UNITED STATESSECURITIES
 AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
March 31, 2008.

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: 001-32007

|NEWALLIANCE BANCSHARES, INC.                          
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|DELAWARE                                                        |  | 52-2407114                           
|--------------------------------------------------------------- |  | -------------------------------------
|(State or
 other jurisdiction of incorporation or organization) |  | (I.R.S.
 Employer Identification No.)
|                                                                |  |                                      
|195 Church Street, New Haven, Connecticut                       |  | 06510                                
|(Address
 of principal executive offices)                       |  | (Zip Code)                           

(203) 789-2767





(Registrants telephone number, including area code)





(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.


[ X ]   Yes         [    ]   No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.


|Large accelerated filer X |  | Accelerated filer ___        
|------------------------- |  | -----------------------------
|                         
|Non-accelerated filer ___ |  | Smaller reporting company ___

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

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

| | Common Stock (par value $.01) |  |  | 108,590,368                | 
| | ----------------------------- |  |  | -------------------------- | 
| | Class                         |  |  | Outstanding at May 5, 2008 | 




TABLE OF CONTENTS

Part I  FINANCIAL INFORMATION


Page No.


|                            |          |  |                                                                                                     |  |    | 
|--------------------------- | -------- |  | --------------------------------------------------------------------------------------------------- |  | -- | 
|                            | Item 1.  |  | Financial Statements (Unaudited)                                                                    |  |    | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  | Consolidated Balance Sheets at March 31, 2008 and December 31, 2007                                 |  | 3  | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  | Consolidated Statements of Income for the three months ended March 31, 2008 and 2007                |  | 4  | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  | Consolidated Statement of Changes in Stockholders Equity for the three months ended March 31, 2008 |  | 5  | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007            |  | 6  | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  | Notes to Unaudited Consolidated Financial Statements                                                |  | 7  | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations               |  | 20 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                          |  | 35 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 4.  |  | Controls and Procedures                                                                             |  | 35 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 4T. |  | Controls and Procedures                                                                             |  | 36 | 
|                            |          |  |                                                                                                     |  |    | 
|Part II  OTHER INFORMATION
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 1.  |  | Legal Proceedings                                                                                   |  | 36 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 1A. |  | Risk Factors                                                                                        |  | 36 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                         |  | 39 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 3.  |  | Defaults Upon Senior Securities                                                                     |  | 39 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                 |  | 39 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 5.  |  | Other Information                                                                                   |  | 40 | 
|                            |          |  |                                                                                                     |  |    | 
|                            | Item 6.  |  | Exhibits                                                                                            |  | 40 | 
|                            |          |  |                                                                                                     |  |    | 
|                            |          |  |                                                                                                     |  |    | 

SIGNATURES

2




New Alliance Bancshares, Inc.


Consolidated Balance Sheets


|                                                                                                                          |  |   |           |   |  |              |           |  
|------------------------------------------------------------------------------------------------------------------------- |  | - | --------- | - |  | ------------ | --------- | -
|                                                                                                                          |  |   | March 31, |   |  | December 31,
|(In thousands,
 except per share data) (Unaudited)                                                                        |  |   | 2008      |   |  | 2007        
|                                                                                                                         
|Assets                                                                                                                    |  |   |           |   |  |              |           |  
|Cash
 and due from banks, noninterest bearing                                                                             |  | $ | 121,246   |   |  | $            | 108,917   |  
|Short-term
 investments                                                                                                   |  |   | 25,000    |   |  |              | 51,962    |  
|                                                                                                                         
|Cash
 and cash equivalents                                                                                                |  |   | 146,246   |   |  |              | 160,879   |  
|Investment
 securities available for sale (note 5)                                                                        |  |   | 2,109,367 |   |  |              | 2,201,021 |  
|Investment
 securities held to maturity (note 5)                                                                          |  |   | 334,583   |   |  |              | 290,472   |  
|Loans
 held for sale                                                                                                      |  |   | 7,268     |   |  |              | 2,669     |  
|Loans,
 net (note 6)                                                                                                      |  |   | 4,713,540 |   |  |              | 4,684,156 |  
|Premises
 and equipment, net                                                                                              |  |   | 61,530    |   |  |              | 61,939    |  
|Cash
 surrender value of bank owned life insurance                                                                        |  |   | 133,588   |   |  |              | 132,059   |  
|Goodwill
 (note 7)                                                                                                        |  |   | 528,117   |   |  |              | 531,191   |  
|Identifiable
 intangible assets (note 7)                                                                                  |  |   | 50,952    |   |  |              | 53,316    |  
|Other
 assets (note 8)                                                                                                    |  |   | 96,818    |   |  |              | 93,282    |  
|                                                                                                                         
|Total
 assets                                                                                                             |  | $ | 8,182,009 |   |  | $            | 8,210,984 |  
|                                                                                                                         
|Liabilities                                                                                                               |  |   |           |   |  |              |           |  
|Deposits
 (note 9)                                                                                                        |  |   |           |   |  |              |           |  
|Non-interest
 bearing                                                                                                     |  | $ | 484,380   |   |  | $            | 477,408   |  
|Savings,
 interest-bearing checking and money market                                                                      |  |   | 2,027,301 |   |  |              | 1,834,190 |  
|Time                                                                                                                      |  |   | 1,745,933 |   |  |              | 2,062,067 |  
|                                                                                                                         
|Total
 deposits                                                                                                           |  |   | 4,257,614 |   |  |              | 4,373,665 |  
|Borrowings
 (note 10)                                                                                                     |  |   | 2,424,860 |   |  |              | 2,355,504 |  
|Other
 liabilities                                                                                                        |  |   | 84,686    |   |  |              | 74,708    |  
|                                                                                                                         
|Total
 liabilities                                                                                                        |  |   | 6,767,160 |   |  |              | 6,803,877 |  
|                                                                                                                          |  |   |           |   |  |              |           |  
|Commitments
 and contingencies (note 14)                                                                                  |  |   |           |   |  |              |           |  
|                                                                                                                          |  |   |           |   |  |              |           |  
|Stockholders Equity                                                                                                      |  |   |           |   |  |              |           |  
|Preferred
 stock,$0.01 par value; authorized 38,000 shares; none issued                                                   |  |   | -         |   |  |              | -         |  
|Common
 stock, $0.01 par value; authorized 190,000 shares; issued
 121,486 shares at March 31, 2008 and December 31, 2007 |  |   | 1,215     |   |  |              | 1,215     |  
|Additional
 paid-in capital                                                                                               |  |   | 1,243,213 |   |  |              | 1,242,100 |  
|Unallocated
 common stock held by ESOP                                                                                    |  |   | (95,124   | ) |  |              | (96,039   | )
|Unearned
 restricted stock compensation                                                                                   |  |   | (23,544   | ) |  |              | (25,466   | )
|Treasury
 stock, at cost (12,896 shares at March 31, 2008 and 12,634
 shares at December 31, 2007)                        |  |   | (181,389  | ) |  |              | (178,401  | )
|Retained
 earnings                                                                                                        |  |   | 456,958   |   |  |              | 451,729   |  
|Accumulated
 other comprehensive income (note 16)                                                                         |  |   | 13,520    |   |  |              | 11,969    |  
|                                                                                                                         
|Total
 stockholders equity                                                                                               |  |   | 1,414,849 |   |  |              | 1,407,107 |  
|                                                                                                                         
|Total
 liabilities and stockholders equity                                                                               |  | $ | 8,182,009 |   |  | $            | 8,210,984 |  
|                                                                                                                         

See accompanying notes to consolidated financial statements.

3




NewAlliance Bancshares, Inc.


Consolidated Statements of Income


|                                                      |  | Three Months Ended
|----------------------------------------------------- |  | ------------------
|                                                      |  | March 31,         
|(In thousands, except share data) (Unaudited)         |  |                   
|                                                     
|Interest
 and dividend income                         |  |                   
|Residential
 real estate loans                        |  | $                 
|Commercial
 real estate loans                         |  |                   
|Commercial
 business loans                            |  |                   
|Consumer
 loans                                       |  |                   
|Investment
 securities                                |  |                   
|Short-term
 investments                               |  |                   
|                                                     
|Total
 interest and dividend income                   |  |                   
|                                                     
|Interest
 expense                                     |  |                   
|Deposits                                              |  |                   
|Borrowings                                            |  |                   
|                                                     
|Total
 interest expense                               |  |                   
|                                                     
|Net
 interest income before provision for loan losses |  |                   
|                                                     
|Provision
 for loan losses                            |  |                   
|                                                     
|Net
 interest income after provision for loan losses  |  |                   
|                                                     
|Non-interest
 income                                  |  |                   
|Depositor
 service charges                            |  |                   
|Loan
 and servicing income                            |  |                   
|Trust
 fees                                           |  |                   
|Investment
 management, brokerage & insurance fees    |  |                   
|Bank
 owned life insurance                            |  |                   
|Net
 gain on securities                               |  |                   
|Net
 gain on sale of loans                            |  |                   
|Other                                                 |  |                   
|                                                     
|Total
 non-interest income                            |  |                   
|                                                     
|Non-interest
 expense                                 |  |                   
|Salaries
 and employee benefits (notes 11 & 12)       |  |                   
|Occupancy                                             |  |                   
|Furniture
 and fixtures                               |  |                   
|Outside
 services                                     |  |                   
|Advertising,
 public relations, and sponsorships      |  |                   
|Amortization
 of identifiable intangible assets       |  |                   
|Merger
 related charges                               |  |                   
|Other                                                 |  |                   
|                                                     
|Total
 non-interest expense                           |  |                   
|                                                     
|Income
 before income taxes                           |  |                   
|                                                     
|Income
 tax provision (note 13)                       |  |                   
|                                                     
|Net income                                            |  | $                 
|                                                     
|                                                      |  |                   
|Basic earnings
 per share (note 17)                   |  | $                 
|Diluted earnings
 per share (note 17)                 |  |                   
|Weighted-average
 shares outstanding (note 17)        |  |                   
|Basic                                                 |  |                   
|Diluted                                               |  |                   
|Dividends
 per share                                  |  | $                 
|                                                      |  |                   

See accompanying notes to consolidated financial statements.

4




New Alliance Bancshares, Inc.


Consolidated Statement of Changes in Stockholders Equity


|                                                   |  |             |   |           |   |            |  |            |           |              |  | Unallocated |         |          |  |               |         |               |  |   |          |       |  |       |         | Accumulated |  |   |        | 
|-------------------------------------------------- |  | ----------- | - | --------- | - | ---------- |  | ---------- | --------- | ------------ |  | ----------- | ------- | -------- |  | ------------- | ------- | ------------- |  | - | -------- | ----- |  | ----- | ------- | ----------- |  | - | ------ | 
|                                                   |  | Common      |   | Par Value |   | Additional |  | Common     |           |              |  |             |         |          |  |               |         |               |  |   |          | Other |  | Total
|For the Three
 Months Ended March 31, 2008         |  | Shares      |   | Common    |   | Paid-in    |  | Stock Held |           | Unearned     |  | Treasury    |         | Retained |  | Comprehensive |         | Stockholders
|(In thousands,
 except per share data) (unaudited) |  | Outstanding |   | Stock     |   | Capital    |  | by ESOP    |           | Compensation |  | Stock       |         | Earnings |  | Income        |         | Equity       
|                                                  
|Balance December 31, 2007                          |  | 108,852     |   |           | $ | 1,215      |  | $          | 1,242,100 |              |  | $           | (96,039 | )        |  | $             | (25,466 | )             |  | $ | (178,401 | )     |  | $     | 451,729 |             |  | $ | 11,969 | 
|                                                  
|Dividends
 declared ($0.065 per share)             |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       | (6,643  | )           |  |   |        | 
|Allocation
 of ESOP shares, net of tax             |  |             |   |           |   |            |  |            | (119      | )            |  |             | 915     |          |  |               |         |               |  |   |          |       |  |       |         |             |  |   |        | 
|Treasury shares
 acquired (note 15)                |  | (262        | ) |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   | (2,988   | )     |  |       |         |             |  |   |        | 
|Restricted
 stock expense                          |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               | 1,922   |               |  |   |          |       |  |       |         |             |  |   |        | 
|Excess tax
 benefit of stock-based compensation    |  |             |   |           |   |            |  |            | 107       |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       |         |             |  |   |        | 
|Stock option
 expense                              |  |             |   |           |   |            |  |            | 1,125     |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       |         |             |  |   |        | 
|Adoption of
 EITF 06-4, net of tax (Note 2)        |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       | (1,062  | )           |  |   |        | 
|                                                  
|Comprehensive
 income:                             |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       |         |             |  |   |        | 
|Net
 income                                        |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       | 12,934  |             |  |   |        | 
|Other
 comprehensive income, net of tax (note 16)  |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       |         | 1,551       |  |   | 1,551  | 
|                                                  
|Total
 comprehensive income                        |  |             |   |           |   |            |  |            |           |              |  |             |         |          |  |               |         |               |  |   |          |       |  |       |         |             |  |   |        | 
|                                                  
|Balance March
 31, 2008                            |  | 108,590     |   |           | $ | 1,215      |  | $          | 1,243,213 |              |  | $           | (95,124 | )        |  | $             | (23,544 | )             |  | $ | (181,389 | )     |  | $     | 456,958 |             |  | $ | 13,520 | 
|                                                  

See accompanying notes to consolidated financial statements.

5




New Alliance Bancshares,
 Inc.


