SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended September 30, 1996
                                       OR

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

             For the transition period from __________ to __________

                         Commission file number 0-15311
                              EAGLE FINANCIAL CORP.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                           06-1194047
  -------------------------------                            -------------------
  (State or other jurisdiction of                             (I.R.S. Employer
   incorporation or organization)                            Identification No.)

    222 Main Street, Bristol, Connecticut                        06010
  ----------------------------------------                     -----------
  (Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (860) 314-6400.

           Securities registered pursuant to Section 12(b) of the Act:
                                (Not applicable)

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.01 par value
                                (Title of class)

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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of  Regulation  S-K (Section  229.405 of this chapter) is not contained
herein,  and will not be contained,  to the best of registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]

         Based upon the closing  price of the  registrant's  common  stock as of
December  16,  1996,   the  aggregate  market  value of the voting stock held by
non-affiliates of the registrant is $104.3  million.*

         The number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date is:

                 Class: Common Stock, par value $.01 per share.
               Outstanding at December 16, 1996: 4,543,398 shares.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Part II:
         Annual report to  shareholders  for the fiscal year ended September 30,
1996. 

Part III:
         Portions of the  definitive  proxy  statement for the Annual Meeting of
Shareholders to be held on January 28, 1997.

--------------------

* Solely for purposes of this calculation,  all executive officers and directors
of the registrant,  Employee Stock Ownership Plan and all shareholders reporting
beneficial  ownership  of more  than 5% of the  registrant's  common  stock  are
considered to be affiliates.

<PAGE>

PART I

         Item 1.  Business

         General

         Eagle Financial Corp. ("Eagle" or the "Company") is the holding company
of Eagle  Federal  Savings  Bank  ("Eagle  Federal"  or the  "Bank").  Eagle was
organized  in 1986 under  Delaware  law for the purpose of becoming  the holding
company of First Federal Savings and Loan Association of Torrington, Connecticut
("Torrington")  upon its  conversion to a stock  company in 1987.  In 1988,  BFS
Bancorp,  Inc., the holding company of Bristol  Federal  Savings Bank,  Bristol,
Connecticut  ("Bristol"),  merged into Eagle in a  combination  structured  as a
merger  of equals  and  accounted  for as a  pooling-of-interests.  Bristol  had
converted to a stock  company in 1987.  Torrington  and Bristol have operated as
savings institutions since 1919 and 1924,  respectively.  In January 1993, Eagle
merged Bristol with  Torrington  under the new name Eagle Federal  Savings Bank.
Unless otherwise  stated,  all references herein to Eagle or the Company include
Eagle Federal and other subsidiaries on a consolidated basis.

         Eagle,  at September 30, 1996,  had total assets of $1.4  billion,  net
loans receivable of $814.5 million,  deposits of $1.1 billion and  shareholders'
equity of $101.1 million.  Through Eagle Federal,  the Company provides consumer
banking  services  through  19  traditional   banking  offices  and  4  in-store
supermarket branch offices in Connecticut,  serving the Torrington, Bristol, and
Hartford market regions.  As a community oriented  savings  bank,  Eagle Federal
focuses on the financial needs of its customers in these local markets,  seeking
to  develop  long-term  deposit  and  lending  relationships.   In  its  lending
activities,  the Bank stresses asset quality  through its emphasis on 1-4 family
residential  first  mortgage  lending  in  its  local  markets  and  the  use of
conservative  loan  underwriting  standards.  Deposit  accounts  at the Bank are
insured by the Federal Deposit Insurance Corporation (the "FDIC").

         Eagle's net income has  increased  each of the  previous  eight  fiscal
years from $3.5 million, or $1.06 per share, in fiscal 1989 to $13.6 million, or
$2.89 per share,  in fiscal 1996.  Eagle intends to continue to  concentrate  on
increasing its earnings,  maintaining high asset quality, meeting customer needs
in  its  existing   local  markets  and  expanding   through   selected   future
acquisitions.

         The  following  table   indicates   selected  ratios  for  the  periods
indicated:
<TABLE>
<CAPTION>

                                                         For the years ended September 30,
                                                       1996            1995            1994
                                                  --------------- --------------- ---------------
<S>                                                  <C>             <C>             <C>  
Return on average assets                              1.00%           0.95%           0.85%
Return on average equity (a)                         13.82%          12.68%          11.99%
Dividend payout ratio                                 31.8%           34.5%           32.5%
Average equity to average assets ratio (b)            7.23%           7.51%           7.05%
</TABLE>

         (a)      If the effect of the unrealized gains and losses on securities
                  available  for sale had been  excluded,  the  return on equity
                  ratio  would have been  13.82% and 12.55% for the years  ended
                  September 30, 1996 and 1995, respectively.

         (b)      If the effect of the unrealized gains and losses on securities
                  available for sale had been  excluded,  the average  equity to
                  average  assets  ratio would have been 7.23% and 7.58% for the
                  years ended September 30, 1996 and 1995, respectively.

         Eagle's  principal  executive  office is  located  at 222 Main  Street,
Bristol, Connecituct 06010 and its telephone number is (860) 314-6400.

                                       2

<PAGE>



         Acquisitions  - In past years,  Eagle has  significantly  expanded  its
operations through three federally assisted  acquisitions in which Eagle Federal
acquired  certain assets and assumed  deposit  liabilities  from the FDIC or the
Resolution Trust Corporation ("RTC"). Substantially all of the loans acquired in
these acquisitions  consisted of 1-4 family residential first mortgage loans and
home equity loans.  In the largest and  most recent  assisted  acquisition,  the
Bank of Hartford,  Inc.  ("Bank of  Hartford")  acquisition,  Eagle Federal also
acquired $72.7 million of investment securities, substantially all of which were
U.S.  Treasury and Government agency  obligations,  and loan servicing rights on
$80.5 million of loans with an average loan servicing fee of 0.375%.

         During 1996,  Eagle  reshaped the structure of its branch  network as a
result of two open market  transactions.  In October 1995,  Eagle  announced the
purchase of five branch offices located in the greater Hartford market area that
were being divested as part of the merger  transaction  between Fleet Bank, N.A.
and  Shawmut  Bank  Connecticut,  N.A.  (the  "Fleet/Shawmut  transaction").  In
December 1995,  Eagle  announced the sale of seven branch offices located in the
Danbury market to Union Savings Bank of Danbury  ("Union").  The  combination of
these two transactions demonstrated Eagle's commitment to expanding its presence
in the  Hartford  market area while at the same time  creating a more  efficient
branch  network  made up of  larger,  more  geographically  concentrated  branch
offices.

         Eagle purchased five branch offices in the  Fleet/Shawmut  transaction,
assumed  deposits  totaling  $253  million  and  acquired  $36 million in loans,
approximately  $24 million of which were  commercial  loans.  As a result of the
premium  paid  on the  deposits  assumed,  along  with  certain  other  purchase
accounting  adjustments,  Eagle Federal recorded goodwill in the amount of $19.9
million.  The  transaction  was completed in January 1996.  Shortly  thereafter,
Eagle Federal closed two branch  offices that were in close  proximity to two of
the acquired branch offices and  transferred all customer  accounts to the newly
acquired branch offices.

         The sale of the branches to Union,  which was  completed in March 1996,
included $184 million of deposits and generated a $15.9 million gain principally
due to the premium received on the deposits. This transaction removes Eagle from
a highly  competitive,  geographically  separate market place and allows for the
focus of resources in a more concentrated area of Connecticut.

         Eagle's expansion strategy, initially reflected in the Bank of Hartford
acquisition and reinforced  through the  Fleet/Shawmut  and Union  transactions,
represents a natural  extension of Eagle's original markets since many residents
of Bristol and Torrington commute to the Hartford area. The Hartford market area
is contiguous to Eagle's original market areas, has a higher population  density
and is generally more affluent than the Bristol and Torrington markets.

         Eagle believes that the operation of more  geographically  concentrated
branch offices will not only provide for an efficient retail service network but
also allow Eagle to maximize  opportunities  for residential and commercial loan
production,  in addition to other services.

         Business - As a holding company,  the business  operations of Eagle are
conducted  through the Bank.  The Bank  primarily  is engaged in the business of
accepting  deposits  from  the  general  public  and  using  such  funds  in the
origination of first mortgage loans for the purchase,  refinance or construction
of 1-4 family homes. At September 30, 1996,  90.3%,  or $744.8  million,  of the
Bank's  $824.7  million  total  gross  loans  receivable  was  secured  by first
mortgages on real estate.  The Bank's real estate loans included  $666.8 million
of first mortgage loans secured by 1-4 family  residential real estate (80.9% of
total gross loans  receivable) and $77.9 million of multi-family,  construction,
commercial real estate,  and land loans (9.4% of total gross loans  receivable).
The  remaining  $79.9  million of loans (9.7% of total  gross loans  receivable)
includes $38.4 million of home equity lines of credit (4.7% of total gross loans
receivable),  $27.5 million of second  mortgage loans (3.3% of total gross loans
receivable)  and $6.9  million of  commercial  loans  (0.8% of total gross loans
receivable)  with the  remainder of the loans being  primarily  loans secured by
deposits and personal loans.

                                       3
<PAGE>




         Eagle has experienced increased loan originations,  with $236.1 million
of originations  in fiscal 1996,  compared to $155.7 million in fiscal 1995. The
increase is primarily  attributable to a favorable interest rate environment for
the origination of fixed rate  residential  mortgage loans,  which accounted for
48% of total loan  production in 1996.  Commercial  loan  originations  of $22.8
million in 1996 compared to $700,000 in 1995 also  contributed  significantly to
the improved loan origination  activity.  Residential  mortgage lending has been
and will continue to be Eagle Federal's main focus,  however, the Bank is moving
forward  with its  strategy  to  diversify  the loan  portfolio  by  originating
commercial  real estate and small business loans within its primary market area.
The Bank began the  commercial  banking  initiative  in 1995,  made  significant
progress in 1996 and expects to further the expansion of  commercial  banking in
1997.  Eagle also  intends  to  increase  the  emphasis  on its home  equity and
consumer  lending  programs.  The marketing of these loans will focus on Eagle's
existing  customer  base,  customers  acquired  as  part  of  the  Fleet/Shawmut
acquisition  and new  relationships  within Eagle's  primary  market areas.  See
"Lending Activities -- General."

         Based  on its  lending  strategy,  Eagle  has  been  able  to  maintain
relatively stable asset quality. Total non-performing assets of Eagle were $12.3
million at September  30, 1994,  $13.6  million at September  30, 1995 and $12.3
million at September 30, 1996. At those dates, non-performing assets constituted
1.51%, 1.89%, and 1.51% respectively,  of total loans receivable and real estate
owned.  At September 30, 1996,  Eagle's  allowance for loan losses  totaled $8.6
million, or 93% of total non-performing loans.

         Eagle  Federal's  funding  strategy is focused  primarily on developing
core  deposits such as regular  savings and checking  accounts,  and  attracting
term certificates of deposit.

         Eagle also makes available to its customers various investment products
through  Liberty  Securities   Corporation,   a  registered   broker-dealer  not
affiliated  with Eagle.  These products  include mutual funds,  unit  investment
trusts and fixed-  and  variable-rate  annuity  contracts,  as well as  discount
brokerage services.

         Regulation - Eagle,  as a unitary  thrift  holding  company,  and Eagle
Federal,   as  its  wholly-owned   subsidiary,   are  subject  to  comprehensive
regulation,  supervision  and  examination  by the Office of Thrift  Supervision
("OTS"),  as the  primary  federal  regulator  of the  Bank.  The FDIC  also has
significant  regulatory  authority  over the Bank. The Board of Governors of the
Federal  Reserve System ("FRB") has regulatory  authority as to certain  matters
concerning  the Bank.  Eagle  Federal is a member of the Federal  Home Loan Bank
("FHLB")  System.  FHLB  advances  are a  source  of  funds  for the  Bank.  See
"Regulation."

         Lending Activities

         General. Eagle traditionally has concentrated its lending activities on
the  origination  and purchase of loans secured by first  mortgage liens for the
purchase, refinancing or construction of residential real property. At September
30, 1996,  mortgage  loans,  including  those secured by 1-4 family  residential
units,   multi-family  residential  units,  commercial  real  estate  and  land,
aggregated $744.8 million or 90.3% of Eagle's gross loans receivable  portfolio.
At September 30, 1995 and 1994, such mortgage loans  aggregated  $654.6 million,
or 90.7%, and $751.9 million, or 91.6%,  respectively.  The remainder of Eagle's
portfolio  consists of  commercial  and consumer  loans,  primarily  home equity
loans.  At September 30, 1996,  over 95% of Eagle's real estate  mortgage  loans
were  secured by  property  located  in  Connecticut.  Substantially  all of the
remaining real estate secured loans were originated prior to 1982.

         At  September  30, 1996  commercial  real estate  loans  totaled  $39.5
million and are  generally  secured by a mix of retail and  professional  office
properties.  This represents a significant  increase from the amount outstanding
at September 30, 1995 of $15.0 million.  The increase was principally the result
of the  acquisition  of  commercial  real  estate  loans  in  the  Fleet/Shawmut
transaction  totaling  $22.2  million.  At September 30, 1996, the Company had a
total  of  $6.9  million  of  non-real  estate  commercial  loans   outstanding.
Multi-family  loans,  secured by properties with 5 units or more,  totaled $15.5
million  as of  September  30,  1996.  This  amount  is down  slightly  from the
September  30,1995 total of $16.7 million.  Land development  loans increased to
$8.6 million at September 30, 1996 from $6.8 million at September 30, 1995.

                                       4
<PAGE>




         Eagle  made  significant  progress  in  implementing  its  strategy  to
emphasize the  origination of commercial  real estate and small business  loans.
Commercial  related  originations  totaled  $22.8  million  for the  year  ended
September  30, 1996  demonstrating  strong  growth from prior years.  Eagle also
significantly  expanded  both its  commercial  origination  resources and credit
administration  resources.  The  origination of commercial  based loans not only
increases  the overall  yield on the  portfolio but adds to the base of interest
rate sensitive assets, as the rate structures for these loans generally call for
annual, quarterly or monthly rate adjustments.

         At September 30, 1996 consumer loans totaled $73.1 million  compared to
$66.5 million at September 30, 1995 and $67.7 million at September 30, 1994. The
increase in consumer loans is  attributable  to the $13.2 million of home equity
and other  consumer  loans  acquired  in the  Fleet/Shawmut  transaction.  Eagle
intends to continue  emphasizing  home equity lines of credit (52.5% of consumer
loans at September 30, 1996), using its existing credit programs and personnel.

         At  September  30,  1996,  the  Company's   largest  loan  relationship
aggregated  $12.8 million.  That  relationship  represents eight loans, of which
$2.4  million  are  secured by  multi-family  properties  and $10.4  million are
secured  by  commercial  properties.  At that  date,  the next  largest  lending
relationship  was $2.8 million,  representing  four loans, of which $2.7 million
are secured by multi-family  properties.  No other lending relationship exceeded
$2.5 million, in aggregate.

         The  following  tables  set forth  the  composition  of the total  loan
portfolio of Eagle,  in dollar amounts and in  percentages,  at the dates shown,
and a reconciliation of loans receivable, net.

