SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________________

(Mark One)

For the quarterly period ended March 31, 2003

OR

For the transition period from _______________ to _______________

Commission file number 000-29343

Port Financial Corp.
(Exact name of registrant as specified in its charter)

1380 Soldiers Field Road, Brighton, Massachusetts 02135
(Address of principal executive offices)
(Zip Code)

(617) 779-8300
(Registrant's telephone number including area code)

                   N/A                   
(Former name, former address and former fiscal year,
if changed from last Report)

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

Indicate by check mark if whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes   X        No        .

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.

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TABLE OF CONTENTS

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See the accompanying notes to the unaudited consolidated financial statements.

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See the accompanying notes to the unaudited consolidated financial statements

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See the accompanying notes to the unaudited consolidated financial statements

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See the accompanying notes to the unaudited consolidated financial statements

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1) Basis of Presentation
The unaudited consolidated financial statements of Port Financial Corp. ("Port" or the "Company") include the accounts of the Company and its two wholly owned subsidiaries, Cambridgeport Bank (the "Bank") and Brighton Investment Corporation. Brighton Investment Corporation invests in marketable securities. The Bank is a Massachusetts-chartered stock savings bank with its headquarters located in Cambridge, Massachusetts. The Bank has four wholly-owned subsidiaries, Temple Investment Corporation, River Investment Corporation, Cambridgeport Insurance Services, Inc. and Prospect Real Estate Investment Corp. Temple Investment Corporation and River Investment Corporation both invest in securities. Cambridgeport Insurance Services, Inc. was established in April 2000 with the intention of providing insurance. It is not engaged in such activities at this time. Prospect Real Estate Investment Corp. is a real estate investment trust which holds certain mortgage loans originated by the Bank as well as mortgage-backed securities. In addition, the Bank is the sole member of Temple Realty LLC, which owns the Company's administrative center.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the unaudited consolidated financial statements presented herein reflect all adjustments (consisting only of normal adjustments) necessary for a fair presentation. Interim results are not necessarily indicative of results to be expected for the entire year. The Company believes that the disclosures are adequate to make the information presented not misleading. All significant intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements.

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2) Stock Based Compensation
In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123 established a fair-value-based method of accounting for stock-based compensation plans. The Company has determined that it will account for stock-based compensation for employees under APB Opinion No. 25, Accounting for Stock Issued to Employees, and elect the disclosure-only alternative under SFAS No. 123.

Had compensation cost for the Company's stock option plan been determined consistent with SFAS No. 123, the pro forma net income would have been as follows:

3) Commitments
At March 31, 2003, the Company had outstanding commitments to originate loans amounting to approximately $40.6 million, unadvanced funds on construction loans of approximately $1.9 million and unadvanced funds on lines of credit amounting to approximately $184.4 million.

4) Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period presented. In calculating basic earnings per share, the number of shares of common stock outstanding is reduced by the number of shares held by Port's Employee Stock Ownership Plan (the "ESOP") and its 2000 Recognition and Retention Plan (the "RRP") that have not been allocated or are not committed for release to participants' individual accounts. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by the Company relate solely to outstanding stock options and unearned RRP shares and are determined using the treasury stock method.

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The following table summarizes the calculation of basic and diluted earnings per share:

For the three months ended March 31, 2003 and 2002, there were -0- options to purchase shares of common stock, which were excluded from the calculation of diluted earnings per share because the options exercise price was greater than the average market price of the Company's common stock for the period and their inclusion would have been anti-dilutive.

5) Merger Agreement
On April 17, 2003, Port and Citizens Financial Group, Inc. ("Citizens") entered into an Agreement and Plan of Merger (the "Agreement") by and among Citizens Bank of Massachusetts ("Citizens Bank"), a wholly-owned subsidiary of Citizens, Citizens and Port. Under the terms of the Agreement, Citizens will acquire Port in a cash merger transaction for $54 per share. Pursuant to the Agreement, CambridgePort Bank will become part of Citizens Bank. The acquisition is subject to customary conditions, including shareholder and regulatory approval, and is expected to close in the third quarter of 2003.

6) Stock Repurchases
On January 22, 2003, the Company announced an eighth 5% repurchase program for a total of 262,000 shares. As of March 31, 2003 no shares have been purchased under this repurchase program.

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7) Loans
The loan portfolio consisted of the following (in thousands):

8) Deposits
A summary of deposit balances, by type, is as follows (in thousands):

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This Quarterly Report on Form 10-Q contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Port Financial Corp.'s (the "Company") actual results could differ materially from those projected in the forward-looking statements. Important factors that might cause such a difference include: changes in national or regional economic conditions; changes in loan default and charge-off rates; reductions in deposit levels necessitating increased borrowing to fund loans and investments; changes in interest rates; changes in the size and the nature of the Company's competition; and changes in the assumptions used in making such forward-looking statements. The Company disclaims any obligation to publicly announce future events or developments, which may affect the forward-looking statements contained herewith.