Consolidated Statements of Cash Flows


|                                                                                                 |  |  | Three Months Ended
|------------------------------------------------------------------------------------------------ |  |  | ------------------
|                                                                                                 |  |  | March 31,         
|                                                                                                 |  |  |                   
|(In thousands)
 (Unaudited)                                                                      |  |  |                   
|                                                                                                
|Cash flows
 from operating activities                                                            |  |  |                   
|Net income                                                                                       |  |  | $                 
|Adjustments
 to reconcile net income to net cash provided by operating activities                |  |  |                   
|Provision
 for loan losses                                                                       |  |  |                   
|Gain
 on sale of OREO                                                                            |  |  |                   
|Restricted
 stock compensation expense                                                           |  |  |                   
|Stock
 option compensation expense                                                               |  |  |                   
|ESOP
 expense                                                                                    |  |  |                   
|Amortization
 of identifiable intangible assets                                                  |  |  |                   
|Net
 amortization/accretion of fair market adjustments from net assets acquired                  |  |  |                   
|Net
 amortization/accretion of investment securities                                             |  |  |                   
|Change
 in deferred income taxes                                                                 |  |  |                   
|Depreciation
 and amortization                                                                   |  |  |                   
|Net
 gain on securities                                                                          |  |  |                   
|Net
 gain on sales of performing loans                                                           |  |  |                   
|Proceeds
 from sales of loans held for sale                                                      |  |  |                   
|Loans
 originated for sale                                                                       |  |  |                   
|Gain
 on sale of fixed assets                                                                    |  |  |                   
|Loss
 (gain) on limited partnerships                                                             |  |  |                   
|Increase
 in cash surrender value of bank owned life insurance                                   |  |  |                   
|(Increase)
 decrease in other assets                                                             |  |  |                   
|Increase
 (decrease) in other liabilities                                                        |  |  |                   
|                                                                                                
|Net
 cash provided by operating activities                                                       |  |  |                   
|                                                                                                
|Cash flows
 from investing activities                                                            |  |  |                   
|Purchase
 of securities available for sale                                                       |  |  |                   
|Purchase
 of securities held to maturity                                                         |  |  |                   
|Proceeds
 from maturity, sales, calls and principal reductions of securities
 available for sale |  |  |                   
|Proceeds
 from maturity, calls and principal reductions of securities held to maturity           |  |  |                   
|Net
 increase in loans held for investment                                                       |  |  |                   
|Net
 cash acquired in acquisitions                                                               |  |  |                   
|Proceeds
 from sales of other real estate owned                                                  |  |  |                   
|Purchase
 of premises and equipment                                                              |  |  |                   
|                                                                                                
|Net
 cash provided by investing activities                                                       |  |  |                   
|                                                                                                
|Cash flows
 from financing activities                                                            |  |  |                   
|Net
 decrease in customer deposit balances                                                       |  |  |                   
|Net
 increase in short-term borrowings                                                           |  |  |                   
|Proceeds
 from long-term borrowings                                                              |  |  |                   
|Repayments
 of long-term borrowings                                                              |  |  |                   
|Shares
 issued for stock option exercise                                                         |  |  |                   
|Excess
 tax benefit of stock-based compensation                                                  |  |  |                   
|Acquisition
 of treasury shares                                                                  |  |  |                   
|Dividends
 declared                                                                              |  |  |                   
|                                                                                                
|Net
 cash used by financing activities                                                           |  |  |                   
|                                                                                                
|Net
 (decrease) increase in cash and cash equivalents                                            |  |  |                   
|                                                                                                
|Cash
 and equivalents, beginning of period                                                       |  |  |                   
|                                                                                                
|Cash
 and equivalents, end of period                                                             |  |  | $                 
|                                                                                                
|Supplemental
 information                                                                        |  |  |                   
|Cash paid for                                                                                    |  |  |                   
|Interest on deposits and
borrowings                                                              |  |  |                   
|Income taxes (refunded) paid, net                                                                |  |  |                   
|Noncash transactions                                                                             |  |  |                   
|Net
 non-cash liabilities acquired                                                               |  |  |                   
|Value
 of shares issued for acquisitions                                                         |  |  |                   

See accompanying notes to consolidated financial statements.

6




NewAlliance Bancshares, Inc.Notes to Unaudited Consolidated Financial
 Statements





|1. |  | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Financial Statement Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | The consolidated
 financial statements of NewAlliance Bancshares, Inc. (the Company) have
 been prepared in conformity with accounting principles generally accepted in the
 United States of America. In the opinion of management, all adjustments (consisting
 of normal recurring accruals) considered necessary for a fair presentation have
 been included. All significant intercompany transactions and balances have been
 eliminated in consolidation. Amounts in prior period financial statements are reclassified
 whenever necessary to conform to the current year presentation. These Consolidated
 Financial Statements should be read in conjunction with the audited Consolidated
 Financial Statements and Notes thereto included in the Companys Annual Report
 on Form 10-K as of and for the year ended December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | The preparation
 of the consolidated financial statements requires management to make estimates and
 assumptions that affect the reported amounts of assets, liabilities, revenues and
 expenses and the disclosure of contingent assets and liabilities. Actual results
 could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Material estimates
 that are particularly susceptible to significant near-term change relate to the
 determination of the allowance for loan losses, the obligation and expense for pension
 and other postretirement benefits, estimates used to evaluate asset impairment including
 income tax contingencies and deferred tax assets and liabilities, stock-based compensation
 and the recoverability of goodwill and other intangible assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. |  | Recent
 Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | In March
 2008, the Financial Accounting Standards Board (FASB) issued Statement
 No. 161 (SFAS No. 161), Disclosures about Derivative Instruments
 and Hedging Activities. SFAS No. 161 requires enhanced disclosures regarding
 derivative instruments and hedging activities that include a tabular summary of
 the fair values of derivative instruments and their gains and losses, disclosure
 of derivative features that are credit-risk-related to provide more information
 regarding an entitys liquidity and cross-referencing within footnotes to make
 it easier for financial statement users to locate important information about derivative
 instruments. The new standard is effective for financial statements issued for fiscal
 years and interim periods beginning after November 15, 2008, with early application
 encouraged. Management believes that the adoption of SFAS No. 161 will not have
 a material impact on the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | In December
 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141(R)) which replaces SFAS No. 141, Business
 Combinations. SFAS No. 141(R) retains the fundamental requirements in
 SFAS No. 141 that the acquisition method of accounting be used for all business
 combinations and for an acquirer to be identified for each business combination.
 SFAS No. 141(R) requires among other things, that acquisition-related transaction
 and restructuring costs be expensed rather than treated as part of the cost of the
 acquisition; that the acquiring entity in a business combination to recognize all
 the assets acquired and liabilities assumed in the transaction; that the acquisition-date
 fair value be used as the measurement objective for all assets acquired and liabilities
 assumed; and that the acquirer provide certain disclosures that will allow users
 of the financial statements to understand the nature and financial effect of the
 business combination. SFAS No. 141(R) is effective for fiscal years beginning after
 December 15, 2008. Management is currently analyzing the impact of this pronouncement
 on the financial statements. The adoption of SFAS No. 141(R) would apply prospectively
 to any future business combinations. It is expected to have a significant effect
 on NewAlliances consolidated financial statements, and therefore the impact
 would be determined when a business combination occurs.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | In February
 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial
 Assets and Financial Liabilities, to permit all entities to choose to
 elect to measure eligible financial instruments at fair value. A business entity
 shall report in earnings, unrealized gains and losses on items for which the fair
 value option has been elected. Eligible items include any recognized financial assets
 and liabilities with certain exceptions including but not limited to, deposit liabilities,
 investments in subsidiaries, and certain deferred compensation arrangements. The
 decision about whether to elect the fair value option is generally applied on an
 instrument-by-instrument basis, is generally irrevocable, and is applied only to
 an entire instrument and not to only specified risks, specific cash flows, or portions
 of that instrument. This Statement was effective as of the beginning of each reporting
 entitys first fiscal year that begins after November 15, 2007. Management
 did not elect the fair value option for any of the Companys eligible financial
 assets or liabilities on January 1, 2008.                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | In September
 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
 Benefit Pension and Other Postretirement Plans  an amendment of
 SFAS Nos. 87, 88, 106, and 132(R), that requires employers to recognize the overfunded
 or underfunded positions of defined benefit postretirement plans, including pension
 plans, in their balance sheets for fiscal years ending after December 15, 2006.
 The Standard also requires that employers measure plan assets and obligations as
 of the date of their financial statements. This Statement requires a public entity
 that currently measures plan assets and benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

7

---



NewAlliance
 Bancshares, Inc.Notes to Unaudited Consolidated Financial
 Statements





|   |  | obligations
 as of a date other than the date of its statement of financial position to implement
 the change in measurement date for fiscal years ending after December 15, 2008.
 Amounts recognized pursuant to SFAS No. 158 will not affect the Banks regulatory
 capital. The impact of adopting SFAS No. 158 on December 31, 2006, was a reduction
 to stockholders equity of $5.8 million, net of tax, with no impact to the
 consolidated statements of income and cash flows. The adoption of the measurement
 date provision on December 31, 2008 will not have a material impact on the Companys consolidated financial statements.                                                                                                                                                                                                                                                            
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  | In September
 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157), which addresses how companies should measure fair value
 when they are required to use a fair value measure for recognition or disclosure
 purposes under generally accepted accounting principles (GAAP). As a
 result of SFAS No. 157, there is now a common definition of fair value to be used
 throughout GAAP as it establishes a fair value hierarchy. SFAS No. 157 will require
 companies to make expanded disclosures about fair value measurements. The Company
 adopted SFAS No. 157 effective January 1, 2008. The adoption of SFAS No. 157 did
 not have a material impact on the Companys consolidated financial statements.
 See Note 3 in Notes to Unaudited Consolidated Financial Statements for additional
 information.                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  | In February
 2008, the FASB issued FASB Staff Position FAS No. 157-2,Effective Date
 of FASB Statement No. 157 (FSP No. 157-2), which delays the
 January 1, 2008 effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial
 liabilities, to fiscal years beginning after November 15, 2008, and interim periods
 within those fiscal years. The adoption of FSP No. 157-2 is not expected to have
 a material effect on the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  | In September
 2006, the FASB reached a consensus on Emerging Issues Task Force (EITF)
 Issue 06-4,Accounting for Deferred Compensation and Postretirement Benefit
 Aspects of Endorsement Split-Dollar Life Insurance Arrangements, (EITF
 Issue 06-4). In March 2007, the FASB reached a consensus on EITF Issue 06-10,
Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements, (EITF Issue 06-10). Both of these standards require a company
 to recognize an obligation over an employees service period based upon the
 substantive agreement with an employee such as the promise to maintain a life insurance
 policy or provide a death benefit. The Company adopted the provisions of these standards
 effective January 1, 2008 which resulted in the recording of a liability of $1.6
 million with a corresponding reduction to retained earnings, (net of tax).
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. |  | Fair Value
 Measurements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  | SFAS No. 157,
 Fair Value Measurements, defines fair value, establishes a framework for measuring
 fair value under GAAP, and expands disclosures about fair value measurements. As
 a result of SFAS No. 157, there is now a common definition of fair value to be used
 throughout GAAP, it establishes a fair value hierarchy and will require companies
 to make expanded disclosures about fair value measurements. The three levels of
 the fair value hierarchy under SFAS No. 157 are described below:                                                                                                                                                                                                                                                                                                                                                                                               
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |  |  | Level 1  Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |  | Level 2  Observable inputs other than Level 1 prices such as quoted prices for similar
 assets or liabilities; quoted prices in markets that are not active; or other inputs
 that are observable or can be corroborated by observable market data for substantially
 the full term of the assets or liabilities. This category generally includes U.S. Government and agency mortgage backed securities; corporate debt securities, derivative
 contracts and residential mortgage loans held-for-sale.
| |  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |  | Level 3  Unobservable inputs that are supported by little or no market activity
 and that are significant to the fair value of the assets or liabilities. Level 3
 assets and liabilities include financial instruments whose value is determined using
 pricing models, discounted cash flow methodologies, or similar techniques, as well
 as instruments for which the determination of fair value requires significant management
 judgment or estimation.                                          

| |  | The following
 table details the financial instruments carried at fair value on a recurring basis
 as of March 31, 2008 and indicates the fair value hierarchy of the valuation techniques
 utilized by the Company to determine the fair value:
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                               |  |  | March 31, 2008    
| |  | ----------------------------- |  |  | ------------------
| |  |                               |  |  |                   
| |  |                               |  |  | Quoted Prices in  
| |  |                               |  |  | Active Markets for
| |  |                               |  |  | Identical Assets  
| |  | (In thousands)                |  |  | (Level 1)         
| |  |                              
| |  | Securities Available for Sale |  |  | $                 
| |  |                              

8

---



NewAlliance
 Bancshares, Inc.Notes to Unaudited Consolidated Financial
 Statements





| |  | Where quoted
 prices are available in an active market, securities are classified within level
 1 of the valuation hierarchy. Level 1 securities include highly liquid government
 bonds, certain mortgage products and exchange-traded equities. If quoted prices
 are not available, then fair values are estimated by using pricing models or quoted
 prices of securities with similar characteristics. The Company utilizes a 3rd party to obtain pricing for its securities portfolio. Examples of such instruments,
 which would generally be classified within Level 2 of the valuation hierarchy, include
 mortgage-backed securities and municipal obligations.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | The following
 table details the financial instruments carried at fair value on a nonrecurring
 basis as of March 31, 2008 and indicates the fair value hierarchy of the valuation
 techniques utilized by the Company to determine the fair value:                                                                                                                                                                                                                                                                                                                                                                                                                      

| |  |                       |  |  | March 31, 2008
| |  | --------------------- |  |  | --------------
| |  |                       |  |  |               
| |  |                       |  |  |               
| |  |                       |  |  |               
| |  |                       |  |  |               
| |  | (In thousands)        |  |  |               
| |  |                      
| |  | Loan Servicing Rights |  |  | $             
| |  | Impaired Loans        |  |  |               
| |  |                      

|   |  | The following
 is a description of the valuation methodologies used for instruments measured at
 fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Loan
 Servicing Rights: A Loan Servicing Right asset represents the amount by which
 the present value of the estimated future net cash flows to be received from servicing
 loans are expected to more than adequately compensate the Company for performing
 the servicing. The fair value of servicing rights is estimated using a present value
 cash flow model. The most important assumptions used in the valuation model are
 the anticipated rate of the loan prepayments and discount rates. Although some assumptions
 in determining fair value are based on standards used by market participants, some
 are based on unobservable inputs and therefore are classified in Level 3 of the
 valuation hierarchy.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Impaired
 loans: Impaired loans for which the Bank expects to receive less than the contracted
 balance are written down to fair value. These loans are written down through a specific
 reserve within the Banks total loan loss reserve allowance. The fair value
 of these assets are classified within Level 3 of the valuation hierarchy and are
 estimated based on either collateral values supported by appraisals, or observed
 market prices.                                                                                                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. |  | Business
 Combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | There were
 no business combinations completed for the quarter ended March 31, 2008. The following
 table summarizes acquisitions completed since January 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |  |                                         |  |             |  | Balance at       |         |                           |   |          |  |             |        |      |              |        |      |       |        |  |         
| |  | --------------------------------------- |  | ----------- |  | ---------------- | ------- | ------------------------- | - | -------- |  | ----------- | ------ | ---- | ------------ | ------ | ---- | ----- | ------ |  | --------
| |  |                                         |  |             |  | Acquisition Date |         | Transaction Related Items
| |  |                                         |  |             |  |                  |         |                          
| |  |                                         |  |             |  |                  |         |                           |   |          |  |             |        |      |              |        |      |       |        |  |         
| |  |                                         |  | Acquisition |  |                  |         |                           |   |          |  |             |        |      | Identifiable |        | Cash |       | Shares |  | Purchase
| |  | (In thousands)                          |  | Date        |  | Assets           |         | Equity                    |   | Goodwill |  | Intangibles |        | Paid |              | Issued |      | Price
| |  |                                        
| |  | Connecticut Investment Management, Inc. |  | 3/5/2007    |  | $                | 951     |                           | $ | 652      |  | $           | 753    |      | $            | 1,363  |      | $     | 2,000  |  | $       
| |  | Westbank Corporation,
 Inc.             |  | 1/2/2007    |  |                  | 716,834 |                           |   | 42,967   |  |             | 79,940 |      |              | 14,232 |      |       | 58,447 |  |         
| |  |                                        

| |  | The transactions
 were accounted for using the purchase method of accounting in accordance with SFAS
 No. 141, Business Combinations. Accordingly, the purchase price
 was allocated based on the estimated fair market values of the assets and liabilities
 acquired.                                                                       
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                 
| |  | Connecticut
 Investment Management, Inc.                                                                                                                                                                                                                                                                                                        
| |  | On March
 5, 2007, the Company completed its acquisition of Connecticut Investment Management,
 Inc. (CIMI) a registered investment advisory firm for $2.0 million in
 cash. At December 31, 2006 CIMI had approximately $190.0 million in assets under management.                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                 
| |  | Westbank
 Corporation Acquisition                                                                                                                                                                                                                                                                                                               
| |  | On January
 2, 2007 the Company completed the acquisition of Westbank Corporation (Westbank), the parent company of Westbank. The aggregate merger consideration was valued
 at approximately $117.4 million. Westbank had assets of approximately $716.8 million
 and stockholders equity of approximately $43.0 million on January 2, 2007.