<TABLE>
<CAPTION>

                                1996                  1995                 1994               1993              1992
                               Amount          %     Amount       %       Amount     %       Amount       %     Amount         %
                              -----------------------------------------------------------------------------------------------------
<S>                          <C>             <C>    <C>          <C>    <C>          <C>   <C>           <C>   <C>            <C> 
                                                                     (in thousands)
Residential mortgage
loans:
1-4 family
  Permanent                  $ 666,815       80.9   $ 604,063    83.6   $ 704,912    85.8  $ 573,165     86.3  $ 481,804      83.5
  Construction                  14,413        1.7      12,014     1.7       7,103     0.9      5,739      0.9     13,255       2.3
Multi-family                    15,471        1.9      16,694     2.3      17,513     2.2     18,629      2.8     16,709       2.9
Commercial real estate          39,510        4.8      15,025     2.1      15,862     1.9     11,268      1.6     11,455       2.0
Land  development (a)            8,555        1.0       6,804     0.9       6,551     0.8      5,735      0.9      4,517       0.8
                              -----------------------------------------------------------------------------------------------------
  Total conventional loans     744,764       90.3     654,600    90.7     751,941    91.6    614,536     92.5    527,710      91.4 
FHA/VA mortgage loans               --         --           1      --           2      --          3       --          5        --
                              ------------------------------------------------------------------------------------------------------
  Total mortgage loans         744,764       90.3     654,601    90.7     751,943    91.6    614,539     92.5    527,715      91.4
                              -----------------------------------------------------------------------------------------------------
Commercial Other                 6,863        0.8         883     0.1          --      --         --       --         --        --
                              -----------------------------------------------------------------------------------------------------
Consumer loans:
  Secured by deposits            3,066        0.4       4,283     0.6       3,322     0.4      3,490      0.5      3,485       0.6
  Second mortgages              27,526        3.3      21,750     3.0      21,734     2.6        402      0.1        411       0.1
  Home equity lines of credit   38,375        4.7      37,018     5.1      38,246     4.7     43,864      6.6     42,892       7.4
  Education                         --         --          16      --         140     0.1        250      0.1        555       0.1
  Personal                       3,712        0.5       3,075     0.4       4,147     0.5      1,488      0.2      1,693       0.3
  Automobile                       404         --         357      --         128      --        174       --        379       0.1
                              -----------------------------------------------------------------------------------------------------
    Total consumer loans        73,083        8.9      66,499     9.2      67,717     8.4     49,668    100%      49,415       8.6
                              -----------------------------------------------------------------------------------------------------

    Total loans receivable
      (before net items)       824,710      100%      721,983   100%      821,172   100%     664,207    100%     577,130     100%
                                            ====                ====                ====                ====                 ==== 
  Add (deduct):
    Unearned discounts  
     and premiums                 (350)                   137                 183                  3                   4          
    Loans in process                --                     --                  --               (600)             (3,518) 
    Allowance for loan losses   (8,592)                (7,457)             (8,311)            (5,005)             (4,011) 
    Deferred loan     
     origination fees           (1,280)                (1,118)             (2,339)            (2,261)             (1,481)  
                             ---------              ---------          ----------          ---------         -----------           
      Total loans receivable $ 814,488              $ 713,545          $  810,705          $ 656,344         $   568,124  
                             =========              =========          ==========          =========         ===========  
</TABLE>
                                                                            
-------------------------

(a)  Loans for developed building lots,  acquisition and development of land and
     unimproved land.


                                       5
<PAGE>



         The  following  table sets forth certain  information  at September 30,
1996  regarding  the dollar amount of loans  maturing in Eagle's loan  portfolio
based on scheduled payments to maturity. Demand loans and loans having no stated
schedule of repayments and no stated maturity are reported as due in one year or
less.
<TABLE>
<CAPTION>
                                                            
                                    Due Within          Due 1 to        Due After                        
                                        1 Year           5 Years          5 Years             Total   
                                      -----------      -----------      -----------       -------------
                                                                 (in thousands)

<S>                                 <C>               <C>              <C>                <C>           
Residential 1-4 family and land     $    25,250       $ 109,883        $   540,237        $   675,370
 loans
Multi-family and commercial
  real estate loans                       4,039          15,097             35,845             54,981
Residential construction loans              609              --             13,804             14,413
Commercial loans                          3,361           3,129                373              6,863
Consumer loans                            7,742          20,338             45,003             73,083
                                       -----------      -----------       -----------       -------------

Total                               $    41,001       $ 148,447        $   635,262        $   824,710
                                       ===========      ===========       ===========       =============
</TABLE>

         The  following  table sets forth as of  September  30,  1996 the dollar
amount  of all  loans of Eagle  due  after  one year  which  have  predetermined
interest rates and floating or adjustable interest rates.
<TABLE>
<CAPTION>

                                     Due 1 to 5 Years                  Due After 5 Years                       Total
                             ---------------------------------    -----------------------------     ----------------------------

                                                   Floating                         Floating                         Floating
                                 Predetermined        or          Predetermined        or            Predetermined       or
                                    Rates         Adjustable         Rates          Adjustable         Rates         Adjustable
                                                     Rates                            Rates                            Rates
                                 -------------    ------------    -------------     -----------     -------------    -----------
                                                                         (in thousands)

<S>                          <C>               <C>             <C>                <C>             <C>              <C>

Residential 1-4 family                                                                                                 
  and land loans              $     77,055     $     33,828    $    142,498       $  397,739      $     219,553    $    430,567
Multi-family and commercial  
   real estate loans                 9,105            5,992          11,619           24,226             20,724          30,218  
Residential construction
  loans                                 --               --          13,804               --             13,804              --    
Commercial loans                       865            2,264              --              373                865           2,637
Consumer loans                      12,669            7,669          10,578           34,425             23,247          42,094
                                 -------------    ------------    -------------     -----------     -------------    -----------
Total                         $     94,694     $     48,753    $    178,499       $  456,763      $     278,193    $    505,516
                                 =============    ============    =============     ===========     =============    ===========
</TABLE>

         One- to Four-Family  First Mortgage Loans. At September 30, 1996, first
mortgage loans  (including  construction  loans)  secured by one-to  four-family
homes comprised 82.6% of Eagle's portfolio,  before net items. From time to time
Eagle has experienced more rapid loan prepayments,  primarily during periods of,
and as a result of, a rapid decline in mortgage interest rates.

         Federally  chartered   institutions,   such  as  Eagle  Federal,   have
substantial  flexibility in structuring the terms of mortgage loans to adjust to
changes in interest  rates.  Federal  regulations  permit  mortgage  loans to be
written for varying  maturities and at adjustable and fixed interest rates.  See
"Lending Activities -- Purchase and Sale of Loans and Loan Servicing."

         Eagle currently offers a variety of adjustable rate loans including,  a
one-year  adjustable  rate loan with a limit on the maximum  change per interest
rate adjustment of 2% and several  adjustable loans that have fixed rates for an
initial  period,  from 3 to 10 years,  and  adjust  annually  thereafter  with a
maximum  interest  rate change of 2% per year. In addition,  Eagle's  adjustable
rate loans have limits on the total interest rate adjustments during the life of
the loan ranging from 4.0% to 6.0%  depending  upon the initial rate and type of
the loan. Interest rate adjustments  currently are based on changes in the rates
on  comparable  maturity  U.S.  Treasury  securities.  There  are no  prepayment
penalties for any of these adjustable rate loans.  Origination fees ranging from
no fees to 2% of the loan amount are charged on such loans.

                                       6
<PAGE>



         Although  adjustable  rate  mortgage  loans allow Eagle to increase the
sensitivity of its asset base to changes in interest  rates,  the extent of this
interest-sensitivity  is  limited  by  the  interest rate  "caps"  contained  in
adjustable-rate  loans. The terms of such loans may also increase the likelihood
of delinquencies  in periods of high interest rates,  particularly if such loans
are originated at discounted  interest rates.  Under regulations  adopted by the
Federal Reserve Board,  although no specific interest rate limit is set, lenders
are required to impose interest rate caps on all adjustable-rate  mortgage loans
and all  dwelling-secured  consumer  loans,  including home equity loans,  which
provide for interest rate adjustments.

         The rates offered on adjustable  rate mortgage  loans are set at levels
that are intended to be  competitive  in the market areas served by Eagle and to
produce a yield that  provides an acceptable  first-year  profit margin over the
cost of funds.  Eagle from time to time  offers  mortgage  loans at an  initial,
discounted interest rate (i.e., a rate which is less than the then-current index
plus margin) until the first loan repricing  period,  at which time the interest
rate  generally  is adjusted  to equal the index plus  margin.  Eagle  generally
qualifies  the  borrower  at the rate which  would be in effect  after one year,
assuming the maximum upward adjustment.

         Most of the fixed rate  mortgage  loans  originated  by Eagle include a
"due-on-sale"  clause,  which is a provision giving Eagle the right to declare a
loan  immediately  due and payable in the event,  among other  things,  that the
borrower  sells or  otherwise  disposes  of the  real  property  subject  to the
mortgage and the loan is not repaid.  Due-on-sale clauses are an important means
of increasing  the rate on existing  fixed rate mortgage loans during periods of
rising interest rates, and Eagle actively enforces such clauses.

         Multi-family  and  Commercial  Mortgage  Loans.  Eagle also makes loans
secured by mortgages on multi-family and commercial properties. At September 30,
1996,  these loans totaled  $55.0  million or 6.7% of the total loan  portfolio,
before net items.  Multi-family  loans  generally are  originated on a one-year,
adjustable rate basis.  Commercial real estate loans, secured by properties such
as office buildings,  are a mix of one-year or three-year  adjustable rate loans
or fixed rate loans,  and the interest rates and fees are often  negotiated with
the borrower.

         Loans secured by commercial  and  multi-family  properties  can involve
greater  risks  than  single-family  residential  mortgage  lending.  Such loans
generally  are  substantially  larger than  single-family  residential  mortgage
loans, and repayment of the loan generally depends on cash flow generated by the
property.  Because the payment  experience  on loans secured by such property is
often dependent on successful  operation or management of the security property,
repayment of the loan may be subject to a greater  extent to adverse  conditions
in the real estate market or the economy generally than is the case with one- to
four-family  residential  mortgage loans. The commercial real estate business is
cyclical and subject to downturns,  overbuilding and local economic  conditions.
Eagle seeks to limit these risks in a variety of ways, including,  among others,
limiting  the  size  of its  commercial  and  multi-family  real  estate  loans,
generally  requiring a personal guaranty from the borrower,  limiting such loans
to a lower maximum  loan-to-value ratio and generally lending on the security of
property  located within its market areas.  At September 30, 1996,  multi-family
and commercial real estate loans comprised 1.9% and 4.8%,  respectively,  of the
total loan portfolio, before net items, compared to 2.3% and 2.1%, respectively,
at September 30, 1995.

         Construction  Loans. Eagle makes a limited number of construction loans
to individuals  and, to a lesser extent,  to  professional  builders who wish to
construct  one-to  four-family  residential  properties,  either  as  a  primary
residence or for investment or resale.  The construction loans made by Eagle are
typically construction/permanent loans that automatically convert to a permanent
first mortgage loan at the end of the construction phase. At September 30, 1996,
construction  loans totaled $14.4 million or 1.7% of the total loan portfolio of
Eagle,  before net items,  compared to $12.0  million or 1.7% at  September  30,
1995.

         Consumer  Loans.  At September 30, 1995, the consumer loan portfolio of
Eagle included loans secured by deposit  accounts,  home equity lines of credit,
second  mortgages,  education,  personal and automobile  loans and totaled $73.1
million or 8.9% of the total loan portfolio of Eagle before net items.  The home
equity loans and second mortgage loans are secured by the equity in a borrower's
home.


                                       7
<PAGE>



         Loan Originations.  Residential loan originations principally come from
three separate sources. Originations generated through the retail branch network
accounts  for  approximately  30% of total  originations.  Traditional  mortgage
originators that cover the Bank's market area account for  approximately  40% of
total originations.  In addition,  Eagle also obtains approximately 30% of total
originations   through   agreements  with   independent   mortgage   brokers  in
Connecticut.  Multi-family  and  commercial  real estate loan  originations  are
currently  obtained  primarily from direct  contacts with Eagle.  Eagle seeks to
attract consumer loans by direct advertising and solicitation of its customers.

         Loan originations  (excluding  purchased loans and participations) were
$236.1 million for the year ended  September 30, 1996 compared to $155.7 million
in fiscal 1995.  Residential  mortgage  loan  originations  accounted for $193.1
million of the total  originations in fiscal 1996. Of the total,  $114.0 million
or 59%,  represented  originations of fixed rate residential mortgage loans with
the  remaining   $79.1  million   representing  a  variety  of  adjustable  rate
residential  loan  products.  The trend of  originations  changed  significantly
during the year, in the first half of fiscal 1996 fixed rate  residential  loans
were more  popular  due to a lower  interest  rate  environment  that  motivated
borrowers to refinance their existing mortgage loans into lower rate residential
mortgage  loans.  During the second half of fiscal 1996, as interest rates moved
higher,  fixed rate  residential  mortgage  loans  declined  in  popularity  and
adjustable  rate  residential  mortgage  loans  became  the  product  of choice.
Approximately  67% of the fixed rate residential  mortgage loans were originated
in  the  first  six  months  of  fiscal  1996,  while  approximately  63% of the
adjustable  rate  residential  mortgage  loans were  originated  in the last six
months of fiscal 1996.

         During  the  year  ended  September  30,  1996,  Eagle  emphasized  the
origination  of fixed rate bi-weekly  residential  mortgage loans for a total of
$45.8 million compared to $5.0 million in 1995. The fiscal 1996 amount accounted
for 40% of the total fixed rate residential mortgage loans originated during the
year. The largest  category of the  adjustable  rate  residential  mortgage loan
originations were 5-1 year product  representing $41.7 million, or 52.7%, of the
total adjustable rate originations.  Adjustable rate loans that reprice annually
accounted  for only $8.0  million  of the 1996  originations  compared  to $17.5
million in 1995.

         Eagle makes single-family  conventional first mortgage loans with up to
a 95%  loan-to-value  ratio.  In the case of loans  with a higher  loan-to-value
ratio than 80%, the policy of Eagle is to require private mortgage insurance for
a specified percentage of the amount of the outstanding principal balance of the
loan. Eagle makes multi-family and commercial real estate loans with up to a 75%
loan-to-value  ratio. See "Lending  Activities -- Purchase and Sale of Loans and
Loan Servicing."

         All  property  securing  real  estate  loans  originated  by  Eagle  is
appraised by one of several  professionally  qualified  appraisers who have been
pre-approved by Eagle. For all real estate loans, Eagle requires the borrower to
obtain fire and  extended  casualty  insurance  and,  where  appropriate,  flood
insurance and loss of rents coverage. Eagle also requires either title insurance
or a title opinion from an attorney experienced with title matters.

         Eagle issues 30 to 90-day commitments to prospective  borrowers to make
loans subject to various conditions.  Loan commitments  generally are issued for
long-term  loans to finance  residential  properties  and for  construction  and
combined  construction/permanent  loans secured by multi-family  residential and
commercial   properties.   With  respect  to  adjustable   rate,   single-family
residential  loans,  it is the practice of Eagle to make  commitments to lend at
the rate of interest and the loan  origination fee quoted to the borrower at the
time of  application.  The proportion of the total value of commitments  derived
from any  particular  category  of loan  varies from time to time and depends on
market  conditions.  At September 30, 1996 and 1995,  loan  commitments of $66.9
million and $49.4 million, respectively, were outstanding. These amounts include
approximately $31.9 million and $23.5 million,  respectively, in unadvanced home
equity credit lines.

         Eagle encounters certain environmental risks in its lending activities.
Under federal and state  environmental  laws,  lenders may become liable for the
costs of cleaning up hazardous materials found on security  properties.  Certain
states may also impose  liens with higher  priorities  than first  mortgages  on
properties  to  recover  funds  used in such  efforts.  Although  the  foregoing
environmental  risks are more usually  associated with industrial and commercial
loans,  environmental  risks may be substantial  for residential  lenders,  like
Eagle  Federal,  since  environmental  contamination  may  render  the  security
property unsuitable for residential use. In addition, the value of residential

                                       8
<PAGE>



properties  may  become  substantially  diminished  by  contamination  of nearby
properties.  In accordance with the guidelines of FNMA and FHLMC, appraisals for
single-family   homes  on  which  Eagle  Federal   lends  include   comments  on
environmental influences and conditions.  Eagle attempts to control its exposure
to  environmental  risks with respect to loans  secured by larger  properties by
training its underwriters to recognize the signs of environmental  problems when
they inspect  properties;  by requiring  borrowers to represent and warrant that
properties securing loans do not contain hazardous waste, asbestos or other such
substances;  by requiring borrowers to indemnify the lending bank, with personal
recourse,  against environmental losses and; by obtaining  environmental reviews
and tests on all loans secured by nonresidential properties. No assurance can be
given, however, that the value of properties securing loans in Eagle's portfolio
will not be adversely  affected by the  presence of hazardous  materials or that
future  changes in federal or state laws will not increase  Eagle's  exposure to
liability for environmental cleanup.

