09		9.60		9.43		9.23
Capital Ratios (4):
Tier 1 capital to average assets	9.01		8.90		8.54		8.13		8.79
Tier 1 capital to risk-weighted assets	10.65		9.88		9.46		9.37		10.33
Total risk-based capital to risk-weighted assets	11.69		10.81		10.32		10.25		11.25
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans	1.11		0.94		0.88		0.89		0.90
Allowance for loan losses as a percent of non-performing loans	23.37		47.59		86.29		179.16		116.10
Net charge-offs to average outstanding loans during the period	0.60		0.16		0.02		(0.01	)	—
Non-performing loans as a percent of total loans	4.75		1.98		1.02		0.50		0.77
Non-performing assets as a percent of total assets	4.55		1.81		0.89		0.43		0.67
Non-performing assets and troubled debt restructurings as a percent of total assets (5)	5.43		1.81		0.89		0.43		0.67
Other Data:
Number of full-service offices	23		22		22		18		18
Number of deposit accounts	48,065		48,273		49,274		48,277		46,715
Number of loans	4,909		5,374		5,171		4,772		4,674

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

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

(3)	Represents non-interest expenses divided by the sum of net interest income and non-interest income.

(4)	Ratios are for Fairfield County Bank.

(5)	See “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Analysis of Non-Performing and Classified Assets” for a detailed discussion of the 201% increase in non-performing assets and troubled debt restructurings in 2009.

Recent Developments

The following tables contain certain information concerning the consolidated financial position and results of operations of Fairfield County Bank, MHC. The information at December 31, 2009 is derived in part from the audited consolidated financial statements of Fairfield County Bank, MHC. You should read this information in connection with the audited consolidated financial statements included in this prospectus. The information at March 31, 2010 and for the three month periods ended March 31, 2010 and 2009 was not audited, but in the opinion of management, reflects all adjustments necessary for a fair presentation. No adjustments were made other than normal recurring entries. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results of operations that may be expected for the entire year.


(In thousands)	At March 31, 2010		At December 31, 2009
	(unaudited)

Financial Condition Data:
Total assets	$	1,584,379	$	1,560,516
Cash and cash equivalents		86,763		75,257
Securities available-for-sale		93,484		57,508
Securities held-to-maturity		34,964		36,558
Loans receivable, net		1,211,042		1,226,576
Deposits		1,292,156		1,251,400
Federal Home Loan Bank advances		118,725		134,199
Mortgage escrow		2,264		3,269
Subordinated debt		8,000		8,000
Stockholders’ equity		140,679		138,221


(In thousands)	For the Three Months Ended March 31,
	2010		2009
	(unaudited)

Operating Data:
Interest and dividend income	$	17,670	$	20,899
Interest expense		4,966		7,277
Net interest income		12,704		13,622
Provision for loan losses		2,050		1,600
Net interest income after provision for loan losses		10,654		12,022
Non-interest income		5,389		5,268
Non-interest expenses		14,501		13,951
Income before income taxes		1,542		3,339
Income tax (benefit) expense		438		1,048
Net income		1,104		2,291


	At or For the Three Months Ended March 31,
	2010		2009
	(unaudited)

Performance Ratios:
Return on average assets	0.28	%	0.56	%
Return on average equity	3.15		6.67
Interest rate spread (1)	3.42		3.41
Net interest margin (2)	3.61		3.65
Non-interest expenses to average assets	3.72		3.40
Efficiency ratio (3)	80.15		73.85
Average interest-earning assets to average interest-bearing liabilities	113.52		112.35
Average equity to average assets	8.98		8.37

Capital Ratios (4):
Tier 1 capital to average assets	9.12		8.43
Tier 1 capital to risk-weighted assets	10.84		9.71
Total risk-based capital to risk-weighted assets	11.86		10.57

Asset Quality Ratios:
Allowance for loan losses as a percent of total loans	1.10		0.89
Allowance for loan losses as a percent of non-performing loans	26.61		30.49
Annualized net charge-offs to average outstanding loans during the period	0.84		0.60
Non-performing loans as a percent of total loans	4.12		2.92
Non-performing assets as a percent of total assets	4.04		2.51

Other Data:
Number of full-service offices	23		23
Number of deposit accounts	47,942		48,909
Number of loans	4,870		5,362

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

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

(3)	Represents non-interest expenses divided by the sum of net interest income and non-interest income.

(4)	Ratios are for Fairfield County Bank.

Change in Financial Condition

Total assets increased $23.9 million, or 1.5%, to $1.58 billion at March 31, 2010 from $1.56 billion at December 31, 2009. This increase primarily reflects an increase in cash balances and securities, primarily due to increased deposits, partially offset by a decrease in loan balances. Cash and cash equivalents increased $11.5 million, or 15.3%, to $86.8 million at March 31, 2010. Total investment securities, excluding Federal Home Loan Bank of Boston stock, increased $34.4 million, or 36.6%, to $128.4 million at March 31, 2010, reflecting the purchase of agency securities totaling $40.0 million, partially offset by calls and repayments of $7.6 million.

Loans receivable, net, decreased $15.5 million, or 1.3%, to $1.2 billion at March 31, 2010 primarily as a result of net decreases in construction loans, home equity loans and lines of credit and other consumer loans of $12.8 million, $5.4 million and $4.3 million, respectively, partially offset by a net increase in one- to four-family loans of $9.3 million. The decrease in loans reflects both a decrease in loan demand as well as management’s de-emphasis of construction loans in the current economic environment.

Deposits increased $40.8 million, or 3.3%, to $1.3 billion at March 31, 2010 from December 31, 2009, primarily due to deposit generation at new branch locations. Total borrowings decreased $15.5 million, or 11.5%, to $118.7 million, primarily as a result of scheduled repayments of outstanding borrowings.

Total stockholders’ equity increased $2.5 million, or 1.8%, to $140.7 million at March 31, 2010 from December 31, 2009. The increase was primarily the result of net income of $1.1 million and a favorable valuation adjustment relating to available for sale securities totaling $1.4 million, net of tax.

Results of Operations for the Three Months Ended March 31, 2010 and 2009

Financial Highlights. Net income decreased $1.2 million, or 51.8%, to $1.1 million for the three months ended March 31, 2010 compared to $2.3 million for the three months ended March 31, 2009. The decrease primarily reflected a decrease in net interest income and increases in the provision for loan losses and non-interest expense, partially offset by an increase in non-interest expense and lower income tax expense.

Net Interest Income. Net interest income decreased $918,000, or 6.7%, to $12.7 million for the three months ended March 31, 2010 compared to $13.6 million for the three months ended March 31, 2009. Interest and dividend income decreased $3.2 million, or 15.5%, to $17.7 million for the three months ended March 31, 2010, which was partially offset by a decrease in total interest expense of $2.3 million, or 31.8%, from $7.3 million for the three months ended March 31, 2010 compared to $5.0 million for the three months ended March 31, 2009.

Interest income and fees on loans totaled $16.8 million for the three months ended March 31, 2010, a decrease of $3.4 million, or 16.7%, from the prior year period. The decrease reflects both a decrease in the average balance of loans, primarily attributable to a decrease in new loan volume, as well as lower yields on the loan portfolio, primarily due to our continued emphasis on residential lending and investments rather than commercial lending. The average balance of loans receivable, net, decreased $140 million to $1.2 billion for the three months ended March 31, 2010 from $1.4 billion for the three months ended March 31, 2009, while the yield on loans decreased 42 basis points to 5.41% for the three months ended March 31, 2010 from 5.83% for the prior period. Interest and dividends on investment securities increased $109,000, primarily due to an increase in agency securities, the effect of which was partially offset by a 24 basis point decrease in the yield on investment securities to 3.44% for the three months ended March 31, 2010 from 3.68% for the three months ended March 31, 2009.

The decrease in interest expense was primarily due to declining interest rates on customer deposit accounts resulting in a lower cost of funds. Average interest-bearing deposits increased $24.7 million from the prior year period, while the average rate paid on interest-bearing deposits decreased 67 basis points, from 2.01% for the three months ended March 31, 2009 to 1.34% for the three months ended March 31, 2010. Additionally, Federal Home Loan Bank advances decreased $15.5 million due to scheduled repayments.

Provision for Loan Losses. The provision for loan losses was $2.1 million for the three months ended March 31, 2010 compared to $1.6 million for the three months ended March 31, 2009. The increase in the provision resulted primarily from an increase in the Company’s non-performing assets and charge-offs during the 2010 period and a resulting increase in the allowance for loan losses to total loans to 1.10% of total loans at March 31, 2010 from 0.89% at March 31, 2009. We have evaluated our charge-off history for the last four quarters, have considered the charge-offs for the quarter ended March 31, 2010 and have evaluated the allowance for loan losses that we would need in the event we continue to experience charge-offs similar to those taken for the quarter ended March 31, 2010. Based upon our analysis, we believe our allowance for loan losses is adequate at March 31, 2010. However, additional increases to the allowance for loan losses may be necessary if we continue to experience increased charge-offs in the future.

Non-interest Income. Non-interest income increased by $121,000 to $5.4 million for the three months ended March 31, 2010 compared to $5.3 million for the three months ended March 31, 2009. The increase in non-interest income was primarily the result of an increase in service charges and financial services fee income of $176,000 to $1.4 million for the three months ended March 31, 2010 compared to $1.3 million for the three months ended March 31, 2009. Gain on sale of mortgages remained consistent and totaled $695,000 and $680,000 for the three months ended March 31, 2010 and 2009, respectively.

Non-interest Expense. Non-interest expense increased $550,000, or 3.9%, to $14.5 million for the three months ended March 31, 2010 compared to $14.0 million for the three months ended March 31, 2009. Salaries and employee benefits increased $559,000 to $8.4 million for the three months ended March 31, 2010 compared to $7.8 million for the three months ended March 31, 2009 as a result of a salary freeze in 2009. Fees and services decreased by $250,000 to $1.6 million for the three months ended March 31, 2010 compared to $1.85 million for the three months ended March 31, 2009. Other real estate owned expense increased $151,000 to $307,000 for the three months ended March 31, 2010 compared to $156,000 for the three months ended March 31, 2009 because of an increase in the number of properties held as real estate owned to eight for the quarter ended March 31, 2010 compared to three for the quarter ended March 31, 2009. Federal Deposit Insurance Corporation assessments increased $137,000 to $562,000 for the three months ended March 31, 2010 compared to $425,000 for the three months ended March 31, 2009.

Income Tax Expense. Income tax expense decreased $610,000 to $438,000 for the three months ended March 31, 2010 from $1.0 million for the three months ended March 31, 2009. The decrease was primarily due to a decrease in pre-tax income.

Credit Risk Management

Non-performing and Classified Assets. The following table sets forth our non-performing and classified assets at March 31, 2010 and December 31, 2009:


(Dollars in thousands)	March 31, 2010			December 31, 2009
Nonaccrual loans:
Real estate loans:
One- to four-family	$	25,793		$	25,221
Commercial real estate		3,440			4,678
Construction		13,834			18,300

Total real estate loans	$	43,067		$	48,199

Commercial business loans	$	3,801		$	5,809

Consumer loans:
Home equity lines of credit	$	3,418		$	4,714
Other consumer loans		111			152

Total consumer loans	$	3,529		$	4,866

Total nonaccrual loans	$	50,397		$	58,874

Real estate owned	$	13,682		$	12,156

Total non-performing assets	$	64,079		$	71,030
Troubled debt restructurings (1)	$	15,233		$	14,615

Troubled debt restructurings and total non-performing assets	$	79,312		$	85,645

Total non-performing loans to total loans		4.12	%		4.75	%
Total non-performing loans to total assets		3.18	%		3.77	%
Total non-performing assets and troubled debt restructurings to total assets		5.01	%		5.43	%

Total loans gross		1,224,455			1,240,485

(1)

Troubled debt restructurings that are on non-accrual status are reflected as non-accrual loans and not as troubled debt restructurings. As of March 31, 2010 and December 31, 2009, respectively, troubled debt restructurings included in non-accrual loans totaled $20.4 million and $15.7 million, respectively.

Interest income that would have been recorded for the quarter ended March 31, 2010, had non-accruing loans been current according to their original terms, amounted to $526,000. No interest related to non-accrual loans was included in interest income for the quarter ended March 31, 2010.

$65.0 million of our $108.3 million in construction loans are due to mature on or before December 31, 2010. We are constantly evaluating our construction loans by obtaining current appraisals on all of the properties securing our construction loans. Appraisals on our construction loans are less than one year old. When considering whether to place a construction loan that is less than 90 days past due on non-accrual status, we not only consider the value of the property, but many other factors, including, but not limited to, the financial strength of the borrower, status of completion of the home being built, marketing plans and a recent market analysis of the local real estate market and economy. In addition, we consider the supply of similar homes in the market and sales activity for the entire market and for new construction, and we analyze our recent experience with final construction loans and the amount a home built on speculation actually sells for compared to the borrower’s expenses incurred in acquiring the land and building the home. Based upon our analysis of these factors, we determine whether a construction loan should be placed on non-accrual status and/or whether any change to the level of the allowance for the accruing construction portion of our portfolio is necessary. As of March 31, 2010, $11.1 million of the construction loans due to mature prior to December 31, 2010 had been placed on non-accrual status. Although we believe that we have identified all of the construction loans that should be placed on non-accrual status due to the factors described above, including our analysis of the financial strength of the borrowers, in the event borrowers are unable to sell homes they built on a speculative basis, or individuals default on contracts they have entered into with our borrowers for the construction of their homes, there is a risk that additional loans will become non-accrual in the future.

Our troubled debt restructurings generally relate to loans for which Fairfield County Bank, for reasons related to the borrower’s financial difficulties, has granted a concession to the borrower that it would not otherwise consider related to adjusting the principal paid, the interest rate or both. At March 31, 2010, we had a total of $35.6 million loans that were troubled debt restructurings compared to $30.3 million at December 31, 2009. At March 31, 2010, $20.4 million of the troubled debt restructurings were in non-accrual status and $15.2 million were accruing, compared to $15.7 million in non-accrual status and $14.6 million accruing at December 31, 2009. At March 31, 2010, $28.4 million of our troubled debt restructurings related to modifications made to one-to four- family residential mortgage loans compared to $23.4 million at December 31, 2009. We have experienced an increase in troubled debt restructurings in our one- to four-family residential loan portfolio primarily due to our efforts to reach out to our borrowers with loans secured by owner-occupied one- to four-family homes who are having financial difficulties due to job loss, lost wages or other financial difficulties that we determine merit an effort to assist the borrowers keep their homes. When a one-to four-family residential loan becomes 30 days or more delinquent, we contact the borrower in an effort to identify the problem and, if appropriate, encourage the borrower to complete a hardship package detailing their financial difficulties. Based upon the information presented, we will seek a way to help the borrower stay current on their loan by adjusting the principal paid, the interest rate or both. At March 31, 2010, our largest troubled debt restructuring related to a loan to a builder for speculative construction. The loan has a current balance of $3.9 million and is a loan to a local builder for a home built on speculation. The home is completed, but remains unsold. The builder has leased the property. The loan is not supported by cash flow from the property and remains on non-accrual status. A recent appraisal of the property securing these loans indicates that the value of the collateral exceeds the amount of the loans.