9

---



NewAlliance Bancshares, Inc.Notes to Unaudited Consolidated Financial
 Statements





|5. |  | Investment Securities                                                                                                                                                                          
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                
|   |  | The following
 table presents the amortized cost, gross unrealized gains, gross unrealized losses
 and estimated fair values of investment securities at March 31, 2008 and December
 31, 2007.
|   |  |                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                
|   |  | (In thousands)                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                
|   |  | Available
 for sale                                                                                                                                                                            
|   |  | U.S. Treasury obligations                                                                                                                                                                      
|   |  | U.S.
 Government sponsored enterprise obligations                                                                                                                                              
|   |  | Corporate
 obligations                                                                                                                                                                         
|   |  | Other
 bonds and obligations                                                                                                                                                                   
|   |  | Marketable
 and trust preferred equity securities                                                                                                                                              
|   |  | Mortgage-backed
 securities                                                                                                                                                                    
|   |  |                                                                                                                                                                                                
|   |  | Total available for sale                                                                                                                                                                       
|   |  |                                                                                                                                                                                                
|   |  | Held to
 maturity                                                                                                                                                                              
|   |  | Mortgage-backed
 securities                                                                                                                                                                    
|   |  | Other
 bonds                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                
|   |  | Total
 held to maturity                                                                                                                                                                        
|   |  |                                                                                                                                                                                                
|   |  | Total
 securities                                                                                                                                                                              
|   |  |                                                                                                                                                                                                

| |  | The following
 table presents the fair value of investments with continuous unrealized losses for
 less than one year and those that have been in a continuous loss position for more
 than one year as of March 31, 2008.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                    |  | Less Than One Year |         | More Than One Year |   | Total     
| |  | -------------------------------------------------- |  | ------------------ | ------- | ------------------ | - | ----------
| |  |                                                    |  |                    |         |                    |   |           
| |  |                                                    |  |                    | Fair    |                    |   | Unrealized
| |  | (In thousands)                                     |  |                    | value   |                    |   | losses    
| |  |                                                   
| |  | U. S. Treasury
 obligations                        |  | $                  | -       |                    | $ | -         
| |  | U. S. Government
 sponsored enterprise obligations |  |                    | 823     |                    |   | (4        
| |  | Corporate
 obligations                             |  |                    | 4,330   |                    |   | (16       
| |  | Other bonds
 and obligations                       |  |                    | 38,216  |                    |   | (1,626    
| |  | Marketable
 and trust preferred equity obligations |  |                    | 40,808  |                    |   | (8,095    
| |  | Mortgage-backed
 securities                        |  |                    | 76,830  |                    |   | (1,194    
| |  |                                                   
| |  | Total securities
 with unrealized losses           |  | $                  | 161,007 |                    | $ | (10,935   
| |  |                                                   

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Of the issues
 summarized above, 65 issues have unrealized losses for less than twelve months and
 one has an unrealized loss for twelve months or more. Management believes that no
 individual unrealized loss as of March 31, 2008 represents an other-than-temporary
 impairment. The unrealized losses reported for mortgage-backed securities relate
 to securities issued by FNMA, FHLMC and AAA rated securities issued by private institutions
 and the unrealized losses on these securities are attributable to changes in market
 interest rates. None of the securities are backed by sub-prime mortgage loans. The
 unrealized losses reported for corporate obligations and other bonds and obligations
 relate to securities that are investment grade and the unrealized losses on these
 securities are attributable to changes in market interest rates rather than credit
 quality of the issuer. In addition to market interest rates, the unrealized losses
 reported for trust preferred equity securities are also attributable to the current
 market stress partially resulting from efforts by banks to raise capital. This has
 in turn inflated coupon rates on new issues of trust preferred equity securities
 versus lower rates on the Companys portfolio of A- to AAA rated, non-perpetual
 seasoned issues of trust preferred equity securities. The Company has the ability
 and intent to hold the securities contained in the table for a period of time necessary
 to recover the unrealized losses, which may be until maturity.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

10

---



NewAlliance
 Bancshares, Inc.Notes to Unaudited Consolidated Financial
 Statements





|6. |  | Loans                                                          
|-- |  | ---------------------------------------------------------------
|   |  |                                                                
|   |  | The composition
 of the Companys loan portfolio is as follows:

| |  |                                         |  | March 31, |           |   | December 31, |  
| |  | --------------------------------------- |  | --------- | --------- | - | ------------ | -
| |  | (In thousands)                          |  | 2008      |           |   | 2007         |  
| |  |                                        
| |  | Residential
 real estate                |  | $         | 2,391,755 |   |              | $
| |  | Commercial
 real estate                 |  |           | 989,961   |   |              |  
| |  | Construction                            |  |           |           |   |              |  
| |  | Residential                             |  |           | 22,547    |   |              |  
| |  | Commercial                              |  |           | 208,142   |   |              |  
| |  | Commercial
 business                    |  |           | 454,463   |   |              |  
| |  | Consumer                                |  |           |           |   |              |  
| |  | Home
 equity and equity lines of credit |  |           | 662,395   |   |              |  
| |  | Other                                   |  |           | 29,691    |   |              |  
| |  |                                        
| |  | Total
 consumer                         |  |           | 692,086   |   |              |  
| |  |                                        
| |  | Total
 loans                            |  |           | 4,758,954 |   |              |  
| |  | Allowance
 for loan losses              |  |           | (45,414   | ) |              |  
|
| |  | Total
 loans, net                       |  | $         | 4,713,540 |   |              | $
| |  |                                        

| |  | At March 31,
 2008 and December 31, 2007, the Companys residential real estate loan, residential
 construction, home equity loan and equity lines of credit portfolios are entirely
 collateralized by one to four family homes and condominiums, the majority of which
 are located in Connecticut and Massachusetts. The commercial real estate loan and
 commercial construction portfolios are collateralized primarily by multi-family,
 commercial and industrial properties located predominately in Connecticut and Massachusetts.
 A variety of different assets, including accounts receivable, inventory and property,
 and plant and equipment, collateralize the majority of the commercial business loan
 portfolio.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | The following
 table provides a summary of activity in the allowance for loan losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |  |                                               |  | At or For the Three Months
| |  | --------------------------------------------- |  | --------------------------
| |  |                                               |  | Ended March 31,           
| |  |                                               |  |                           
| |  | (In thousands)                                |  |                           
| |  |                                              
| |  | Balance at
 beginning of period               |  | $                         
| |  | Net allowance
 gained through acquisitions    |  |                           
| |  | Provision
 for loan losses                    |  |                           
| |  | Charge-offs                                   |  |                           
| |  | Residential
 and commercial real estate loans |  |                           
| |  | Commercial
 business loans                    |  |                           
| |  | Consumer
 loans                               |  |                           
| |  |                                              
| |  | Total
 charge-offs                            |  |                           
| |  |                                              
| |  | Recoveries                                    |  |                           
| |  | Residential
 and commercial real estate loans |  |                           
| |  | Commercial
 business loans                    |  |                           
| |  | Consumer
 loans                               |  |                           
| |  |                                              
| |  | Total
 recoveries                             |  |                           
| |  |                                              
| |  | Net charge-offs                               |  |                           
| |  |                                              
| |  | Balance at
 end of period                     |  | $                         
| |  |                                              

11

---



|NewAlliance Bancshares, Inc.                        
|----------------------------------------------------
|Notes to Unaudited Consolidated Financial Statements
|                                                    
|                                                    
|                                                    
|7.                                                  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    

The reduction of $3.1 million in goodwill, shown above as other, was primarily due to a reduction of unrecognized tax benefits
for tax positions taken in prior years based on the settlement of an IRS examination.The components of identifiable intangible assets are comprised of core deposit and customer relationships which had the
following balances at March 31, 2008:

Original





BalanceRecorded


Cumulative


March 31,(In thousands)


Amount


Amortization


2008Core deposit and customer relationships

$
86,908

$
35,956

$
50,952


|   |  |              |  |  |  |  | 
|-- |  | ------------ |  |  |  |  | 
|8. |  | Other Assets |  |  |  |  | 
|   |  |              |  |  |  |  | 

Selected components of other assets are as follows:(In thousands)


March 31,2008

December 31,2007Deferred tax
 asset, net

$
8,006

$
10,033Accrued interest
 receivable


33,643


35,071Prepaid pension


13,815


14,180Investments
 in limited partnerships and other investments


8,940


9,069All other


32,414


24,929Total other
 assets


96,818


93,282


12




|NewAlliance Bancshares, Inc.                        
|----------------------------------------------------
|Notes to Unaudited Consolidated Financial Statements
|                                                    

9.          Deposits

A summary of deposits by account type is as follows:(In thousands)


March 31,2008


December 31,2007Savings

$
1,126,787

$
941,051Money market


494,845


492,042NOW


405,669


401,097Demand


484,380


477,408Time


1,745,933


2,062,067Total
 deposits

$
4,257,614

$
4,373,665


10.        Borrowings

The following is a summary of the Companys borrowed funds:March 31,

December 31,(In thousands)


2008

2007FHLB advances
 (1)

$
2,211,038

$
2,136,965Repurchase
 agreements


187,512


192,145Mortgage loans
 payable


1,425


1,459Junior subordinated
 debentures issued to affiliated trusts (2)


24,885


24,935Total
 borrowings

$
2,424,860

$
2,355,504


(1)

Includes fair value adjustments on acquired borrowings, in accordance with SFAS No. 141, Business Combinations, of $8.6
million and $9.6 million at March 31, 2008 and December 31, 2007, respectively.(2)

Includes fair value adjustments on acquired borrowings, in accordance with SFAS No. 141, Business Combinations, of $250,000
and $300,000 at March 31, 2008 and December 31, 2007, respectively. The trusts were organized to facilitate the issuance of
trust preferred securities. The Company acquired these subsidiaries when it acquired Alliance Bancorp of New England, Inc. and Westbank Corporation, Inc. The affiliated trusts are wholly-owned subsidiaries of the Company and the payments of these securities
are irrevocably and unconditionally guaranteed by the Company.The acquisition fair value adjustments (premiums) are being amortized as an adjustment to interest expense on borrowings over
their remaining term using the level yield method.


FHLB advances are secured by the Companys investment in FHLB stock, a blanket security agreement and other eligible
securities. This agreement requires the Bank to maintain as collateral certain qualifying assets, principally mortgage loans. At
March 31, 2008 and December 31, 2007, the Bank was in compliance with the FHLB collateral requirements. At March 31,
2008, the Company could borrow an additional $162.6 million from the FHLB, inclusive of a line of credit of approximately
$20.0 million. Additional borrowing capacity of approximately $797.4 million would be available by pledging additional
eligible securities as collateral. The Company also has borrowing capacity at the Federal Reserve Bank of Bostons discount
window, which was approximately $121.5 million as of March 31, 2008, all of which was available on that date. At March 31,
2008, the majority of the Companys $2.20 billion outstanding FHLB advances were at fixed rates, while only $15.0 million had
floating rates.

11.       Pension and Other Postretirement Benefit
 Plans

The Company provides various defined benefit and other postretirement benefit plans (postretirement health and life insurance
benefits) to substantially all employees hired prior to January 1, 2008. The Company also has supplemental retirement plans
(the Supplemental Plans) that provide benefits for certain key executive officers. Benefits under the supplemental plans are
based on a predetermined formula and are reduced by other benefits. The liability arising from these plans is being accrued over
the participants remaining periods of service so that at the expected retirement dates, the present value of the annual payments
will have been expensed.

13




NewAlliance Bancshares, Inc.


Notes to Unaudited Consolidated Financial Statements





| | The following table presents the amount of net periodic pension cost for the three
 months ended March 31, 2008 and 2007. |                  
| | ------------------------------------------------------------------------------------------------------------------------- | -----------------
| |                                                                                                                          
| |                                                                                                                           |                  
| |                                                                                                                           |                  
| |                                                                                                                           | Qualified Pension
| |                                                                                                                           |                  
| | (In thousands)                                                                                                            |                  
| |                                                                                                                          
| | Service cost
 - benefits earned during the period                                                                         | $                
| | Interest cost
 on projected benefit obligation                                                                            |                  
| | Expected return
 on plan assets                                                                                           |                  
| | Amortization:                                                                                                             |                  
| | Transition                                                                                                                |                  
| | Prior
 service cost                                                                                                       |                  
| | Loss
 (gain)                                                                                                              |                  
| |                                                                                                                          
| | Net
 periodic benefit cost                                                                                                | $                
| |                                                                                                                          

| | In connection
 with its conversion to a state-chartered stock bank, the Company established an
 ESOP to provide substantially all employees of the Company the opportunity to become
 stockholders. The ESOP borrowed $109.7 million of a $112.0 million line of credit
 from the Company and used the funds to purchase 7,454,562 shares of common stock
 in the open market subsequent to the subscription offering. The loan will be repaid
 principally from the Banks discretionary contributions to the ESOP over a
 remaining period of 26 years. The unallocated ESOP shares are pledged as collateral
 on the loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | At March
 31, 2008, the loan had an outstanding balance of $101.6 million and an interest rate
 of 4.0%. The Company accounts for its ESOP in accordance with Statement of Position
 (SOP) 93-6,Employers Accounting for Employee Stock Ownership
 Plans. Under SOP 93-6, unearned ESOP shares are not considered outstanding
 and are shown as a reduction of stockholders equity as unearned compensation.
 The Company will recognize compensation cost equal to the fair value of the ESOP
 shares during the periods in which they are committed to be released. To the extent
 that the fair value of the Companys ESOP shares differs from the cost of such
 shares, this differential will be credited to equity. The Company will receive a
 tax deduction equal to the cost of the shares released to the extent of the principal
 paydown on the loan by the ESOP. As the loan is internally leveraged, the loan receivable
 from the ESOP to the Company is not reported as an asset nor is the debt of the
 ESOP shown as a liability in the Companys financial statements. Dividends
 on unallocated shares are used to pay the ESOP debt. The ESOP compensation expense
 for the three months ended March 31, 2008 and 2007 was approximately $730,000 and $1.0
 million, respectively. The amount of loan repayments made by the ESOP is used to
 reduce the unallocated common stock held by the ESOP.

| | The ESOP shares
 as of March 31, 2008 were as follows:              |   |          
| | ------------------------------------------------------------------- | - | ---------
| |                                                                    
| |                                                                    
| | Shares released
 for allocation                                     |   | 975,773  
| | Unreleased
 shares                                                  |   | 6,478,789
| |                                                                    
| | Total
 ESOP shares                                                  |   | 7,454,562
| |                                                                    
| | Market value
 of unreleased shares at March 31, 2008 (in thousands) | $ | 79,430   

|12. | Stock-Based
 Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 provides compensation benefits to employees and non-employee directors under its
 2005 Long-Term Compensation Plan (the LTCP) which was approved by shareholders.
 The Company accounts for stock-based compensation using the fair value recognition
 provisions of revised SFAS No. 123 (SFAS No. 123R), Share Based
 Payment, which was adopted using the modified prospective transition method
 effective January 1, 2006. Under SFAS No. 123R, the fair value of stock option and
 restricted stock awards, measured at grant date, is amortized to compensation expense
 on a straight-line basis over the vesting period.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The LTCP
 allows for the issuance of up to 11.4 million Options or Stock Appreciation Rights
 and up to 4.6 million Stock Awards or Performance Awards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Option Awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Options
 awarded to date are for a term of ten years. Substantially all of these options
 were awarded on the original award date of June 17, 2005 and these 2005 options
 have the following vesting schedule: 40% vested at year-end 2005, 20% vested at
 year-end 2006 and 2007, respectively and 20% will vest at year-end of 2008. Subsequent
 awards have vesting periods of either three                                                                                                                                                                                                                                                     

14






NewAlliance Bancshares, Inc.