         Purchase and Sale of Loans and Loan Servicing.  From time to time Eagle
may  purchase  mortgage  loans and loan  participations  secured  by  properties
outside of Connecticut,  however no significant activity has occurred in several
years.

         In addition to servicing its own loans,  Eagle  services loans owned by
others,  which  loans had a balance  at  September  30,  1996 and 1995 of $242.6
million and $234.8 million,  respectively.  Servicing fees have not historically
been a  significant  source of income for Eagle but will become an area of focus
for increasing revenue in the future.

         During  fiscal  1995,  Eagle  completed  the  securitization  of $154.2
million  of  fixed  rate  loans  into  FHLMC   mortgage-backed   securities  and
subsequently sold $95 million of the securities. The remainder of the securities
were sold in the first  quarter of fiscal  1996.  This  securitization  and sale
allowed the Company to eliminate a portion of the  long-term  interest rate risk
inherent in the balance  sheet by  replacing  fixed rate assets with  adjustable
rate assets. Eagle sold $10.0 million of residential,  fixed rate mortgage loans
to FHLMC in fiscal 1994.

         During  fiscal 1996,  Eagle  changed its approach to holding fixed rate
residential  mortgage loans currently being originated in order to better manage
the  interest  rate risk  inherent in the balance  sheet.  Prior to 1996,  Eagle
retained all fixed rate  originations  in portfolio,  contributing to the Bank's
level of interest rate risk in rising rate  environments.  In order to eliminate
placing  additional  risk on the  balance  sheet,  Eagle began  identifying  the
majority of its newly originated  fixed rate residential  mortgage loans as held
for sale and then selling the loans into the secondary  market.  This  strategy,
along with the  securitization  of mortgage  loans in fiscal 1995 and  resultant
sale of the  securities  created,  has improved  and should  continue to improve
Eagle's  ability to manage its interest rate risk. The servicing  created should
also increase other income in the future.

                                       9
<PAGE>




         Eagle  has  selected  the  following  types of fixed  rate  residential
mortgage  originations  for  identification  as held for sale:  all 30-year term
loans and 15-year term loans based on monthly pay  amortization.  Mortgage loans
with  15-year  terms but based on  bi-weekly  pay  amortization  are retained in
portfolio as the expected life of these loans falls within the tolerance  levels
established  by  the  Bank's   Asset/Liability   Committee  (the  "ALCO").   The
identification  of mortgage  loans as held for sale is subject to future  change
based on assessments by ALCO regarding the acceptable  level of risk that may be
maintained on the balance sheet.

         For the year ended  September  30, 1996,  Eagle sold or  securitized  a
total of $35.6  million  in  mortgage  loans and  transferred  $21.9  million of
mortgage loans  originally  classified as held for sale back into the portfolio.
The mortgage loans were  transferred at their estimated market value at the date
of transfer and the transfer was primarily the result of the determination  that
the mortgage loans,  after initially being classified as held for sale, were not
underwritten to secondary market standards.  As a result of the mortgage banking
activities,  Eagle recorded a loss of $1.5 million for the year ended  September
30, 1996. The loss is principally the result of a decline in the market value of
the loans in the second quarter of fiscal 1996.



                                       10
<PAGE>



         The table below shows Eagle's  mortgage loan activities for the periods
indicated.
<TABLE>
<CAPTION>

                                                                           Years Ended September 30,
                                                           ---------------------------------------------------------
                                                                    1996                1995               1994
                                                                -------------       -------------      -------------
                                                                                (In thousands)
<S>                                                        <C>                <C>                 <C>          
MORTGAGE LOAN ORIGINATIONS AND PURCHASES:
  Loan originations:
    Permanent:
     1-4 family units                                      $       145,515    $         84,901    $     138,779
     Multi-family units                                                 43                 729              316
     Commercial real estate                                          9,889                 643               --
     Land                                                            4,546               2,502            2,836
                                                                -------------       -------------      -------------
     Total permanent loans                                         159,993              88,775          141,931
                                                                -------------       -------------      -------------

     Refinancing*                                                   23,748              23,806           42,705
                                                                -------------       -------------      -------------

     Construction:
      1-4 family units                                              32,434              27,086           19,166
      Non-Residential                                                   --                  --              500
                                                                -------------       -------------      -------------
        Total construction loans                                    32,434              27,086           19,666
                                                                -------------       -------------      -------------

       Total mortgage loan originations                            216,175             139,667          204,302
                                                                -------------       -------------      -------------

  Loan purchases:
    Participations                                                      --                 130            2,507
    Whole loans                                                         --                  --               --
    Loans purchased through acquisition                             22,233                  --           60,180
                                                                -------------       -------------      -------------
      Total loan purchases                                          22,233                 130           62,687
                                                                -------------       -------------      -------------

      Total mortgage loan originations and purchases               238,408             139,797          266,989
                                                                -------------       -------------      -------------

MORTGAGE LOAN SALES, SECURITIZATION AND PRINCIPAL
   REPAYMENTS:
    Loan sales                                                      18,732                  --           10,009
    Loan securitization                                             16,971             154,194               --
    Principal repayments                                           112,542              82,945          119,576
                                                                -------------       -------------      -------------

    Total mortgage loan sales, securitization and
      principal repayments                                         148,245             237,139          129,585
                                                                -------------       -------------      -------------

Increase (decrease) in mortgage loans receivable (before
net items)                                                 $        90,163    $        (97,342)   $     137,404
                                                                =============       =============      =============
</TABLE>

*    Consists of loans originated in connection with the refinancing of existing
     loans  from  Eagle.  The  corresponding  pay-off  of the  original  loan is
     included in the table under "principal repayments."

                                       11
<PAGE>



         The following table shows the consumer loan activities of Eagle for the
periods indicated.
<TABLE>
<CAPTION>
                                                                  Years Ended September 30,
                                                  ---------------------------------------------------------
                                                            1996               1995               1994
                                                        -------------      -------------      -------------
                                                                       (In thousands)

<S>                                               <C>                 <C>                <C>         
LOAN ORIGINATIONS:
  Secured by deposits                             $        2,770      $       3,599      $      2,219
  Home improvement                                           249                283               236
  Home equity                                             14,874              9,824            11,510
  Education                                                   --                 --                 6
  Automobile and personal                                  2,282              2,351             1,631
                                                        -------------      -------------      -------------
    Total originations                                    20,175             16,057            15,602
  Loan purchases through acquisition                      13,169                 --            20,596
                                                        -------------      -------------      -------------
    Total loan originations and purchases                 33,344             16,057            36,198
                                                        -------------      -------------      -------------

LOAN SALES AND PRINCIPAL REPAYMENTS:
  Principal repayments                                    25,761             17,275            18,149
  Loan sales                                                 999                 --                --
                                                        -------------      -------------      -------------
  Total loan sales and principal repayments               26,760             17,275            18,149
                                                        -------------      -------------      -------------

Increase (decrease) in consumer loans             $        6,584      $      (1,218)     $     18,049
                                                        =============      =============      =============
</TABLE>

         Fee  Income  from  Lending   Activities.   Currently,   Eagle   charges
origination fees ranging from no fee to 2% of the amount of the loan,  depending
on the type of loan  involved.  Higher  fees  may be  charged  for  construction
financing or for loans secured by properties which are not owner-occupied.  Fees
for loan  modifications,  late payments,  changes of property  ownership and for
related  miscellaneous  services are also  charged.  Income  realized from these
activities  can  vary  significantly  with the  volume  and type of loans in the
portfolio and in response to competitive factors.

         Loan  origination  fees and certain direct loan  origination  costs are
being  deferred  and the net amount  amortized as an  adjustment  to the related
loan's yield.  This amount is generally  amortized over the contractual  life of
the related  loans.  At September 30, 1996,  Eagle had deferred net loan fees of
$1.3 million.

         Usury  Limitations.  Federal  legislation  first  enacted  in 1980  has
preempted  all state usury laws  concerning  residential  first  mortgage  loans
unless the state  legislature acted to override the preemption by April 1, 1983.
The  Connecticut   State  Legislature  did  not  act  to  override  the  federal
preemption. Connecticut law imposes no ceiling on interest rates on the types of
loans currently originated by Eagle Federal.

         NON-PERFORMING ASSETS

         All loans  generally are placed on a  non-accrual  basis when a loan is
contractually delinquent for more than three complete calendar months, when full
collection is in doubt or when legal action has been instituted.  Management may
elect to  continue  the  accrual of interest  when the  estimated  fair value of
collateral is sufficient to cover the principal balance and accrued interest.

         At September  30, 1996,  the  Company's  total  non-performing  assets,
including non-performing (or non-accrual) loans and real estate owned, was $12.3
million or 0.88% of total  assets.  This  compares to  non-performing  assets of
$13.6  million,  or 1.10% of total  assets,  at  September  30,  1995 and  $12.3
million, or 1.15% of total assets, at September 30, 1994.

                                       12
<PAGE>



         The  following   table  sets  forth   information   regarding   Eagle's
non-performing assets at the dates indicated.
<TABLE>
<CAPTION>

                                                                           At September 30,
                                             ------------------------------------------------------------------------------
                                                  1996            1995            1994            1993            1992
                                                  ----------      ----------      ---------       ---------       ---------
                                                                            (in thousands)
<S>                                          <C>             <C>             <C>            <C>             <C>          
Non-performing Loans:
  Mortgage loans:
    One-to-four family residential           $      6,893    $      9,419    $       6,596  $       5,407   $       2,801
    Multi-family and commercial                     1,031             597              169            196             513
  Non-mortgage commercial loans                       261               -                -              -               -
  Home equity lines of credit and
    second mortgages                                1,047           1,094            1,227            871             633
  Other consumer loans                                 47              20               17             18              49
Real estate owned                                   3,050           2,439            4,310          5,471           6,403
                                                  ----------      ----------      ---------       ---------       ---------

Total                                        $     12,329    $     13,569    $      12,319  $      11,963   $      10,399
                                                  ==========      ==========      =========       =========       =========

Impaired loans:
  Performing                                 $      4,799    $          -    $           -  $           -   $           -
  Non-performing                                    1,984               -                -              -               -
                                                  ==========      ==========      =========       =========       =========

  Non-performing assets to loans
   receivable, net and real estate owned             1.51%           1.89%           1.51%           1.81%           1.81%
  Non-performing assets to total assets              0.88%           1.10%           1.15%           1.51%           1.38%
  Net charge-offs to average loans
   receivable, net (for the period)                  0.35%           0.28%           0.20%           0.11%           0.19%
</TABLE>

         Non-performing loans decreased $1.9 million, or 17%, from September 30,
1995 to September 30, 1996. This decrease can be attributed to several  factors,
although two primary factors are significant  contributors to the decrease.  The
primary  factors are an increase  in  foreclosures  during the year and a higher
level of charge-offs  compared to prior years. Loans foreclosed into real estate
owned  totaled $4.3 million for the year ended  September  30, 1996  compared to
$2.2 million for fiscal 1995. Loan  charge-offs  increased 15.6% to $2.9 million
during fiscal 1996 from $2.5 million during fiscal 1995.

         As a result of  managing  non-performing  loans,  management  expects a
number of the  non-performing  loans to become  real estate  owned.  The overall
level of real  estate  owned  will  depend on the  number of loans  which can be
resolved prior to foreclosure and the ability of Eagle to sell properties  which
it owns. The Company strives to aggressively market properties and has been able
to reduce the level of real estate  owned by more then 50% since  September  30,
1992.

         With  respect  to  mortgage  loans,  when a  borrower  fails  to make a
required  payment by the 15th day after payment is due,  Eagle attempts to cause
the deficiency to be cured by corresponding with the borrower. If the deficiency
continues,  Eagle  corresponds  further with the borrower and, through telephone
calls  and  letters,   attempts  to  determine  the  reason  for  and  cure  the
delinquency.  If the  deficiency  cannot be cured,  Eagle  generally  institutes
appropriate legal action through an approved  collection  attorney.  Real estate
acquired through  foreclosure or by deed in lieu of foreclosure is placed on the
books at the lower of the carrying value of the loan or the fair market value of
the real  estate  based  upon a  current  appraisal,  less  selling  costs.  Any
reduction  below the value  previously  recorded on the books is charged against
income or  against a  valuation  reserve.  Any loss in excess of the  reserve is
charged against income.  With respect to consumer loans,  the borrower  receives
correspondence  from  Eagle  after  the loan is 10 to 15 days  past  due.  If it
appears,  after further  communications with the borrower,  that the delinquency
cannot be cured, legal action is instituted. These procedures may be accelerated
further in certain cases, such as chronic delinquencies or unsecured loans.

                                       13
<PAGE>



         In addition to non-performing loans, Eagle has $4.0 million of loans at
September 30, 1996 which were  classified as  restructured  loans.  Restructured
loans  are the  result  of term  modifications  with  borrowers  that  meet  the
following criteria; loan terms,  particularly interest rate, that are consistent
with those terms on newly originated loans,  standard underwriting criteria such
as income  guidelines and loan-to-value  ratios and consistent,  on-time monthly
payments.  Based  on  the  borrowers  meeting  the  above  criteria,  management
considers it appropriate to continue the accrual of interest on these loans. The
majority of these borrowers have had short-term  financial  difficulties  and do
not represent  chronically  delinquent or  slow-paying  customers.  During 1996,
Eagle restructured loans totaling $4.2 million.

         Beginning in 1996,  Eagle began reporting  impaired loans in accordance
with the  requirements  of SFAS No.  114.  Loans are  considered  impaired  when
management  has  concluded  that it is probable  that the Bank will be unable to
collect all amounts due in  accordance  with the  contractual  terms of the loan
agreement.  All amounts due include both principal and interest. In addition all
restructured loans that have been modified have been classified as impaired.  At
September 30, 1996,  impaired loans totaled $6.8 million,  $4.8 million of which
were  classified  as  performing  and $2.0 million of which were  classified  as
non-performing.   The   non-performing   impaired  loans  are  included  in  the
non-performing loan total of $9.3 million.

         The Company's  non-performing  assets are predominately  residential in
nature  with  $12.4  million  secured  by  one-to-four  residential  properties,
including  $1.1 million of  non-performing  home equity loans,  and $1.2 million
secured by multi-family or commercial real estate.

ALLOWANCE FOR LOAN LOSSES

         At September 30, 1996,  Eagle's  allowance for loan losses totaled $8.6
million,  compared to $7.5  million at September  30, 1995,  and $8.3 million at
September 30, 1994.  Eagle added $2.0 million in  provisions  for loan losses to
the allowance during fiscal 1996 compared to provisions of $1.5 million and $1.2
million during the years ended September 30, 1995 and 1994, respectively.

                                       14
<PAGE>




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

<TABLE>
<CAPTION>
                                                                      Years Ended September 30,
                                               -------------------------------------------------------------------------
                                                 1996            1995           1994            1993            1992
                                               ---------       ---------      ----------      ----------      ----------
                                                                           (in thousands)
<S>                                       <C>            <C>             <C>             <C>             <C>         
Balance at beginning of period            $      7,457   $       8,311   $      5,005    $      4,011    $      1,544

Charge-offs:
  One-to-four family mortgage loans             (2,077)         (1,729)        (1,033)           (271)           (891)
  Multi-family, commercial and
   land development loans                         (491)           (381)          (405)           (521)           (249)
  Consumer and home equity loans                  (295)           (366)           (68)           (166)            (10)
                                               ---------       ---------      ----------      ----------      ----------
                                                (2,863)         (2,476)        (1,506)           (958)         (1,150)
                                               ---------       ---------      ----------      ----------      ----------

Recoveries:
  One-to-four family mortgage loans                 83              92            107             224             192
  Multi-family, commercial and land
    development loans                                -              29              3               7              17
  Consumer and home equity loans                     3               1              2              13               3
                                               ---------       ---------      ----------      ----------      ----------
                                                    86             122            112             244             212
                                               ---------       ---------      ----------      ----------      ----------
    Net charge-offs                             (2,777)         (2,354)        (1,394)           (714)           (938)

Allowance associated with purchases              1,871               -          3,500               -           1,759
Provision for loan losses                        2,041           1,500          1,200           1,708           1,646
                                               ---------       ---------      ----------      ----------      ----------

Balance at end of period                  $      8,592   $       7,457   $      8,311    $      5,005    $      4,011
                                               =========       =========      ==========      ==========      ==========

Ratio of net charge-offs to
average loans outstanding, net                 0.35%           0.28%          0.20%           0.11%           0.19%
</TABLE>

         At  September  30, 1996,  Eagle had $8.6 million in loan loss  reserves
established  for commercial real estate  mortgage  loans,  residential  mortgage
loans,  commercial  loans and consumer  loans.  This reserve is  maintained at a
level  believed  adequate by  management to absorb  probable  losses in the loan
portfolio.  Management's  determination  of the  adequacy of the  allowance at a
particular  time is based on an  evaluation  of the  portfolio,  past  loan loss
experience,  then-current economic conditions, volume, growth and composition of
the loan portfolio,  and other relevant  factors.  The allowance is increased by
provisions for loan losses charged against income.