We had impaired loans of $21.1 million at March 31, 2010 compared to $28.8 million at December 31,2009. An allowance for loan impairment was not required at March 31, 2010 due to the sufficiency of collateral values since any collateral shortfall which existed has been previously charged off. The charge-offs recorded on impaired loans totaled $1.2 million in the quarter ended March 31, 2010 compared to $1.7 million for the quarter ended March 31, 2009.

Classified assets decreased to $97.6 million at March 31, 2010 from $104.4 million at December 31, 2009. The decrease in classified assets reflects our efforts to manage our nonperforming assets, authorize troubled debt restructurings in appropriate circumstances and work with our borrowers to resolve these loans or pursue foreclosure proceedings.

The following table shows the aggregate amounts of our classified assets at the dates included.


(In thousands)	March 31, 2010		December 31, 2009
Special mention assets	$	42,854	$	53,184
Substandard assets		54,709		51,177
Doubtful assets		—		—

Total classified assets	$	97,563	$	104,361

Other than disclosed in the above tables, there are no other loans that management currently has serious doubts about the ability of the borrowers to comply with the present loan repayment terms; however, given liquidity problems faced by some of our borrowers, particularly borrowers unable to sell properties built on speculation, there can be no assurance that existing borrowers will not become unable to meet their obligations on their loans in the future.

Loan Delinquencies. The following table provides information about delinquencies in our loan portfolio at March 31, 2010.


	March 31, 2010						December 31, 2009
December 31, (In thousands)	30-59 Days Past Due		60-89 Days Past Due		Non- Accrual		30-59 Days Past Due		60-89 Days Past Due		Non- Accrual
Real estate loans:
One- to four-family	$	1,191	$	—	$	25,793	$	4,676	$	2,177	$	25,221
Commercial real estate		579		2,284		3,440		2,806		555		4,678
Construction		2,745		—		13,834		—		—		18,300
Commercial construction		—		—		—		—		—		—

Total real estate		4,515		2,284		43,067		7,482		2,732		48,199


Commercial business		85		116		3,801		158		—		5,809

Consumer:
Home equity lines of credit		151		261		3,418		1,230		516		4,714
Other consumer loans		127		33		111		203		78		152

Total consumer		278		294		3,529		1,433		594		4,866

Total		4,878		2,694		50,397	$	9,073	$	3,326	$	58,874

Analysis and Determination of the Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We maintain a Loan Loss Reserve Committee, which includes members of management, that evaluates the adequacy of the allowance for loan losses on a monthly basis. When additional allowance is necessary, a provision for loan losses is charged to earnings.

Our methodology for assessing the appropriateness of the allowance for loan losses is based on an internal calculation which consists of: (1) an impairment analysis of loans when we determined full collectability is not reasonably assured; (2) a general valuation allowance on the remainder of the loan portfolio; and (3) an unallocated component. We do not establish specific loan loss allowances. We evaluate all classified loans and we assign risk weights to all commercial and construction loans to facilitate our ability to track these loans for signs of weakness. We are aggressive in charging off the value of any impaired loan to its net realizable value. We calculate net realizable value based upon an appraisal that is not more than twelve months old less a discount rate, which is intended to approximate the cost to sell, carrying costs and other factors that we believe will affect the value we receive for the collateral. For the quarter ended March 31, 2010, we used a discount rate of 15%. Because any shortfall in collateral value for impaired loans is charged off, there is no allocation required for these loans. We did not maintain an allowance for loan losses for impaired loans in 2009 and 2008, as we had taken action during both years (and monitored that action through year end) to charge off the impaired loan balances to the net realizable values.

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


	March 31, 2010				December 31, 2009
(Dollars in thousands)	Amount of Allowance Allocated to Loan Category		Loan Category as a % of Total Loans		Amount of Allowance Allocated to Loan Category		Loan Category as a % of Total Loans
Real estate loans:
One- to four-family	$	2,628	29.9	%	$	2,442	28.8	%
Commercial real estate		4,785	28.9			4,817	28.8
Construction		1,270	8.9			1,664	9.8

Total real estate		8,683	67.7			8,923	67.4

Commercial business		2,478	13.8			2,550	13.6

Consumer:
Home equity lines of credit		1,522	16.8			1,576	17.0
Auto loans		—	—			—	—
Other consumer loans		543	1.7			487	2.0

Total consumer		2,065	18.5			2,063	19.0

Unallocated		187	—			222	—
Total allowance for loan losses	$	13,413	100.0	%	$	13,758	100.00	%

Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses in conformity with generally accepted accounting principles, there can be no assurance that regulators, in reviewing our loan portfolio, will not require us to increase our allowance for loan losses. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

During the quarter ended March 31, 2010, our non-performing loans as a percentage of total loans decreased from 4.75% at December 31, 2009 to 4.12% at March 31, 2010. Our approach has been to aggressively manage our non-performing loans when we believe there are inherent weaknesses that could result in a loss being incurred. We evaluate all of our loans that have been classified for regulatory purposes and, if a determination is made that full collectability may not be reasonably assured, we consider the estimated fair value of the underlying collateral, less selling costs and other marketing costs and conditions. If a shortfall exists, we charge-off that portion of the loan.


	Three Months Ended
(Dollars in thousands)	March 31, 2010			March 31, 2009
Allowance at beginning of period	$	13,758		$	12,978
Provision for loan losses		2,050			1,600
Charge offs:
Real estate loans:
One- to four-family		(926	)		(366	)
Commercial real estate		(672	)		(15	)
Construction		(301	)		(936	)

Total real estate loans		(1,899	)		(1,317	)

Commercial business loans		(195	)		(700	)

Consumer:
Home equity lines of credit		(342	)		(213	)
Other consumer loans		(120	)		(212	)

Total consumer loans		(462	)		(425	)

Total charge-offs		(2,556	)		(2,442	)

Recoveries:
Real estate loans:
One- to four-family		12			—
Construction		140			—

Total real estate loans		152			—

Commercial business		5			1

Consumer:
Other consumer loans		4			90

Total consumer loans		4			90

Total recoveries		161			91

Net charge-offs	$	(2,395	)	$	(2,351	)

Allowance at end of period	$	13,413		$	12,227
Allowance to non-performing loans		26.61	%		29.28	%
Allowance to total loans outstanding at the end of the period		1.10	%		0.89	%
Annualized net charge-offs (recoveries) to average loans outstanding during the period		0.84	%		0.60	%

Charge-offs during the quarter ended March 31, 2010 related primarily to loans that management identified weaknesses in during the quarter ended December 31, 2009. Upon determining that these loans may subject us to loss, we ordered appraisals, which were received during the quarter ended March 31, 2010, and charge-offs were taken to charge-off the loan balances to the net realizable value of the collateral securing the loans based upon the recently received appraisals.

Use of Proceeds

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


	Minimum of Offering Range					Midpoint of Offering Range					Maximum of Offering Range					Adjusted Maximum
(Dollars in thousands)	4,394,500 Shares at $10.00 Per Share			Percent of Net Proceeds		5,170,000 Shares at $10.00 Per Share			Percent of Net Proceeds		5,945,500 Shares at $10.00 Per Share			Percent of Net Proceeds		6,837,325 Shares at $10.00 Per Share			Percent of Net Proceeds
Gross offering proceeds	$	43,945				$	51,700				$	59,455				$	68,373
Less: offering expenses		(1,756	)				(1,827	)				(1,899	)				(1,980	)

Net offering proceeds		42,189		100.00	%		49,873		100.00	%		57,556		100.00	%		66,393		100.00	%
Less:
Proceeds contributed to Fairfield County Bank		(22,993	)	(54.50	)		(24,937	)	(50.00	)		(28,778	)	(50.00	)		(33,197	)	(50.00	)
Proceeds used for loan to employee stock ownership plan		(3,665	)	(8.69	)		(4,312	)	(8.65	)		(4,959	)	(8.62	)		(5,703	)	(8.59	)
Cash contributed to Fairfield County Bank, MHC		(100	)	(0.24	)		(100	)	(0.20	)		(100	)	(0.17	)		(100	)	(0.15	)
Proceeds remaining for Fairfield County Bank Corp.	$	15,431		36.57	%	$	20,524		41.15	%	$	23,719		41.21	%	$	27,393		41.26	%

Fairfield County Bank Corp. intends to use a portion of the offering proceeds to make a loan to the Fairfield County Bank employee stock ownership plan to purchase 366,520, 431,200, 495,880 and 570,262 shares of stock at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range. The loan will have a ten year term and bear an interest rate equal to the prime rate, as reported in the Wall Street Journal.

Fairfield County Bank Corp. intends to contribute 54.6% of the net offering proceeds to Fairfield County Bank at the minimum of the offering range and 50.0% of the net offering proceeds to Fairfield County Bank at each of the midpoint, maximum and maximum, as adjusted, of the offering range, which will enable Fairfield County Bank to have tangible capital in excess of 10% of assets at each point in the offering range following the completion of the offering. Fairfield County Bank Corp. intends to invest the remaining proceeds in short-term, liquid investments, such as United States government agency securities and treasury securities, mortgage-backed securities and cash and cash equivalents. The actual amounts to be invested in different instruments will depend on the interest rate environment and Fairfield County Bank Corp.’s liquidity requirements. In the future, Fairfield County Bank Corp. may liquidate its investments and use those funds:

•

to invest in Fairfield County Bank in order to help fund Fairfield County Bank’s operations;

•

to pay dividends to stockholders;

•

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

•

to finance the possible acquisition of other financial institutions or businesses that are related to banking, although Fairfield County Bank Corp. has no plans to do so at this time; and

•

for general corporate purposes.

Under current Office of Thrift Supervision regulations, Fairfield County Bank Corp. may not repurchase shares of its common stock during the first year following the offering, except to fund equity benefit plans or, with prior regulatory approval, when extraordinary circumstances exist.

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

•

to fund new consumer and business loans, including larger lending relationships associated with commercial lending, in our primary market area;

•

to invest in securities authorized under Fairfield County Bank’s investment policy;

•

to finance the possible expansion of its business activities, including new branch locations, although Fairfield County Bank has no such expansion plans at this time; and

•

for general purposes.

Fairfield County Bank may need regulatory approval to engage in some of the activities listed above.

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

Our Dividend Policy

We plan to pay a dividend on the common stock. However, our ability to pay dividends will be subject to certain business and regulatory restrictions set forth below. Accordingly, we cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future.

Our ability to pay dividends may depend, in part, upon dividends we receive from Fairfield County Bank because we initially will have no source of income other than dividends from Fairfield County Bank and earnings from the investment of the net proceeds from the offering that we retain. We expect that Fairfield County Bank Corp. will retain approximately $23.7 million from the net proceeds raised in the offering at the maximum of the offering range based upon our estimate of offering expenses and other assumptions described in “Pro Forma Data.” Fairfield County Bank Corp. may not make a distribution that would constitute a return of capital during the three-year term of the business plan submitted in connection with the offering. No insured depository institution may make a capital distribution if, after making the distribution, the institution would be undercapitalized.

If Fairfield County Bank Corp. pays dividends to its stockholders, it also will be required to pay dividends to Fairfield County Bank, MHC, unless Fairfield County Bank, MHC elects to waive the receipt of dividends. We anticipate that Fairfield County Bank, MHC will waive any dividends that Fairfield County Bank Corp. may pay. Any decision to waive dividends will be subject to regulatory approval by the Office of Thrift Supervision. The Office of Thrift Supervision reviews dividend waiver notices on a case-by-case basis and, in general, does not object to a waiver if: (i) the waiver would not be detrimental to the safe and sound operation of a savings association; and (ii) a mutual holding company’s board of directors determines that their waiver is consistent with such directors’ fiduciary duties to the mutual holding company. The House Banking Committee and the Senate Banking Committee have each released financial regulatory restructuring bills. The House Bill would preserve the ability of federal thrift mutual holding companies to waive dividends, while the Senate Bill would not. If new banking legislation were to prohibit the ability of Fairfield County Bank, MHC to waive dividends, the cost of declaring dividends would increase materially for Fairfield County Bank Corp. and would restrict its ability to pay dividends to its stockholders.

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

In addition to the regulatory restrictions that may limit our ability to pay dividends, we will only pay a dividend after considering many factors including, but not limited to, our financial condition and results of operations, tax considerations, capital requirements, industry standards and economic conditions. The regulatory restrictions that affect the payment of dividends by Fairfield County Bank to us discussed above will also be considered.

Market for Common Stock of Fairfield County Bank Corp.

We have not previously issued common stock and there is currently no established market for the common stock. Upon completion of the offering, we expect that our shares of common stock will trade on the Nasdaq Global Market under the symbol “FFBK.” Sandler O’Neill & Partners, L.P. has advised us that it intends to become a market maker in our common stock following the offering, but it is under no obligation to do so. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for the common stock will develop or, if developed, will be maintained.

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

the offering. Purchasers of our common stock should have a long-term investment intent and should recognize that there may be a limited trading market in the common stock.

Capitalization

The following table presents the historical capitalization of Fairfield County Bank, MHC at December 31, 2009 and the capitalization of Fairfield County Bank Corp. after giving effect to the offering proceeds (referred to as “pro forma” information). The table depicts capitalization following the offering at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range. The pro forma capitalization gives effect to the assumptions listed under “Pro Forma Data,” based on the sale of the number of shares of common stock indicated in the table. This table does not reflect the issuance of additional shares as a result of the exercise of options granted under the proposed equity incentive plan. A change in the number of shares to be issued in the offering may materially affect pro forma capitalization. We are offering our common stock on a best efforts basis. We must sell a minimum of 4,394,500 shares to complete the offering.


				Fairfield County Bank Corp. Pro Forma Capitalization Based Upon the Sale of (1)
(Dollars in thousands)	Fairfield County Bank, MHC Historical at December 31, 2009			Minimum 4,394,500 Shares at $10.00 per Share			Midpoint 5,170,000 Shares at $10.00 per Share			Maximum 5,945,500 Shares at $10.00 per share			Maximum, as adjusted, 6,837,325 Shares at $10.00 per share
Deposits (2)	$	1,251,400		$	1,251,400		$	1,251,400		$	1,251,400		$	1,251,400
Borrowings		142,199			142,199			142,199			142,199			142,199

Total deposits and borrowed funds	$	1,393,599		$	1,393,599		$	1,393,599		$	1,393,599		$	1,393,599

Stockholders’ equity:
Preferred stock (3)	$	—		$	—		$	—		$	—		$	—
Common stock (3)		—			94			110			127			145
Additional paid-in capital		—			42,095			49,763			57,429			66,248
Retained earnings (4)		144,656			144,656			144,656			144,656			144,656
Accumulated other comprehensive loss		(6,435	)		(6,435	)		(6,435	)		(6,435	)		(6,435	)
Less: Cash contributed to Fairfield County Bank, MHC		—			(100	)		(100	)		(100	)		(100	)
Less: Common stock acquired by employee stock ownership plan (5)		—			(3,665	)		(4,312	)		(4,959	)		(5,703	)
Less: Common stock acquired by equity incentive plan (6)		—			(1,833	)		(2,156	)		(2,479	)		(2,851	)

Total stockholders’ equity	$	138,221		$	174,812		$	181,526		$	188,239		$	195,960

Total stockholders’ equity as a percentage of pro forma total assets					10.95	%		11.32	%		11.69	%		12.11	%

(1)

For a discussion of the assumptions used in calculating the expenses of the offering, see “Pro Forma Data.” Shares issued and outstanding total 9,350,000, 11,000,000, 12,650,000 and 14,547,500, at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range, respectively, including shares issued to Fairfield County Bank, MHC. There will be 4,394,500, 5,170,000, 5,945,500 and 6,837,325 shares issued to the public at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range, respectively, and 4,955,500, 5,830,000, 6,704,500 and 7,710,175 shares issued to Fairfield County Bank, MHC at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively.