Notes to Unaudited Consolidated Financial
 Statements





| | or four
 years. The Company has assumed a 0.4% forfeiture rate as the majority of the options
 have been awarded to senior level management. Compensation expense recorded on options
 for the three months ended March 31, 2008 and 2007 was $1.1 million for both periods
 or after tax expense of approximately $730,000 and $715,000, respectively. It is
 anticipated that the Company will recognize expense on options of approximately
 $4.2 million, $167,000, $142,000, $58,000 and $4,000 in calendar years 2008 through
 2012, unless additional awards are granted.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | Options
 to purchase 59,250 shares were granted to employees during the three months ended
 March 31, 2008 and 60,000 shares were granted during the three months ended March
 31, 2007. Using the Black-Scholes option pricing model, the weighted-average grant
 date fair value was $1.86 and $2.69 for these options which were granted in 2008 and
 2007, respectively. The weighted-average related assumptions for the three months
 ended March 31, 2008 and 2007 are presented in the following table.                                                                 

| |                          |  | 2008       |   |  | 2007       |   | 
| | ------------------------ |  | ---------- | - |  | ---------- | - | 
| |                         
| | Risk-free
 interest rate |  | 2.80       | % |  | 4.46       | %
| | Expected dividend
 yield |  | 2.15       | % |  | 1.50       | %
| | Expected volatility      |  | 16.11      | % |  | 16.02      | %
| | Expected life            |  | 6.25 years |   |  | 3.84 years |   | 
| |                         

| | A summary of option activity under the LTCP as of March 31, 2008 and changes during
 the period ended is presented below.
| | -------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                          
| |                                                                                                                          
| |                                                                                                                          
| |                                                                                                                          
| |                                                                                                                          
| |                                                                                                                          
| | Options outstanding
 at beginning of year                                                                                
| | Granted                                                                                                                  
| | Exercised                                                                                                                
| | Forfeited/cancelled                                                                                                      
| | Expired                                                                                                                  
| |                                                                                                                          
| | Options outstanding
 at March 31, 2008                                                                                   
| |                                                                                                                          
| | Options exercisable
 at March 31, 2008                                                                                   
| |                                                                                                                          

| | The following table summarizes the nonvested options during the three months ended
 March 31, 2008.
| | ---------------------------------------------------------------------------------------------------
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| | Nonvested
 at January 1, 2008                                                                      
| | Granted                                                                                            
| | Vested                                                                                             
| | Forfeited
 / Cancelled                                                                             
| |                                                                                                    
| | Nonvested
 at March 31, 2008                                                                       
| |                                                                                                    

| | Restricted
 Stock Awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | To date,
 3,530,217 shares of restricted stock have been awarded under the LTCP. The majority
 of these shares were awarded in 2005 and these 2005 awards have a vesting schedule
 of 15% per year for six years and 10% in the seventh year. Subsequent awards in
 2006, 2007 and 2008 have vesting schedules of either three or four years. The associated
 expense is recorded based on the vesting schedules. Compensation expense recorded
 on restricted stock for the three months ended March 31, 2008 and 2007 was approximately
 $1.9 million and $1.7 million or after tax expense of approximately $1.2 million
 and $1.1 million, respectively. The Company anticipates that it will record expense
 of approximately $7.0 million, $6.4 million, $6.3 million, $4.1 million and $29,000
 in calendar years 2008 through 2012, respectively, unless additional awards are
 granted.

15






NewAlliance
 Bancshares, Inc.


Notes to Unaudited Consolidated Financial
 Statements





| | The following table summarizes the nonvested restricted stock awards during the three
 months ended March 31, 2008.
| | -------------------------------------------------------------------------------------------------------------------
| |                                                                                                                    
| |                                                                                                                    
| |                                                                                                                    
| |                                                                                                                    
| | Nonvested
 at January 1, 2008                                                                                      
| | Granted                                                                                                            
| | Vested                                                                                                             
| | Forfeited
 / Cancelled                                                                                             
| |                                                                                                                    
| | Nonvested
 at March 31, 2008                                                                                       
| |                                                                                                                    

|13. | Income
 Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 had transactions in which the related tax effect was recorded directly to stockholders equity or goodwill instead of operations. Transactions in which the tax effect
 was recorded directly to stockholders equity included the tax effects of unrealized
 gains and losses on available for sale securities and excess tax benefits related
 to the vesting of restricted stock. Deferred taxes charged to goodwill were in connection
 with prior acquisitions. The Company had a net deferred tax asset of $8.0 million
 and $10.0 million at March 31, 2008 and December 31, 2007, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The allocation
 of deferred tax expense involving items charged to income, items charged directly
 to shareholders equity and items charged to goodwill is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                                                       |  | Three Months Ended
| | --------------------------------------------------------------------- |  | ------------------
| |                                                                       |  | March 31,         
| |                                                                       |  |                   
| | (In thousands)                                                        |  |                   
| |                                                                      
| | Deferred tax
 expense allocated to:                                   |  |                   
| | Stockholders equity, tax effect of net unrealized gain on investment |  |                   
| | securities
 available for sale, net of valuation allowance            |  | $                 
| | Stockholders equity, tax impact of adoption of EITF 06-04            |  |                   
| | Goodwill                                                              |  |                   
| | Income                                                                |  |                   
| |                                                                      
| | Total
 deferred tax expense                                           |  | $                 
| |                                                                      

| | The Company adopted the provisions of FIN 48, Accounting for Uncertainty
 in Income Taxes, on January 1, 2007. A reconciliation of the beginning
 and ending amount of unrecognized tax benefits is as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                  
| | (In thousands)                                                                                                                                                                                                   
| |                                                                                                                                                                                                                  
| | Balance at
 December 31, 2007                                                                                                                                                                                    
| | Additions
 for tax positions of current year                                                                                                                                                                     
| | Additions
 for tax positions of prior year                                                                                                                                                                       
| | Reductions
 for tax positions of prior year                                                                                                                                                                      
| | Settlements
 with taxing authorities                                                                                                                                                                             
| |                                                                                                                                                                                                                  
| | Balance
 at March 31, 2008                                                                                                                                                                                       
| |                                                                                                                                                                                                                  

| | Included
 in the balance at March 31, 2008 are $422,000 of tax positions for which the ultimate
 deductibility is highly uncertain and for which the disallowance of the tax position
 would affect the annual effective tax rate. The Company anticipates that approximately $75,000
 to $125,000 of unrecognized tax benefits will reverse in the next twelve months due
 to statute expirations. The Company recognizes interest and penalties accrued related
 to unrecognized tax benefits as a component of income tax expense. As of March 31,
 2008, the Company has accrued approximately $121,000 in interest and penalties.                                                                          
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | The Company
 is generally no longer subject to federal, state or local income tax examinations
 by tax authorities for the years before 2002. In the first quarter of 2006, the
 Internal Revenue Service (IRS) commenced an examination of the 2003 and 2004 tax
 years for the Company and various acquired entities. As of March 31, 2008, the IRS
 has completed their audit and they have communicated $64,000 of adjustments before
 interest, to the audited tax years. As a result of the settlement with the IRS,
 the Company released $924,000 of interest and penalties on unrecognized tax benefits
 through continuing operations and $2.9 million of unrecognized tax benefits through
 goodwill.

16






NewAlliance Bancshares, Inc.


Notes to Unaudited Consolidated Financial
 Statements





|14. | Commitments
 and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company
 is party to financial instruments with off-balance sheet risk in the normal course
 of business to meet the financing needs of its customers. These financial instruments
 consist primarily of commitments to extend credit and standby letters of credit.
 Commitments to extend credit are agreements to lend to customers as long as there
 is no violation of any condition established in the contract. Commitments generally
 have fixed expiration dates or other termination clauses that may require payment
 of a fee. Since many of the commitments could expire without being drawn upon, the
 total commitment amounts do not necessarily represent future cash requirements.
 These commitments consist principally of unused commercial and consumer lines of
 credit. Standby letters of credit generally are contingent upon the failure of the
 customer to perform according to the terms of an underlying contract with a third
 party. The credit risks associated with commitments to extend credit and standby
 letters of credit are essentially the same as those involved with extending loans
 to customers and are subject to normal credit policies. Collateral may be obtained
 based on managements assessment of the customers creditworthiness.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The table
 below summarizes the Companys commitments and contingencies discussed above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                                           |  |           |         |              |   |        
| | ----------------------------------------- |  | --------- | ------- | ------------ | - | -------
| |                                           |  | March 31, |         | December 31,
| | (In thousands)                            |  | 2008      |         | 2007        
| |                                          
| | Loan commitments                          |  | $         | 152,531 |              | $ | 71,191 
| | Unadvanced
 portion of construction loans |  |           | 145,774 |              |   | 163,302
| | Standby letters
 of credit                |  |           | 14,852  |              |   | 15,885 
| | Unadvanced
 portion of lines of credit    |  |           | 572,884 |              |   | 560,298
| |                                          
| | Total
 commitments                        |  | $         | 886,041 |              | $ | 810,676
| |                                          

|    | Other Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | As of March
 31, 2008 and December 31, 2007, the Company was contractually committed under limited
 partnership agreements to make additional partnership investments of approximately $2.8
 million for each period which constitutes our maximum potential obligation to these
 partnerships. The Company is obligated to make additional investments in response
 to formal written requests, rather than a funding schedule. Funding requests are
 submitted when the partnerships plan to make additional investments.                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | There are
 no material legal proceedings or other litigation. See Part II, Item I, Legal Proceedings,
 of this Form 10-Q.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|15. | Stockholders Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | At March
 31, 2008 and December 31, 2007, stockholders equity amounted to $1.41 billion,
 representing 17.3% and 17.1% of total assets, respectively. The Company paid cash
 dividends totaling $0.065 per share on common stock during the three months ended
 March 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company
 and the Bank are subject to dividend restrictions imposed by various regulators.
 Connecticut banking laws limit the amount of annual dividends that the Bank may
 pay to the Company to an amount that approximates the Banks net income retained
 for the current year plus net income retained for the two previous years. In addition,
 the Bank may not declare or pay dividends on, and the Company may not repurchase
 any of its shares of its common stock if the effect thereof would cause stockholders equity to be reduced below applicable regulatory capital maintenance requirements
 or if such declaration, payment or repurchase would otherwise violate regulatory
 requirements.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Share Repurchase
 Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On January
 31, 2006, the Companys Board of Directors authorized a repurchase plan of
 up to an additional 10.0 million shares or approximately 10% of the then outstanding
 Company common stock. Under this plan the Company has repurchased 5,291,000 shares
 of common stock at a weighted average price of $13.46 per share as of March 31,
 2008. There is no set expiration date for this repurchase plan.                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Regulatory
 Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Capital
 guidelines of the Federal Reserve Board and the Federal Deposit Insurance Corporation
 (FDIC) require the Company and its banking subsidiary to maintain certain
 minimum ratios, as set forth below. At March 31, 2008, the Company and the Bank
 were deemed to be well capitalized under the regulations of the Federal
 Reserve Board and the FDIC, respectively, and in compliance with the applicable
 capital requirements.                                                                                                                                                                                                                                                                     

17






NewAlliance Bancshares, Inc. Notes to Unaudited Consolidated Financial
 Statements




| | The following table provides information on the capital ratios.
| | ---------------------------------------------------------------
| |                                                                
| |                                                                
| |                                                                
| |                                                                
| |                                                                
| | (Dollars in
 thousands)                                        
| |                                                                
| | NewAlliance
 Bank                                              
| | March
 31, 2008                                                
| | Tier 1 Capital (to Average Assets)                             
| | Tier
 1 Capital (to Risk Weighted Assets)                      
| | Total
 Capital (to Risk Weighted Assets)                       
|
| | December
 31, 2007                                             
| | Tier
 1 Capital (to Average Assets)                            
| | Tier
 1 Capital (to Risk Weighted Assets)                      
| | Total
 Capital (to Risk Weighted Assets)                       
|
| | NewAlliance
 Bancshares, Inc.                                  
| | March
 31, 2008                                                
| | Tier
 1 Capital (to Average Assets)                            
| | Tier
 1 Capital (to Risk Weighted Assets)                      
| | Total
 Capital (to Risk Weighted Assets)                       
|
| | December
 31, 2007                                             
| | Tier
 1 Capital (to Average Assets)                            
| | Tier
 1 Capital (to Risk Weighted Assets)                      
| | Total
 Capital (to Risk Weighted Assets)                       
| |                                                                

16.    Other Comprehensive Income

| | The following
 table presents the components of other comprehensive income and the related tax
 effects for the three months ended March 31, 2008 and 2007.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |                                                                                                                                                            
| |                                                                                                                                                            
| |                                                                                                                                                            
| | (In thousands)                                                                                                                                             
| |                                                                                                                                                            
| | Net income                                                                                                                                                 
| | Other comprehensive
 income, before tax                                                                                                                    
| | Unrealized
 gains on securities                                                                                                                            
| | Unrealized
 holding gains, arising during the period                                                                                                       
| | Reclassification
 adjustment for gains included in net income                                                                                              
| |                                                                                                                                                            
| | Other comprehensive
 income, before tax                                                                                                                    
| | Income tax
 expense, net of valuation allowance                                                                                                            
| |                                                                                                                                                            
| | Other comprehensive
 income, net of tax                                                                                                                    
| |                                                                                                                                                            
| | Comprehensive
 income                                                                                                                                      
| |                                                                                                                                                            

18




NewAlliance
 Bancshares, Inc.Notes to Unaudited Consolidated Financial Statements