         Management  monitors the adequacy of the  allowance for loan losses and
periodically  makes  additions in the form of  provisions  for loan losses based
upon an ongoing assessment of the loan portfolio.  These provisions are based on
an evaluation of the loan portfolio,  past loan loss experience,  current market
and economic conditions,  volume,  growth and composition of the loan portfolio,
and other relevant  factors.  The provisions are computed  quarterly  based on a
review of the loan portfolio. The additional $1.9 million, $3.5 million and $1.8
million  of   allowance   for  loan  losses  that  were   recorded  as  part  of
Fleet/Shawmut, Bank of Hartford and Danbury Federal transactions,  respectively,
were  based  on   management's   evaluation  of  the  loans  acquired  in  these
transactions. Such evaluation included an analysis of the loss of all delinquent
loans  as well as the  risk of the  remaining  loans  acquired.  The  additional
allowances were accounted for as purchase accounting adjustments to the premiums
paid by  Eagle  in the  Fleet/Shawmut,  Bank of  Hartford  and  Danbury  Federal
transactions.


                                       15
<PAGE>



         The following  table  presents an  allocation of Eagle's  allowance for
loan losses by loan  category and presents the percent of each loan  category to
the total loan portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                     September 30,
                                         1996              1995             1994              1993             1992
                                      -----------       -----------      -----------       -----------      ------------
                                                                     (in thousands)
<S>                              <C>              <C>               <C>              <C>               <C>          
Balance at end of period
applicable to:                   $       4,915    $       5,581     $      6,231     $        4,234    $       3,438
  1-4 family mortgage loans
                                            82.6%            85.3%            86.7%              87.2%            85.7%
  Multi-family, commercial
  real estate and land           $       2,345    $         927     $        803     $          492    $         319
   development loans
                                             7.7%             5.3%             4.9%               5.3%             5.7%
  Consumer and home equity       $       1,229    $         890     $      1,277     $          279    $         254
  loans
                                             8.9%             9.3%             8.4%               7.5%             8.6%
  Commercial loans               $         103    $          59                -                  -                -
                                             0.8%             0.1%             -                  -                -
                                      -----------       -----------      -----------       -----------      ------------
Total allowance for loan losses  $       8,592    $       7,457     $      8,311     $        5,005    $       4,011
                                      ===========       ===========      ===========       ===========      ============
</TABLE>


         The ratio of allowance for loan losses to non-performing loans was 93%,
67% and 104% at September  30, 1996,  September 30, 1995 and September 30, 1994,
respectively.  This  coverage  ratio  will vary from time to time based upon the
composition  of, and  management's  analysis  of the risk  elements  in the loan
portfolio,  as well as the composition of problem loans.  The allowance for loan
losses is not based on a percentage of  non-performing  loans,  but on the total
portfolio  classified by risk group plus estimated losses on individual  problem
loans.  The  increase  in 1996 in the  ratio of  allowance  for loan  losses  to
non-performing loans is due to additions to the allowance of $3.9 million.

         The following table sets forth the amount of accruing loans  delinquent
60-89  days,  the amount of  non-accrual  loans,  the  balance of the  Company's
allowance for loan losses and the coverage  ratio of such allowance to the total
of  loans  at the  dates  indicated.  
<TABLE>
<CAPTION>
                                                                Years Ended September 30,
                                                       1996                  1995                  1994
                                                       ----                  ----                  ----
                                                                      (in thousands)
<S>                                          <C>                   <C>                   <C>           
Accruing loans delinquent 60-89 days         $          1,521      $          1,211      $        1,480
Nonaccrual loans                                        9,279                11,130               8,009
                                                  ----------------      ----------------      ----------------
    Total                                    $         10,800      $         12,341      $        9,489
                                                  ================      ================      ================

Allowance for Loan losses                    $          8,592      $          7,457      $        8,311
                                                  ================      ================      ================

Coverage ratio                                             79.6%                 60.4%               87.6%
</TABLE>

         Various regulatory  agencies,  as an integral part of their examination
process,  periodically  review the Bank's allowance for losses on loans and real
estate owned.  Such agencies may require the Bank to recognize  additions to the
allowances  based on their  judgments  of  information  available to them at the
examination.  The OTS completed a regularly  scheduled  examination  of the Bank
during 1995 and no changes to the  allowance  for loan  losses were  required at
that time.

         At  September  30, 1996,  Eagle had $6.9  million of potential  problem
loans  with  $3.5  million  classified  as  special  mention  and  $3.4  million
classified as watch. In aggregate the appraised  value of the property  securing
these loans totaled $7.9 million at September 30, 1996.  Commercial  real estate
and land loans comprised $2.8 million of the total

                                       16
<PAGE>



         INVESTMENT ACTIVITIES

         Federally  chartered  savings  institutions have authority to invest in
various types of liquid assets,  including  United States Treasury  obligations,
securities of federal  agencies,  certificates  of deposit of federally  insured
banks and savings institutions,  bankers' acceptances and federal funds. Subject
to various  restrictions,  federally  chartered  savings  institutions  may also
invest a portion of their assets in commercial paper, corporate debt securities,
and mutual  funds  whose  assets  conform to the  investments  that a  federally
chartered savings institution is otherwise authorized to make directly.  Federal
laws and regulations also require savings institutions to maintain liquid assets
at minimum  levels  which  vary from time to time.  See  "Regulation  -- Savings
Institution Regulation -- Liquidity."

         Eagle, as a Delaware  corporation,  has authority to invest in any type
of  investment  permitted  under  Delaware  law. As a savings  and loan  holding
company,   however,  Eagle's  investments  are  subject  to  certain  regulatory
restrictions  described  under  "Regulation -- Savings and Loan Holding  Company
Regulation."  Eagle Federal maintains an investment  portfolio that provides not
only a source of income but also a source of liquidity  to meet lending  demands
and fluctuations in deposit flows. The relative mix of investment securities and
loans in these  investment  portfolios is dependent upon  management's  judgment
from  time to time as to the  attractiveness  of  yields  available  on loans as
compared to investment  securities.  Neither Eagle,  nor Eagle Federal invest in
below-investment grade corporate bonds and notes.

         The  Company's  total  holdings  of   mortgage-backed   and  investment
securities increased to $464.6 million at September 30, 1996 from $412.1 million
at September 30, 1995. The Bank's portfolio is almost entirely made up of agency
issued mortgage-backed  securities and collateralized mortgage obligations which
collectively  total  $448.0  million,  or 96.4%  of the  total  portfolio.  This
represents an increase from $353.1 million at September 30, 1995.  Agency issued
mortgage-backed  securities  decreased from $299.8 million at September 30, 1995
to  $225.5  million  at  September  30,  1996  while   collateralized   mortgage
obligations increased from $53.3 million at September 30, 1995 to $222.5 million
at September 30, 1996.

         The execution of two separate  strategies were principally  responsible
for the shift in the balances of each respective investment category.  The first
strategy,  which was  implemented  during  the  quarter  ended  March 31,  1996,
involved the sale of  approximately  $100 million of the Bank's lowest  yielding
securities,  of which 67.9% were agency issued  mortgage-backed  securities  and
73.6% were adjustable or floating rate  securities.  The proceeds were primarily
reinvested in fixed rate, short average life, approximately three to four years,
collateralized  mortgage obligations.  This transaction was estimated to improve
the yield on the $100 million of securities  traded by  approximately  150 basis
points on average and resulted in a loss recorded in the consolidated statements
of income of $1.2 million.  The second strategy was to supplement  balance sheet
growth  derived from the loan  portfolio  with periodic  purchases of securities
throughout  the year.  The majority of these  purchases  were fixed rate,  short
average life collateralized mortgage obligations.

         The  Company's  security  portfolio at September 30, 1996 was comprised
primarily of mortgage-backed securities and collateralized mortgage obligations.
Mortgage-backed  securities  are  investments  secured by pools of fixed rate or
adjustable  rate  mortgage  loans.  Agency  issued  mortgage-backed   securities
represent  $225.5,  or 48.5%,  of the  security  portfolio  with $139.2  million
secured by pools of adjustable  rate loans and $86.3 million secured by pools of
fixed rate  loans.  The  payments of interest  and  principal  on such loans are
passed  through to the securities  holders after  deducting a servicing fee. The
collateralized  mortgage obligation portion of the investment  portfolio,  which
totals $222.5  million,  contains no derivative  investment  securities  such as
interest only  tranches,  principal  only  tranches or strips.  There were $38.4
million of  adjustable  or floating  rate  collateralized  mortgage  obligations
outstanding   at  September  30,  1996.  The   mortgage-backed   securities  and
collateralized  mortgage  obligations held by Eagle are subject to interest rate
and prepayment risks customarily  associated with such securities.  The weighted
average  life  of  mortgage-backed   securities  and   collateralized   mortgage
obligations will differ from contractual maturities,  depending upon the rate of
prepayments.  Borrowers on the underlying mortgages may have the right to prepay
their loans with or without prepayment  penalties.  In a declining interest rate
environment,  more borrowers than would  otherwise be anticipated  may choose to
prepay their loans in order to refinance the loans at lower rates.  As a result,
the actual  yield on  mortgage-backed  securities  may differ from the  expected
yields based upon prepayment experience.

                                       17
<PAGE>




         At September 30, 1996, the following details  investments in any issuer
where the aggregate book value exceeded 10% of Eagle's shareholder's equity.
<TABLE>
<CAPTION>
                                                           Aggregate                    Aggregate
                                                           Book Value                   Market Value
                                                           ----------------------       ----------------------
                                                                          (in thousands)
<S>                                                   <C>                         <C>                  
FHLMC                                                 $            133,111        $             133,114
FNMA                                                               106,242                      106,530
GNMA                                                                43,079                       42,111
G.E.  Capital Mortgage Services, Inc.                               40,203                       39,824
Prudential Home Mortgage Securities                                 29,932                       29,268
Residential Funding Mortgage Securities, Inc.                       25,321                       24,888
Structured Mortgage Asset Residential Trust                         20,642                       20,516
Chemical Mortgage Securities, Inc.                                  14,988                       15,081
Independent National Mortgage Corporation                           13,230                       13,111
PNC Mortgage Securities Corp.                                       10,145                       10,166
                                                           ----------------------       ----------------------
                                                      $            436,893        $             434,609
                                                           ======================       ======================
</TABLE>

         All securities  included above represent agency issued  mortgage-backed
securities or collateralized mortgage obligations.



                                       18
<PAGE>
         The   following   table   sets   forth  the   composition   of  Eagle's
mortgage-backed and investment portfolio at the dates indicated.
<TABLE>
<CAPTION>
                                                                At September 30,

                                            1996                      1995                        1994
                                   -----------------------   ------------------------    -----------------------
                                   Carrying        % of      Carrying        % of        Carrying        % of
                                    Value        Portfolio     Value       Portfolio      Value        Portfolio
                                   ---------     ---------   ----------    ----------    ---------     ---------
                                                                  (in thousands)
<S>                                <C>           <C>         <C>            <C>          <C>             <C>   
U.S. Treasury securities           $    4,960      1.1%      $    6,325       1.5%       $    12,834       7.0%
U.S. Government agency
  obligations                           7,012      1.5           22,001       5.4             14,018       7.7
Other bonds and notes                   2,468      0.5           13,001       3.2             23,040      12.6
Mutual fund and marketable
  equity  securities                        -        -           14,965       3.6             16,936       9.3
Mortgage-backed securities:
  Agency                              225,507     48.5          299,758      72.7             68,564      37.4
  Other                                 2,104      0.5            2,704       0.7                142       0.1
  Collateralized mortgage
     obligations                      222,509     47.9           53,323       2.9             47,357      25.9
                                     ---------   -------       ----------  ----------       ---------   --------
  Total carrying value of 
    portfolio                      $ 464,560     100%        $  412,077     100%         $   182,891     100%  
                                     =========   =======       ==========  ==========       =========   ========

  Total market value of portfolio  $ 464,480                 $  413,282                  $  179,388
                                     =========                 ==========                   =========
</TABLE>

         The   following   table   sets   forth  the   maturities   of   Eagle's
mortgage-backed and investment securities at September 30, 1996 and the weighted
average  yields  of  such  securities.  Expected  maturities  will  differ  from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations  with or  without  call  or  prepayment  penalties.  Mortgage-backed
securities and collateralized  mortgage  obligations are presented in accordance
with date of final maturity without  consideration  of scheduled amortization or
anticipated prepayments.
<TABLE>
<CAPTION>

                             Within One Year      One to Five Years    Five to 10 Years      After 10 Years                   Total 
                                      Weighted            Weighted             Weighted             Weighted                Weighted
                                      Average             Average              Average               Average                 Average
                             Amount   Yield       Amount   Yield       Amount   Yield        Amount   Yield       Amount      Yield 
                             -------- -------     ------- --------     ------- --------      ------- --------    --------    -------
                                                                       (In thousands)
<S>                        <C>           <C>      <C>        <C>    <C>           <C>     <C>          <C>      <C>         <C>
U.S. Treasury                                                                                                                       
  securities               $    -           -%    $  4,960   5.03%  $      -         -%   $       -       -%    $   4,960    5.03% 
U.S. Government      
  agency obligations            -           -        7,012   7.30          -         -            -       -         7,012    7.30  
Other bonds and notes           -           -        1,100   6.07        976      7.91          392    6.01         2,468    6.79  
Mortgage-backed securities:                                                                       
    Agency                      1        8.05       16,445   6.55      9,105      7.95%     199,956    7.05       225,507    7.05   
    Other                       -           -            -      -          -         -        2,104    7.73         2,104    7.73   
                                                                                                                                    
Collateralized mortgage                                                                                                             
   obligations                  -           -        1,103   6.52          -         -      221,406    7.06       222,509    7.05   
                             -------- -------       ------ ------    -------   --------     ------- --------     --------  ------   
Total                      $    1        8.05%    $ 30,620  6.46%  $  10,081      7.94%  $  423,858    7.05%  $  464,560    7.03%   
                             ======== =======       ====== ======    =======   ========     ======= ========    ========   ======   
</TABLE>                  

                                       19
<PAGE>



         SOURCES OF FUNDS

         General.  Deposits  are the  primary  source  of  funds  for use in the
lending and investment activities of Eagle. In addition,  funds are derived from
loan payments (including  interest,  amortization of principal and prepayments),
earnings on investments,  amortization of investments,  maturing investments and
FHL Bank  advances.  Historically,  Eagle  has not  relied on sales of loans and
investment  securities  as  sources  of funds.  Loan and  investment  repayments
fluctuate  significantly  based on  prevailing  interest  rates,  while  deposit
inflows and outflows are significantly  influenced by prevailing  interest rates
on alternative products and general economic conditions.  Borrowings may be used
on a short-term basis to compensate for reductions in normal sources of funds or
on a longer term basis to support expanded lending or investing activities.

         Deposits  increased to $1.06  billion at September 30, 1996 from $951.8
million at September  30, 1995,  an increase of $107.6  million or 11.3%.  Total
borrowings  increased by $66.2 million to $221.7  million at September 30, 1996.
Approximately  $68.2 million,  or 63.4%,  of the increase in deposits is the net
result of the Fleet/Shawmut and Union  transactions.  The increase in borrowings
is principally a result of funding  purchases  of securities  as part of Eagle's
balance sheet management strategies.