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

(3)	Reflects total shares issued, including shares sold in the offering, as well as all shares to be issued to Fairfield County Bank, MHC. Fairfield County Bank, MHC has no capital stock authorized.

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

(5)

Assumes that 3.92% of the outstanding common stock, including shares issued to Fairfield County Bank, MHC, will be acquired by the employee stock ownership plan in the offering with funds borrowed from Fairfield County Bank Corp. Under United States generally accepted accounting principles, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and is, accordingly, reflected as a reduction of capital. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with a related tax benefit, and a reduction in the charge against capital will occur in the amount of the compensation expense recognized. Since the funds are borrowed from Fairfield County Bank Corp., the borrowing will be eliminated in consolidation and no liability or interest expense will be reflected in the consolidated financial statements of Fairfield County Bank Corp. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

(6)

Assumes the purchase in the open market at $10.00 per share, for restricted stock awards under the proposed equity incentive plan, of a number of shares equal to 1.96% of the outstanding shares of common stock, including shares issued to Fairfield County Bank, MHC. The shares are reflected as a reduction of stockholders’ equity. The equity incentive plan will be submitted to stockholders for approval at a meeting following the offering. See “Risk Factors—Risks Related to This Offering—Issuance of shares for benefit programs may dilute your ownership interest,” “Pro Forma Data” and “Our Management—Nonqualified Deferred Compensation—Future Equity Incentive Plan.”

Regulatory Capital Compliance

At December 31, 2009, Fairfield County Bank exceeded all regulatory capital requirements. The following table presents Fairfield County Bank’s regulatory capital position relative to the regulatory capital requirements at December 31, 2009, on a historical and a pro forma basis assuming completion of the public offering. The table reflects receipt by Fairfield County Bank of 56.4% of the net offering proceeds at the minimum of the offering range and 50.0% of the net offering proceeds at each of the midpoint, maximum and maximum, as adjusted, of the offering range. For purposes of the table, the amount expected to be borrowed by the employee stock ownership plan (3.92% of the shares of common stock outstanding, including shares issued to Fairfield County Bank, MHC) is deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Data.” For a discussion of the capital standards applicable to Fairfield County Bank, see “Regulation and Supervision—Bank Regulation—Regulatory Capital Requirements.”


					Pro Forma at December 31, 2009
	Fairfield County Bank Historical at December 31, 2009				Minimum of Offering Range 4,394,500 Shares at $10.00 per Share					Midpoint of Offering Range 5,170,000 Shares At $10.00 per Share					Maximum of Offering Range 5,945,500 Shares at $10.00 per Share					15% Above Maximum of Offering Range 6,837,325 Shares at $10.00 per Share
(Dollars in thousands)	Amount		Percent of Assets (1)		Amount			Percent of Assets		Amount			Percent of Asset		Amount			Percent of Assets		Amount			Percent of Assets
Capital under generally accepted accounting principles (3)	$	146,119	9.38	%	$	163,614		10.38	%	$	164,588		10.44	%	$	167,459		10.60	%	$	170,762		10.79	%
Tangible Capital (3):
Actual		141,435	9.01			158,930		10.01			159,904		10.06			162,775		10.22			166,078		10.41
Requirement		23,559	1.50			23,822		1.50			23,836		1.50			23,879		1.50			23,929		1.50

Excess		117,876	7.51			135,108		8.51			136,068		8.56			138,896		8.72			142,149		8.91
Core Capital (3):
Actual		141,435	9.01			158,930		10.01			159,904		10.06			162,775		10.22			166,078		10.41
Requirement		62,824	4.00			63,524		4.00			63,563		4.00			63,678		4.00			63,810		4.00

Excess		78,611	5.01			95,406		6.01			96,341		6.06			99,097		6.22			102,268		6.41
Tier 1 Risk-Based Capital (3):
Actual		141,435	10.65			158,930		11.94			159,904		12.01			162,775		12.22			166,078		12.46
Requirement		53,105	4.00			53,245		4.00			53,253		4.00			53,276		4.00			53,302		4.00

Excess		88,330	6.65			105,685		7.94			106,651		8.01			109,499		8.22			112,776		8.46
Total Risk-Based Capital (3):
Actual		155,198	11.69			172,693		12.97			173,667		13.04			176,538		13.25			179,841		13.50
Requirement (2)		106,210	8.00			106,490		8.00			106,506		8.00			106,552		8.00			106,605		8.00

Excess		48,988	3.69			66,203		4.97			67,161		5.04			69,986		5.25			73,236		5.50
Capital Reconciliation:
Net Proceeds to the Bank						22,993					24,937					28,778					33,197
Less: common stock acquired by employee stock ownership plan						(3,665	)				(4,312	)				(4,959	)				(5,703	)
Less: common stock to be acquired by equity incentive plan						(1,833	)				(2,156	)				(2,479	)				(2,851	)

Pro Forma Increase to Capital						17,495					18,469					21,340					24,643

(1)

Shown as percent of assets under generally accepted accounting principles, adjusted total assets for tangible and core capital ratios or adjusted risk-weighted assets for risk based capital ratios. Adjusted total assets are adjusted for intangible assets and goodwill pursuant to the instructions to the Federal Deposit Insurance Corporation’s Call Report.

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

(3)	Pro forma capital assumes that the employee stock ownership plan is funded by purchasing shares in the offering at a price of $10.00 per share and that the equity incentive plan is funded by purchasing shares in the open market at a price of $10.00 per share.

(4)	Institutions with Tier 1 risk-based capital, total risk-based capital and core capital of 6.0%, 10.0% and 5.0% or greater, respectively, are deemed “well capitalized,” which is the highest capital rating that the Office of Thrift Supervision assigns.

Pro Forma Data

The following tables illustrate the pro forma impact of the offering on our net income and stockholders’ equity based on the sale of common stock at the minimum, midpoint, maximum and maximum, as adjusted of the offering range. The actual net proceeds from the sale of the common stock cannot be determined until the offering is completed. Net proceeds indicated in the following tables are based upon the following assumptions:

•

100% of the shares of common stock will be sold in the subscription and direct community offerings;

•

Our employee stock ownership plan will purchase a number of shares equal to 3.92% of the shares sold in the offering, including shares issued to Fairfield County Bank, MHC, with a loan from Fairfield County Bank Corp. that will be repaid in equal installments over ten years;

•

Sandler O’Neill & Partners, L.P. will receive a management fee equal to 1.0% of the aggregate purchase price of the shares sold in the subscription and direct community offerings, except that no fee will be paid with respect to shares purchased by the employee stock ownership plan or by our officers, directors and employees or members of their immediate families; and

•

Total expenses of the offering, excluding Sandler O’Neill & Partners, L.P.’s management fees referenced above, will be approximately $1.4 million.

Actual expenses may vary from this estimate, and the amount of fees paid will depend upon the number of shares sold in the subscription and direct community offerings, as opposed to the syndicated community offering. The sales commission and management fee for shares sold in any syndicated community offering will be equal to 6.5% of the aggregate purchase price of the shares sold in the syndicated community offering.

Pro forma net income for the year ended December 31, 2009 has been calculated as if the offering were completed at the beginning of each period, and the net proceeds had been invested at 3.54%, which represents the arithmetic average of yield on earning assets and the cost of deposits for the trailing 12 months. A pro forma after-tax return of 2.34% is used for the year ended December 31, 2009, after giving effect to a combined federal and state income tax rate of 34.0%. The actual rate experienced by Fairfield County Bank Corp. may vary. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the number of shares of common stock indicated in the tables.

When reviewing the following tables you should consider the following:

•

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

•

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

•

Pro forma stockholders’ equity (“book value”) represents the difference between the stated amounts of our assets and liabilities. Book value amounts do not represent fair market values or amounts available for distribution to shareholders in the unlikely event of liquidation. The amounts shown do not reflect the federal income tax consequences of the restoration to income of Fairfield County Bank’s special bad debt reserves for income tax purposes or liquidation accounts, which would be required in the unlikely event of liquidation. See “Federal and State Taxation.”

•

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

The following pro forma data, which are based on Fairfield County Bank, MHC’s stockholders’ equity at December 31, 2009, and net income for the year ended December 31, 2009, may not represent the actual financial effects of the offering or our operating results after the offering. The pro forma data rely exclusively on the assumptions outlined above and in the notes to the pro forma tables. The pro forma data do not represent the fair market value of our common stock, the current fair market value of our assets or liabilities, or the amount of money that would be available for distribution to shareholders if we were to be liquidated after the offering.


	At or For the Year Ended December 31, 2009
	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			Maximum, as Adjusted of Offering Range
(Dollars in thousands, except per share amounts)	4,394,500 Shares at $10.00 Per Share			5,170,000 Shares at $10.00 Per Share			5,945,500 Shares at $10.00 Per Share			6,837,325 Shares at $10.00 Per Share
Gross proceeds	$	43,945		$	51,700		$	59,455		$	68,373
Less: estimated expenses		(1,756	)		(1,827	)		(1,898	)		(1,980	)

Estimated net proceeds		42,189			49,873			57,557			63,393
Less: cash contributed to Fairfield County Bank, MHC		(100	)		(100	)		(100	)		(100	)
Less: common stock acquired by employee stock ownership plan (1)		(3,665	)		(4,312	)		(4,959	)		(5,703	)
Less: common stock to be acquired by equity incentive plan (2)		(1,833	)		(2,156	)		(2,479	)		(2,851	)

Net investable proceeds	$	36,591		$	43,305		$	50,019		$	57,739

Pro Forma Net Income:
Pro forma net income (3):
Historical	$	1,978		$	1,978		$	1,978		$	1,978
Pro forma income on net investable proceeds		856			1,013			1,170			1,351
Less: pro forma employee stock ownership plan adjustments (1)		(242	)		(285	)		(327	)		(376	)
Less: pro forma stock option expense (3)		(260	)		(306	)		(352	)		(405	)
Less: restricted stock award expense (2)		(242	)		(285	)		(327	)		(376	)

Pro forma net income	$	2,090		$	2,115		$	2,142		$	2,172

Pro forma net income per share (3):
Historical	$	0.22		$	0.19		$	0.16		$	0.14
Pro forma income on net investable proceeds		0.09			0.10			0.10			0.10
Less: pro forma employee stock ownership plan adjustments (1)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: pro forma stock option expense (3)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: restricted stock award expense (2)		(0.03	)		(0.03	)		(0.03	)		(0.03	)

Pro forma net income per share	$	0.22		$	0.20		$	0.17		$	0.15

Offering price as a multiple of pro forma net income per share (annualized)		43.48x			50.00x			55.56x			66.67x
Number of shares used to calculate pro forma net income per share (4)		9,020,132			10,611,920			12,203,708			14,034,264
Pro Forma Stockholders’ Equity:
Pro forma stockholders’ equity:
Historical	$	138,221		$	138,221		$	138,221		$	138,221
Estimated net proceeds		42,189			49,873			57,557			63,393
Less: cash contributed to Fairfield County Bank. MHC		(100	)		(100	)		(100	)		(100	)
Less: common stock acquired by employee stock ownership plan (1)		(3,665	)		(4,312	)		(4,959	)		(5,703	)
Less: common stock to be acquired by equity incentive plan (2)		(1,833	)		(2,156	)		(2,479	)		(2,851	)

Pro forma stockholders’ equity		174,812			181,526			188,240			195,960
Less: intangible assets		(8,106	)		(8,106	)		(8,106	)		(8,106	)

Pro forma tangible equity	$	166,706		$	173,420		$	180,134		$	187,854

Pro forma stockholders’ equity per share (book value):
Historical	$	14.79		$	12.57		$	10.93		$	9.50
Estimated net proceeds		4.51			4.53			4.55			4.57
Less: cash contributed to Fairfield County Bank, MHC		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Less: common stock acquired by employee stock ownership plan (1)		(0.39	)		(0.39	)		(0.39	)		(0.39	)
Less: common stock to be acquired by equity incentive plan (2)		(0.20	)		(0.20	)		(0.20	)		(0.20	)

Pro forma book value		18.70			16.50			14.88			13.47
Less: intangible assets		(0.87	)		(0.74	)		(0.64	)		(0.56	)

Pro forma tangible book value		17.83			15.76			14.24			12.91

Offering price as a percentage of pro forma book value per share		53.48	%		60.61	%		67.20	%		74.24	%
Offering price as a percentage of pro forma tangible book value per share		56.09	%		63.41	%		70.22	%		77.46	%
Offering price as a percentage of pro forma tangible book value per share on a fully converted basis		44.48	%		49.00	%		52.94	%		56.95	%
Number of shares used to calculate pro forma stockholders’ equity per share (4)		9,350,000			11,000,000			12,650,000			14,547,500

(footnotes on page __)

(1)

Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 3.92% of the shares issued in the offering, including shares issued to Fairfield County Bank, MHC (366,520, 431,200, 495,880 and 570,262 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively). The employee stock ownership plan will borrow the funds to acquire these shares from the proceeds retained by Fairfield County Bank Corp. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. This borrowing will have an interest rate equal to the prime rate as published in The Wall Street Journal, which is currently %, and a term of ten years. Fairfield County Bank intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. As the debt is paid down, shares will be released for allocation to participants’ accounts and stockholders’ equity will be increased.

The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares (10% of the total, based on a ten-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released would be based upon the average market value of the shares during the year, which, for purposes of the pro forma tables, was assumed to be equal to the $10.00 per share purchase price. If the average market value per share is greater than $10.00 per share, total employee stock ownership plan expense would be greater. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

(2)

Assumes that Fairfield County Bank Corp. will purchase in the open market a number of shares of common stock equal to 1.96% of the shares sold in the offering, including shares issued to Fairfield County Bank, MHC (183,260, 215,600, 247,940 and 285,131 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), that will be reissued as restricted stock awards under a new equity incentive plan to be adopted following the offering. Purchases will be funded with cash on hand at Fairfield County Bank Corp. or with dividends paid to Fairfield County Bank Corp. by Fairfield County Bank. The cost of these shares has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. In calculating the pro forma effect of the restricted stock awards, it is assumed that the required shareholder approval has been received, that the shares used to fund the awards were acquired at the beginning of the respective period and that the shares were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued shares of the common stock instead of shares repurchased in the open market would dilute the ownership interests of existing shareholders by approximately 1.92%.

The adjustment to pro forma net income for the restricted stock awards reflects the after-tax compensation expense associated with the awards. It is assumed that the fair market value of a share of Fairfield County Bank Corp. common stock was $10.00 at the time the awards were made, that shares of restricted stock issued under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the shares awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 34.0%. If the fair market value per share is greater than $10.00 per share on the date shares are awarded under the equity incentive plan, total equity incentive plan expense would be greater.