17.    Earnings Per Share

| | The calculation of basic and
 diluted earnings per share for the three months ended March 31, 2008 and 2007 is
 presented below.
| | --------------------------------------------------------------------------------------------------------------------------------
|
| |                                                                                                                                 
| |                                                                                                                                 
| |                                                                                                                                 
| | (In thousands,
 except per share data)                                                                                          
| |                                                                                                                                 
| | Net income                                                                                                                      
| | Average common
 shares outstanding for basic EPS                                                                                
| | Effect of
 dilutive stock options and unvested stock awards                                                                     
| |                                                                                                                                 
| | Average common
 and common-equivalent shares for dilutive EPS                                                                   
| | Net income
 per common share:                                                                                                   
| | Basic                                                                                                                           
| | Diluted                                                                                                                         
| |                                                                                                                                 

19




Forward-Looking Statements
This report may contain certain forward-looking statements as that term is defined in
 the U.S. federal securities laws.Forward-looking statements are based on certain
 assumptions and describe future plans, strategies, and expectations of Management
 and are generally identified by use of the word plan, believe, expect, intend, anticipate, estimate, project, or similar expressions. Managements ability to
 predict results or the actual effects of its plans or strategies is inherently uncertain.
 Accordingly, actual results may differ materially from anticipated results.
Factors that could have a material adverse effect on the operations of NewAlliance
 Bancshares, Inc. (NewAlliance or the Company) and its subsidiaries
 include, but are not limited to:

| |  | Changes in
 the interest rate environment may reduce net interest margin and/or the volumes
 and values of loans made or held as well as the value of other financial assets
 held;                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | General economic
 or business conditions, either nationally or regionally, may be less favorable than
 expected, resulting in, among other things, a deterioration in credit quality and/or
 a reduced demand for credit or other services;
| |  | Competitive
 pressures among depository and other financial institutions may increase significantly
 and may decrease the profit margin associated with its business;                                                                      
| |  | Legislative
 or regulatory changes, including those related to residential mortgages and changes
 in accounting standards, may adversely affect the businesses in which NewAlliance
 is engaged;                                           
| |  | Local, state
 or federal taxing authorities may take tax positions that are adverse to NewAlliance;                                                                                                                                        
| |  | Costs or
 difficulties related to the integration of acquired businesses may be greater than
 expected;                                                                                                                                    
| |  | Expected
 cost savings associated with completed mergers may not fully be realized or realized
 within expected time frames;                                                                                                               
| |  | Deposit attrition,
 customer loss or revenue loss following completed mergers may be greater than expected;                                                                                                                                
| |  | Adverse changes
 may occur in the securities markets impacting the value of NewAlliances investments;
 and                                                                                                                                
| |  | Competitors
 of NewAlliance may have greater financial resources and develop products that enable
 them to compete more successfully than NewAlliance.                                                                                     

Readers are cautioned not to place undue reliance on these forward-looking statements, which
 speak only as of the date of this report. Except as required by applicable law or
 regulation. Management undertakes no obligation to update these forward-looking
 statements to reflect events or circumstances that occur after the date on which
 such statements were made.

Item 2. Managements Discussion
 and Analysis of Financial Condition and Results of OperationsThe following
 Managements Discussion and Analysis of Financial Condition and Results of
 Operations (MD&A) is intended to help the reader understand NewAlliance
 Bancshares, Inc., our operations and our present business environment. We believe
 transparency and clarity are the primary goals of successful financial reporting.
 We remain committed to increasing the transparency of our financial reporting, providing
 our stockholders with informative financial disclosures and presenting an accurate
 view of our financial disclosures, financial position and operating results.

MD&A is provided as a supplement toand should be read in conjunction withour Consolidated Financial Statements and the accompanying notes thereto contained
 in Part I, Item 1, of this report as well as our Annual Report on Form 10-K for
 the year ended December 31, 2007. The following sections are included in MD&A:

| Our
 Business  a general description of our business, our objectives and regulatory
 considerations.                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                            
| Critical
 Accounting Estimates  a discussion of accounting estimates that require
 critical judgments and estimates.                                     
|                                                                                                                                                            
| Recent
 Accounting Changes  a discussion of recently adopted accounting pronouncements
 or changes.                                                      
|                                                                                                                                                            
| Operating
 Results  an analysis of our Companys consolidated results of operations
 for the periods presented in our Consolidated
 Financial Statements.
|                                                                                                                                                            
| Financial
 Condition and Management of Market and Interest Rate Risk  an overview
 of financial condition and market and interest rate
 risk.            

20




Our BusinessGeneralNewAlliance is the third largest banking institution headquartered in Connecticut
 and the fourth largest based in New England with consolidated assets of $8.18 billion
 and stockholders equity of $1.41 billion at March 31, 2008. Its business philosophy
 is to operate as a community bank with local decision-making authority.The Companys results of operations depend primarily on net interest income, which is the
 difference between the income earned on its loan and securities portfolios and its
 cost of funds, consisting of the interest paid on deposits and borrowings. Results
 of operations are also affected by the Companys provision for loan losses,
 income and expenses pertaining to other real estate owned, gains and losses from
 sales of loans and securities and non-interest income and expenses.Non-interest
 income primarily consists of fee income from depositors and wealth management services
 and bank owned life insurance (BOLI). Non-interest expenses consist
 principally of compensation and employee benefits, occupancy, data processing, amortization
 of acquisition related intangible assets, marketing, professional services and other
 operating expenses.Results of operations are also significantly affected by
 general economic and competitive conditions and changes in interest rates as well
 as government policies and actions of regulatory authorities. Future changes in
 applicable laws, regulations or government policies may materially affect the Company.
Our ObjectivesNewAlliance seeks to continually deliver superior
 value to its customers, stockholders, employees and communities through achievement
 of its core operating objectives which are to:

| |  | Build high
 quality, profitable loan portfolios using organic, purchase and acquisition strategies;                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increase
 core deposit relationships with a focus on checking and savings accounts;                                                                       
| |  | Increase
 the non-interest income component of total revenues through development of banking-related
 fee income and growth in wealth management services;
| |  | Grow through
 a disciplined acquisition strategy, supplemented by de-novo branching;                                                                      
| |  | Improve operating
 efficiencies; and                                                                                                                      
| |  | Utilize technology
 to enhance superior customer service and products.                                                                                    

Significant factors management reviews to
 evaluate achievement of the Companys operating objectives and its operating
 results and financial condition include, but are not limited to: net income and
 earnings per share, performance of acquisitions and integration activities, return
 on equity and assets, net interest margin, non-interest income, operating expenses
 related to total assets and efficiency ratio, asset quality, loan and deposit growth,
 capital management, liquidity and interest rate sensitivity levels, customer service
 standards, market share and peer comparisons.Regulatory ConsiderationsNewAlliance and its subsidiaries are subject to numerous examinations
 by federal and state banking regulators, as well as the Securities and Exchange
 Commission. Please refer to NewAlliances Annual Report on Form 10-K for the
 year ended December 31, 2007 for additional disclosures with respect to laws and
 regulations affecting the Companys businesses.Critical Accounting EstimatesOur Consolidated Financial Statements are prepared in accordance with GAAP.
 In connection with the preparation of our financial statements, we are required
 to make assumptions and estimates about future events, and apply judgments that
 affect the reported amounts of assets, liabilities, revenue, expenses and the related
 disclosures. We base our assumptions, estimates and judgments on historical experience,
 current trends and other factors that management believes to be relevant at the
 time our Consolidated Financial Statements are prepared. On a regular basis, management
 reviews the accounting policies, assumptions, estimates and judgments to ensure
 that our financial statements are presented fairly and in accordance with GAAP.
 However, because future events and their effects cannot be determined with certainty,
 actual results could differ from our assumptions and estimates, and such differences
 could be material.We believe that our most critical accounting policies, and those
 which involve the most complex subjective decisions or assessments relate to income
 taxes, pension and other postretirement benefits, goodwill and intangible assets,
 the allowance for

21




loan losses and stock-based compensation.
 None of the Companys critical accounting estimates have changed during the
 quarter. A brief description of our current policies involving significant management
 valuation judgments follows:Income TaxesManagement uses the
 asset and liability method of accounting for income taxes in which defined tax assets
 and liabilities are established for the temporary differences between the financial
 reporting basis and the tax basis of the Companys assets and liabilities.Significant management judgment is required in determining income tax expense and
 deferred tax assets and liabilities. Some judgments are subjective and involve estimates
 and assumptions about matters that are inherently uncertain. In determining the
 valuation allowance, we use historical and forecasted future operating results,
 based upon approved business plans, including a review of the eligible carryforward
 periods, tax planning opportunities and other relevant considerations. Management
 believes that the accounting estimate related to the valuation allowance is a critical
 accounting estimate because the underlying assumptions can change from period to
 period. For example, tax law changes or variances in future projected operating
 performance could result in a change in the valuation allowance.The reserve for
 tax contingencies contains uncertainties because management is required to make
 assumptions and to apply judgment to estimate the exposures associated with our
 various filing positions. The effective income tax rate is also affected by changes
 in tax law, entry into new tax jurisdictions, the level of earnings and the results
 of tax audits.Pension and Other Postretirement BenefitsManagement
 uses key assumptions that include discount rates, expected return on plan assets,
 benefits earned, interest costs, mortality rates, increases in compensation, and
 other factors. The two most critical assumptionsestimated return on plan assets
 and the discount rateare important elements of plan expense and asset/liability
 measurements. These critical assumptions are evaluated at least annually on a plan
 basis. Other assumptions are evaluated periodically and are updated to reflect actual
 experience and expectations for the future.Goodwill and Identifiable Intangible
 AssetsWe evaluate goodwill and identifiable intangible assets for impairment
 annually or whenever events or changes in circumstances indicate the carrying value
 of the goodwill or identifiable intangible assets may not be recoverable. We complete
 our impairment evaluation by performing internal valuation analyses based on discounted
 cash flow modeling techniques, considering publicly available market information
 and using an independent valuation firm, as appropriate. These types of analyses
 contain uncertainties because they require management to make assumptions and to
 apply judgment to estimate industry economic factors and the profitability of future
 business strategies.Allowance for Loan LossesThe allowance
 for loan losses reflects managements best estimate of probable losses inherent
 in the loan portfolio. The adequacy of the allowance is determined based upon a
 detailed evaluation of the portfolio and sub-portfolios through a process which
 considers numerous factors, including levels and direction of delinquencies, non-performing
 loans and assets, risk ratings, estimated credit losses using both internal and
 external portfolio reviews, current economic and market conditions, concentrations,
 portfolio volume and mix, changes in underwriting, experience of staff, historical
 loss rates over the business cycle and current economic trends. All of these factors
 may be susceptible to significant change.Stock-Based Compensation

We have a
 stock-based compensation plan, which includes non-qualified stock options and non-vested
 share awards. Fair value at the grant date is determined using the Black-Scholes
 option-pricing model and associated assumptions include future volatility of our
 stock price, expected dividend yield and future employee turnover rates. Changes
 in these assumptions can materially affect the fair value estimate.A complete
 discussion of critical accounting estimates can be found in the Companys most
 recent Annual Report on Form 10-K (fiscal year ended December 31, 2007).

Recent Accounting Changes

We adopted
 the following new accounting pronouncements on January 1, 2008:

| |  | Statement
 of Financial Accounting Standards (SFAS) No. 157, Fair Value
 Measurements;                                                                                               
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SFAS No.
 159, The Fair Value Option for Financial Assets and Financial Liabilities;                                                                                                   
| |  | Emerging
 Issues Task Force (EITF) Issue 06-4, Accounting for Deferred
 Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life
 Insurance Arrangements; and
| |  | EITF Issue
 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance
 Arrangements.                                                                                     

22




SFAS No. 157
 had no impact on retained earnings and is not expected to have a material impact
 on our statements of income and condition. We have not made material changes to
 our valuation methodologies as previously disclosed in our Annual Report on Form
 10-K for the year ended December 31, 2007. For further information, see Note 3 in
 the Notes to the Unaudited Consolidated Financial Statements.

SFAS No. 159 had no impact on retained earnings
 as management did not elect the fair value option for any of the Companys
 eligible financial assets or liabilities as of January 1, 2008.EITF Issue 6-4 and
 EITF Issue 06-10 had the effect of recording a liability in the amount of $1.6 million
 with a corresponding reduction to retained earnings. For further information, see
 Note 2 in the Notes to the Unaudited Consolidated Financial Statements.Operating
 Results for the Three Months Ended March 31, 2008 and 2007Executive
 OverviewIn 2007 the Company completed two acquisitions, Westbank Corporation
 (Westbank) on January 2nd and Connecticut Investment Management,
 Inc. (CIMI) on March 5th. Westbank was the holding company
 for Westbank, a commercial bank and trust company with 16 banking offices in Massachusetts
 and Connecticut. CIMI was a registered investment advisory firm with approximately
 $190.0 million in assets under management. Further information regarding acquisitions
 can be found in Note 4, Business Combinations in the Notes to the Unaudited
 Consolidated Financial Statements.Net income for the first quarter of 2008 was
 $12.9 million or $0.13 per diluted share, compared to $9.3 million or $0.09 per
 diluted share for the first quarter of 2007. The increase in earnings of nearly
 40.0% was primarily due to an increase in net interest income and non-interest income,
 as well as a decrease in merger related charges. These improvements were partially
 offset by an increase in operating expenses primarily due to a severance charge
 for an executive. Our return on average assets increased 16 basis points and our
 return on average equity increased 92 basis points.The net interest margin experienced
 an improvement of six basis points in the three months ended March 31, 2008 compared
 to the same period in 2007. Our strong loan growth and the restructuring of the
 investment securities portfolio during the 2nd quarter of 2007 more than
 offset the decrease in the average yield earned on the loan portfolio. The net interest
 margin was also improved by the reduction in deposit costs, partially offset by
 an increase in FHLB borrowings expense. Overall, however, net interest income increased
 $2.6 million, or 6.0%, for the three months ended March 31, 2008 over the three
 months ended March 31, 2007.Our continued focus on maintaining credit quality
 has resulted in positive asset quality ratios as of March 31, 2008. The allowance
 for loan losses to total loans increased two basis points to 0.95% from 0.93% at
 December 31, 2007. The ratio of nonperforming loans to total loans was 0.40% at
 March 31, 2008 which was only slightly higher than 0.35% at December 31, 2007 and
 an improvement of one basis point from March 31, 2007 when the ratio was 0.41%.
 Net charge-offs were $99,000 for the three months ended March 31, 2008 compared
 to $217,000 for the same period in 2007.Stockholders equity remained essentially
 flat with December 31, 2007 as net income for the three months ended March 31, 2008
 of $12.9 million, was partially offset by a cash dividend paid in the amount of
 $6.6 million, or $0.065 per common share, as well as the repurchase of approximately
 148,000 shares for $1.7 million. Dividend payments and stock buybacks are in accordance
 with our continued strategy of judicial capital deployment. The Tier I capital ratio
 was 11.20% at March 31, 2008. Per common share data also improved as of March 31,
 2008 from March 31, 2007. Book value per share increased to $13.03 from $12.62 and
 tangible book value per share increased to $7.70 from $7.40. Diluted weighted average
 shares decreased by 4.4 million shares which was a factor in the increase in earnings
 per share.