         Deposit  Activities.  Eagle has developed a variety of deposit products
ranging in maturity from demand-type accounts to certificates with maturities of
up to five years.  Deposits  are  primarily  derived from the areas in which the
offices of Eagle Federal are located.  Eagle does not actively  solicit deposits
outside the State of Connecticut or use brokers to obtain  deposits.  Eagle does
occasionally use premiums and promotions to attract deposits.

         The  deregulation of various federal  controls on insured  deposits has
allowed Eagle to be more  competitive in the acquisition and retention of funds,
but has also resulted in a more volatile cost of funds.  Federal  regulations no
longer  require  Eagle to impose  interest  penalties  for early  withdrawal  of
deposits.  However,  to assist in maintaining the maturity and cost structure of
their deposits,  Eagle continues to impose such penalties.  The deposit accounts
offered  by Eagle  are  reviewed  on a  systematic  basis in order to  determine
whether such accounts continue to meet  asset/liability  management goals. Eagle
attempts to control the flow of funds in its deposit  accounts  according to the
need for funds and the cost of alternative  sources of funds.  The flow of funds
is  controlled  primarily by the pricing of deposits,  which is  influenced to a
large extent by competitive  factors in the market area.  Interest rates paid by
Eagle generally are competitive with the rates offered by other  institutions in
its primary market areas.  Eagle has maintained a strong liquidity  position and
has generally  maintained  its deposit base,  but has not actively  competed for
deposits when funds were available from other sources or when its existing funds
were sufficient to meet their liquidity needs.

                                       20
<PAGE>



         The following table describes the deposit  accounts offered by Eagle at
September 30, 1996.

                                         Minimum                 Interest
                                         Deposit                   Rate
                                   --------------------      -----------------

Passbook                      $                 10                    2.00%
NOW                                            500                     .50
Money market accounts                        1,000                    2.50

Market-rate certificates:
  31 day                                     5,000                    2.96
  91 day                                       500                    3.93
  Six month                                    500                    4.65
  Six month liquid                             500                    4.89
  Nine month                                   500                    4.65
  Nine month bump                              500                    5.37
  Nine month liquid                            500                    5.13
  One Year                                     500                    5.13
  Fifteen month                                500                    5.13
  Fifteen month bump                           500                    5.60
  Eighteen month                               500                    5.08
  Two year                                     500                    5.03
  Two and one-half year                        500                    4.98
  Two and one-half year bump                   500                    5.84
  Three year                                   500                    5.37
  Three and one-half year                      500                    4.98
  Four year                                    500                    5.84
  Five year                                    500                    5.60

IRA certificates:
  One and one-half year
    (variable rate)                             50                    4.65
  One and one-half year
    (fixed rate)                               500                    5.08
  Four and one-half year
    (fixed rate)                               500                    5.84

         Eagle  prices its  deposits  to take  advantage  of  opportunities  for
profitable investment of the funds through regular lending activities,  and to a
lesser amount to encourage deposits in longer term accounts.  Interest rates are
primarily based on prevailing market conditions,  the need for funds and ability
to pay.

                                       21
<PAGE>



The  following  table sets forth the deposit  flows for Eagle during the periods
indicated.
<TABLE>
<CAPTION>
                                                                   Years Ended September 30,
                                               -----------------------------------------------------------
                                                    1996                  1995                1994
                                               ----------------      ----------------    ----------------
                                                                        (In thousands)

<S>                                            <C>                 <C>                <C>            
Deposits acquired through acquisitions         $        253,139    $           --     $       272,752
Deposits sold through dispositions                     (184,410)               --                  --
Deposits                                              2,048,831         1,893,451           1,455,747
Withdrawals                                          (2,054,769)       (1,932,822)         (1,513,532)
                                                   ---------------   ----------------    ----------------
Net cash inflow (outflow)                                62,791           (39,371)            214,967
Interest credited                                        44,813            36,449              27,648
                                                   ---------------   ----------------    ----------------

Net increase (decrease) in deposits            $        107,604    $       (2,922)    $       242,615
                                               =================== ================== ===================
</TABLE>


The following  table provides detail  regarding the Bank's deposit  accounts for
the periods indicated.
<TABLE>
<CAPTION>
                                                             Years Ended September 30,
                            --------------------------------------------------------------------------------------------
                                           1996                           1995                           1994
                                 -------------------------      -------------------------      -------------------------
                                   Average                        Average                        Average
                                   Amount        Rate             Amount        Rate             Amount        Rate
                                 ------------ ------------      ------------ ------------      ------------ ------------
                                                                     (In thousands)

<S>                         <C>                    <C>     <C>                     <C>    <C>                   <C> 
Demand  accounts            $     117,913          0.58%   $       99,266          .72%   $       79,635          .98%
Passbook accounts                 148,593          2.01           151,170         1.98           134,731         2.20
Money market accounts             102,367          2.70           124,260         2.67           144,478         2.72
Certificate accounts              676,598          5.58           566,675         5.19           433,989         4.60
</TABLE>

The following  table sets forth the deposit  accounts of Eagle in dollar amounts
and as percentages of total deposits at the dates indicated.
<TABLE>
<CAPTION>

                                                                            At September 30,                                        
                                    ------------------------------------------------------------------------------------------------
                                                  1996                            1995                            1994              
                                    ------------------------------------------------------------------------------------------------
                                     Weighted                 % of      Weighted              % of     Weighted               % of  
                                      Average                 total      Average              total    Average                total 
                                       Rate         Amount   deposits     Rate      Amount   deposits    Rate       Amount  deposits
                                    ------------------------------------------------------------------------------------------------
                                                                                (In thousands)
<S>                                      <C>       <C>          <C>      <C>        <C>        <C>       <C>       <C>        <C>   
Balance by account type:                                                                                                            
  Non-interest bearing                   0.00% $   30,260       2.8%     0.00%  $    27,913     2.9%     0.00%  $   22,101     2.3% 
  Regular savings                        2.00     144,728      13.7      1.99       143,271    15.1      1.99      162,344    17.1  
  NOW accounts                           0.98      90,758       8.6      1.04        80,625     8.5      1.05       76,111     8.0  
  Money market accounts                  2.78      94,510       8.9      2.71       104,428    11.0      2.67      151,290    16.0  
                                                  -------------------               -----------------              -----------------
                                                  360,256      34.0                 356,237    37.5                411,846    43.4  
                                                  -------------------               -----------------              -----------------
Certificate accounts                                                                                                                
with                                                                                                                                
  original maturities of:                                                                                                           
  Six months or less                     4.59      83,514       7.9      4.64        57,383     6.0      3.27      107,722    11.4  
  Over six months to one year            5.14     289,815      27.4      5.69       178,098    18.7      3.77      110,928    11.7  
  Over one year to two years             5.55      98,986       9.3      5.57       145,895    15.3      4.37      113,970    12.0  
  Over two years                         6.05     226,784      21.4      6.09       214,138    22.5      5.85      204,363    21.5  
                                                  -------------------               -----------------              -----------------
                                                                                                                                    
                                                  699,099      66.0                 595,514    62.5                536,983    56.6  
                                                  -------------------               -----------------              -----------------
                                                                                                                                    
                                               $  1,059,355   100.0%            $   951,751   100.0%            $  948,829   100.0% 
                                                  ===================               =================              =================
</TABLE>                            

                                       22
<PAGE>



         The following table presents, by various interest rate categories,  the
amounts of certificate accounts at Eagle as of the dates indicated.
<TABLE>
<CAPTION>
                                                                 September 30,
                                          --------------------------------------------------------------
                                               1996                   1995                   1994
                                          ----------------      -----------------      -----------------
                                                                 (In thousands)
<S>                                 <C>                    <C>                    <C>            
Less than 4.01%                     $          17,077      $        11,484        $       228,638
4.01 - 6.00%                                  570,015              369,885                253,076
6.01 - 10.00%                                 112,007              214,145                 55,629
                                          ----------------      -----------------      -----------------

                                    $         699,099      $       595,514        $       537,343
                                          ================      =================      =================
</TABLE>

         The following  table sets forth the amount and remaining  maturities by
interest rate of time deposits at September 30, 1996.
<TABLE>
<CAPTION>

                                  Less Than           One to Three           After Three
           Rate                    One Year               Years                 Years                 Total
---------------------------      -------------       ----------------      -----------------      --------------
                                                              (In Thousands)

<S>                        <C>                 <C>                    <C>                    <C>
Less than 4.01%             $      16,957      $           102        $             18       $        17,077
4.01 - 6.00%                      422,715              119,604                  27,696               570,015
6.01 - 10.00%                      37,620               41,728                  32,659               112,007
                                 -------------       ----------------      -----------------      --------------

    Total                   $     477,292      $       161,434        $         60,373       $       699,099
                                 =============       ================      =================      ==============
</TABLE>

         Certain information  regarding the deposit accounts at Eagle in amounts
of $100,000 or more at September 30, 1996 is shown in the table below.
<TABLE>
<CAPTION>

      Total Deposits         Three Months or        Over Three             Over Six               Over One Year    % of Total
      of $100,000 or         Less                   Months through         Months through                          Deposits
      more                                          Six Months             One Year
      -----------------      -----------------      -----------------      ----------------       ---------------- -------------
                                 (in thousands)

<C>                     <C>                    <C>                    <C>                   <C>                       <C>  
$          63,300       $          22,335      $         10,689       $        12,681       $          17,595         5.98%
</TABLE>

         Borrowings.  The FHL Bank System functions in a reserve credit capacity
for savings institutions and certain other home financing institutions.  Members
of the FHL Bank  System  are  required  to own  capital  stock in the FHL  Bank.
Members are  authorized  to apply for advances on the security of such stock and
certain of their home mortgages and other assets  (principally  securities which
are  obligations  of, or  guaranteed  by, the United  States)  provided  certain
creditworthiness  standards have been met. See  "Regulation -- Federal Home Loan
Bank System." Under its current credit  policies,  the FHL Bank limits  advances
based on the value of a member's qualified  collateral that has not been pledged
to  outside  sources.  Historically,  Eagle  Federal  has not relied on FHL Bank
advances and other borrowings to any significant extent as a source of funds. At
September  30, 1996,  Eagle  Federal had  authority to borrow up to $688 million
from the FHL Bank of Boston,  and will  continue  to use this source of funds to
take advantage of lending and  investment  opportunities.  Outstanding  FHL Bank
advances at September 30, 1996 totaled $207.0 million  compared to $73.2 million
at  September  30, 1995 and $31.8  million at September  30, 1994.  The weighted
average  interest rate on FHL Bank advances  outstanding  at September 30, 1996,
1995 and 1994 was 5.65%, 5.96% and 5.44% respectively.

                                       23
<PAGE>

         On a consolidated  basis,  Eagle had other borrowed money in the amount
of $14.7  million at September  30, 1996  compared to $82.3 million at September
30,  1995.  Repurchase  agreements  constitute  100.0%  and  99.9% of the  other
borrowed money total at September 30, 1996 and 1995, respectively.  The weighted
average  interest rate on other borrowed money at September 30, 1996,  1995, and
1994 was 5.22%, 5.89%, and 5.20%, respectively.

                                       24

<PAGE>



         INTEREST RATE SENSITIVITY GAP

         A method  used to  measure  the  interest  rate  risk  exposure  of the
Company's  balance sheet is the interest rate  sensitivity  "gap",  which is the
difference  between  rate  sensitive  assets  and  rate  sensitive   liabilities
repricing or maturing within specific time periods. A gap is considered positive
when the amount of interest rate sensitive assets exceeds the amount of interest
rate  sensitive  liabilities,  and is  considered  negative  when the  amount of
interest  rate  sensitive  liabilities  exceeds  the  amount  of  interest  rate
sensitive assets.

         The following table shows the estimated maturity/repricing structure of
the interest  sensitive  assets and interest  sensitive  liabilities of Eagle at
September 30, 1996:
<TABLE>
<CAPTION>

                                                                         Repricing     Repricing     Repricing     Repricing
                                                           Percent       Within        Within        Within        Over 3
                                              Amount       of Total      0-3           4-12          1-3 Years       Years
                                                                          Months        Months
                                             ----------    ----------    ----------    ----------    ----------    ----------
                                                                                (In thousands)
<S>                                       <C>                 <C>     <C>           <C>           <C>           <C>       
Interest-earning assets
  Loans receivable , net (a)              $   815,413         61.9%   $   159,502   $  222,474    $  190,071    $  243,366
  Mortgage-backed securities (b)              453,112         34.1         75,915      138,524        73,452       165,221
  Investment securities (c)                    24,893          1.9              -            -         6,077        18,816
  Interest-bearing deposits                    27,989          2.1         27,989            -             -             -
                                             ----------    ----------    ----------    ----------    ----------    ----------
                                                                         
Total interest sensitive assets           $  1,321,407       100.0%       263,406      360,998       269,600       427,403
                                             ==========    ==========    ----------    ----------    ----------    ----------

Interest sensitive liabilities
  Passbook accounts                       $   144,728         11.6%         7,511       17,744        40,582        78,891
  Certificate accounts                        699,099         55.9        194,999      282,288       161,421        60,391
  NOW accounts                                 90,758          7.2          6,149       11,624        20,899        52,086
  Money market accounts                        94,510          7.6          6,285       11,881        20,072        56,272
  FHLB advances                               207,008         16.5         86,885       36,245        62,537        21,341
  Other borrowings                             14,670          1.2              -       14,670             -             -
                                             ----------    ----------    ----------    ----------    ----------    ----------
  Total interest sensitive liabilities    $  1,250,773       100.0%       301,829      374,452       305,511       268,981
                                             ==========    ==========    ----------    ----------    ----------    ----------

Periodic repricing difference                                         $  (38,423)   $  (13,454)   $  (35,911)   $  158,422
(cumulative gap)
                                                                         ==========    ==========    ==========    ==========

Cumulative repricing difference                                       $  (38,423)   $  (51,877)   $  (87,788)   $   70,634
(cumulative gap)
                                                                         ==========    ==========    ==========    ==========

Cumulative gap to total assets                                              (2.7)%        (3.7)%        (6.3)%        (5.0)%
</TABLE>

     (a)  Loans are net of non-performing  loans,  undisbursed  portion of loans
          due borrowers and unearned discounts and premiums.
     (b)  Mortgage-backed  securities include mortgage-backed securities held to
          maturity and mortgage-backed securities available for sale.
     (c)  Investment  securities include investment securities held to maturity,
          investment securities available for sale and FHL Bank stock.


The following  assumptions were determined by management in order to prepare the
gap table set forth above. Non-amortizing investment securities are shown in the
period in which they contractually mature. Prepayment rates on loans, amortizing
investment   securities  and   mortgage-backed   securities  are  based  upon  a
combination of market  consensus.  Estimated decay rates on all deposit accounts
are based upon the formula derived by the OTS.

The interest rate sensitivity of the Company's assets and liabilities could vary
substantially if different assumptions were used or if actual experience differs
from the assumptions used. For example, if all passbook deposits were assumed to
reprice in one year or less,  the  Company's  one-year  cumulative  gap to total
assets would be negative 12.2%.

                                       25
<PAGE>



         SERVICE CORPORATION ACTIVITIES

         Federal regulations permit a federally chartered savings institution to
invest an  amount up to 2% of its  assets in the  stock,  paid-in  surplus,  and
unsecured  obligations  of subsidiary  service  corporations  engaged in certain
activities,  and an  additional 1% of its assets when the  additional  funds are
used  primarily  for  community or  inner-city  development  or  investment.  In
addition,  federal regulations  generally authorize such institutions which meet
minimum  regulatory  capital  requirements  to  invest  up to 50% of  regulatory
capital in conforming first mortgage loans to service corporations. At September
30, 1996,  Eagle  Federal's  direct  investment  (capital  stock) in its service
corporation,  Eagle Service Corp., was $ 1,000. Eagle Service Corp.  administers
the  securities  brokerage  and  investment  services  made  available  to Eagle
Federal's customers.

         EMPLOYEES

         At September 30, 1996, Eagle had 417 employees (including 115 part-time
employees),  all of whom are employed by Eagle Federal.  None of these employees
are  represented  by  a  collective  bargaining  group.  Employee  benefits  for
full-time   employees  include   reimbursement  of  approved,   business-related
educational  expenses, a pension plan, an ESOP, a 401k plan and life, health and
disability insurance.