(3)

The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the stock options that may be granted under the new equity incentive plan to be adopted following the offering. If the equity incentive plan is approved by shareholders, a number of shares equal to 4.9% of the number of shares issued in the offering, including shares issued to Fairfield County Bank, MHC (458,150, 539,000, 619,850 and 712,827) shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), will be reserved for future issuance upon the exercise of stock options that may be granted under the plan. We will comply with Financial Accounting Standards Board Statement No. 123 (revised 2004), Share-Based Payment, to account for stock options issued. This standard requires compensation cost relating to share-based payment transactions be recognized in the financial statements over the period the employee is required to provide services for the award. The cost will be measured based on the fair value of the equity instruments issued. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. For purposes of this table, the fair value of stock options to be granted under the equity incentive plan has been estimated at $2.84 per option using the Black-Scholes option pricing model with the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 6.5 years; expected volatility, 18.55%; and risk-free interest rate, 3.35%. It is assumed that stock options granted under the equity incentive plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the options awarded was an amortized expense during each year and that all of the options awarded are non-qualified options and therefore there is no tax benefit. We plan to use the Black-Scholes option-pricing formula; however, if the fair market value per share is different than $2.84 per share on the date options are awarded under the equity incentive plan, or if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing shareholders by approximately 4.67%.

(4)

The number of shares used to calculate pro forma net income per share is equal to the number of shares to be outstanding upon completion of the offering, less the number of shares purchased by the employee stock ownership plan not committed to be released within one year following the offering as adjusted to effect a weighted average over the period. The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering. The following table sets forth the number and percentage of total shares of Fairfield County Bank Corp. that will be held by Fairfield County Bank, MHC and public stockholders at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range:


	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			Maximum as Adjusted of Offering Range
Shares owned by Fairfield County Bank, MHC	4,955,500	53.00	%	5,830,000	53.00	%	6,704,500	53.00	%	7,710,175	53.00	%
Shares owned by public stockholders	4,394,500	47.00		5,170,000	47.00		5,945,500	47.00		6,837,325	47.00
Total Shares Outstanding	9,350,000	100.00	%	11,000,000	100.00	%	12,650,000	100.00	%	14,547,500	100.00	%

Our Business

General

Fairfield County Bank Corp. is being organized as a federally chartered savings and loan holding company in connection with the offering and will become the wholly owned subsidiary of Fairfield County Bank, MHC and the holding company for Fairfield County Bank. Fairfield County Bank Corp.’s primary business activity will be the ownership of the outstanding capital stock of Fairfield County Bank. Fairfield County Bank Corp. will not own or lease any property but instead will use the premises, equipment and other property of Fairfield County Bank with the payment of appropriate reimbursement, as required by applicable law and regulations, under the terms of an expense allocation agreement. In the future, Fairfield County Bank Corp. may acquire or organize other operating subsidiaries; however, there are no current plans, arrangements, agreements or understandings, written or oral, to do so.

Fairfield County Bank is a Connecticut chartered savings bank originally founded in 1871. In 2007, we reorganized into the mutual holding company structure, forming Fairfield County Bank, MHC as our holding company. As a Connecticut chartered savings bank, Fairfield County Bank never had members. When we reorganized into the mutual holding company structure, Fairfield County Bank, MHC was organized with no members as well; although, under Connecticut law, the former corporators who oversaw the operations of Fairfield County Bank prior to the reorganization became the corporators of Fairfield County Bank, MHC. We are a community-minded, customer focused institution that has served the financial needs of our depositors and the local community since our founding. We offer traditional financial services to consumers, businesses and local builders in our market areas. We attract deposits from the general public and use those funds to originate a variety of loans, including one-to four-family, commercial real estate, construction, consumer, particularly home equity, and commercial business loans. We also offer insurance and investment products to our customers and maintain investments in cash, securities and other assets.

Our website address is www.fairfieldcountybank.com. We plan to make available on our website, free of charge, our annual report on Form 10-K, quarterly report on Form 10-Q and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. Information on our website should not be considered a part of this prospectus.

Market Area

We are headquartered in Ridgefield, Connecticut. In addition to our main office, we operate 23 full-service branch offices in Fairfield County, Connecticut.

Fairfield County Market Area. Fairfield County is situated in the southwestern corner of the State of Connecticut. It is the most populous and wealthiest county in Connecticut and contains four of the state’s largest cities. Fairfield County is located approximately 40 miles outside of New York City and, as a result, its economy is largely tied to that of the greater New York City metropolitan area. We consider our primary market area to consist of the towns and cities of Bridgeport, Danbury, Darien, Fairfield, Georgetown, Greenwich, Norwalk, Ridgefield, Rowayton, Stamford Trumbull, Weston, Westport and Wilton, Connecticut. Bridgeport, Danbury, Norwalk and Stamford are commercial or financial centers, while the remaining towns are predominantly residential areas consisting of high-end properties occupied by affluent individuals, many of whom commute into New York City. Accordingly, the average home prices in Fairfield County are substantially higher than those in other parts of Connecticut and the United States. In recent years, the economy of Fairfield County has been adversely impacted by the national economic recession and negative effect of the financial industry crisis on New York City’s economy as well as a decline in the local real estate market.

Real estate values and the demand for real estate in our market have declined substantially in recent months. For example, in Greenwich, the average days a home was on the market increased from 180 days in 2008 to 203 days in 2009, the number of homes sold decreased by 17.8% from the number sold in 2008 and the median sales price declined by 15.5% Similarly, in New Canaan, there was a 23.7% drop in the number of homes sold in 2009 compared to 2008. Fairfield, Ridgefield, Weston, Wilton, Bridgeport, Danbury and Darien also experienced

substantial declines in the median sales price of homes as well as a decrease in the number of homes sold during 2009.

Competition

We face significant competition for deposits and loans. Our most direct competition for deposits has historically come from the many financial institutions operating in our market area and, to a lesser extent, from other financial service companies such as brokerage firms, credit unions and insurance companies. Some of these institutions are significantly larger than us and, therefore, historically have had a competitive advantage over us given their significantly greater resources. We also face competition for investors’ funds from money market funds, mutual funds and other corporate and government securities.

At June 30, 2009, which is the most recent date for which data is available from the Federal Deposit Insurance Corporation, we held approximately 4.55% of the deposits in the Bridgeport-Stamford-Norwalk, Connecticut metropolitan statistical area, which was the seventh largest market share out of the 32 institutions with offices in that metropolitan statistical area. However, we currently maintain a much larger percentage of deposits in a number of the individual towns which comprise our market area. For example, at June 30, 2009, we held approximately: (i) 40.98% of deposits in the town of Ridgefield, which was the largest market share out of the 10 institutions with offices in Ridgefield; (ii) 19.51% of deposits in the city of Norwalk, which was the second largest market share out of the 15 institutions with offices in Norwalk; and (iii) 13.20% of deposits in the town of Wilton, which was the third largest market share out of the nine institutions with offices in Wilton.

Our competition for loans comes primarily from financial institutions in our market area and, to a lesser extent, from other financial service providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from the increasing number of non-depository financial service companies entering the mortgage market, such as insurance companies, securities companies and specialty finance companies.

We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. Changes in federal law permit affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. Competition for deposits and the origination of loans could limit our growth in the future.

Lending Activities

We offer a variety of loans. Although our loan portfolio has always had its highest concentration of loans in one-to four-family loans, historically, we have also had a substantial portion of our loan portfolio concentrated in commercial real estate, construction, consumer loans, including home equity loans, and commercial business loans, including loans guaranteed by the Small Business Administration. Although we had emphasized construction loans in the past, we have not emphasized construction loans since 2007 given the weakened economic environment and do not plan to emphasize those loans in the near future. We sought to decrease our construction loan portfolio throughout 2009 by not seeking to originate new construction loans in 2009, working with our borrowers to ensure they understood market conditions so that they could better market their properties, which contributed to many homes built on speculation being sold, and seeking to convert existing construction loans to fully amortizing permanent loans when possible. A substantial portion of our construction loan portfolio consists of loans to local builders for the construction of single-family homes to be built on a speculative basis. Given the recent downturn in the economy, certain of the builders with construction loans outstanding have had difficulty selling the homes built on a speculative basis. This has caused some delays in certain loans being repaid and we have modified certain of those loans primarily to extend the maturity of the loans to provide the borrower with more time to sell the properties securing those loans. We have aggressively monitored this portion of our loan portfolio and have sought to gain additional collateral where possible to secure those loans. We will continue to originate commercial real estate and commercial business loans in our local community in accordance with what we believe to be prudent underwriting guidelines, and closely monitor those portions of our loan portfolio as well.

One-to Four-Family Residential Loans. At December 31, 2009, our one-to four-family loans totaled $357.2 million, or 28.8% of our total loan portfolio. We offer two types of residential mortgage loans: fixed-rate loans and adjustable-rate loans. Generally, we offer fixed-rate mortgage loans with terms of up to 30 years. We generally sell all of the fixed rate loans we originate with servicing released. Generally, we offer adjustable-rate mortgage loans with interest rates and payments that adjust annually after an initial fixed period of one, two, three or five years. Interest rates and payments on our adjustable-rate loans generally are adjusted to a rate equal to a percentage above the one year Treasury constant maturity rate. The maximum amount by which the interest rate may be increased or decreased is generally 2.0% per adjustment period and the lifetime interest rate cap is generally 6.0% over the initial interest rate of the loan.

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

While one-to four-family residential real estate loans are normally originated with up to 30-year terms, such loans typically remain outstanding for substantially shorter periods because borrowers often prepay their loans in full either upon sale of the property pledged as security or upon refinancing the original loan. Therefore, average loan maturity is a function of, among other factors, the level of purchase and sale activity in the real estate market, prevailing interest rates and the interest rates payable on outstanding loans. We do not offer loans with negative amortization, subprime loans or loans with no documentation.

It is our general policy not to make high loan-to-value loans (defined as loans with a loan-to-value ratio of 80% or more) without private mortgage insurance. Recently, we have adjusted our lending policies to reduce our risk, while permitting us to continue to originate residential loans. For example, we currently limit the loan to value ratio depending on a number of factors, including whether a property will be owner-occupied or leased and whether the property securing the loan is a condominium. Further, we charge higher rates for loans with a higher loan to value ratio. For example, currently, loans with a loan to value ratio of 75% are more favorably priced than loans with a loan to value ratio of 80%. Further, while we generally will lend up to 80% of the value of an owner occupied single family home, we generally will only loan up to 75% of the value of an owner-occupied condominium with a loan amount below $1.5 million, and 65% of the value of an owner occupied condominium with a loan amount from $1.5 million to up to $2.5 million. The maximum loan to value ratio generally can not exceed 50% of a non-owner occupied condominium. We require all properties securing mortgage loans to be appraised by a board-approved independent appraiser. We generally require title insurance on all first mortgage loans. Borrowers must obtain hazard insurance, and flood insurance is required for loans on properties located in a flood zone.

As of December 31, 2009, our largest one-to four-family loan was a $4.2 million loan secured by an owner occupied home in Greenwich, Connecticut, which is performing in accordance with its original terms.

Commercial Real Estate Loans. At December 31, 2009, we had commercial real estate loans totaling $357.1 million, or 28.8%, of our total loan portfolio, which was the second largest component of our loan portfolio. We offer commercial real estate loans secured by real estate primarily with adjustable rates. We originate a variety of commercial real estate loans generally for terms up to 25 years and payments based on an amortization schedule of up to 25 years. These loans are typically based on the Federal Home Loan Bank of Boston’s borrowing rate plus a spread and adjust every three to five years. Generally, our commercial real estate loans are secured by owner-occupied local businesses, including automobile dealerships, small retail and mixed use properties, as well as non-profit organizations such as churches. Approximately 59% of our commercial real estate loans are owner-occupied. To a more limited extent we offer commercial real estate loans for the acquisition of improved real estate and for real estate acquisition and development. Historically, we generally have originated commercial real estate loans with loan to value ratios of up to 75%.

As of December 31, 2009, our largest commercial real estate loan was a $13.4 million loan secured by a country club, which was performing in accordance with its original terms. The second largest commercial real estate loan was initially originated as a construction loan in 2006 to a local business and a private developer for the construction of 10 condominiums in Greenwich, Connecticut on a speculative basis. All units are complete and nine remain unsold; all nine units are leased. This loan was converted to a permanent, amortizing commercial real estate loan in accordance with our commercial real estate loan underwriting standards, which include a careful review of the value of the collateral, cash flows from the collateral and the borrower’s personal liquidity. This loan is currently performing in accordance with its terms.

Construction Loans. At December 31, 2009, we had construction loans totaling $121.1 million, or 9.8% of our total loan portfolio. Historically, we have offered construction loans to builders for the construction of commercial properties, to individuals for the construction of their own homes, to builders with contracts with purchasers for the home being built, and to builders for houses being built on a speculative basis. Of the $121.1 million construction loans, $84.2 million are secured by speculative building projects. The average balance of those loans is $1.7 million. We generally lend to experienced local builders and our construction loans are generally secured by properties located within a 50 mile radius of Ridgefield, Connecticut. Our policy is to loan up to a maximum of 75% of the cost of construction or value of the property, whichever is less, although we will consider loaning up to 80% of the cost of construction for construction loans to be secured by a home for which the builder has a contract with no contingencies. Advances are only made following an inspection of the property confirming completion of the required percentage of the property. In addition, we generally require our borrowers to personally guarantee their loans.

Due to the current economic environment, we have reduced our emphasis on the origination of construction loans, particularly on a speculative basis. Our construction loans have generally been originated with two year terms; however, it has been necessary for us to modify the terms of many of these loans to give the borrower more time to sell properties built on speculation. We will finance up to 75% of the cost of construction and we permit the interest on the loan to be included in the overall cost of construction for purposes of determining loan to value ratios. There are two ways we will permit a borrower to establish an interest reserve: a borrower may post cash in an account at Fairfield County Bank from which monthly interest payments may be deducted; or we may establish an interest reserve as an aggregate portion of the loan amount and advance cash to cover monthly interest. When the interest income is funded from loan advances, the amount is capitalized as part of the loan. Interest reserves are used for construction loans only. Our loan policy allows for additional interest advances on renewed loans provided certain financial conditions related to the borrower and the property are met, including adequate borrower liquidity and a recent appraisal that indicates that the value of the property adequately secures the loan. When a construction loan becomes non-accrual or is considered impaired, Fairfield County Bank will freeze any existing interest reserves, will not recognize any payments as income and treats all payments as principal reductions to the loan balance. We do not have any restructured construction loans where we have provided an interest reserve to keep the loan current. As of December 31, 2009, the outstanding balance of all modified construction loans was $50.4 million. At December 31, 2009, our outstanding construction loans included $15.3 million to builders and businesses for construction projects that will convert to permanent financing upon completion of construction; $6.4 million in loans to individuals for the construction of owner-occupied residential homes; and $106.3 million in construction loans to local builders. Of the $106.7 million in loans to local builders, $4.5 million of that amount is to builders for homes under contract, $12.0 million is for land acquisition, and $84.2 million is to builders for homes being built on speculation.