Selected financial data, ratios
 and per share data are provided in Table 1.

23




|Table 1:
 Selected Data                               |  |                    |             |   |  |   |             |  
|----------------------------------------------------- |  | ------------------ | ----------- | - |  | - | ----------- | -
|                                                      |  | Three Months Ended
|                                                      |  | March 31,         
|                                                      |  |                   
|(Dollars in
 thousands, except per share data)        |  |                    | 2008        |   |  |   | 2007        |  
|                                                     
|Condensed
 Income Statement                           |  |                    |             |   |  |   |             |  
|Interest and
 dividend income                         |  | $                  | 102,214     |   |  | $ | 96,806      |  
|Interest expense                                      |  |                    | 56,208      |   |  |   | 53,401      |  
|                                                     
|Net interest
 income before provision for loan losses |  |                    | 46,006      |   |  |   | 43,405      |  
|Provision
 for loan losses                            |  |                    | 1,700       |   |  |   | 1,000       |  
|                                                     
|Net interest
 income after provision for loan losses  |  |                    | 44,306      |   |  |   | 42,405      |  
|Non-interest
 income                                  |  |                    | 15,666      |   |  |   | 14,229      |  
|Operating
 expenses                                   |  |                    | 42,181      |   |  |   | 40,902      |  
|Merger related
 charges                               |  |                    | 56          |   |  |   | 1,867       |  
|                                                     
|Income before
 income taxes                           |  |                    | 17,735      |   |  |   | 13,865      |  
|Income tax
 provision                                 |  |                    | 4,801       |   |  |   | 4,569       |  
|                                                     
|Net income                                            |  | $                  | 12,934      |   |  | $ | 9,296       |  
|                                                     
|Weighted average
 shares outstanding                  |  |                    |             |   |  |   |             |  
|Basic                                                 |  |                    | 100,277,267 |   |  |   | 104,196,785 |  
|Diluted                                               |  |                    | 100,330,148 |   |  |   | 104,699,748 |  
|Earnings per
 share                                   |  |                    |             |   |  |   |             |  
|Basic                                                 |  | $                  | 0.13        |   |  | $ | 0.09        |  
|Diluted                                               |  |                    | 0.13        |   |  |   | 0.09        |  
|                                                     
|                                                      |  |                    |             |   |  |   |             |  
|Financial
 Ratios                                     |  |                    |             |   |  |   |             |  
|Return on
 average assets (1)                         |  |                    | 0.64        | % |  |   | 0.48        | %
|Return on
 average equity (1)                         |  |                    | 3.66        |   |  |   | 2.74        |  
|Net interest
 margin (1)                              |  |                    | 2.56        |   |  |   | 2.50        |  
|                                                      |  |                    |             |   |  |   |             |  
|Non-GAAP
 Ratios                                      |  |                    |             |   |  |   |             |  
|Efficiency
 ratio (2)                                 |  |                    | 69.24       |   |  |   | 75.15       |  
|                                                      |  |                    |             |   |  |   |             |  
|Per
 share data                                       |  |                    |             |   |  |   |             |  
|Book value
 per share                                 |  | $                  | 13.03       |   |  | $ | 12.62       |  
|Tangible book
 value per share                        |  |                    | 7.70        |   |  |   | 7.40        |  
|                                                     

|(1) | Annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The efficiency
 ratio represents the ratio of non-interest expenses, net of OREO expenses, to the
 sum of net interest income and non-interest income, excluding security and limited
 partnership net gains or losses. The efficiency ratio is not a financial measurement
 required by accounting principles generally accepted in the United States of America.
 However, management believes such information is useful to investors in evaluating
 Company performance.

Average Balances, Interest, Average
 Yields/Cost and Rate/Volume AnalysisTable 2 below sets forth certain
 information concerning average interest-earning assets and interest-bearing liabilities
 and their associated yields or rates for the periods indicated. The average yields
 and costs are derived by dividing income or expenses by the average balances of
 interest-earning assets or interest-bearing liabilities, respectively, for the periods
 shown and reflect annualized yields and costs. Average balances are computed using
 daily balances. Yields and amounts earned include loan fees and fair value adjustments
 related to acquired loans, deposits and borrowings. Loans held for sale and nonaccrual
 loans have been included in interest-earning assets for purposes of these computations.
Table 3 below presents the extent to which changes in interest rates and changes
 in volume of interest-earning assets and interest-bearing liabilities have affected
 the Companys interest income and interest expense during the periods indicated.
 Information is provided in each category with respect to: (i) change attributable
 to change in volume (change in volume multiplied by prior rate), (ii) change attributable
 to change in rate (change in rate multiplied by prior volume); and (iii) the change
 attributable to rate and volume (change in rate multiplied by change in volume),
 which is prorated between the changes in rate and volume.

24




|Table 2: Average Balance Sheets for the Three Months Ended March 31, 2008 and
 2007
|-----------------------------------------------------------------------------------
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|(Dollars in
 thousands)                                                            
|                                                                                   
|Interest-earning
 assets                                                           
|Loans                                                                              
|Residential
 real estate                                                           
|Commercial
 real estate                                                            
|Commercial
 business                                                               
|Consumer                                                                           
|                                                                                   
|Total
 Loans                                                                       
|Short-term
 investments                                                            
|Investment
 securities                                                             
|                                                                                   
|Total
 interest-earning assets                                                     
|Non-interest-earning
 assets                                                       
|                                                                                   
|Total
 assets                                                                      
|                                                                                   
|                                                                                   
|Interest-bearing
 liabilities                                                      
|Deposits                                                                           
|Money
 market                                                                      
|NOW                                                                                
|Savings                                                                            
|Time                                                                               
|                                                                                   
|Total
 interest-bearing deposits                                                   
|Repurchase
 agreements                                                             
|FHLB
 advances and other borrowings                                                
|                                                                                   
|Total
 interest-bearing-liabilities                                                
|Non-interest-bearing
 demand deposits                                              
|Other
 non-interest-bearing liabilities                                            
|                                                                                   
|Total
 liabilities                                                                 
|Equity                                                                             
|                                                                                   
|Total
 liabilities and equity                                                      
|                                                                                   
|Net interest-earning assets                                                        
|                                                                                   
|Net
 interest income                                                               
|                                                                                   
|Interest
 rate spread                                                              
|Net
 interest margin (net interest income                                          
|as
 a percentage of total interest-earning assets)                                 
|Ratio
 of total interest-earning assets                                            
|to
 total interest-bearing liabilities                                             
|                                                                                   

25




|Table 3:
 Rate/Volume Analysis      |  |                     |        |        |  |     |        |   |  |   |        |  
|----------------------------------- |  | ------------------- | ------ | ------ |  | --- | ------ | - |  | - | ------ | -
|                                    |  | Three Months Ended 
|                                    |  | March 31, 2008     
|                                    |  | Compared to        
|                                    |  | Three Months Ended 
|                                    |  | March 31, 2007     
|                                    |  |                    
|                                    |  | Increase (Decrease) |        |        |  |    
|                                    |  | Due to              |        |        |  |    
|(In thousands)                      |  | Rate                |        | Volume |  | Net
|                                   
|Interest-earning
 assets            |  |                     |        |        |  |     |        |   |  |   |        |  
|Loans                               |  |                     |        |        |  |     |        |   |  |   |        |  
|Residential
 real estate            |  | $                   | (13    | )      |  | $   | 3,471  |   |  | $ | 3,458  |  
|Commercial
 real estate             |  |                     | (730   | )      |  |     | 1,245  |   |  |   | 515    |  
|Commercial
 business                |  |                     | (971   | )      |  |     | 218    |   |  |   | (753   | )
|Consumer                            |  |                     | (1,046 | )      |  |     | 579    |   |  |   | (467   | )
|                                   
|Total
 loans                        |  |                     | (2,760 | )      |  |     | 5,513  |   |  |   | 2,753  |  
|Short-term
 investments             |  |                     | (196   | )      |  |     | (398   | ) |  |   | (594   | )
|Investment
 securities              |  |                     | 4,468  |        |  |     | (1,219 | ) |  |   | 3,249  |  
|                                   
|Total
 interest-earning assets      |  | $                   | 1,512  |        |  | $   | 3,896  |   |  | $ | 5,408  |  
|                                   
|Interest-bearing
 liabilities       |  |                     |        |        |  |     |        |   |  |   |        |  
|Deposits                            |  |                     |        |        |  |     |        |   |  |   |        |  
|Money
 market                       |  | $                   | (647   | )      |  | $   | (123   | ) |  | $ | (770   | )
|NOW                                 |  |                     | (439   | )      |  |     | (86    | ) |  |   | (525   | )
|Savings                             |  |                     | 1,831  |        |  |     | 685    |   |  |   | 2,516  |  
|Time                                |  |                     | (1,155 | )      |  |     | (2,089 | ) |  |   | (3,244 | )
|                                   
|Total
 interest bearing deposits    |  |                     | (410   | )      |  |     | (1,613 | ) |  |   | (2,023 | )
|Repurchase
 agreements              |  |                     | (675   | )      |  |     | (99    | ) |  |   | (774   | )
|FHLB
 advances and other borrowings |  |                     | 664    |        |  |     | 4,940  |   |  |   | 5,604  |  
|                                   
|Total
 interest-bearing liabilities |  |                     | (421   | )      |  |     | 3,228  |   |  |   | 2,807  |  
|                                   
|Increase in
 net interest income    |  | $                   | 1,933  |        |  | $   | 668    |   |  | $ | 2,601  |  
|                                   

Net Interest Income AnalysisNet interest income is the amount that interest and fees on earning assets (loans
 and investments) exceeds the cost of funds, primarily interest paid to the Companys depositors and interest on external borrowings. Net interest margin is the
 difference between the income on earning assets and the cost of interest-bearing
 funds as a percentage of average earning assets.As shown in Table 2, net interest
 income for the quarter ended March 31, 2008 was $46.0 million, an increase of $2.6
 million from March 31, 2007. The increase is due to a 6 basis point increase in
 the net interest margin to 2.56% at March 31, 2008 from 2.50% from the same period
 in the prior year. This increase was partially offset by the $90.1 million decrease
 in net interest-earning assets as the increase in interest-bearing liabilities outpaced
 the increase in interest-earning assets due to a decline in non-interest bearing
 liabilities of $48.7 million.Interest income increased $5.4 million to $102.2
 million at March 31, 2008 due to the continued positive effects of the June 2007
 investment portfolio restructuring and to a $2.8 million increase attributed to
 the loan portfolio.While all loan categories experienced increases in average
 balances, the residential real estate loan portfolio was the main driver of the
 growth and offset the 26 basis point decline in average yield earned on loans. The
 decrease in the average yield earned on loans was in response to the Federal Reserve
 Bank rate cuts in the first quarter as newly originated loans and loans that were
 reset were at lower rates. The increase in average balances was due to increased
 organic loan originations as the Company took advantage of the pricing opportunities
 in our lending area due to the continued dislocations in the credit market, which
 has diminished competition in the short term. Loan portfolio volume accounted for
 approximately $5.5 million of the increase in interest income.The restructuring
 of the investment portfolio in the 2nd quarter of 2007 led to a 73 basis
 point increase in the average yield earned over the prior year period. The increase
 in the yield earned offset the $102.8 million decline in the average balance of
 investment securities as the Company used cash flows from investments as one of
 the vehicles to fund loan growth and offset deposit outflows.

26




The cost of funds for the quarter ended
 March 31, 2008 increased $2.8 million to $56.2 million for the three months ended
 March 31, 2008, compared to $53.4 million for the same period a year ago. The Companys strategy during this period was to bring down deposit costs. As a result
 the Company experienced a decrease of 13 basis points on the average rate paid on
 interest-bearing deposits with a corresponding decrease of $2.0 million in interest
 expense on deposits. This decrease was primarily in time deposits as interest expense
 in this category decreased $3.2 million as the average balances and average yield
 paid decreased $194.2 million and 23 basis points, respectively. The decrease in
 time deposits was partially offset by an increase in savings accounts as the average
 balance for the period rose $156.9 million and when combined with the increase in
 the average yield paid of 76 basis points caused interest expense to increase $2.5
 million on this product. Savings accounts increased due to targeted marketing campaigns
 and migration from maturing time deposits as they repriced at reduced rates. To
 offset the overall decrease in the average balance of deposit accounts and to fund
 the Companys loan growth, the Company expanded the use of FHLB advances and
 other borrowings. This resulted in an increase in the average balance of $429.4
 million, which attributed $4.9 million of the increase in interest expense. Going
 forward, the Company will continue to evaluate its options to counter deposit outflows
 while funding loan growth including, a) expanding the use of FHLB advances and other
 borrowings, and b) increasing the rate paid on deposits, which may have a negative
 impact on the net interest margin.Provision for Loan Losses
The provision for loan losses (provision) is based on managements
 periodic assessment of the adequacy of the loan loss allowance which, in turn, is
 based on such interrelated factors as the composition of the loan portfolio and
 its inherent risk characteristics, the level of nonperforming loans and charge-offs,
 both current and historic, local economic conditions, the direction of real estate
 values, and regulatory guidelines.Management performs a monthly review of the
 loan portfolio, and based on this review determines the level of the provision necessary
 to maintain an adequate allowance for loan losses (allowance). Management
 recorded a provision for loan losses of $1.7 million for the three months ended
 March 31, 2008. The primary factors that influenced managements decision to
 record a provision were growth in the loan portfolio, an increase in non-performing
 loans, an increase in adversely classified loans and maintenance of key coverage
 ratios. A provision for loan losses of $1.0 million was recorded for the three months
 ended March 31, 2007, based on the level of net charge-offs, delinquencies, nonperforming
 loans and criticized assets at that time.At March 31, 2008, the allowance for
 loan losses was $45.4 million, which represented 0.95% of total loans and 239.16%
 of nonperforming loans. This compared to the allowance for loan losses of $43.8
 million at December 31, 2007 which represented 267.38% of nonperforming loans and
 0.93% of total loans.

|Table 4:
 Non-Interest Income                      |  |                    |        |        |  |   |        |  |  |   |        |   |  |  |         |  
|-------------------------------------------------- |  | ------------------ | ------ | ------ |  | - | ------ |  |  | - | ------ | - |  |  | ------- | -
|                                                   |  | Three Months Ended |        |        |  |   |        |  |  |  
|                                                   |  | March 31,          |        | Change
|                                                   |  |                    |        |       
|(Dollars in
 thousands)                            |  |                    | 2008   |        |  |   | 2007   |  |  |   | Amount |   |  |  | Percent |  
|                                                  
|Depositor
 service charges                         |  | $                  | 6,632  |        |  | $ | 6,489  |  |  | $ | 143    |   |  |  | 2.20    | %
|Loan and servicing
 income                         |  |                    | 381    |        |  |   | 446    |  |  |   | (65    | ) |  |  | (14.57  | )
|Trust fees                                         |  |                    | 1,670  |        |  |   | 1,667  |  |  |   | 3      |   |  |  | 0.18    |  
|Investment
 management, brokerage & insurance fees |  |                    | 2,532  |        |  |   | 1,674  |  |  |   | 858    |   |  |  | 51.25   |  
|Bank owned
 life insurance                         |  |                    | 1,529  |        |  |   | 1,570  |  |  |   | (41    | ) |  |  | (2.61   | )
|Net gain on
 securities                            |  |                    | 1,138  |        |  |   | 158    |  |  |   | 980    |   |  |  | 620.25  |  
|Net gain on
 sale of loans                         |  |                    | 257    |        |  |   | 197    |  |  |   | 60     |   |  |  | 30.46   |  
|Other                                              |  |                    | 1,527  |        |  |   | 2,028  |  |  |   | (501   | ) |  |  | (24.70  | )
|                                                  
|Total
 non-interest income                         |  | $                  | 15,666 |        |  | $ | 14,229 |  |  | $ | 1,437  |   |  |  | 10.10   | %
|                                                  

Non-Interest IncomeAs
 displayed in Table 4, non-interest income increased $1.4 million to $15.7 million
 for the three months ended March 31, 2008 from the prior year period. The increase
 was primarily due to investment management, brokerage and insurance fees, net gain
 on securities and depositor service charges, partially offset by other income.

| |  | Investment
 management, brokerage and insurance fees have increased mainly due to the sales
 of fixed annuity products resulting from a favorable yield curve for these products.
 Investment income also increased due to the acquisition of Connecticut Investment
 Management, Inc. in March of 2007. Increased sales personnel and strong marketing
 efforts have contributed to increased trading activity and the sales of investment
 products.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | Net gain
 on securities increased due to the gains recorded on the sale of adjustable rate
 mortgage backed securities. These securities were sold at a premium and were sold
 in order to reduce prepayment risk and offset deposit outflow. Partially offsetting
 the mortgage-backed securities gain was a loss on the sale of a utility stock that
 was sold in order to reduce the Companys exposure in equity securities.                      