MARKET AREA AND COMPETITION

         Eagle Federal is  headquartered  in Bristol,  Connecticut  and conducts
business from four offices in Bristol, three offices in Hartford, two offices in
West Hartford, and one office each in Bloomfield, Canton, Manchester, Rocky Hill
and Simsbury (all of which are in Hartford  County),  two offices in Torrington,
one office  each in  Litchfield,  Terryville  and  Winsted  (all of which are in
Litchfield   County).   Eagle  also  operates   supermarket  branch  offices  in
Bloomfield, East Hartford, Glastonbury and Avon.

         Hartford, the capital of Connecticut, has a population of approximately
140,000 and is the  governmental  and  economic  center of Central  Connecticut.
Bristol,  located in central Connecticut 18 miles west of Hartford, is a city of
approximately 60,000 people with a broad-based  economy.  Over 100 manufacturing
firms of all sizes operate in or near Bristol. The city of Torrington is located
27 miles west of Hartford at the northern end of the Route 8 corridor which runs
from the  northwest  corner  of  Connecticut  to the New  Haven  and  Bridgeport
metropolitan areas.  Torrington has an estimated population of 30,000 and is the
largest city in Litchfield County.

         Eagle  Federal  faces  substantial  competition  for deposits and loans
throughout  its market area.  The primary  factors  stressed by Eagle Federal in
competing for deposits are interest rates,  personalized  services,  the quality
and range of financial  services,  convenience  of office  locations  and office
hours. Competition for deposits comes primarily from other savings institutions,
commercial  banks,  credit  unions,  money  market  funds and  other  investment
alternatives.  The primary  factors in competing  for loans are interest  rates,
loan   origination   fees,  the  quality  and  range  of  lending  services  and
personalized service.  Competition for origination of first mortgage loans comes
primarily from other savings  institutions,  mortgage banking firms,  commercial
banks and insurance companies.

         Connecticut  law now permits  Connecticut  bank  holding  companies  to
engage in stock  acquisitions  of depository  institutions  in other New England
states with reciprocal  legislation.  All New England states currently have some
form of reciprocal  legislation.  As a result,  bank holding  companies from any
state in New England can establish  non-bank offices  (including loan production
offices) in Connecticut on a limited basis.  The impact may be to  significantly
increase the competition  faced by Eagle.  The Connecticut  legislature also has
enacted  legislation  which  reduces  the  home  office  protection  enjoyed  by
Connecticut-chartered  savings institutions and commercial banks. This and other
legislative  and  regulatory  changes  may  increase  the  size  of the  banking
institutions competing in the general market area of Eagle.

                                       26
<PAGE>



         Effective  September 29, 1995, the Riegle-Neal  Interstate  Banking and
Branching Efficiency Act of 1994 ("IBBEA"), amended the Bank Holding Company Act
of 1956 (the "BHCA") to permit a bank holding  company to acquire a bank located
in any state,  provided that the acquisition does not result in the bank holding
company  controlling more than 10% of the deposits in the United States,  or 30%
of deposits in the state in which the bank to be acquired is located (unless the
state waives the 30% deposit  limitation).  Individual  states are  permitted to
restrict the ability of an out-of-state  bank holding company or bank to acquire
an  in-state  bank that has been in  existence  for less than five  years and to
establish a state  concentration  limit of less than 30% if such  reduced  limit
does not discriminate against out-of-state bank holding companies or banks.

         Effective  June 1, 1997, an  "adequately  capitalized"  bank,  with the
approval of the  appropriate  federal  banking  agency,  may merge with  another
adequately  capitalized  bank in any state that has not opted out of  interstate
branching and operate the target's offices as branches if certain conditions are
satisfied.  The same national (10%) and state (30%) deposit concentration limits
and any applicable  state  minimum-existence  restrictions (up to a maximum of 5
years) apply to interstate mergers as to interstate acquisitions.  The applicant
also must  comply  with any  nondiscriminatory  host  state  filing  and  notice
requirements and demonstrate a record of compliance with applicable  federal and
state community  reinvestment laws. A state may opt out of interstate  branching
by  enacting  a law  between  September  29,  1994  and June 1,  1997  expressly
prohibiting interstate merger transactions.

         The  resulting  bank to an  interstate  merger may establish or acquire
additional  branches at any location in a state where any of the banks  involved
in the  merger  could have  established  or  acquired a branch.  A bank also may
acquire one or more  branches of an  out-of-state  bank  without  acquiring  the
target  out-of-state  bank if the law of the target's  home state permits such a
transaction. In addition, a bank may establish a de novo branch in another state
if the host state by statute expressly permits de novo interstate branching.

         Furthermore,  a bank  subsidiary of a bank holding company is permitted
to act as agent  for other  depository  institutions  owned by the same  holding
company for purposes of receiving deposits,  renewing time deposits,  closing or
servicing loans, and receiving loan payments effective as of September 29, 1995.
A savings  association may perform similar agency services for affiliated  banks
to the extent that the savings association was affiliated with a bank on July 1,
1994 and satisfies certain additional requirements.

         The OTS  also has  adopted  a  statement  of  policy  on  branching  by
federally chartered savings  institutions  providing that the OTS will generally
permit  such  institutions  to branch or merge  across  state  lines to the same
extent permitted under state law to a state-chartered  provided that the federal
institution  continues to meet the domestic  building and loan test as set forth
in the Internal Revenue Code. See "Regulation - Savings and Loan Holding Company
Regulation."

         The foregoing  provisions are expected to further increase  competition
within Eagle's existing market area.

REGULATION

GENERAL

         The Company, as a savings and loan holding company,  and the Bank, as a
federally   chartered  savings  bank,  are  subject  to  extensive   regulation,
supervision and examination by the OTS as their primary federal  regulator.  The
Bank also is subject to regulation,  supervision and examination by the FDIC and
as to certain  matters by the Board of Governors of the Federal  Reserve  System
(the "Federal Reserve Board").  See  "Management's  Discussion and Analysis" and
"Notes to Consolidated  Financial  Statements" as to the impact of certain laws,
rules and  regulations  on the operations of the Company and the Bank. Set forth
below is a description of certain recent regulatory developments.


                                       27
<PAGE>


         In September 1996,  legislation (the "1996 legislation") was enacted to
address the  undercapitalization  of the Savings Association Insurance Fund (the
"SAIF"), of which the Bank is a member. As a result of the 1996 legislation, the
Federal Deposit  Insurance  Corporation  (the "FDIC") imposed a one-time special
assessment  of .657% on deposits  insured by the SAIF as of March 31, 1995.  The
Bank incurred a one-time  charge of $4.7 million  (before  taxes) to pay for the
special  assessment  based  upon on its level of SAIF  deposits  as of March 31,
1995.  After  the  SAIF was  deemed  to be  recapitalized,  the  Bank's  deposit
insurance  premiums to the SAIF were reduced as of September 30, 1996.  The Bank
expects that its future  deposit  insurance  premiums  will continue to be lower
than the premiums it paid prior to the recapitalization.

         The 1996 legislation also  contemplates the merger of the SAIF with the
Bank Insurance Fund (the "BIF"),  which generally  insures  deposits in national
and  state-chartered  banks. The combined deposit insurance fund, to formally be
known as the Depository Insurance Fund (the "DIF"), to be formed no earlier than
January  1,  1999,  will  insure   deposits  at  all  FDIC  insured   depository
institutions.  As a condition to the formation of the DIF,  however,  no insured
depository institution can be chartered as a savings association.  To facilitate
the abolition of the savings association  charter, the Secretary of the Treasury
is required to report to the  Congress no later than March 31, 1997 with respect
to the development of a common charter for all insured  depository  institutions
and the  abolition of separate and distinct  charters  between banks and savings
associations. If legislation with respect to the development of a common charter
is enacted,  the Bank may be required to convert its federal charter to either a
new federal type of bank charter or to a state depository  institution  charter.
Future  legislation  also may result in the Company  becoming  regulated  at the
holding  company  level by the  Federal  Reserve  Board  rather than by the OTS.
Regulation  by the Federal  Reserve  Board could  subject the Company to capital
requirements  that are not  currently  applicable  to the  Company  as a holding
company under OTS regulation and may result in statutory limitations on the type
of business activities in which the Company may


                                       28

<PAGE>

engage at the holding company level, which business activities currently are not
restricted.  The  Company  and the Bank  are  unable  to  predict  whether  such
legislation will be enacted.

         The 1996  legislation  also,  contained  several  provisions that could
impact  operations  of the Bank,  including  augmenting  the  Bank's  commercial
lending authority by 10% of assets, provided that any loans in excess of 10% are
used for small business  loans.  Furthermore,  the qualified  thrift lender test
that the Bank must comply with was  liberalized to provide that small  business,
credit card and student  loans can be included  without any limit,  and that the
Bank can qualify as a  qualified  thrift  lender by meeting  either the test set
forth  in the  Home  Owner's  Loan Act or under  the  definition  of a  domestic
building and loan  association  as defined  under the  Internal  Revenue Code of
1986, as amended.

         Separate  legislation was enacted in 1996 to repeal most of Section 593
of the Internal  Revenue Code pertaining to how qualified  savings  institutions
calculate  their bad debt  deduction  for  federal  income  tax  purposes.  This
legislation  eliminated  the Bank's  ability to compute  its bad debt  deduction
utilizing the  percentage-of-taxable-income  method or the reserve  method based
upon  experience.  It also  suspended the recapture of the pre-1988 tax bad debt
reserves and will require the recapture of these amounts only under very limited
circumstances.   It does  require the  recapture of the  post-1987  tax bad debt
reserves over a six year period. The Bank's pre-1988 tax bad debt reserves which
have been  suspended are $8.9 million and the amount of the  post-1987  reserves
which will be recaptured into income are $90,000.

         During  1996,  the  OTS  continued  its  comprehensive  review  of  its
regulations  to  eliminate   duplicative,   unduly  burdensome  and  unnecessary
regulations   concerning   lending  and   investments,   corporate   governance,
subsidiaries  and equity  investments,  conflicts of interest and  usurpation of
corporate  opportunity.  The OTS's revised  lending and  investments  regulation
generally imposes general safety and soundness standards, and also provides that
commercial loans made by a service  corporation of a savings association will be
exempted  from an  institution's  overall 10% limit on  commercial  loans.  Such
regulations  now  allow  an  institution  to use its own  cost-of-fund  index in
structuring  adjustable  rate  mortgages,  and  eliminate  percentage  of assets
limitations on credit card lending.

         The  OTS's  revised  subsidiaries  and  equity  investments  regulation
consolidated  all OTS regulations that apply to various types of subsidiaries of
federal  associations and updates the list of pre-approved  service  corporation
activities  to  include  activities  that the OTS has  deemed  to be  reasonably
related to the activities of a federal savings  institution,  yet not previously
included  on OTS's  pre-approved  list.  In  general,  if an  activity is on the
pre-approved list, institutions will merely have to provide the OTS and the FDIC
with 30 days prior notice of such

                                       29
<PAGE>


activity.  Activities  not  on  the  pre-approved  list  remain  subject  to  an
application process. The revised corporate governance  regulation is intended to
provide  greater  flexibility  with respect to corporate  governance  of federal
savings institutions, such as the Bank, consistent with safety and soundness and
fairness to shareholders or members.  For example,  the OTS corporate governance
regulations provide for after-the-fact notice for pre-approved charter and bylaw
amendments and increase the list of  pre-approved  charter  amendments,  such as
supermajority  voting  provisions and the eliminations of cumulative  voting. In
addition,  institutions that are subsidiaries of holding companies,  such as the
Bank, no longer are required to have staggered  terms for members of their board
of directors,  provide  notice of  shareholder  meetings or compile  shareholder
voting lists.

         The OTS also converted its policy statement on conflicts of interest to
a regulation that is intended to be based upon common law principles of "duty of
loyalty"  and  "duty  of  care."  The new  conflicts  regulation  provides  that
directors,  officers,  employees,  persons  having  the  power  to  control  the
management  or  policies  of savings  associations,  and other  persons  who owe
fiduciary duties to savings institutions will be prohibited from advancing their
own personal or business  interests,  or those of others,  at the expense of the
institutions  they serve.  The OTS also eliminated its current  "appearance of a
conflict of interest"  standard from the scope of the revised rule. The OTS also
codified its  interpretative  position  concerning the phrase "person having the
power to control the management or policies of savings associations," to provide
that the phrase includes holding companies,  such as the Company.  Finally,  the
OTS eliminated its corporate  opportunity  regulations and policy statements and
adopted a standard  similar  to common law  standards  governing  usurpation  of
corporate opportunity. Significantly under the revised regulation, transfer of a
line of business within a holding  company  structure will not be deemed to be a
usurpation  of corporate  opportunity  if an  institution  receives  fair market
consideration  for a line of business  transferred to its holding company or its
affiliate. In such transactions,  the OTS will generally defer to decisions made
by a holding  conpany,  subject to  compliance  with  Sections 23A or 23B of the
Federal Reserve Act and general safety and soundness principles.


                                       30
<PAGE>


SAVINGS AND LOAN HOLDING COMPANY REGULATION

         Under the Home Owners Loan Act (the  "HOLA"),  the  Director of the OTS
has regulatory jurisdiction over savings and loan holding companies. Eagle, as a
savings and loan holding  company  within the meaning of the HOLA, is subject to
regulation,  supervision and examination by, and the reporting  requirements of,
the Director of the OTS.

         As a unitary holding company,  the Company  generally is not restricted
under  existing  laws as to the  types of  business  activities  in which it may
engage,  provided that Eagle Federal  continues to qualify as a qualified thrift
lender  ("QTL").  Eagle  could  be  prohibited  from  engaging  in any  activity
(including  those  otherwise  permitted  under the HOLA)  not  allowed  for bank
holding  companies if Eagle fails to  constitute a QTL or if Eagle  subsequently
becomes a multiple savings and loan holding company.  See "Regulation -- Savings
Institution Regulation -- Qualified Thrift Lender Requirement."

SAVINGS INSTITUTION REGULATION

         General. As a federally chartered savings institution, Eagle Federal is
subject to supervision and regulation by the Director of the OTS and by the FDIC
in its  capacity as  administrator  of the SAIF.  Under OTS  regulations,  Eagle
Federal is  required to obtain  audits by an  independent  accountant  and to be
examined periodically by the Director of the OTS. Examinations must be conducted
no less frequently than every 12 months. Eagle Federal is subject to assessments
by the OTS and FDIC to cover the costs of such examinations. The OTS may revalue
assets of Eagle Federal, based upon appraisals, and require the establishment of
specific  reserves in amounts equal to the difference  between such  revaluation
and the book value of the assets.  The Director of the OTS also is authorized to
promulgate  regulations  to ensure  the safe and  sound  operations  of  savings
institutions  and  may  impose  various  requirements  and  restrictions  on the
activities  of  savings  institutions.  See  "Regulation  - Savings  Institution
Regulation  - Safety  and  Soundness  Guidelines."  See  "Regulation  -  Savings
Institution Regulation - Insurance of Deposits".

         Capital Requirements.  Eagle Federal is subject to the capital adequacy
regulations  adopted by the OTS. Eagle Federal's ability to pay dividends to the
Company and expand its business  can be  restricted  if its capital  falls below
levels established by the OTS. Pursuant to OTS regulations, savings associations
are required to maintain (i) "leverage capital" in an amount not less than 3% of
total assets,  (ii) "tangible  capital" in an amount not less than 1.5% of total
assets, and (iii) risk-based capital equal to 8.00% of risk-weighted assets. The
capital standards established by the OTS for savings institutions must generally
be no less stringent than those applicable to national banks of 4.0%.