At December 31, 2009, our largest construction loan was a $6.8 million construction loan to a local developer that was originated in 2008. The loan currently has a balance of $5.9 million. This loan is secured by a single family home that is being built on speculation and was approximately 85% complete at December 31, 2009. The loan is performing in accordance with its terms due to interest reserves that were established when the loan was originated. The interest reserves of $414,000 are included in the $6.8 million loan amount. A recent appraisal on the property securing this loan reflects that the value of the collateral exceeds the loan amount due to us.

Our second largest construction lending relationship is part of our largest loan to one borrower relationship. This construction portion of our relationship is a combination of three loans totaling $5.8 million secured by three condominiums built on a speculative basis. None of the condominiums have been sold, but all are currently leased. The borrowers have suffered some problems with liquidity and these loans have been modified to extend their terms.

The borrower and guarantor have provided additional real estate collateral and have non-real estate related sources of income to service the loan. These loans are performing in accordance with their modified terms at this time.

Commercial Loans. At December 31, 2009, commercial business loans totaled $164.5 million, or 13.2% of our total loan portfolio. We offer commercial business loans to professionals, sole proprietorships and small businesses in our market area. We offer installment loans for capital improvements, equipment acquisition and long-term working capital. These loans are typically based on the prime rate, as reported by the Wall Street Journal, plus a spread. These loans are secured by business assets other than real estate, such as business equipment and inventory, or are backed by the personal guarantee of the borrower. We originate lines of credit to finance the working capital needs of businesses to be repaid by seasonal cash flows or to provide a period of time during which the business can borrow funds for planned equipment purchases. We also make loans guaranteed by the Small Business Administration. These loans, which totaled $16.0 million at December 31, 2009, are typically made to enable qualifying start-up and existing small businesses to obtain financing which might not otherwise be available through conventional methods for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building and leasehold improvements. Candidates for loans guaranteed by the Small Business Administration are typically profitable or exhibit the potential for successful development but are unable to present sufficient loan collateral or debt service history to obtain approval for traditional financing. Loans guaranteed by the Small Business Administration generally have terms of up to 10 years for working capital and terms of up to 25 years for fixed assets.

When making commercial business loans, we consider the financial statements of the borrower, the borrower’s payment history of both corporate and personal debt, the debt service capabilities of the borrower, the projected cash flows of the business, the viability of the industry in which the borrower operates and the value of the collateral.

At December 31, 2009, our largest commercial business loan relationship consists of two commercial business loans totaling $6.6 million loan to a group of physicians. Our total lending relationship with this group of people totals $7.6 million. This group of loans is performing in accordance with their original terms.

Consumer Loans. At December 31, 2009, consumer loans totaled $236.0 million, or 19.0% of our total loan portfolio. We offer a variety of consumer loans, including home equity loans and lines of credit and loans secured by passbook accounts and certificates of deposit. We also offer unsecured lines of credit.

We generally offer home equity loans and lines of credit with a maximum combined loan-to-value ratio of 75% on lines of credit up to $500,000. Home equity lines of credit in excess of $500,000 must have a combined loan-to-value ratio of 70% or less depending on the amount of the line of credit. Home equity lines of credit have adjustable rates based upon the prime rate as reported by the Wall Street Journal. The actual rate charged is based upon a number of factors, including the dollar amount of the line of credit and the borrower’s credit score. As our risk increases, the rate we charge will increase. Currently, the maximum home equity line of credit we offer is $1.0 million.

We offer other secured and unsecured consumer loans with terms up to five years. The availability of credit is dependent upon our determination of a borrower’s creditworthiness based upon our evaluation of a borrower’s income, net worth, liquidity and credit history. Secured loans may be secured by marketable securities or real estate and must be secured by any capital asset the loan funds are used to purchase. Unsecured loans are only originated to borrowers in our market area who demonstrate stable employment, a good credit history and satisfy other credit related tests. Our unsecured loans and lines of credit bear a substantially higher interest rate than our secured loans and lines of credit. For more information on our loan commitments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Liquidity Management.”

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

Loan Underwriting Risks.

Adjustable-Rate Residential Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased monthly mortgage payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate mortgage loans make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits. Our adjustable-rate mortgage loans generally do not provide for downward adjustments below the initial discounted contract rate.

Commercial Real Estate Loans. Loans secured by commercial real estate generally have larger balances and involve a greater degree of risk than one-to four-family residential mortgage loans. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide annual financial statements on commercial real estate loans and rent rolls where applicable. In reaching a decision on whether to make a commercial real estate loan, we consider and review a global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. We have generally required that the properties securing these real estate loans have a minimum stand alone debt service coverage ratio (the ratio of earnings before debt service to debt service) of at least 1.15x. An appraisal report and an environmental report are obtained for all commercial real estate loans.

Construction Loans. Over 70% of our construction loans are loans to builders for the construction of new homes for which there is no buyer at the time construction commences. Speculative loans for the construction of real estate generally involve a higher degree of risk than one-to four-family loans because repayment of the loan is generally dependent on the ability of the builder to complete and sell the home. In the current economic environment, many of the builders we have done business with are having trouble selling homes they have built. While we require borrowers to show sufficient liquidity to cover the projected interest payments during the term of the loan, the ability of a borrower to maintain adequate liquidity and carry loans following construction of the home is compromised when a borrower is unable to sell homes once they are constructed.

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

Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that may depreciate rapidly. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Loan Approval Procedures and Authority. Our lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by our board of directors and management. The board of directors has granted loan approval authority to certain officers or groups of officers up to prescribed limits, based on the officer’s experience and tenure. Individual loans or lending relationships with aggregate exposure of $3.5 million must be approved by the Management Loan Committee; loans up to $10.0 million must be approved by the Board Loan Committee; and all loans in excess of $10.0 million must be approved by the board.

Loans to One Borrower. The board of directors has adopted a policy that currently limits loans to one borrower to 15% of our capital, or $24.2 million at December 31, 2009.

At December 31, 2009, our largest lending relationship was $19.2 million and involved a number of loans for personal mortgages, commercial business loans, commercial real estate loans and speculative construction loans, including our second largest construction lending relationship, secured by a variety of commercial and residential properties. The borrowers have been unable to sell properties built on speculation and have experienced some cash flow difficulties. We have modified certain loans and the loans are currently performing in accordance with their terms. One of the loans to this group was for the construction of condominiums being built on speculation. None of the condominiums have been sold, but they have all been leased, which has supported the borrower group’s liquidity. However, the rental income is insufficient to completely cover the cash flow necessary to service the debt. This borrower group has income produced from a business, as well as other cash producing real estate, which combined, supports the payments owed to us. Further, based upon current appraisals, the value of all collateral for all loans to this borrower group exceeds the total loan amounts due to us. Consequently, in the event we were to be forced to foreclose on these properties, we believe we would not incur a loss.

The second largest lending relationship involves two loans totaling $14.4 million, including a $13.4 million loan to a local country club for the construction and permanent financing of a new club house. This loan has converted to permanent financing and is performing in accordance with its terms. In addition, this borrower group has a $1.0 million revolving line of credit for working capital.

The third largest lending relationship involves $14.0 million of loans to a local businessman and a local developer, including $6.7 million of loans for the development of nine condominiums in Greenwich, Connecticut. All nine condominiums remain unsold, but all nine have been leased. Another borrower is jointly and severally liable for $8.6 million of these loans. The loans are performing in accordance with their terms.

The fourth largest lending relationship involves $11.9 million of loans secured by commercial and residential real estate. The loans are performing in accordance with their original terms.

The fifth largest lending relationship involves $10.3 million of loans to two local developers and are secured by residential and commercial real estate, including $4.2 million in loans secured by commercial real estate that the borrowers own with other partners. These two borrowers have experienced problems with liquidity. Certain of these loans have been modified to extend their terms. Currently, these loans are performing in accordance with their modified terms.

Additional large lending relationships that we have include: (i) a $9.8 million lending relationship with a group of borrowers who have sufficient cash flow to service the various loans with us that are secured by personal residences and commercial properties; and (ii) a $5.1 million lending relationship with a local developer for the construction of a residential single family home built on speculation for which we have received a deed in lieu of foreclosure from the borrower. We also have a residential mortgage loan secured by a condominium located in Greenwich, Connecticut with this borrower that is in foreclosure. We have charged-off $100,000 on the loan secured by the condominium. Recent appraisals on the properties securing these two loans reflect that the value of these properties exceeds the amounts due to us. In addition, we have: (i) a $9.3 million lending relationship with a group that runs a convalescent home that is performing in accordance with its original terms, (ii) a $9.2 million lending relationship, including $5.7 million for a construction loan secured by a property built on speculation, which has converted to an amortizing commercial real estate loan that is performing in accordance with its original terms; (iii) an $8.8 million lending relationship consisting primarily of commercial loans to a local business that are performing in accordance with their original terms; and (iv) a $7.8 million lending relationship, which includes a commercial real estate loan and several mortgages. With respect to this last lending relationship, the borrowers have had some liquidity problems and are seeking to sell properties, including their own residences, to improve their liquidity. At this time, not all loans are currently performing in accordance with their original terms. While we considered this lending relationship in establishing our allowance for loan losses, no specific allowance was established for these loans as they were not deemed impaired; however, it was included in our general allowance for loan loss calculation.

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

Investment Activities

We have authority to invest in various types of liquid assets, including United States Treasury obligations, securities of various U.S. government sponsored enterprises, federal agencies and state and municipal governments, mortgage-backed securities and certificates of deposit of federally insured institutions. Within certain regulatory limits, we also may invest a portion of our assets in corporate securities and mutual funds. As a member of the Federal Home Loan Bank of Boston, we also are required to maintain an investment in Federal Home Loan Bank of Boston stock. While we have the authority under applicable law to invest in derivative instruments for hedging activities, we have not engaged in these activities with the exception of a $10.0 million cash flow hedge that expired in 2008. We had no such investments at December 31, 2009.

At December 31, 2009, our investment portfolio excluding Federal Home Loan Bank stock totaled $94.1 million and consisted primarily of United States government and agency securities, including securities issued by government sponsored enterprises, municipal and other bonds and equity securities, as well as mortgage-backed securities.

Our investment objectives are to provide and maintain liquidity, to establish an acceptable level of interest rate and credit risk, to provide an alternate source of low-risk investments when demand for loans is weak and to generate a favorable return. Our board of directors has the overall responsibility for the investment portfolio, including approval of our investment policy, which is reviewed and approved at least annually. Our board of directors reviews the status of our investment portfolio on a quarterly basis.

Deposit Activities and Other Sources of Funds

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

Deposit Accounts. Deposits are primarily attracted from within our market area through the offering of a broad selection of deposit instruments, including non-interest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts and certificates of deposit. From time to time, we solicit brokered time deposits as an alternative source of funds.

We also offer a variety of deposit accounts designed for the businesses operating in our market area. Our business banking deposit products include a commercial checking account and a checking account specifically designed for small businesses. Additionally, we offer cash management, including lockbox service and sweep accounts.

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

Borrowings. We have the ability to utilize advances from the Federal Home Loan Bank of Boston to supplement our investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit for member financial institutions. As a member, we are required to own capital stock in the Federal Home Loan Bank and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each

having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the Federal Home Loan Bank’s assessment of the institution’s creditworthiness. We also utilize securities sold under agreements to repurchase and overnight repurchase agreements to supplement our supply of investable funds and to meet deposit withdrawal requirements. In addition, we have a $199.0 million line of credit with the Federal Reserve Board of New York, which we have not accessed to date, through the Federal Reserve Board’s Borrower in Custody of Collateral Program. The Borrower in Custody of Collateral Program is a program maintained by the Federal Reserve Board pursuant to which qualifying financial institutions may arrange to retain physical control of collateral that is pledged to a Federal Reserve Bank. These arrangements are often established when an institution is pledging a high volume of assets, such as consumer or commercial loans, and prefers to maintain custody of the assets. All assets pledged pursuant to the Borrower in Custody of Collateral Program are required to be marked as being pledged to the Federal Reserve Bank.

In July 2008, Fairfield County Bank, MHC established Fairfield County Trust I, a Delaware statutory trust. Fairfield County Trust I issued and sold $8.0 million of trust preferred securities in a private placement and issued $248,000 of trust common securities to Fairfield County Bank, MHC. Fairfield County Trust I used the proceeds of these issuances to purchase $8.2 million of Fairfield County Bank, MHC’s floating rate junior subordinated debentures due July 11, 2038. The interest rates on the junior subordinated debentures and trust preferred securities are variable and adjustable quarterly. At December 31, 2009, the interest rate was 4.674%. The junior subordinated debentures are the sole assets of Fairfield County Trust I and are subordinate to all of Fairfield County Bank, MHC’s existing and future obligations for borrowed money. It is anticipated that the obligations of Fairfield County Trust I will be transferred to Fairfield County Bank Corp. upon consummation of the offering.

Insurance Agency Activities

We offer business, personal, life and health insurance services through our wholly-owned subsidiary, Fairfield County Bank Insurance Services, LLC. Our business insurance services include, among other things, workers’ compensation, general liability, property, marine, business automobile, business interruption, umbrella liability, professional liability, directors’ and officers’ liability, employment practices liability and environmental liability products. Our personal insurance services include, among other things, automobile, home, condominium, renters, watercraft and recreational vehicle products. In addition, we also offer life and health insurance services including, but not limited to, employee benefit programs and life insurance, disability insurance, long-term care insurance and estate and business planning products. During the year ended December 31, 2009, Fairfield County Bank Insurance Services, LLC generated $5.8 million in gross insurance commissions.

Properties

The following table sets forth certain information relating to our properties as of December 31, 2009.