27




| |  | Depositor
 service charges increased primarily due to visa check card and merchant services
 income primarily attributable to increased volume.                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                              
| |  | Other income
 decreased due to a net loss recorded on limited partnerships during the first quarter
 of 2008, compared to a net gain recorded in the prior year period, partially offset
 by the receipt of approximately $500,000 from the partial redemption of the Companys stake in Visa Inc., following Visas initial public offering.

|Table 5:
 Non-Interest Expense                   |  |                    |        |        |  |   |        |  |  |   |        |   |  |  |         |   
|------------------------------------------------ |  | ------------------ | ------ | ------ |  | - | ------ |  |  | - | ------ | - |  |  | ------- | --
|                                                 |  | Three Months Ended |        |        |  |   |        |  |  |  
|                                                 |  | March 31,          |        | Change
|                                                 |  |                    |        |       
|(Dollars in
 thousands)                          |  |                    | 2008   |        |  |   | 2007   |  |  |   | Amount |   |  |  | Percent |   
|                                                
|Salaries and
 employee benefits                  |  | $                  | 23,689 |        |  | $ | 21,857 |  |  | $ | 1,832  |   |  |  | 8.38    | % 
|Occupancy                                        |  |                    | 4,895  |        |  |   | 4,404  |  |  |   | 491    |   |  |  | 11.15   |   
|Furniture
 and fixtures                          |  |                    | 1,686  |        |  |   | 1,741  |  |  |   | (55    | ) |  |  | (3.16   | ) 
|Outside services                                 |  |                    | 4,273  |        |  |   | 4,578  |  |  |   | (305   | ) |  |  | (6.66   | ) 
|Advertising,
 public relations, and sponsorships |  |                    | 1,709  |        |  |   | 1,679  |  |  |   | 30     |   |  |  | 1.79    |   
|Amortization
 of identifiable intangible assets  |  |                    | 2,364  |        |  |   | 3,088  |  |  |   | (724   | ) |  |  | (23.45  | ) 
|Merger related
 charges                          |  |                    | 56     |        |  |   | 1,867  |  |  |   | (1,811 | ) |  |  | (97.00  | ) 
|Other                                            |  |                    | 3,565  |        |  |   | 3,555  |  |  |   | 10     |   |  |  | 0.28    |   
|                                                
|Total
 non-interest expense                      |  | $                  | 42,237 |        |  | $ | 42,769 |  |  | $ | (532   | ) |  |  | (1.24   | )%
|                                                

Non-Interest ExpenseAs
 displayed in Table 5, non-interest expense decreased $532,000 to $42.2 million for
 the three months ended March 31, 2008 from $42.8 million for the same period a year
 ago. The main drivers of the decrease were merger related charges and amortization
 of identifiable intangible assets. These decreases were mostly offset by increases
 in salaries and employee benefits and occupancy expense.

| |  | Conversion
 and merger related charges decreased due to charges for legal, consulting, advertising
 and data processing associated with the Westbank acquisition that occurred in 2007.                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Amortization
 of identifiable intangible assets decreased due to using an accelerated method of
 amortization for core deposit intangibles which results in a higher level of expense
 in earlier periods. Amortization of non-compete agreements decreased due to the
 expiration of all agreements in the third quarter of 2007.                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Salaries
 and employee benefits increased as a result of severance recorded for an executive
 that is no longer with the Company, and increased bonus accruals attributable to
 increased sales of investment products. These increases were partially offset by
 a decrease in ESOP expense due to a lower average stock price during the first three
 months of 2008 as compared to the same period in 2007.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Occupancy
 expense increased due to a charge of approximately $350,000 in order to facilitate
 the disposition of excess leased space and increased maintenance and repair costs
 spread throughout the branch network.                                                                                                                                                                                       

Income Tax ProvisionThe
 income tax expense for the three months ended March 31, 2008 and 2007 was $4.8 million
 and $4.6 million, respectively. The effective tax rate for these periods was 27.1%
 and 33.0%, respectively.The decrease in the effective tax rate for the three
 months ended March 31, 2008 is primarily due to the reduction of $924,000 of unrecognized
 tax benefits for tax positions of prior years resulting from the settlement of the
 IRS audit in the first quarter of 2008.

28




Financial ConditionFinancial
 Condition SummaryFrom December 31, 2007 to March 31, 2008, total assets
 and total liabilities decreased $29.0 million and $36.7 million, respectively, due
 mainly to decreases in investments and deposits, partially offset by increases in
 loans and borrowings. Stockholders equity increased $7.7 million.Investment SecuritiesThe following table presents the amortized cost
 and fair value of investment securities at March 31, 2008 and December 31, 2007.

|Table 6:
 Investment Securities                   |  |                |           |                   |  |   |           |  |  |   |           |  |  |   |           | 
|------------------------------------------------- |  | -------------- | --------- | ----------------- |  | - | --------- |  |  | - | --------- |  |  | - | --------- | 
|                                                  |  | March 31, 2008 |           | December 31, 2007
|                                                  |  |                |           |                  
|                                                  |  |                | Amortized |                   |  |   | Fair      |  |  |   | Amortized |  |  |   | Fair      | 
|(In thousands)                                    |  |                | cost      |                   |  |   | value     |  |  |   | cost      |  |  |   | value     | 
|                                                 
|Available
 for sale                               |  |                |           |                   |  |   |           |  |  |   |           |  |  |   |           | 
|U.S.
 Treasury obligations                        |  | $              | 1,092     |                   |  | $ | 1,094     |  |  | $ | 1,092     |  |  | $ | 1,095     | 
|U.S.
 Government sponsored enterprise obligations |  |                | 180,240   |                   |  |   | 181,470   |  |  |   | 201,408   |  |  |   | 202,059   | 
|Corporate
 obligations                            |  |                | 22,502    |                   |  |   | 22,648    |  |  |   | 22,531    |  |  |   | 22,515    | 
|Other
 bonds and obligations                      |  |                | 44,182    |                   |  |   | 42,647    |  |  |   | 52,853    |  |  |   | 52,634    | 
|Marketable
 and trust preferred equity securities |  |                | 201,672   |                   |  |   | 193,464   |  |  |   | 200,303   |  |  |   | 197,226   | 
|Mortgage-backed
 securities                       |  |                | 1,641,461 |                   |  |   | 1,668,044 |  |  |   | 1,706,966 |  |  |   | 1,725,492 | 
|                                                 
|Total
 available for sale                         |  |                | 2,091,149 |                   |  |   | 2,109,367 |  |  |   | 2,185,153 |  |  |   | 2,201,021 | 
|                                                 
|Held to
 maturity                                 |  |                |           |                   |  |   |           |  |  |   |           |  |  |   |           | 
|Mortgage-backed
 securities                       |  |                | 326,998   |                   |  |   | 334,700   |  |  |   | 282,887   |  |  |   | 286,968   | 
|Other
 bonds                                      |  |                | 7,585     |                   |  |   | 7,690     |  |  |   | 7,585     |  |  |   | 7,577     | 
|                                                 
|Total
 held to maturity                           |  |                | 334,583   |                   |  |   | 342,390   |  |  |   | 290,472   |  |  |   | 294,545   | 
|                                                 
|Total
 securities                                 |  | $              | 2,425,732 |                   |  | $ | 2,451,757 |  |  | $ | 2,475,625 |  |  | $ | 2,495,566 | 
|                                                 

At March 31, 2008, the Company had total
 investments of $2.44 billion, or 30.0%, of total assets. The decrease of $47.5 million,
 from $2.49 billion at December 31, 2007 was primarily the result of using cash flows
 from available-for-sale and held-to-maturity mortgage-backed securities to fund
 loan growth and offset deposit outflows, partially offset by purchases of mortgage-backed
 securities using funds borrowed from the Federal Home Loan Bank.The Companys underlying investment strategy has been to purchase FNMA and FHLMC hybrid
 adjustable rate mortgage-backed securities, and seasoned GSE fixed rate mortgage-backed
 securities. The Company has focused on the purchases of these securities due to
 their attractive spreads versus funding costs and for their monthly cash flows that
 provide the Company with liquidity. This strategy is also supplemented with select
 purchases of bullet agency securities. For mortgage-backed securities, the average
 life, when purchased, would range between 1.5 and 3.5 years and the maturity dates
 for Agency obligations would range between one and five years.SFAS No. 115 requires
 the Company to designate its securities as held to maturity, available for sale
 or trading depending on the Companys intent regarding its investments at the
 time of purchase. The Company does not currently maintain a portfolio of trading
 securities. As of March 31, 2008, $2.11 billion, or 86.3%, of the portfolio, was
 classified as available for sale and $334.6 million of the portfolio was classified
 as held to maturity. The net unrealized gain on securities classified as available
 for sale as of March 31, 2008 was $18.2 million compared to an unrealized gain of
 $15.9 million as of December 31, 2007. The appreciation in the market value of securities
 available for sale was primarily due to fluctuations in market interest rates during
 the period. Management has performed a review of all investments with unrealized
 losses and determined that none of these investments had other-than-temporary impairment.
 The investment portfolio does not have exposure to sub-prime lending, does not include
 collateralized debt obligations or structured investment vehicles. The Company does
 not own or plan on investing in securities backed by sub-prime mortgage collateral.

29




Lending ActivitiesThe
 Company makes residential real estate loans secured by one-to-four family residences,
 commercial real estate loans, residential and commercial construction loans, commercial
 business loans, multi-family loans, home equity loans and lines of credit and other
 consumer loans. Table 7 displays the balances of the Companys loan portfolio
 as of March 31, 2008 and December 31, 2007.

|Table 7:
 Loan Portfolio                |  |                |           |                   |  |  |          |   |  |        |           |  |  |          |       |  
|--------------------------------------- |  | -------------- | --------- | ----------------- |  |  | -------- | - |  | ------ | --------- |  |  | -------- | ----- | -
|                                        |  |                |           |                   |  |  |          |   |  |        |           |  |  |          |       |  
|                                        |  | March 31, 2008 |           | December 31, 2007
|                                        |  |                |           |                  
|                                        |  |                |           |                   |  |  | Percent  |   |  |        |           |  |  | Percent 
|(Dollars in
 thousands)                 |  |                | Amount    |                   |  |  | of Total |   |  | Amount |           |  |  | of Total
|                                       
|Residential
 real estate                |  | $              | 2,391,755 |                   |  |  | 50.3     | % |  | $      | 2,360,921 |  |  |          | 49.9  | %
|Commercial
 real estate                 |  |                | 989,961   |                   |  |  | 20.8     |   |  |        | 947,185   |  |  |          | 20.1  |  
|Residential
 real estate construction   |  |                | 22,547    |                   |  |  | 0.5      |   |  |        | 29,023    |  |  |          | 0.6   |  
|Commercial
 real estate construction    |  |                | 208,142   |                   |  |  | 4.4      |   |  |        | 247,428   |  |  |          | 5.2   |  
|Commercial
 business                    |  |                | 454,463   |                   |  |  | 9.5      |   |  |        | 457,745   |  |  |          | 9.7   |  
|Home equity
 and equity lines of credit |  |                | 662,395   |                   |  |  | 13.9     |   |  |        | 652,107   |  |  |          | 13.8  |  
|Other consumer                          |  |                | 29,691    |                   |  |  | 0.6      |   |  |        | 33,560    |  |  |          | 0.7   |  
|                                       
|Total
 loans                            |  | $              | 4,758,954 |                   |  |  | 100.0    | % |  | $      | 4,727,969 |  |  |          | 100.0 | %
|                                       

As shown in Table 7, gross loans were $4.76
 billion, up $31.0 million, or 0.7%, at March 31, 2008 from year-end 2007. The Company
 experienced an increase in most loan categories due to organic loan growth.Residential real estate loans continue to represent the largest segment of the Companys loan portfolio as of March 31, 2008, comprising fifty percent of gross loans.
 The increase of $30.8 million was due solely to organic loan growth. The Company
 has resumed its purchased loan program, however, there were no purchases in the
 first quarter due to the lack of available loan pools that met our underwriting
 guidelines and pricing requirements.Commercial real estate loans and commercial
 business loans increased $39.4 million. The increase was attributable to the commercial
 real estate loan portfolio which increased due to organic loan growth and a shift
 from the commercial construction category due to loans completing the construction
 phase and converting to fully amortizing commercial mortgage loans. The Companys continued strategy is to build a larger percentage of the Companys
 assets in commercial loans including real estate, construction and other business
 loans by promoting strong business development efforts to obtain new business banking
 relationships, while maintaining strong credit quality and profitability.Home
 equity loans and lines of credit increased $10.3 million from December 31, 2007
 to March 31, 2008. These products were promoted by the Company through competitive
 pricing and marketing campaigns as the Company is committed to growing this loan
 segment while maintaining credit quality as a higher yielding alternative to first
 mortgage loans.Asset QualityAs displayed in Table 8, nonperforming
 assets at March 31, 2008 increased to $19.5 million compared to $17.3 million at
 December 31, 2007. The increase is primarily due to loans secured by residential
 one-to-four family loans based on current economic conditions. As has been its practice
 historically, the Company does not originate sub-prime loans. Nonperforming loans
 as a percent of total loans outstanding continue to remain at low levels and at
 March 31, 2008 was 0.40%, compared to 0.35% at December 31, 2007. The allowance
 for loan losses to total loans was 0.95% at March 31, 2008 compared to 0.93% at
 December 31, 2007.