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes included in this report.

General
Port Financial Corp. is a Massachusetts-chartered stock holding company, which owns all of the capital stock of Cambridgeport Bank (the "Bank"). The Company converted from a Massachusetts-chartered mutual holding company, formerly known as Cambridgeport Mutual Holding Company, to a Massachusetts-chartered stock holding company and changed its name to Port Financial Corp. and sold 7,442,818 shares of its common stock, par value $0.01 per share, to the Company's eligible depositors, management and employees and to the Company's Employee Stock Ownership Plan ("ESOP"). Net proceeds of the stock offering were $71.8 million. The conversion and stock offering were completed on April 11, 2000.

The Company's principal business is its investment in the Bank, a Massachusetts stock savings bank, chartered in 1853, with headquarters in the Cambridgeport neighborhood of Cambridge, Massachusetts. The Cambridgeport neighborhood is located near the Charles River, between the campuses of Harvard and MIT. The Bank is a community-oriented bank, with eleven full service banking offices and a Telebanking Center. It provides retail and business customers with value-driven products and services, including a wide variety of deposit products, investment management services, residential mortgage loans, commercial real estate loans, commercial loans and consumer loans. Most of its customers are located in the cities and towns around Cambridge, Massachusetts. The Bank's newest branch office, located in Brookline, Massachusetts opened in April, 2002.

The Bank's revenues are derived principally from interest on loans and investment securities. The Bank's primary sources of funds are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities and calls of

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investment securities, and funds provided by operations. The Bank also uses borrowings from the Federal Home Loan Bank as a source of funds for loans, investments and other assets. The largest component of the Bank's expenses is the interest it pays on deposits.

Total assets increased by $77.2 million, from $1.47 billion at December 31, 2002 to $1.55 billion at March 31, 2003. This growth included increases in investment securities of $76.2 million and cash and cash equivalents of $7.7 million, partially offset by a decrease in net loans and loans held for sale of $6.1 million.

The trend in portfolio loan balances reflects residential mortgage refinancing activity in the current low interest rate environment.

Non-performing assets totaled $337,000 and $361,000 at March 31, 2003 and December 31, 2002, respectively. The balance of non-performing assets at March 31, 2003 consists of a single residential mortgage and several student loans.

The allowance for loan losses was $10.1 million at March 31, 2003, or 1.20% of total loans. This compares to $10.0 million and 1.18% at December 31, 2002. The Company believes that the current allowance for loan losses accurately reflects the size and level of risk in the loan portfolio. The Company continues to apply its consistent, systematic methodology for measuring the adequacy of the allowance for loan losses.

Deposits at March 31, 2003 totaled $1.21 billion, an increase of $52.3 million from $1.16 billion at December 31, 2002. The growth was primarily concentrated in money market accounts, which increased $72.0 million to $585.0 million at March 31, 2003. During the first quarter of 2003, the Bank continued to market its Money Manager Savings account, offering premium rates for new customer deposits.

NOW account balances declined $22.5 million, from $158.7 million at December 31, 2002 to $136.3 million at March 31, 2003, as customers transferred funds into higher yielding accounts.

Borrowings from the Federal Home Loan Bank totaled $196.6 million at March 31, 2003, an increase of $21.1 million from December 31, 2002. The Company increased its utilization of low cost, short-term borrowings during the quarter to fund loans held for sale and other short-term assets.

The $2.8 million increase in stockholders' equity to $123.9 million at March 31, 2003 from $121.1 million at December 31, 2002 was due primarily to growth of $2.3 million in retained earnings. During the quarter there was also a $784,000 reduction in treasury stock, as stock options were exercised. The effects of higher retained earnings and treasury stock balances were partially offset by a $641,000 reduction in accumulated other comprehensive income.

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The following tables set forth information relating to the Company's financial condition and net interest income at and for the first quarter ending March 31, 2003 and 2002 and reflect the average yield on assets and average cost of liabilities for the periods indicated. Yields and costs are derived by dividing interest income by the average balance of interest-earning assets and interest expense by the average balance of interest-bearing liabilities for the periods shown. Average balances are derived from actual daily balances over the periods indicated. Interest income includes fees earned from making changes in loan rates of terms, and fees earned when real estate loans were prepaid or refinanced.

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The following table shows how changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to:

The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.