Location	Type of Office	Year Opened	Square Footage	Owned/ Leased	Lease Expiration Date	Net Book Value at December 31, 2009 (In thousands) (5)
720 Branchville Road Ridgefield, Connecticut	Branch	1998	250	Leased	3/1/2013	$	18
1089 Madison Ave Bridgeport, Connecticut	Branch	2008	4,100	Owned		$	3,297
121 New Canaan Ave Norwalk, Connecticut	Branch	1981	1,300	Owned		$	94
280 North Bedford Road, Suite 204 (1) Mount Kisco, New York 10549	Office	2005	1,298	Leased	4/30/2015		—


Location	Type of Office	Year Opened	Square Footage	Owned/ Leased	Lease Expiration Date	Net Book Value at December 31, 2009 (In thousands) (5)
401 Main Street (1) Ridgefield, Connecticut	Office	1999	6,000	Owned		$	2,723
20 Compo Road South Westport, Connecticut	Branch	2010	6,000	Owned		$	10,485
26 Chestnut Hill Road Norwalk, Connecticut	Branch	1974	2,000	Leased	7/31/2014	$	234
150 Danbury Road Ridgefield, Connecticut	Branch	1991	24,200	Owned		$	364
714 Post Road Darien, Connecticut	Branch	2008	3,750	Leased	5/1/2025	$	2,303
1312 Post Road Fairfield, Connecticut	Branch	2004	2,704	Leased	12/31/2012	$	64
114 Federal Road Danbury, Connecticut	Branch	2007	1,200	Leased	11/1/2016	$	379
941 Danbury Road Georgetown, Connecticut	Branch	1991	2,700	Leased	6/29/2014	$	90
3 Governor Street (2) Ridgefield, Connecticut	Drive-Up Facility	1960	800	Owned		$	27
1899 Bronson Road Fairfield, Connecticut	Branch	1996	2,200	Owned		$	402
I Park 761 Main Ave Norwalk & Wilton	Branch	2008	1,000	Leased	9/1/2013	$	86
374 Main Street Ridgefield, Connecticut	Branch	Pre- 1900	6,800	Owned		$	24
100 Redding Road (3) Redding, Connecticut	Branch	2001	250	Leased	12/18/2011		—
94 Danbury Road (4) Ridgefield, Connecticut	Operations Center	2007	19,050	Leased	8/1/2021	$	1,428
215 Post Road Westport, Connecticut	Branch	2009	3,153	Leased	11/1/2016	$	590
2 McKinley Street Rowayton, Connecticut	Branch	1974	2,000	Owned		$	942
840-860 East Main Street Unit C1 Stamford, Connecticut	Branch	2009	4,000	Leased	2/1/2024	$	832
915-935 White Plains Road Trumbull, Connecticut	Branch	2007	3,000	Leased	5/1/2017	$	198
784-806 Villa Ave Fairfield, Connecticut	Branch	2005	4,000	Leased	4/1/2015	$	1,070
67-69 Wall Street Norwalk, Connecticut	Branch	Pre- 1900	9,500	Owned		$	958


Location	Type of Office	Year Opened	Square Footage	Owned/ Leased	Lease Expiration Date	Net Book Value at December 31, 2009 (In thousands) (5)
707 Connecticut Ave Norwalk, Connecticut	Branch	1981	900	Leased	9/1/2010	$	29
190 Weston Road Weston Shopping Ctr, Weston, Connecticut	Branch	2007	2,209	Leased	3/1/2018	$	344
180 Post Road, 1^st Floor Westport, Connecticut	Branch	2004	2,319	Leased	1/31/2015	$	81
180 Post Road (2^nd floor) Westport, Connecticut	Office	2007	2,500	Leased	1/1/2015		—
190 Old Ridgefield Road, 2^nd Floor Wilton, Connecticut	Office	2004	840	Leased	1/31/2015		—
190 Old Ridgefield Road Wilton, Connecticut	Branch	1998	8,111	Owned		$	3,958

(1)	These offices are used by Fairfield County Bank Insurance Services, LLC and are not branch offices of Fairfield County Bank.

(2)	This is drive-up branch office and is not a full service facility.

(3)	This is a limited facility located in a nursing home.

(4)	This property is where our operations facility is located. There is no branch office on the premises.

(5)	For leased properties, the amount represents the amortized cost of the leasehold improvements.

Personnel

As of December 31, 2009, we had 296 full-time employees and 38 part-time employees, none of whom is represented by a collective bargaining unit. We believe our relationship with our employees is good.

Legal Proceedings

Periodically, there have been various claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.

Subsidiaries

Fairfield County Bank owns 100% of the following subsidiary companies:

Ridgefield Bank Mortgage Corp. This subsidiary is a wholly owned subsidiary that is a passive investment company. Fairfield County Bank contributes real estate loans to the subsidiary, which allows for certain tax adjustments under Connecticut law.

Fairfield County Investment Services Corp. This subsidiary is wholly-owned by Fairfield County Bank and is a shell company. Its sole activity is the investment in 8.05% of the stock of Infinex Financial, a bank-owned provider of investment and insurance products and services for community banks. Infinex is a company that is owned by its participant depository institutions and state banking associations. Fairfield County Bank maintains a dual employee arrangement with Infinex whereby Infinex operates an office at Fairfield County Bank and offers to customers a range of non-deposit investment products, including mutual funds, bonds, equity securities and annuities. It holds the stock because Fairfield County Bank was required to maintain an ownership interest in Infinex to enable it to participate in the investment and insurance brokerage services of Infinex.

Fairfield County Bank Insurance Services, LLC this subsidiary is wholly owned by Fairfield County Bank and engages in full-service insurance agency services.

Affordable Community Housing LLC (“ACH”). This is a wholly-owned subsidiary of Fairfield County Bank. Fairfield County Bank, through ACH, owns a 33% interest in a partnership known as Blind Brook Limited Partnership, which it organized with two other banks and the general partner. The partnership purchased federal tax credits for four low income housing units in Danbury, Connecticut.

Residential Investment LLC This is a wholly owned subsidiary solely engaged in the acquisition and development of single family real estate. Currently, Residential Investment LLC has three projects. One relates to a home located in New Canaan that was built on speculation that serves as collateral for a $5.0 million loan. The home has not been sold, but is currently leased. Residential Investment LLC is also developing another home on a speculative basis in New Canaan that secures a $707,000 loan. Residential Investment LLC has also acquired a lot on which a home which will eventually be built in Ridgefield and has entered into an agreement with other developers with adjoining lots to build roads around the lot. Residential Investment LLC has a $491,000 loan which is secured by that property.

Real Estate Holdings, LLC. This is a wholly owned subsidiary that was established to hold foreclosed and deed in lieu properties.

In addition, Fairfield County Bank, MHC owns 100% of the following subsidiary company:

Fairfield County Trust I. This is a Delaware statutory trust formed in July 2008 that issued and sold $8.0 million of trust preferred securities in a private placement and issued $248,000 of trust common securities to Fairfield County Bank, MHC. Fairfield County Trust I used the proceeds of these issuances to purchase $8.2 million of Fairfield County Bank, MHC’s floating rate junior subordinated debentures due July 11, 2038. The junior subordinated debentures are the sole assets of Fairfield County Trust I and are subordinate to all of Fairfield County Bank, MHC’s existing and future obligations for borrowed money. For more information, see “—Deposit Activities and Other Sources of Funds—Borrowings.”

Management’s Discussion and Analysis of

Results of Operations and Financial Condition

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

Overview

Fairfield County Bank was established to serve the financing needs of the public and has expanded its services over time to offer personal and business checking accounts, residential real estate loans, including home equity loans and lines of credit, construction loans, commercial real estate loans and other types of commercial and consumer loans. We also provide insurance services through our wholly-owned subsidiary, Fairfield County Bank Insurance Services, LLC, and investment services through our wholly-owned subsidiary, Fairfield County Investment Services, Corp. Our primary retail and lending market areas primarily include all of Fairfield County.

The history of Fairfield County Bank Corp. dates back to 1871. In 2004, Fairfield County Savings Bank and Ridgefield Bank merged to form what is now Fairfield County Bank. Later in 2004, Fairfield County Bank expanded further by acquiring Bank of Westport. Fairfield County Savings Bank was primarily a residential lender, while Ridgefield Bank had more of a commercial lending focus. Following our merger, we continued to emphasize both residential and commercial and construction lending and sought to increase the yields earned on our loan portfolio by capitalizing on our seasoned commercial lenders to increase our commercial real estate and construction loans. Since the merger, we have grown steadily, reaching $1.56 billion in assets at December 31, 2009. Effective January 1, 2007, Fairfield County Bank reorganized into the mutual holding company structure, forming Fairfield County Bank, MHC as its holding company.

In addition to expanding relationships with current customers, we have sought to increase the number of households, businesses and customers we serve by expanding our branch network with the addition of eight branch offices in the past three years. Branch expansions have focused on expanding our presence into Danbury, Bridgeport, Weston and Trumbull, Connecticut. Our rapid expansion over the last three years has caused our non-interest expense to increase. To mitigate these increases, we staffed our newest branch office with existing employees and consolidated one of our old branch offices located in Westport with one of our new branch offices. It is not our intention to continue to expand through opening any additional branch offices at this time.

We established Residential Investment LLC as a subsidiary in 1999 to acquire direct ownership and participation interests in building residential real estate and undeveloped land. We entered this market because we believed that we could increase non-interest income by developing properties in our local market area given our in-depth knowledge of the local real estate market and our strong relationships with local builders. With the downturn in the economy and the adverse effect that had in our local real estate market, we currently are holding three properties that we have been unable to sell. Two of the properties are complete and are rented. We intend to sell those properties when the real estate market improves. The third property consists of undeveloped land that we will not develop until market conditions improve. We have no intention of pursuing development opportunities in the future through this subsidiary.

With the recent downturn in the economy, we have seen property values in our market area decline and have experienced an increase in non-performing loans, which has had a negative effect on our profitability. Specifically, our non-performing assets and troubled debt restructurings have increased from $5.7 million at December 31, 2006 to $28.4 million and $85.6 million at December 31, 2008 and 2009, respectively and total charge-offs have increased from $190,000 for the year ended December 31, 2006 to $2.3 million and $8.7 million for the years ended December 31, 2008 and 2009, respectively, which has contributed to our provisions for loan losses increasing from $700,000 for the year ended December 31, 2006 to $4.0 million and $8.7 million for the years ended December 31, 2008 and December 31, 2009, respectively. These factors, coupled with an increase in non-interest expense primarily associated with the addition of several branch offices, has adversely affected our net interest income and our return on average assets. Our return on average assets was 0.12% at December 31, 2009 compared to 0.35% at and 0.66% for the years ended December 31, 2008 and 2007, respectively. To offset the

negative impact the current economic environment is having on our profitability, we have reduced our emphasis on construction lending and are seeking to find ways to increase interest income and non-interest income while controlling expenses. As a result, we have identified key strategic objectives, which are described in the Business Strategy section that begins on page .

Income. Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income. Historically, we have been able to generate attractive yields on our loan portfolio due to the higher concentration of construction, commercial real estate and commercial loans in our loan portfolio, which tend to yield greater amounts than traditional one-to four-family lending. Beginning in June 2004, the Federal Open Market Committee initiated a series of increases in the federal funds rate, which had the effect of progressively increasing the rates we had to pay for funds. Since long-term rates did not increase correspondingly, we experienced a narrowing of our net interest margin in 2006 and 2007; however, given the substantial portion of our loan portfolio consisting of higher-yielding commercial and construction loans as opposed to residential one-to four-family loans, we did not experience a decrease in our net interest income. In late 2007, to address an economic slowdown related in large part to falling housing prices in many parts of the country, including Fairfield County, the Federal Open Market Committee began reducing interest rates and the inverted yield curve began to reverse. As economic conditions worsened throughout 2008 and into 2009, the Federal Reserve Board and the Department of Treasury undertook unprecedented efforts to inject liquidity into the market and continued to lower short-term interest rates. The resulting improvement in interest rate spread will allow Fairfield County Bank to lend to residential customers at a higher rate than the cost of short-term borrowed funds, which will help offset the reduction in yield on our loan portfolio we expect to experience as a result of our decision to reduce our emphasis on construction loans in this economic environment.

A secondary source of income is non-interest income, which is revenue that we receive from providing products and services. The majority of our non-interest income generally comes from service charges (mostly from service charges on deposit accounts). We also recognize income from the sale of loans and securities. In addition, we have sought to increase non-interest income by expanding the insurance and investment products we can offer our customers through our insurance subsidiary, Fairfield County Bank Insurance Services, LLC, and our investment subsidiary, Fairfield County Investment Services Corp.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings. For more information on our calculation of the allowance for loan losses, see “—Critical Accounting Policies—Allowance for Loan Losses.”

Expenses. The non-interest expenses we incur in operating our business consist of salaries and employee benefits expenses, occupancy expenses, depreciation, amortization and maintenance expenses and other miscellaneous expenses, such as advertising, insurance, professional services and printing and supplies expenses. We also incurred substantial expense in 2009 due to Federal Deposit Insurance Corporation assessments and the cost of managing and selling real estate owned.

Our largest non-interest expense is salaries and employee benefits, which consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, retirement plans and other employee benefits. Our salaries and employee benefits expense has increased in recent periods as a result of the addition of staff for our new branch offices. Following the offering, we will recognize additional annual employee compensation expenses stemming from the adoption of new equity benefit plans. For an illustration of expenses associated with new equity benefit plans, see “Pro Forma Data.”

Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of furniture and equipment expenses, maintenance, real estate taxes and costs of utilities. Our occupancy expenses have increased in recent periods because of the new branch offices we have opened in our market area.

Following the offering, we will incur additional non-interest expenses as a result of operating as a public company. These additional expenses will consist primarily of legal and accounting fees, expenses of shareholder communications and meetings and expenses related to the addition of personnel.

Critical Accounting Policies

In the preparation of our consolidated financial statements, we have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States. Our significant accounting policies are described in the notes to our consolidated financial statements, beginning on page of this prospectus.

Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Allowance for Loan Losses. The calculation of the allowance for loan losses is a critical accounting policy for us. The allowance for loan losses is a valuation account that reflects management’s evaluation of the probable losses inherent in the loan portfolio. We maintain the allowance for loan losses through provisions for loan losses that are charged to income. Charge-offs against the allowance for loan losses are taken on loans where management determines that the collection of loan principal is unlikely. Recoveries made on loans that have been charged-off are credited to the allowance for loan losses.

Our evaluation of the adequacy of the allowance for loan losses is performed on the entire loan portfolio. Each quarter, management categorizes the loan portfolio by loan type (residential mortgage, commercial real estate, construction, commercial, consumer, etc.). We consider non-accrual commercial mortgages, construction loans and commercial loans to be impaired. Generally, impaired loans are charged off down to net realizable value based on the fair value of the collateral for collateral dependent loans or the present value of future expected cash flows for all other loans. As a result, no further allowance for loan losses are required for these impaired loans. We do consider accruing commercial mortgages, construction loans or commercial loans for impairment in the event we determine there are factors that indicate the full collectibility of the loan may not be reasonably assured. Such factors include whether the loan has become past due, the financial strength of the borrower, and in the case of our construction loans secured by property being built on a speculative basis, the status of the completion of the home being built, marketing plans, our analysis of the real estate market and the economy, among other factors. In the event we determined an accruing loan was impaired, we would evaluate whether a partial charge-off of the loan were required consistent with our policy for non-accruing impaired loans. The balance of the loans in each category are included in our general allowance for loan losses calculation which uses seven characteristics including: (1) level and trends in past due loans; (2) level and trends in classified loans; (3) portfolio growth and concentrations; (4) quality of lending policies and procedures; (5) knowledge and experience of lending staff; (6) economic conditions; and (7) interest rate environment. Each portfolio type loan is assigned a factor in each of the seven characteristics and a total allowance for loan losses required for each category is determined.

With respect to loans identified as troubled debt restructures, a net present value calculation is performed for each loan, quantifying the financial relief granted as a result of interest rate concessions or interest only payments not to exceed two years to each borrower during the period of relief. These amounts are specifically allocated in our analysis of the adequacy of the allowance for loan losses.

These are the components of the evaluation of the adequacy of the allowance for loan losses. The results are quantified and compared to the allowance recorded. To the extent there is a shortfall, an additional provision would be recorded. If there is a portion of the allowance for loan losses left after comparing it to the recorded allowance, it would be designated as an unallocated allowance for loan losses.

Our loan policy requires that we obtain updated appraisals on the collateral securing impaired loans annually; however, it has been our recent practice to obtain updated appraisals every six months. We have taken

into consideration that approximately $91.2 million of construction loans are maturing in one year or less in preparing our allowance calculation. We have obtained updated appraisals and enhanced the monitoring on these loans.