         The following  table sets forth the actual and required  minimum levels
of regulatory  capital for Eagle Federal under  applicable OTS regulations as of
September 30, 1996.
<TABLE>
<CAPTION>

                                    ACTUAL        ACTUAL              REQUIRED       REQUIRED             EXCESS
                                    AMOUNT        PERCENT              AMOUNT        PERCENT              AMOUNT
                                 ------------- --------------      --------------- -------------       -------------
                                                                (in thousands)

<S>                         <C>                  <C>         <C>                        <C>     <C>             
Core                        $       74,566          5.42%     $        41,283            3.0%    $         33,283
Tangible                    $       74,566          5.42%     $        20,641            1.5%    $         53,925
Risk-based                  $       81,953         13.89%     $        47,186            8.0%    $         34,767
</TABLE>

                                       31
<PAGE>




         The following is a  reconciliation  of Eagle  Federal's  equity capital
under GAAP to regulatory capital at September 30, 1996.
<TABLE>
<CAPTION>

                                                                       Core           Tangible          Risk-based
                                                                    -----------      ------------      -------------
                                                                                    (in thousands)
<S>                                                            <C>              <C>               <C>          
GAAP Capital                                                   $      99,720    $      99,720     $      99,720
Less:  Goodwill and other intangible assets                          (26,864)         (26,864)          (26,864)
Less:  Unrealized gain in certain available for sale                   1,769            1,769             1,769
   securities
Less:  Excess qualifying purchased mortgage loan servicing               (59)             (59)              (59)
Add:  General loan and lease valuation allowances                         --               --             7,387
                                                                    -----------      ------------      -------------
Regulatory capital                                             $      74,566    $      74,566     $      81,953
                                                                    ===========      ============      =============
</TABLE>

         Prompt Corrective Action. The federal banking agencies have established
by  regulation,  for each  capital  measure,  the  levels  at  which an  insured
institution  is  well  capitalized,  adequately  capitalized,  undercapitalized,
significantly  undercapitalized  and  critically  undercapitalized,  and to take
prompt corrective action with respect to insured  institutions  which fall below
minimum capital  standards.  The degree of regulatory  intervention  mandated by
FDICIA is tied to an insured  institution's  capital  category,  with increasing
scrutiny  and more  stringent  restrictions  being  imposed as an  institution's
capital  declines.  Any  insured  depository  institution  which falls below the
minimum capital  standards must submit a capital  restoration  plan. Any company
that controls an under  capitalized  institution  must,  in connection  with the
submission of a capital restoration plan by the savings  institution,  guarantee
that  the  institution  will  comply  with  the  plan  and  provide  appropriate
assurances of performance. As of September 30, 1996, Eagle Federal was deemed to
be  well-capitalized.   See  "Regulation  -  Savings  Institution  Regulation  -
Insurance of Deposits."

         Safety and Soundness Regulations. The OTS, along with the other federal
banking agencies,  adopted safety and soundness guidelines in July 1995 relating
to (i) internal controls,  information systems, and internal audit systems; (ii)
loan documentation;  (iii) credit underwriting; (iv) interest rate exposure; (v)
asset  growth;  and  (vi)  compensation  and  benefit  standards  for  officers,
directors,  employees  and  principal  shareholders.  The HOLA requires that all
regulations  and  policies  of the  Director  of the OTS for the safe and  sound
operations  of  savings  institutions  are to be no less  stringent  than  those
established by the OCC for national banks. The foregoing operational, managerial
and compensation issues are set out in the safety and soundness  guidelines that
the  federal  banking  agencies  issued to  identify  and  address  problems  at
institutions before capital becomes impaired.

         Qualified  Thrift Lender  Requirement.  Eagle Federal must maintain its
status as a "qualified  thrift  lender"  ("QTL") in order to exercise the powers
granted to federally chartered savings  institutions and maintain full access to
FHL Bank  advances.  Eagle  Federal  will remain a QTL if its  qualified  thrift
investments  continue  to  equal  or  exceed  65% of the  savings  association's
portfolio  assets on a monthly  average  basis in 9 out of every 12  months,  as
defined by HOLA and the rules and regulations of the OTS. At September 30, 1996,
qualified  thrift  investments  as a percentage  of  portfolio  assets for Eagle
Federal was 96.6%. The qualified thrift  investments of Eagle Federal equaled or
exceeded 65% of its portfolio  assets on a monthly  average basis for at least 9
months during the fiscal year ended September 30, 1996.

         The failure to maintain  QTL status would  require  that Eagle  Federal
convert to a bank charter and will result in a limitation in future  investments
and activities including branching and payment of dividends.  Eagle Federal also
would be required to repay all  outstanding  FHL Bank advances and dispose of or
discontinue  any  preexisting  investments  or activities not permitted for both
savings institutions and national banks. Further, within one year of the loss of
QTL status,  the holding company of a savings  institution that does not convert
to a bank charter must register as a bank holding company and will be subject to
all statutes applicable to bank holding companies.

         Liquidity.  Under applicable federal regulations,  savings institutions
are required to maintain an average daily  balance of liquid  assets  (including
cash,  certain time deposits,  certain bankers'  acceptances,  certain corporate
debt securities and highly rated commercial paper,  securities of certain mutual
funds  and  specified  United  States   government,   state  or  federal  agency
obligations) equal to a monthly average of not less than a specified  percentage
of the average  daily  balance of the  savings  institution's  net  withdrawable
deposits plus short-term borrowings. Under


                                       32
<PAGE>



the HOLA,  this  liquidity  requirement  may be changed from time to time by the
Director of the OTS to any amount within the range of 4% to 10%  depending  upon
economic conditions and the deposit flows of member institutions,  and currently
is 5%.  Savings  institutions  are also  required to  maintain an average  daily
balance of short term liquid assets at a specified percentage  (currently 1%) of
the total of the average  daily  balance of its net  withdrawable  deposits  and
short-term  borrowings.  At September 30, 1996,  Eagle Federal was in compliance
with these liquidity requirements.

         Restrictions  on  Dividends  and  Other  Capital  Distributions.  Eagle
Federal is subject to  limitations  an the extent to which it may pay dividends.
Savings institution  subsidiaries of holding companies generally are required to
provide their OTS Regional  Director with not less than 30 days' advance  notice
of any proposed declaration of a dividend on the institution's stock.

         Applicable   OTS   regulations   impose   limitations  on  all  capital
distributions by savings associations  (including  dividends,  stock repurchases
and cash-out  mergers) based upon an institution's  level of regulatory  capital
both before and after giving effect to a proposed capital distribution. The FDIA
also prohibits an insured  depository  institution  from declaring any dividend,
making  any  other  capital  distribution,  or  paying  a  management  fee  to a
controlling  person if, following the  distribution or payment,  the institution
would be  classified  as  undercapitalized,  significantly  undercapitalized  or
critically undercapitalized.

         Insurance of Deposits. Deposits in the Bank are insured to a maximum of
$100,000 for each insured depositor by the FDIC. Although the Bank is considered
a SAIF-insured  institution,  as of September 30, 1996, approximately 47% of its
deposits were BIF-insured.










                                       33
<PAGE>



FEDERAL HOME LOAN BANK SYSTEM

         The Federal  Home Loan Bank System  consists of 12 regional  FHL Banks,
each subject to supervision  and regulation by the Federal Housing Finance Board
(the "FHFB"). The FHL Banks provide a central credit facility for member savings
institutions.  Eagle Federal, as a member of the FHL Bank of Boston, is required
to own shares of capital  stock in that FHL Bank in an amount at least  equal to
1% of the aggregate principal amount of their unpaid residential mortgage loans,
home purchase  contracts and similar  obligations at the beginning of each year,
or 1/20 of their advances  (borrowings) from the FHL Bank, whichever is greater.
Eagle Federal is in compliance with this  requirement.  The maximum amount which
the FHL Bank of Boston will advance  fluctuates  from time to time in accordance
with changes in policies of the FHFB and the FHL Bank of Boston, and the maximum
amount  generally is reduced by borrowings  from any other source.  In addition,
the amount of FHL Bank  advances that a savings  institution  may obtain will be
restricted  in the  event  the  institution  fails  to  constitute  a  QTL.  See
"Regulation  --  Savings  Institution  Regulation  --  Qualified  Thrift  Lender
Requirement."

FEDERAL RESERVE SYSTEM

         The Federal Reserve Board has adopted  regulations that require savings
institutions to maintain nonearning reserves against their transaction  accounts
(primarily  NOW and regular  checking  accounts) and  nonpersonal  time deposits
(those which are  transferable  or held by a person other than a natural person)
with an original maturity of less than 1 1/2 years. At September 30, 1996, Eagle
Federal was in compliance with these requirements. These reserves may be used to
satisfy  liquidity  requirements  imposed by the  Director  of the OTS.  Because
required   reserves  must  be  maintained  in  the  form  of  vault  cash  or  a
non-interest-bearing  account  at a Federal  Reserve  Bank,  the  effect of this
reserve   requirement   is  to   reduce   the   amount   of  the   institution's
interest-earning assets.

         Savings institutions also have the authority to borrow from the Federal
Reserve "discount window." Federal Reserve Board regulations,  however,  require
savings  institutions  to exhaust all FHL Bank sources  before  borrowing from a
Federal  Reserve Bank. A Federal  Reserve Bank's  ability to extend  advances to
undercapitalized  and critically  undercapitalized  depository  institutions  is
limited.  A Federal Reserve Bank generally may not have advances  outstanding to
an undercapitalized institution for more than 60 days in a 120-day period.

TAXATION

         Federal.  Eagle,  on  behalf of itself  and its  subsidiaries,  files a
September  30 tax year  consolidated  federal  income tax return.  Eagle and its
subsidiaries  report  their  income and  expenses  using the  accrual  method of
accounting.

         The Small  Business  Job  Protection  Act of 1996,  signed  into law on
August 20, 1996,  repealed the special  thrift bad debt  deductions  provisions.
This  legislation  eliminates the use of the percentage of taxable income method
as a  means  of  calculating deductions  for bad  debts,  allows  banks  greater
flexibility in diversifying their loan and investment portfolios and establishes
requirements   for  the  recapture  of  previously   untaxed  bad  debt  reserve
accumulations.

         Bad debt reserve  accumulations prior to 1988 are exempt from recapture
unless the Bank liquidates, pays a dividend in excess of earnings and profits or
redeems stock. Post 1987 bad debt reserve  accumulations  will be taxed in equal
amounts over six years  beginning in 1996.  The Bank may defer the recapture tax
in 1996 or 1997 if it originates  the same  principal  amount of mortgage  loans
that it had  originated  in the six years before 1996.  The Bank does not expect
the post  1987  recapture  tax to have a  material  effect  on the  consolidated
financial statements.

                                       34
<PAGE>



         The federal income tax returns for Eagle Federal's  predecessor savings
institutions  have been examined and audited or closed  without audit by the IRS
for tax years through September 30, 1989.

         Savings institutions are also entitled to limited special tax treatment
with  respect to the  deductibility  of  interest  expense  relating  to certain
tax-exempt  obligations.  Savings  institutions  are  entitled to deduct 100% of
their  interest  expense  allocable  to the  purchase or carrying of  tax-exempt
obligations  acquired  before 1983. The deduction is reduced to 80% with respect
to obligations acquired after 1982. For taxable years after 1986, the Tax Reform
Act of 1986 eliminates the deduction  entirely for  obligations  purchased after
August 7, 1986 (except for certain issues by small municipal issuers).

         Depending  on the  composition  of its items of income and  expense,  a
savings institution may be subject to the alternative minimum tax. For tax years
beginning after 1986, a savings  institution must pay an alternative minimum tax
equal to the amount (if any) by which 20% of alternative  minimum taxable income
("AMTI"),  as reduced by an exemption varying with AMTI, exceeds the regular tax
due.  AMTI equals  regular  taxable  income  increased  or  decreased by certain
adjustments   and  increased  by  certain  tax   preferences.   Adjustments  and
preferences  include  depreciation  deductions in excess of those  allowable for
alternative  minimum tax purposes,  tax-exempt interest on most private activity
bonds  issued  after  August 7, 1986  (reduced by any related  interest  expense
disallowed  for  regular  tax  purposes),  the  amount  of the bad debt  reserve
deduction claimed in excess of the deduction based on the experience method and,
for 1990 and succeeding  years,  75% of the excess of adjusted  current earnings
("ACE")  over AMTI.  ACE  equals  pre-adjustment  AMTI  ("PAMTI")  increased  or
decreased  by certain ACE  adjustments,  which  include  tax-exempt  interest on
municipal bonds for tax purposes, depreciation deductions in excess of those

                                       35
<PAGE>



allowable  for ACE purposes and the dividend  received  deduction.  PAMTI equals
AMTI  computed  with all the  preferences  and  adjustments  other  than the ACE
adjustment and the alternative minimum tax net operating loss (AMTNOL). AMTI may
be reduced  only up to 90% by AMTNOL  carryovers.  The  payment  of  alternative
minimum tax will give rise to a minimum tax credit which will be available  with
an indefinite  carry forward period  available to reduce federal income taxes of
the institution in future years (but not below the level of alternative  minimum
tax arising in each of the carry forward years).

         State. State income taxation is in accordance with the corporate income
tax laws of  Connecticut.  As a thrift,  Eagle  Federal is required to pay taxes
equal to the larger of $250, 11.25% (scheduled to decrease in increments to 7.5%
by 2001) of the year's taxable income (which, with certain exceptions,  is equal
to taxable  income for federal  purposes) or an amount equal to 4% for each year
of the amount of interest or dividends  credited by them on savings  accounts of
depositors or account  holders  during the taxable year  preceding that in which
the tax becomes due,  provided  that, in  determining  such amount,  interest or
dividends  credited to the savings  account of a depositor or account holder are
deemed to be the lesser of the actual  interest  or  dividends  credited  or the
interest or dividend  that would have been  credited if it had been computed and
credited at the rate of one-eighth of 1% per annum.

         Item 2.  Properties

         Eagle's nineteen traditional branch offices and four supermarket branch
offices  are located in  Hartford  and  Litchfield  counties.  Automated  teller
machines ("ATM") are located in all of the nineteen  traditional offices and all
four  supermarket  branches.   Eagle  also  operates  three  free  standing  ATM
locations.  Eagle's  ATM's participate  in the "NYCE" ATM network  which permits
access to funds at  approximately  13,200  locations and 57,000  "point-of-sale"
terminals  throughout  the  Northeast.  Data  processing  services for Eagle are
provided by Connecticut  On-Line  Computer  Center,  a data  processing  company
jointly owned by a number of New England  savings  institutions  including Eagle
Federal.

                                       36
<PAGE>



         The  following  table sets forth  certain  information  concerning  the
business offices of Eagle at September 30, 1996.
<TABLE>
<CAPTION>

                                                    Percent                          Lease          
                                         Year       of Total       Owned or        Expiration        Lease Renewal
                                        Opened      Deposits        Leased            Date              Option    
                                      ----------- ------------- ----------------- ------------- -------------------------

<S>                                      <C>       <C>           <C>                <C>         <C>          
Torrington Main Office                   1945        11.5%           Owned             -                   -

East Main Street - Torrington            1973         3.9%           Owned             -                   -

Litchfield                               1976         3.4%           Owned             -                   -

Canton                                   1971         3.3%           Leased           2001         One 5-year option

Winsted                                  1988         3.3%           Leased           2006        Seven 5-year options
                                                                   Land Only

Bristol Main Office                      1957        14.4%           Owned             -                   -

Commons - Bristol                        1972         3.1%           Leased           2004         No renewal option

Farms - Bristol                          1983         4.5%           Leased           1998         One 5-year option
                                                                   Land Only

Forestville                              1992         1.9%           Leased           2001         No renewal option

Terryville                               1984         2.5%           Leased           1999         No renewal option

Hartford Main Office                     1994         4.7%           Owned             -                   -

Franklin Avenue - Hartford               1994         5.3%           Owned             -                   -

State House Square - Hartford            1996         5.6%           Leased           1997                 -

West Hartford                            1994         6.0%           Owned             -                   -

Bishops Corner - West Hartford           1996         4.3%           Leased           2004         One 10-year option

Rocky Hill                               1994         4.9%           Leased           2000         One 5-year option

Manchester                               1996         4.2%           Leased           1997        Three 5-year options

Bloomfield                               1996         7.7%           Leased           1998         No renewal option

Simsbury                                 1996         5.1%           Leased           1999         Two 5-year options

Avon - Supermarket                       1996         0.1%           Leased           1999         No renewal option

Bloomfield - Supermarket                 1996         0.0%           Leased           1999         No renewal option

East Hartford - Supermarket              1996         0.1%           Leased           1999         No renewal option

Glastonbury - Supermarket                1996         0.2%           Leased           1999         No renewal option
</TABLE>




                                       37
<PAGE>



The total net book value of  properties  owned and used for  offices by Eagle at
September 30, 1996 and the aggregate net book value of leasehold improvements on
properties used for offices was $6.0 million.