Although management believes that we have established and maintained the allowance for loan losses at adequate levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. Illiquid credit markets, volatile securities markets, declines in the housing market and the economy, elevated unemployment levels and state and local budget deficits generally have combined to increase the uncertainty inherent in such estimates and assumptions. We took the above noted factors into account when establishing our allowance for loan losses in 2008 and 2009, which caused our allowance to increase; however, our policy of not establishing specific allowance for loan losses, but charging off loan amounts in excess of our calculation of the net realizable value of the collateral securing loans we have determined are impaired has resulted in our allowance not increasing as dramatically as our non-performing loans, charge-offs, real estate owned and troubled debt restructurings have increased. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements of future periods. In addition, various regulatory agencies periodically review our allowance for loan losses as an integral part of their examination process. Such agencies may require us to recognize additions to the allowance or additional write-downs based on their judgment about information available to them at the time of their examination. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to judgment and short-term change.

Other Asset Impairments. Additional critical accounting policies relate to judgments about other asset impairments, including goodwill, investment securities and deferred tax assets. Goodwill is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates. For purposes of goodwill impairment evaluation, Fairfield County Bank is identified as the reporting unit. The fair value of goodwill is determined in the same manner as goodwill recognized in a business combination and uses standard valuation methodologies. Fair value is determined using discounted cash flow analysis and other factors. Estimated cash flows may extend far into the future and by their nature are difficult to determine over an extended time frame. Factors that may significantly affect the estimates include specific industry or market sector conditions, changes in revenue growth trends, customer behavior, competitive forces, cost structures and changes in discount rates. These fair value measurements are subject to the provisions of ASC Topic 820, “Fair Value Measurement and Disclosures,” which we adopted on January 1, 2008.

Our available for sale securities portfolio is carried at estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income (loss) in stockholders’ equity. Our held to maturity portfolio is carried at amortized cost. We conduct a quarterly review of securities available for sale and held to maturity to determine if any of the declines in fair value are other than temporary. In assessing other than temporary impairment on debt securities, we consider whether we intend to sell the security and whether it is more than likely not that we will be required to sell the security prior to the recovery of its amortized cost basis. If one of these circumstances applies to the security, an other than temporary impairment loss is recognized in the statement of income equal to the full amount of the decline below amortized cost basis. If neither of these circumstances applies to the security but we do not expect to recover the entire amortized cost basis, an other than temporary impairment loss has occurred and must be separated into the amount related to credit loss and the amount related to other factors. In assessing other than temporary impairment for credit loss, the present value of expected cash flows is compared to the amortized cost basis of the security. The portion of other than temporary impairment related to credit loss is recognized in earnings while the amount related to other factors is recognized in other comprehensive income. When a debt security becomes other than temporarily impaired, its amortized cost basis is reduced to reflect the portion of the total impairment related to the credit loss. Equity securities are reviewed for other than temporary impairment by comparing cost to the security’s current market price with consideration given to the amount of time a security’s market price has been below cost. Equity securities that are below market for greater than one year are reviewed for impairment and if considered other-than-temporarily impaired, the loss is recognized in earnings.

The market value of the securities portfolio is significantly affected by changes in interest rates. In general, as interest rates rise, the market value of fixed-rate securities decreases and as interest rates fall, the market value of fixed-rate securities increases. The current turmoil in the credit markets has resulted in a lack of liquidity in the mortgage-backed securities and corporate debt markets. Increases in delinquencies and foreclosures, primarily in securities that are backed by sub-prime loans, have resulted in limited trading activity and significant price declines, regardless of favorable movements in interest rates. The Company evaluates its intent and ability to hold securities to maturity or for a sufficient period of time to recover the recorded principal balance as well as whether it would be more likely than not that we would be required to sell the security before maturity or recovery of the principal balance. We also have investments in common stock issued by several publicly-traded financial institutions, the valuation of which is affected by the institutions’ performance and market conditions. During the year ended December 31, 2009, we recognized a pre-tax credit-related charge of $3.5 million related to the other-than-temporary impairment of our investment in a pool of trust preferred securities and equity securities consisting of large capital mutual funds.

The determination of whether deferred tax assets will be realizable is predicated on estimates of future taxable income. Such estimates are subject to management’s judgment. A valuation allowance is established when management is unable to conclude that it is more likely than not that it will realize deferred tax assets based on the nature and timing of these items. A valuation allowance of has been established pertaining primarily to state tax benefits.

Business Strategy

Our current management team has largely been in place for many years, and our Chairman of the Board and Chief Executive Officer have served in their respective roles for over twenty years. During that time, we have focused on building a profitable, community-oriented financial institution offering outstanding service, added convenience, and the products and services our customers require to meet their dynamic financial needs. We believe that we have been successful in doing so, with twenty consecutive years of profitable operations and a substantial increase in total assets over the last twenty years of more than $1.4 billion, from $119.3 million at December 31, 1989 to $1.6 billion at December 31, 2009. Our objective is to continue this focus, and our current strategies for achieving this objective include the following:

Continued growth of our diversified lending portfolio.

Historically, we have sought to maintain a diversified lending portfolio, comprised primarily of residential mortgage, construction, commercial real estate and commercial business loans. A diversified loan portfolio improves our earnings because commercial and construction loans generally have higher interest rates than residential mortgage loans and provides opportunities for cross-selling other products to our business customers. Commercial and construction lending also helps us manage our interest rate risk, as such loans typically have shorter terms and different pricing structures than residential mortgage loans.

At December 31, 2009, we had $568.2 million of residential mortgage loans, which includes one- to four-family mortgage loans and home equity lines of credit. These loans represented 45.8% of the total loan portfolio at that date, and such loans have historically represented the largest, and a relatively stable, portion of the total loan portfolio. Traditionally, construction lending has been an area of emphasis for us, and a substantial portion of our construction loan portfolio has consisted of loans to local builders for the construction of single-family homes to be built on a speculative basis. In 2007 we began reducing our emphasis on construction loans due to weakening economic conditions and in the past three years we have sought to decrease our portfolio of these loans by greatly reducing the construction loans that we originate, closely monitoring the local real estate market and helping our borrowers understand current market conditions, which has facilitated the ability of many borrowers to sell properties built on speculation, and, in some cases, converting construction loans to fully amortizing permanent commercial loans where properties had been completed. Our construction loan portfolio has declined from $280.6 million, or 24.3% of the total loan portfolio, at December 31, 2006, to $121.1 million, or 9.8% of the portfolio at December 31, 2009. In the past several years, commercial real estate and commercial business loans have represented an increasing proportion of the loan portfolio as we have sought to serve the needs of local businesses in

our market area. At December 31, 2009, we had $357.1 million and $164.5 million of commercial real estate and commercial business loans, representing 28.8% and 13.2% of total loans, respectively.

With the additional capital raised in the offering, we intend to continue to pursue larger lending relationships associated with commercial lending to local businesses in our primary market area. While construction loans will remain an integral part of our loan portfolio, we do not intend to emphasize this type of lending, particularly speculative construction lending, until market conditions improve.

Maintaining a strong emphasis on asset quality.

We believe that maintaining high asset quality is a key to long-term financial success. Our strategy for credit risk management focuses on having established credit policies and procedures and underwriting criteria and providing prompt attention to potential problem loans. We are primarily a secured lender, which provides us with an additional source of repayment if a borrower fails to meet its obligations. At December 31, 2009, 84.4% of our total loan portfolio was secured by real estate. We maintain a credit administration department that is separate from our lending operations and is responsible for, among other things, preparing independent credit analyses for certain larger loan requests and managing our collections and asset resolution efforts. Management and the board of directors closely monitor the loan portfolio and impose procedures and limits for addressing credit risk as economic conditions require. We periodically adjust our underwriting standards to address risks in the market and we diligently monitor collection efforts.

Historically, we have had very few non-performing loans. However, in 2007, as interest rates increased and real estate values started to decline, we experienced an increase in non-performing loans, particularly in our one- to four-family, home equity and construction loan portfolios, which continued throughout 2008 and 2009. At December 31, 2009, our non-performing loans were 4.75% of our total loan portfolio, up substantially from 0.50% in 2006, 1.02% in 2007 and 1.98% in 2008. In response to weakening market conditions, beginning in 2007 we stopped emphasizing construction loans, particularly speculative construction loans, and also put policies and procedures in place to monitor that portion of our loan portfolio.

We take additional steps to monitor our lending relationships with large borrowers and those who have experienced credit difficulties, including obtaining current financial statements, revaluing collateral and obtaining additional collateral when possible. It is generally our goal to reach a mutually satisfactory arrangement with the borrower that results in the orderly repayment of the loan. However, our goal is always to seek the most economical resolution for Fairfield County Bank, which may include repossession, foreclosure or a sale of the assets serving as collateral for the loan. We do not carry specific valuation allowances on our impaired loans. Instead, we charge-off any portion of the loan as to which we believe full collectability is not reasonably assured. We recorded $7.9 million in net charge-offs for the year ended December 31, 2009 compared to net charge-offs of $2.1 million in 2008 and $243,000 in 2007. We have also increased our allowance for loan losses from $10.3 million at December 31, 2006 to $13.8 million at December 31, 2009. We intend to continue to monitor our loan portfolio.

Capturing our customers’ financial relationship.

We emphasize providing superior customer service and convenience as a means to attract and retain customers, which we believe is important to our customers and distinguishes us from the large banks that operate in our market area. We offer a broad array of deposit, lending, insurance and investment products that provide diversification of revenue sources and solidify our relationship with our customers.

We believe a solid banking relationship is best expressed in the form of the primary transaction account. For consumers, this is the household checking account from which they pay their bills. For businesses, it is one or more operating accounts and related cash management services. The primary transaction account provides us with a low-cost source of funds. It also becomes linked to automated payment links in the form of direct debits and direct deposits and, coupled with superior customer service, tends to create a relationship between Fairfield County Bank and the customer. We intend to focus our resources on growing profitable business and consumer relationships by emphasizing the primary transaction account, particularly when we originate loans for our customers.

We are also seeking to expand the non-traditional financial products that we offer to serve the insurance and investment needs of our customers. We market our insurance services through our subsidiary, Fairfield County Bank Insurance Services, LLC, and our investment services through our subsidiary, Fairfield County Investment Services Corp. We intend to market these services more aggressively to our existing customers as well as new customers.

Leveraging our existing operating structure.

As a community bank, we emphasize service and convenience. We have opened eight branch offices in the last three years, including two branch offices in 2009 and one in January 2010, which caused our operating expenses to increase substantially. We believe that we are well positioned to accommodate further asset and revenue growth without substantial additional investments in our facilities, and we have no current plans for opening any additional branches. In an effort to reduce the expense associated with the three new offices, we consolidated one of our offices with one of our new Westport branch offices. We also closed a loan production office in Danbury in the second quarter of 2009, and are evaluating the potential for branch consolidation in the future. We intend to focus our efforts on making our current branch network operate as efficiently and profitably as possible.

Managing our balance sheet risk.

Managing risk is an essential part of successfully managing a financial institution. In addition to credit risk associated with our loan portfolio discussed above, we also have exposure to interest rate risk, market risk and liquidity risk, and have risk management policies in place to address them.

Our Asset/Liability and Investment Committee, which includes members of management, oversees all aspects of our asset/liability management. We monitor our exposure to net interest income over both a one-year planning horizon and a longer-term strategic horizon. We have sought to manage our sensitivity to interest rate risk by emphasizing the origination of loans with adjustable rates. We typically do not hold long-term assets on our books. Instead, we generally sell in the secondary market all fixed-rate mortgage loans. In addition, we originate most commercial real estate and commercial business loans with terms that reprice every three to five years. This is designed to better balance our assets against our liabilities, most of which are shorter-term in nature.

At December 31, 2009, $957.8 million, or 88.1%, of the $1.09 billion in loans due after December 31, 2010 had adjustable rates. We regularly monitor our adjustable rate loans to determine what impact these loans might have on impaired loans and our allowance for loan losses. As part of our review of our adjustable rate loan portfolio, we consider the impact of current interest rates and forecasted interest rates for the near future. We allocate additional reserves when economic forecasts project an increase in the interest rate environment to offset future cash flow constraints to borrowers. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased monthly mortgage payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults. A significant increase in the number of adjustable rate loan borrowers who are unable or unwilling to repay their loans would likely require us to charge off more loans and increase our allowance for loan losses. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate mortgage loans make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits. These events, alone or in combination, may contribute to higher delinquency rates and negatively impact our earnings. See “Risk Factors—Risks Related to Our Business—We are subject to credit risks in connection with the concentration of adjustable rate loans in our portfolio.”

Historically, we have not maintained high liquidity, choosing instead to maximize the yield in our loan portfolio by originating loans. However, given the weak real estate market in our primary market area and the substantial increase in non-performing loans we have experienced, we made the strategic decision to increase liquidity by establishing a $199.0 million line of credit with the Federal Reserve Bank of New York through the Borrower in Custody of Collateral Program, selling participations in some of our commercial loans and originating loans for sale, decreasing borrowings, reducing the size of our construction loan portfolio and seeking short-term, low-risk investment opportunities such as United States agency securities, including securities issued by government agencies or government-sponsored entities.

Finally, we have consistently sough to maintain strong capital levels to support our current operations and future growth. At December 31, 2009, we exceeded all of our regulatory capital requirements and were considered “well capitalized” under regulatory guidelines. The additional capital raised in the offering will augment our existing capital levels and position us to continue to grow in the future as economic conditions improve.

Balance Sheet Analysis

Loans. At December 31, 2009, total loans, net, were $1.2 billion, or 78.6% of total assets. We have maintained a diversified loan portfolio. Our one-to four-family loans as a percentage of our total loan portfolio have remained relatively stable over the years, while commercial real estate and commercial business loans grew from 20.8% and 8.6% of our total loan portfolio at December 31, 2005, respectively, to 28.8% and 13.2% of our total loan portfolio, respectively at December 31, 2009. Construction loans grew in 2005 and 2006, but have decreased substantially from 24.3% of the total loan portfolio at December 31, 2006 to 9.8% of the total loan portfolio at December 31, 2009.


	December 31,
	2009					2008					2007					2006					2005
(Dollars in thousands)	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
Real estate loans:
Residential	$	357,207		28.8	%	$	401,203		29.2	%	$	361,449		28.9	%	$	343,220		29.7	%	$	298,868		28.2	%
Commercial real estate		357,132		28.8			343,447		25.0			302,228		24.1			246,824		21.4			220,971		20.8
Construction(1)		121,114		9.8			221,505		16.1			234,640		18.7			280,635		24.3			253,515		23.9

Total real estate loans		835,453		67.4			966,155		70.3			898,317		71.7			870,679		75.4			773,354		72.9
Commercial loans		164,450		13.2			163,475		11.9			150,041		12.0			106,811		9.3			91,795		8.6
Consumer loans:
Home equity lines of credit		211,029		17.0			217,983		15.9			183,775		14.7			155,967		13.5			144,707		13.6
Consumer loans		24,922		2.0			21,713		1.6			15,448		1.2			14,744		1.3			12,828		1.2

Total consumer loans		235,951		19.0			239,696		17.4			199,223		15.9			170,711		14.8			157,535		14.8

U.S. Government Guaranteed		4,631		0.4			4,924		0.4			5,127		0.4			5,806		0.5			38,882		3.7	%
Total Loans		1,240,485		100.0			1,374,250		100.0			1,252,708		100.0			1,154,007		100.0			1,061,566		100.0
Net deferred loan fees		(151	)	—			(370	)	—			(585	)	—			(974	)	—			(1,467	)	—
Allowance for losses		(13,758	)	—			(12,978	)	—			(11,065	)	—			(10,308	)	—			(9,532	)	—

Loans, net	$	1,226,576		100.0	%	$	1,360,902		100.0	%	$	1,241,058		100.0	%	$	1,142,725		100.0	%	$	1,050,567		100.0	%

(1)

At December 31, 2009, construction loans include: $15.3 million in loans to local businesses for construction projects that will convert to permanent commercial real estate loans when the construction is complete; $6.4 million in loans to individuals for the construction of single family homes that will be owner occupied; $4.5 million in loans to local builders for the construction of single family homes under contract; $12.0 million in loans to local builders for the acquisition of land; and $84.2 million in loans to local builders for single family homes being built on speculation.

Loan Maturity

The following tables set forth certain information at December 31, 2009 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments, which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less. The amounts shown below exclude applicable loans in process and unearned interest in consumer loans and include net deferred loan costs. Our adjustable-rate mortgage loans generally do not provide for downward adjustments below the initial discounted contract rate. When market interest rates rise, as has occurred in recent periods, the interest rates on these loans may increase based on the contract rate (the index plus the margin) exceeding the initial interest rate floor.


December 31, 2009 (Dollars in thousands)	One- to Four-Family Loans		Commercial Real Estate Loans		Construction Loans		Commercial Business Loans		Home Equity Loans		Other Consumer Loans		Total Loans
Amounts due in:
One year or less	$	—	$	20	$	91,171	$	52,651	$	1,894	$	7,803	$	153,359
More than one to five years		1,022		13,084		7,265		52,375		16,489		11,915		102,150
More than five to ten years		7,638		34,547		—		50,855		9,604		5,176		107,820
More than ten years		348,547		309,481		22,678		13,200		183,042		28		876,976

Total	$	357,207	$	357,112	$	121,114	$	169,081	$	211,029	$	24,922	$	1,240,485

The following table sets forth the dollar amount of all loans at December 31, 2009 that are due after December 31, 2010 and have either fixed interest rates or floating or adjustable interest rates. The amounts shown below exclude unearned loan origination fees.


(In thousands)	Fixed Rates		Floating or Adjustable Rates		Total
One- to four-family	$	36,294	$	320,913	$	357,207
Commercial real estate		25,813		331,299		357,112
Construction		4,855		25,088		29,943
Commercial business		54,053		62,377		116,430
Consumer		4,559		12,560		17,119
Home equity line of credit		3,586		205,549		209,135

Total	$	129,160	$	957,786	$	1,086,946

Loan Activity

The following table shows loans originated, purchased and sold during the periods indicated.


	Year Ended December 31,
(Dollars in thousands)	2009		2008		2007		2006		2005
Total loans at beginning of period	$	1,360,902	$	1,241,058	$	1,142,725	$	1,050,567	$	920,058
Originations:
Real estate loans:
One- to four-family		51,237		98,151		91,453		118,962		98,175
Commercial real estate		28,900		80,457		87,244		61,584		69,197
Construction (1)		66,197		135,410		182,922		230,414		259,149

Total real estate loans		146,334		314,018		361,619		410,960		426,521
Commercial business loans		56,890		99,791		113,800		74,813		81,297
Consumer:
Home equity lines of credit		80,002		123,990		149,526		131,048		104,784
Other consumer loans		11,330		16,621		14,153		18,677		10,201

Total consumer loans		91,332		140,611		163,679		149,725		114,985

Total loans originated		294,556		554,420		639,098		635,498		622,803
Less:
Principal payments and repayments		395,105		429,400		540,404		517,811		474,210
Loan sales		16,317		—		—		25,244		16,300
Transfers to foreclosed real estate		16,897		3,478		—		—		—
Other (provision, charge offs and deferred fees)		561		1,698		361		285		1,784

Total loans at end of period	$	1,226,576	$	1,360,902	$	1,241,058	$	1,142,725	$	1,050,567

(1)	Includes advances made on construction loans.

Loan originations decreased substantially in 2009. Although we intentionally reduced our emphasis on the origination of construction loans, we experienced a decrease in the origination of loans in all loan categories primarily due to a decrease in borrower demand. In addition, as a result of our Asset Liability Committee’s strategy to reduce the higher risk-weighted assets on our balance sheet to enhance our regulatory capital, we did not actively seek to originate new commercial real estate or business loans.

Securities. At December 31, 2009, the investment securities portfolio excluding Federal Home Loan Bank of Boston stock was $94.1 million, or 6.0% of total assets. The following table shows the amortized cost and fair value of our securities at the dates indicated.


	December 31,
	2009				2008				2007
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available for sale:
U.S. Government and agency securities	$	42,039	$	41,469	$	10,864	$	2,605	$	—	$	—
Mortgage-backed securities		10,007		10,046		520		510		775		771
Corporate and other obligations		10,901		3,466		2,000		2,078		14,235		13,079
Equity securities		2,516		2,527		5,935		5,938		6,361		6,137

Total available for sale		65,463		57,508		19,319		11,131		21,371		19,987
Securities held to maturity:
U.S. Government and agency securities		5,829		5,919		8,075		7,985		10,924		10,990
Mortgage-backed securities		7,634		7,735		10,943		10,855		17,596		16,712
Corporate and other obligations		6,916		5,358		7,697		5,452		2,927		2,819
Municipal		16,179		16,496		18,150		18,792		18,519		19,043

Total held to maturity		36,558		35,508		44,865		43,084		49,966		49,564

Total	$	102,021	$	93,016	$	64,184	$	54,215	$	71,337	$	69,551

Mortgage-backed securities are a type of asset-backed security that is secured by a mortgage, or a collection of mortgages and guaranteed by an agency of the United States. These securities must also be grouped in

one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. The contractual cash flows of those investments in government sponsored enterprises mortgage-backed securities are debt obligations of FHLMC and FNMA. The cash flows related to GNMA securities are direct obligations of the U.S. Government. Mortgage-backed securities are also known as mortgage pass-throughs. CMOs are a type of mortgage-backed security that creates separate pools of pass-through rates for different classes of bondholders with varying maturities, called tranches. The repayments from the pool of pass-through securities are used to retire the bonds in the order specified by the bonds’ prospectus.

At December 31, 2008, we had no investments in a single company or entity (other than United States government sponsored enterprise securities) that had an aggregate book value in excess of 10% of our equity at December 31, 2009.

As with any type of investment there are risk factors to consider. The risks typically associated with mortgage-backed securities and CMOs include, but are not limited to, interest rate risk, which would affect the market value of the security, and prepayment risk, which would affect the cash flow and average life of the security. All of these risk factors are taken into consideration during prepurchase analysis of a security.

In addition, we hold certain pooled trust preferred securities that are collateralized debt obligations consisting primarily of trust preferred debt issued by financial institutions. At December 31, 2009, these trust preferred securities had a book value of $12.9 million (after an impairment charge of $3.7 million) and an estimated fair value of $4.4 million. Changes in the expected cash flows of these securities and/or prolonged price declines may result in our concluding in future periods that the impairment of these securities is other than temporary, which would require a charge to earnings to write down these securities to their fair value. For more information, see note 4 of the notes to the consolidated financial statements included in this prospectus.

The municipal bond portfolio represents 17.2% of the investment portfolio at December 31, 2009. The majority of this portfolio was acquired in connection with our merger with Fairfield County Savings Bank in 2004. The portfolio is largely comprised of local municipalities. With the exception of one municipality, the securities are rated A3 or higher. All municipal securities are bank qualified as tax exempt securities.

Fair value is determined for securities using a market approach. Agency obligations are fixed income securities that are not traded on a separate exchange but in active markets, which determines their fair market value. At December 31, 2009, equity securities consisted of 3 limited partnership investments and one mutual fund. For limited partnerships, the investments are valued based on their audited financial statements, and where necessary a review of the underlying assets. Mutual funds are valued based on current market prices. The majority of the mutual funds were sold in 2009. Mortgage backed securities and municipal bonds are valued using an established independent pricing service. Corporate obligations primarily consist of pooled trust preferred securities. The fair market value of these securities is evaluated using a discounted cash flow methodology, which is adjusted for deferrals, defaults and potential changes in the amount and timing of anticipated cash flows based on the underlying creditworthiness of the issuers.

To determine whether a security is other-than-temporarily impaired, we consider factors that include, the causes of decline in fair value such as credit problems, interest rate fluctuations or market volatility, the severity and duration of the decline in value, our ability and intent to hold security investments until they recover in value, our intent to sell investments, or if it is more likely than not that we will be required to sell securities before recovery of their individual amortized cost basis. For debt securities, the primary consideration for determining whether an impairment is other than temporary is whether or not it is probable that current or future contractual cash flows have been or may be impaired.

The following table sets forth the stated maturities and weighted average yields of the investment securities at December 31, 2009. Certain securities have adjustable interest rates and will reprice monthly, quarterly or annually within the various maturity ranges. These repricing schedules are not reflected in the table below. All but approximately $56.2 million of the securities listed have fixed rates. We did not have any securities maturing in one year or less.


	More than One Year to Five Years				More than Five Years to Ten Years				More than Ten Years				Total
December 31, 2009 (Dollars in thousands)	Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield
Securities available-for-sale:
U.S. Government and agency securities	$	12,059	2.6	%	$	24,682	3.0	%	$	4,728	3.0	%	$	41,469	2.9	%
Corporate and other obligations		715	—			—	—			2,751	2.4			3,466	1.9

Total available for sale		12,774	2.5			24,682	3.0			7,479	2.8			44,935	2.8
Equity securities		—	—			—	—			—	—			2,527	2.9
Securities held to maturity:
U.S. Government and agency securities		—	—			1,429	6.2			4,400	5.2			5,829	5.5
Corporate		962	3.0			853	8.6			5,101	5.1			6,916	5.3
Municipal bonds		3,689	3.8			12,490	3.9			—	—			16,179	3.9

Total held to maturity		4,651	3.7			14,772	4.4			9,501	5.2			28,924	4.5

Total	$	17,425	2.8	%	$	34,454	3.5	%	$	16,980	4.1		$	73,859	3.5	%

Premises and Equipment. Premises and equipment totaled $39.6 million at December 31, 2009 as compared to $37.2 million at December 31, 2008. Bank premises increased $3.2 million primarily due to the addition of eight banking offices.

Deposits. Our deposit base is comprised of non-interest bearing deposits and interest-earning checking accounts, money market and passbook accounts and time deposits. We consider non-interest bearing deposits and interest-earning checking accounts and money market and savings accounts to be core deposits. At December 31, 2009, core deposits were 67.1% of total deposits. Deposits increased $51.2 million, or 4.3%, in the year ended December 31, 2009, as core deposits increased $73.6 million, which increase was partially offset by a $22.4 million decrease in time deposits. Our efforts to grow core deposits have been focused on the promotion of interest earning checking accounts. We have experienced an decrease in our time deposit accounts as we have not competed to attract time deposits. We believe we are most successful attracting and retaining deposits by offering superior customer service.


	At December 31,
	2009				2008				2007
(In thousands)	Amount		Percent of Total Deposits		Amount		Percent of Total Deposits		Amount		Percent of Total Deposits
Non-interest bearing deposits	$	168,102	13.4	%	$	169,191	14.1	%	$	156,132	13.9	%
Interest-earning checking accounts		229,541	18.3			171,905	14.3			152,038	13.5
Money market accounts		340,131	27.2			340,662	28.4			343,760	30.6
Savings accounts		102,594	8.2			85,030	7.1			94,019	8.4
Time deposits		411,032	32.9			433,392	36.1			377,804	33.6

Total	$	1,251,400	100.0	%	$	1,200,180	100.0	%	$	1,123,753	100.0	%

The following table indicates the amount of certificates of deposit of $100,000 or more by time remaining until maturity as of December 31, 2009. From time to time we have solicited brokered time deposits as an alternative source of funds. At December 31, 2009, we had no brokered deposits and we do not currently intend to solicit brokered deposits.


December 31, 2009 (Dollars in thousands)	Certificates of Deposit
Maturity Period:
Three months or less	$	77,818
Over three through six months		40,424
Over six through twelve months		61,664
Over twelve months		50,907

Total	$	230,813

The following table sets forth the time deposits classified by rates at the dates indicated.


At December 31, (In thousands)	2009		2008		2007
0.00 - 1.00%	$	68,612	$	1,564	$	5
1.01 - 2.00%		133,099		30,380		—
2.01 - 3.00%		91,885		102,629		11,560
3.01 - 4.00%		63,261		223,857		71,525
4.01 - 5.00%		48,586		64,162		114,343
5.01 - 6.00%		5,589		10,800		180,371

Total	$	411,032	$	433,392	$	377,804

The following table sets forth the amount and maturities of time deposits classified by rate at December 31, 2009.


	Amount Due
(In thousands)	Less Than One Year		More Than One Year to Two Years		More Than Two Years to Three Years		More Than Three Years		Total
0.00 - 1.00%	$	68,411	$	201	$	—	$	—	$	68,612
1.01 - 2.00%		128,469		4,312		318		—		133,099
2.01 - 3.00%		77,193		9,141		1,794		3,757		91,885
3.01 - 4.00%		29,987		27,806		1,640		3,828		63,261
4.01 - 5.00%		9,915		21,791		16,849		31		48,586
5.01 - 6.00%		3,402		1,542		645		—		5,589

Total	$	317,377	$	64,793	$	21,246	$	7,616	$	411,032

The following table sets forth the deposit activity for the periods indicated.


Year Ended December 31, (In thousands)	2009		2008		2007
Beginning balance	$	1,200,180	$	1,123,753	$	1,053,468
Increase (decrease) before interest credited		32,268		50,043		36,610
Interest credited		18,952		26,384		33,675
Net increase (decrease) in deposits		51,220		76,427		70,285
Ending balance	$	1,251,400	$	1,200,180	$	1,123,753

Borrowings. We use borrowings from the Federal Home Loan Bank of Boston to supplement our supply of funds for loans and investments.


Year Ended December 31, (In thousands)	2009			2008			2007
Maximum amount outstanding at any month-end during period:
Federal Home Loan Bank advances	$	205,398		$	200,758		$	153,277
Federal Home Loan Bank overnight borrowings		17,500			7,300			24,750
Other – BIC (1)		10,000			—			—
Average outstanding balance during period:
Federal Home Loan Bank advances	$	159,919		$	170,778		$	128,865
Federal Home Loan Bank overnight borrowings		202			3,115			5,375
Other – BIC (1)		411			—			—
Weighted average interest rate during period:
Federal Home Loan Bank advances		3.4	%		3.9	%		4.7	%
Federal Home Loan Bank overnight borrowings		0.4			3.2			4.9
Other – BIC (1)		0.5			—			—
Balance outstanding at end of period:
Federal Home Loan Bank advances	$	134,199		$	195,398		$	119,528

Acknowledgment of Receipt by the Plan Administrator. This Investment Form was received by the Plan Administrator and will become effective on the date noted below.

Fairfield County Bank Corp. S-1/A