         Item 3.  Legal Proceedings

         As of  September  30,  1996,  there  were  no  material  pending  legal
proceedings to which Eagle, Eagle Federal or Eagle Service Corp.  was a party or
to which any of their property was subject.

         Item 4.  Submission of Matters to a Vote of Security Holders

         No matters were  submitted to a vote of Eagle  shareholders  during the
fourth quarter of the fiscal year ended September 30, 1996.

PART II

         Item 5.  Market  for  Registrant's Common Stock and Related Stockholder
                  Matters

         Information  as to the principal  market on which the Company's  common
stock is traded, the approximate number of holders of record as of September 30,
1996,  the Company's  dividend  policy,  and the high and low bid  quotations or
sales  prices,  as  applicable,  for each calendar  quarter  during the two most
recent fiscal years is  incorporated  herein by reference to page 43 of the 1996
Annual Report to Shareholders.

         Item 6.  Selected Financial Data

         Selected consolidated financial data for the five years ended September
30, 1996 is included under separate caption in Part I of this Form 10-K.

         Item 7.  Management's  Discussion  and  Analysis of Financial Condition
                  and Results of Operations

         Management's Discussion and Analysis of Financial Condition and Results
of  Operations  on pages 8 to 17 of the 1996 Annual  Report to  Shareholders  is
incorporated herein by reference.

         Item 8.  Financial Statements and Supplementary Data

         The  information  required by this Item is incorporated by reference to
pages 18 to 41 of the 1996 Annual Report to Shareholders.

         Item 9.  Changes  in  and Disagreements  with Accountants on Accounting
                  and Financial Disclosure

PART III

         Item 10.  Directors and Executive Officers of the Registrant

         Reference  is made to the  information  set forth  under  the  captions
"Election of Directors" and "Management -- Executive  Officers" appearing in the
Company's  definitive proxy statement dated December 22, 1996, which information
is incorporated herein by reference.


                                       38
<PAGE>



         Item 11.  Executive Compensation

         Reference  is made to the  information  set  forth  under  the  caption
"Management  -- Executive  Compensation"  appearing in the Company's  definitive
proxy  statement  dated December 22, 1996,  which  information  is  incorporated
herein by reference.

         Item 12. Security Ownership of Certain Beneficial Owners and Management

         Reference  is made to the  information  set forth  under  the  captions
"Stock Owned by  Management"  and  "Principal  Holders of Voting  Securities  of
Eagle" appearing in the Company's definitive proxy statement dated  December 22,
1996, which information is incorporated herein by reference.

         Item 13.  Certain Relationships and Related Transactions

         Reference  is made to the  information  set  forth  under  the  caption
"Management -- Certain Transactions" appearing in the Company's definitive proxy
statement dated December 22, 1996, which  information is incorporated  herein by
reference.

PART IV

         Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on
                   Form 8-K

         (a)(1) The following  consolidated  financial  statements of registrant
and its subsidiaries  and report of independent  auditors are included in Item 8
hereof.

         Report of Independent Auditors.
         Consolidated Balance Sheets - September 30, 1996 and 1995.
         Consolidated  Statements  of Income - Years Ended  September  30, 1996,
            1995 and 1994.  
         Consolidated Statements of Shareholders' Equity - Years Ended September
            30, 1996,  1995 and 1994.  
         Consolidated Statements of Cash Flows - Years Ended September 30, 1996,
            1995 and 1994.
         Notes to Consolidated Financial Statements.

         (a)(2) All  schedules  for which  provision  is made in the  applicable
accounting  regulations  of the  Securities  and  Exchange  Commission  are  not
required under the related  instructions or are  inapplicable and therefore have
been omitted.

         (a)(3) The following  exhibits are either filed with this Report or are
incorporated herein by reference:

           3.1 Certificate of Incorporation,  as amended, incorporated herein by
reference from  Pre-Effective  Amendment No. 2 to the Registrant's  Registration
Statement on Form S-1 (No. 33-9166), filed with the SEC on December 24, 1986.

           3.2  Bylaws of the  Company,  as  amended  to date,  incorporated  by
reference from Eagle's Current Report on Form 8-K dated November 12, 1993.

         10.1 Eagle Financial Corp.  Stock Option Plan  (incorporated  herein by
reference  from the  Company's  Annual  Report on Form  10-K for the year  ended
September 30, 1987 as filed with the SEC on December 22, 1987).

         10.2    BFS Bancorp, Inc. Stock Option Plan, (incorporated by reference
from the Company's  Registration Statement on Form S-8 (No. 33-28403) filed with
the SEC on April 28, 1989.)

         10.3     Eagle  Financial Corp. 1988 Stock Option Plan (incorporated by
reference from the Company's  definitive Proxy Statement dated December 21, 1988
for the 1989 Annual Meeting of  Shareholders,  as filed with the SEC on December
22, 1988).


                                       39
<PAGE>


        10.4      Employment  Agreement  dated April 1, 1994 among the  Company,
the Bank and Ralph T.  Linsley  (incorporated  by reference  from  Pre-effective
Amendment  No.1 to the Company's  Registration  Statement on Form S-2 (Reg.  No.
33-54981) filed with the SEC on September 12, 1994)

        10.5      Consulting Agreement dated August 25, 1988 between the Company
and Ralph T. Linsley (incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended  September  30,  1988,  as filed with the SEC on
December 29, 1988).

        10.6      Employment  Agreement  dated April 1, 1994 among the  Company,
the Bank and Robert J. Britton  (incorporated  by reference  from  Pre-effective
Amendment No. 1 to the Company's  Registration  Statement of Form S-2 (Reg.  No.
33-54981) filed with the SEC on September 12, 1994).

        10.7      Employment  Agreement  dated April 1, 1994 among the  Company,
the Bank and Ercole J. Labadia  (incorporated  by reference  from the  Company's
Registration  Statement of Form S-2 (Reg.  No.  33-54981)  filed with the SEC on
August 9, 1994).

        10.8      Employment  Agreement  dated April 1, 1994 among the  Company,
the  Bank  and Mark J.  Blum  (incorporated  by  reference  from  the  Company's
Registration  Statement on Form S-2 (Reg.  No.  33-54981)  filed with the SEC on
August 9, 1994).

        10.9      Employment  Agreement  dated April 1, 1994 among the  Company,
the  Bank  and Irene K. Hricko (incorporated  by  reference from  the  Company's
Registration  Statement on Form S-2 (Reg.  No.  33-54981)  filed with the SEC on
August 9, 1994).

        10.10      Employment  Agreement dated April 1, 1994 among the  Company,
the  Bank  and Barbara S. Mills (incorporated by reference  from  the  Company's
Registration  Statement on Form S-2 (Reg.  No.  33-54981)  filed with the SEC on
August 9, 1994).

        10.11     The Bank deferred compensation plan (incorporated by reference
from Pre-Effective  Amendment No. 1 to the Company's  Registration  Statement on
Form S-4 (Reg. No. 33-31122) filed with the SEC on May 17, 1988).

        10.12     Deferred   Compensation   Plan  for   Non-Employee   Directors
(incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended September 30, 1988, as filed with the SEC on December 29, 1988).

        10.13     Outside  Directors Post Retirement  Plan,  dated July 26, 1994
(incorporated by reference from the Company's Registration Statement on Form S-2
(Reg. No. 33-54981) filed with the SEC on August 9, 1994).

        10.14     Guarantee and Pledge  Agreement dated November 1, 1990 between
the Company and Bank of Boston  Connecticut  (incorporated by reference from the
Company's  Annual Report on Form 10-K for the year ended  September 30, 1990, as
filed with the SEC on December 28, 1990).

        10.15     Annual  Incentive  Plan  (incorporated  by  reference from the
Company's  Registration Statement on Form S-2 (Reg. No. 33-54981) filed with the
SEC on August 9, 1994).

        10.16     Amendment to  Employment  Agreement  dated July 26, 1994 among
the Company,  the Bank and Ralph T.  Linsley  (incorporated  by  reference  from
Pre-effective  Amendment No. 1 to the Company's  Registration  Statement on Form
S-2 (Reg. No. 33-54981) filed with the SEC on September 12, 1994).

       10.17      Amendment to  Employment  Agreement  dated July 26, 1994 among
the Company,  the Bank and Robert J.  Britton  (incorporated  by reference  from
Pre-effective  Amendment No. 1 to the Company's  Registration  Statement on Form
S-2 (Reg. No. 33-54981) filed with the SEC on September 12, 1994).

                                       40

<PAGE>

         12       Computation of Ratio of Earnings to fixed charges.

         13       1996  Annual  Report to  Shareholders,  portions of which have
                  been incorporated by reference into this Form 10-K.

         21       Subsidiaries of the Registrant

         23       Consent of KPMG Peat Marwick LLP

         27       Financial Data Schedule

         (b)      No  current  reports  on Form 8-K were  filed by the
                  Registrant during the fourth quarter of fiscal 1996.
         (c)      Exhibits   to  this  Form  10-K  are   attached   or
                  incorporated by reference as stated above.
         (d)      Not applicable.




                                       41
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                              EAGLE FINANCIAL CORP.
                                       -----------------------------------------
                                                     Registrant

                                       By:  /s/ Ralph T. Linsley
                                       -----------------------------------------
                                                Ralph T. Linsley
                                              Chairman of the Board

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

                                                                                     TITLE
                                                           -----------------------------------------------------------
<S>                                                        <C>


By: /s/  Ralph T. Linsley                                  Chairman of the Board
-----------------------------------------
            Ralph T. Linsley

By:  /s/  Robert J. Britton                                Chief Executive Officer, President and
-----------------------------------------                  Director (principal executive officer)
           Robert J. Britton              

By:  /s/  Mark J. Blum                                     Vice President, Chief Financial Officer and Secretary
-----------------------------------------                  (principal financial and accounting officer)
              Mark J. Blum               

By: /s/   Richard H. Alden                                 Director
-----------------------------------------
            Richard H. Alden

By: /s/   George T. Carpenter                              Director
-----------------------------------------
          George T. Carpenter

By: /s/   Theodore M. Donovan                              Director
-----------------------------------------
          Theodore M. Donovan

By: /s/   Thomas V. LaPorta                                Director
-----------------------------------------
           Thomas V. LaPorta

By: /s/   John F. McCarthy                                 Director
-----------------------------------------
            John F. McCarthy

By: /s/   Ernest J. Torizzo                                Director
-----------------------------------------
           Ernest J. Torizzo

By: /s/   Steven E. Lasewicz                               Director
-----------------------------------------
           Steven E. Lasewicz

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
                                                                                
Exhibit                                                                         
Number          Identity of Exhibit                                             
------          -------------------                                             
<S>            <C>                                                              
3.1             Certificate of  Incorporation,  amended herein by reference from
                Pre-Effective  Amendment No. 2 to the Registrant's  Registration
                Statement  on Form  S-1  (No.  33-9166),  filed  with the SEC on
                December 24, 1986.

3.2             Bylaws,  as amended   to date (incorporated  by  reference  from
                Eagle's Current Report on Form 8-K dated November 12, 1993).

10.1            Eagle Financial Corp. Stock Option Plan, (incorporated herein by
                reference  from Eagle's  Annual Report on Form 10-K for the year
                ended  September  30, 1987 as filed with the SEC on December 22,
                1987).

10.2            BFS Bancorp, Inc. Stock Option Plan,  (incorporated by reference
                from Eagle's  Registration  Statement on Form S-8 (No. 33-28403)
                filed with the SEC on April 28, 1989).

10.3            Eagle Financial Corp. 1988 Stock Option Plan,  (incorporated  by
                reference from Eagle's definitive Proxy Statement dated December
                21, 1988 for the 1989 Annual Meeting of  Shareholders,  as filed
                with the SEC on December 22, 1988).

10.4            Employment  Agreement dated April 1, 1994 among the Company, the
                Bank and  Ralph T.  Linsley,  (incorporated  by  reference  from
                Pre-effective  Amendment  No.  1 to the  Company's  Registration
                statement  on Form  S-2  (No.  33-54981)  filed  with the SEC on
                September 12, 1994).

10.5            Consulting  Agreement  dated August 25, 1988 between the Company
                and  Ralph  T.  Linsley  (incorporated  by  reference  from  the
                Company's  Annual  Report  on  Form  10-K  for  the  year  ended
                September 30, 1988, as filed with the SEC on December 29, 1988).

10.6            Employment  Agreement dated April 1, 1994 among the Company, the
                Bank and Robert J.  Britton  (incorporated  by  referenced  from
                Pre-effective  Amendment  No.  1 to the  Company's  Registration
                Statement on Form S-2 (Reg. No.  33-54981) filed with the SEC on
                September 12, 1994).

10.7            Employment  Agreement dated April 1, 1994 among the Company, the
                Bank and Ercole J. Labadia  (incorporated  by reference from the
                Company's Registration Statement on Form S-2 (Reg. No. 33-54981)
                filed with the SEC on August 9, 1994).

10.8            Employment  Agreement dated April 1, 1994 among the Company, the
                Bank  and  Mark J.  Blum  (incorporated  by  reference  from the
                Company's Registration Statement on Form S-2 (Reg. No. 33-54981)
                filed with the SEC on August 9, 1994).

10.9            Employment  Agreement dated April 1, 1994 among the Company, the
                Bank and Irene K. Hricko  (incorporated  by  reference  from the
                Company's Registration Statement on Form S-2 (Reg. No. 33-54981)
                filed with the SEC on August 9, 1994).

10.10           Employment Agreement dated April 1, 1994, among the Company, the
                Bank and Barbara S. Mills  (incorporated  by reference  from the
                Company's Registration Statement on Form S-2 (Reg. No. 33-54981)
                filed with the SEC on August 9, 1994).

10.11           The Bank deferred  compensation plan  (incorporated by reference
                from Pre-Effective Amendment No. 1 to the Company's Registration
                Statement on Form S-4 (No.  33-21122)  filed with the SEC on May
                17, 1988).

10.12           Deferred   Compensation   Plan   for   Non-Employee    Directors
                (incorporated  by reference from the Company's  Annual Report on
                Form 10-K for the year ended  September  30, 1988, as filed with
                the SEC on December 29, 1988).


<PAGE>
                                                                                                  
<CAPTION>
Exhibit                                                                                            
Number          Identity of Exhibit                                                                
------          -------------------                                                                

10.13           Outside  Directors  Post  Retirement  Plan,  dated July 26, 1994
                (incorporated  by  reference  from  the  Company's  Registration
                Statement on Form S-2 (Reg. No. 33-54981), filed with the SEC on
                August 9, 1994).

10.14           Guarantee and Pledge  Agreement  dated  November 1, 1990 between
                the  Company  and Bank of Boston  Connecticut  (incorporated  by
                reference from the Company's  Annual Report on Form 10-K for the
                year ended September 30, 1990, as filed with the SEC on December
                28, 1990).

10.15           Annual  Incentive  Plan  (incorporated  by  reference  from  the
                Company's Registration Statement on Form S-2 (Reg. No. 33-54981)
                filed with the SEC on August 9, 1994).

10.16           Amendment to Employment  Agreement dated July 26, 1994 among the
                Company,  the  Bank  and  Ralph  T.  Linsley   (incorporated  by
                reference  from  Pre-effective  Amendment No. 1 to the Company's
                Registration  Statement on Form S-2 (Reg.  No.  33-54981)  filed
                with the SEC on September 12, 1994).

10.17           Amendment to Employment  Agreement dated July 26, 1994 among the
                Company,  the  Bank  and  Robert  J.  Britton  (incorporated  by
                reference  from  Pre-effective  Amendment No. 1 to the Company's
                Registration  Statement on Form S-2 (Reg.  No.  33-54981)  filed
                with the SEC on September 12, 1994).

12              Computation of Ratio of Earnings to fixed charges


13              1996 Annual Report to Shareholders,  portions of which have been
                incorporated by reference into this Form 10-K.

21              Subsidiaries of the Registrant.

23              Consent of KPMG Peat Marwick.

27              Financial Data Schedule
</TABLE>