30




|Table 8:    Nonperforming Assets                              |  |           |        |              |   |        | 
|------------------------------------------------------------- |  | --------- | ------ | ------------ | - | ------ | 
|                                                              |  | March 31, |        | December 31, |  
|(Dollars in
 thousands)                                       |  | 2008      |        | 2007         |  
|                                                             
|Nonaccruing
 loans (1)                                        |  |           |        |              |   |        | 
|Real
 estate loans                                            |  |           |        |              |   |        | 
|Residential
 (one- to four- family)                           |  | $         | 7,068  |              | $ | 4,837  | 
|Commercial                                                    |  |           | 5,304  |              |   | 5,796  | 
|                                                             
|Total
 real estate loans                                      |  |           | 12,372 |              |   | 10,633 | 
|Commercial
 business                                          |  |           | 5,497  |              |   | 4,912  | 
|Consumer
 loans                                               |  |           |        |              |   |        | 
|Home equity
 and equity lines of credit                       |  |           | 907    |              |   | 606    | 
|Other
 consumer                                               |  |           | 213    |              |   | 235    | 
|                                                             
|Total
 consumer loans                                         |  |           | 1,120  |              |   | 841    | 
|                                                             
|Total
 Nonaccruing loans                                      |  |           | 18,989 |              |   | 16,386 | 
|Real Estate
 Owned                                            |  |           | 557    |              |   | 897    | 
|                                                             
|Total
 nonperforming assets                                   |  | $         | 19,546 |              | $ | 17,283 | 
|                                                             
|                                                              |  |           |        |              |   |        | 
|Total
 nonperforming loans as a percentage of total loans (2) |  |           | 0.40   |              |   | 0.35   | 
|Total
 nonperforming assets as a percentage of total assets   |  |           | 0.24   |              |   | 0.21   | 

|(1) |  | Nonaccrual
 loans include all loans 90 days or more past due, restructured loans and other loans,
 which have been identified by the Company as presenting uncertainty with respect
 to the collectability of interest or principal.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) |  | Total
 loans are stated at their principal amounts outstanding, net of deferred fees and
 fair value adjustments on acquired loans.                                                                                                 

Allowance For Loan LossesAs displayed in Table 9 below, during the three months ended March 31, 2008,
 the Company recorded net charge-offs of $99,000, compared to net charge-offs of
 $217,000 for the three months ended March 31, 2007. Management believes that the
 allowance for loan losses is adequate and consistent with asset quality and delinquency
 indicators. The Company had a loan loss allowance of $45.4 million and $43.8 million
 at March 31, 2008 and December 31, 2007, respectively.

|Table 9:    Schedule of Allowance for Loan Losses |  |   |                                            |   |  |   |        |  
|------------------------------------------------- |  | - | ------------------------------------------ | - |  | - | ------ | -
|                                                  |  |   | At or For the Three Months Ended March 31,
|(Dollars in
 thousands)                           |  |   | 2008                                       |   |  |   | 2007   |  
|                                                 
|Balance at
 beginning of period                   |  | $ | 43,813                                     |   |  | $ | 37,408 |  
|Net allowances
 gained through acquisition        |  |   | -                                          |   |  |   | 3,739  |  
|Provision
 for loan losses                        |  |   | 1,700                                      |   |  |   | 1,000  |  
|Charge-offs                                       |  |   |                                            |   |  |   |        |  
|Residential
 and commercial real estate loans     |  |   | 51                                         |   |  |   | 2      |  
|Commercial
 business loans                        |  |   | 270                                        |   |  |   | 538    |  
|Consumer
 loans                                   |  |   | 146                                        |   |  |   | 112    |  
|                                                 
|Total charge-offs                                 |  |   | 467                                        |   |  |   | 652    |  
|                                                 
|Recoveries                                        |  |   |                                            |   |  |   |        |  
|Residential
 and commercial real estate loans     |  |   | 15                                         |   |  |   | 250    |  
|Commercial
 business loans                        |  |   | 320                                        |   |  |   | 53     |  
|Consumer
 loans                                   |  |   | 33                                         |   |  |   | 132    |  
|                                                 
|Total
 recoveries                                 |  |   | 368                                        |   |  |   | 435    |  
|                                                 
|Net charge-offs                                   |  |   | 99                                         |   |  |   | 217    |  
|                                                 
|Balance at
 end of period                         |  | $ | 45,414                                     |   |  | $ | 41,930 |  
|                                                 
|Net charge-offs
 to average loans                 |  |   | 0.01                                       | % |  |   | 0.02   | %
|Allowance
 for loan losses to total loans         |  |   | 0.95                                       |   |  |   | 0.93   |  
|Allowance
 for loan losses to nonperforming loans |  |   | 239.16                                     |   |  |   | 226.62 |  
|Net charge-offs
 to allowance for loan losses     |  |   | 0.22                                       |   |  |   | 0.52   |  
|Total recoveries
 to total charge-offs            |  |   | 78.80                                      |   |  |   | 66.72  |  

31




Goodwill and Identifiable Intangible Assets
At March 31, 2008, the Company had intangible assets
 of $579.1 million, a decrease of $5.4 million, from $584.5 million at December 31,
 2007. The decrease is due to year-to-date amortization expense for core deposit
 and customer relationships as well as for the reduction of unrecognized tax benefits
 for tax positions taken in prior years related to acquisitions. In accordance with
 SFAS No. 141, all assets acquired and liabilities assumed are recorded based on
 their fair values on the acquisition date.Identifiable
 intangible assets are amortized on a straight-line or accelerated basis, over their
 estimated lives. Management assesses the recoverability of intangible assets subject
 to amortization whenever events or changes in circumstances indicate that their
 carrying value may not be recoverable. If the carrying amount exceeds fair value,
 an impairment charge is recorded to income. Goodwill is not amortized, but instead
 is reviewed for impairment on an annual basis. The Company performed its annual
 test for goodwill impairment during the first quarter of the year, and no impairment
 was recorded. No events or circumstances subsequent to those evaluations indicate
 that the carrying value of the Companys goodwill may not be recoverable.

Sources of FundsCash flows
 from deposits, loan and mortgage-backed securities repayments, securities sales
 proceeds and maturities, borrowings and earnings are the primary sources of the
 Companys funds available for use in its lending and investment activities
 and in meeting its operational needs. While scheduled loan and securities repayments
 are a relatively stable source of funds, deposit flows and loan and investment security
 prepayments are influenced by prevailing interest rates and local and economic conditions
 and are inherently uncertain. The borrowings primarily include FHLB advances and
 repurchase agreement borrowings. See Note 10 of Notes to Consolidated Financial
 Statements contained elsewhere within this Report for further borrowings information.
The Company attempts to control the flow of funds in its deposit accounts according
 to its need for funds and the cost of alternative sources of funding. A Loan and
 Deposit Pricing Committee meets weekly to determine pricing and marketing initiatives.
 It influences the flow of funds primarily by the pricing of deposits, which is affected
 to a large extent by competitive factors in its market area and asset/liability
 management strategies.

Deposits The Company
 receives retail and commercial deposits through its main office and 88 other banking
 offices throughout Connecticut (77 locations) and Massachusetts (12 locations).
 Customer deposits generated through the NewAlliance banking network are the largest
 source of funds used to support asset growth.

|Table 10.    Deposits |  |   |               |  |                  |           | 
|--------------------- |  | - | ------------- |  | ---------------- | --------- | 
|(In thousands)        |  |   | March 31,2008 |  | December 31,2007
|                     
|Savings               |  | $ | 1,126,787     |  | $                | 941,051   | 
|Money market          |  |   | 494,845       |  |                  | 492,042   | 
|NOW                   |  |   | 405,669       |  |                  | 401,097   | 
|Demand                |  |   | 484,380       |  |                  | 477,408   | 
|Time                  |  |   | 1,745,933     |  |                  | 2,062,067 | 
|                     
|Total
 deposits       |  | $ | 4,257,614     |  | $                | 4,373,665 | 
|                     

As displayed
 in Table 10, deposits decreased $116.1 million compared to December 31, 2007. The
 Companys strategy was to reduce rates paid on interest bearing deposits, particularly
 on time deposits, in order to stabilize the net interest margin and increase core
 deposits. The strategy resulted in our net interest margin increasing seven basis
 points from December 31, 2007. However, deposit outflow in the quarter did occur
 due to the reduction in the average rate paid on deposits. Many of our peers did
 not reduce their rates as quickly, therefore, a portion of maturing time deposits
 was lost to competitors. Partially offsetting the decrease in time deposit accounts
 was an increase in core deposits of approximately $200.0 million, as the Company
 was able to retain some of the attrition in time deposit accounts and established
 new customer accounts and relationships through targeted product promotions. However,
 if deposit outflows continue the Company may increase the rate paid on interest-bearing
 deposits to stem the outflows which could have a negative impact on the net interest
 margin.

BorrowingsNewAlliance
 also uses various types of short-term and long-term borrowings in meeting funding
 needs. While customer deposits remain the primary source for funding loan originations,
 management uses short-term and long-term borrowings as a supplementary funding source
 for loan growth and other liquidity needs when the cost of these funds are favorable
 compared to alternative funding, including deposits.

32




The following table summaries the Companys recorded borrowings at March 31, 2008.

|Table 11.    Borrowings                                         |  |   |           |  |   |              | 
|--------------------------------------------------------------- |  | - | --------- |  | - | ------------ | 
|                                                                |  |   |           |  |   |              | 
|                                                                |  |   | March 31, |  |   | December 31, | 
|(In thousands)                                                  |  |   | 2008      |  |   | 2007         | 
|                                                               
|FHLB advances (1)                                               |  | $ | 2,211,038 |  | $ | 2,136,965    | 
|Repurchase
 agreements                                          |  |   | 187,512   |  |   | 192,145      | 
|Mortgage loans
 payable                                         |  |   | 1,425     |  |   | 1,459        | 
|Junior subordinated
 debentures issued to affiliated trusts (2) |  |   | 24,885    |  |   | 24,935       | 
|                                                               
|Total
 borrowings                                               |  | $ | 2,424,860 |  | $ | 2,355,504    | 
|                                                               

|(1)                                                                                                                                                                              |  | Includes fair value adjustments on acquired borrowings, in accordance with SFAS No. 141, Business Combinations, of $8.6
million and $9.6 million at March 31, 2008 and December 31, 2007, respectively.                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)                                                                                                                                                                              |  | Includes fair value adjustments on acquired borrowings, in accordance with SFAS No. 141, Business Combinations, of $250,000
and $300,000 at March 31, 2008 and December 31, 2007, respectively. The trusts were organized to facilitate the issuance of
trust preferred securities. The Company acquired these subsidiaries when it acquired Alliance Bancorp of New England, Inc. and Westbank Corporation, Inc. The affiliated trusts are wholly-owned subsidiaries of the Company and the payments of these securities
are irrevocably and unconditionally guaranteed by the Company.
|                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|The acquisition fair value adjustments (premiums) are being amortized as an adjustment to interest expense on borrowings over
their remaining term using the level yield method.

Borrowings were $2.42 billion at March 31, 2008, an increase of $69.4 million from
 the balance recorded at December 31, 2007, and was mainly in FHLB advances. This
 increase in FHLB advances was primarily due to funding loan growth and offsetting
 deposit outflows while managing interest rate risk and liquidity. At March 31, 2008,
 the majority of the Companys outstanding FHLB advances were at fixed rates,
 while only $15.0 million had floating rates.

Stockholders Equity
Total stockholders equity equaled $1.41 billion at March 31, 2008, $7.7 million higher than the
 balance at December 31, 2007. The increase consisted primarily of current year earnings
 of $12.9 million and stock option and restricted stock expense of $3.0 million.
 These increases were partially offset by the $6.6 million payment of cash dividends
 declared on our common stock during the three months ended March 31, 2008 and our
 repurchase of 147,913 shares of our common stock for $1.7 million. For information
 regarding our compliance with applicable capital requirements, see Liquidity
 and Capital Position below.Dividends declared in the first quarter were
 $0.065 per share compared to $0.06 per share for the same period last year. On April
 17, 2008, we declared a $0.07 per share cash dividend payable on May 16, 2008 to
 shareholders of record on May 6, 2008. Book value per share amounted to $13.03 and
 $12.93 at March 31, 2008 and December 31, 2007, respectively, and tangible book
 value amounted to $7.70 and $7.56 at the same dates, respectively.

Management Of Market And Interest Rate
 Risk

GeneralMarket risk
 is the exposure to losses resulting from changes in interest rates, foreign currency
 exchange rates, commodity prices and equity prices. The Company has no foreign currency
 or commodity price risk. Credit risk related to investment securities is low as
 all are investment grade or have government guarantees. There is no sub-prime mortgage
 exposure in the investment portfolio. The chief market risk factor affecting financial
 condition and operating results is interest rate risk. Interest rate risk is the
 exposure of current and future earnings and capital arising from adverse movements
 in interest rates and spreads. This risk is managed by periodic evaluation of the
 interest rate risk inherent in certain balance sheet accounts, determination of
 the level of risk considered appropriate given the Companys capital and liquidity
 requirements, business strategy, performance objectives and operating environment
 and maintenance of such risks within guidelines approved by the Board of Directors.
 Through such management, the Company seeks to reduce the vulnerability of its net
 earnings to changes in interest rates. The Asset/Liability Committee, comprised
 of several senior executives, is responsible for managing interest rate risk. On
 a quarterly basis, the Board of Directors reviews the Companys gap position
 and interest rate sensitivity exposure described below and Asset/Liability Committee
 minutes detailing the Companys activities and strategies, the effect of those
 strategies on the Companys operating results, interest rate risk position
 and the effect changes in interest rates would have on the Companys net interest
 income. The extent of movement of interest rates is an uncertainty that could have
 a negative impact on earnings.

33




The principal strategies used to manage
 interest rate risk include (i) emphasizing the origination, purchase and retention
 of adjustable rate loans, and the origination and purchase of loans with maturities
 matched with those of the deposits and borrowings funding the loans, (ii) investing
 in debt securities with relatively short maturities and/or average lives and (iii)
 classifying a significant portion of its investment portfolio as available for sale
 so as to provide sufficient flexibility in liquidity management. By its strategy
 of limiting the Banks risk to rising interest rates, the Bank is also limiting
 the benefit of falling interest rates.The Company employs two approaches to
 interest rate risk measurement; gap analysis and income simulation analysis.

Gap AnalysisThe matching of assets and liabilities may be analyzed
 by examining the extent to which such assets and liabilities are interest
 rate sensitive and by monitoring a banks interest rate sensitivity gap. An asset or liability is deemed to be interest rate sensitive within
 a specific time period if it will mature or reprice within that time period. The
 interest rate sensitivity gap is defined as the difference between the
 amount of interest-earning assets maturing or repricing within a specific time period
 and the amount of interest-bearing liabilities maturing or repricing within that
 same time period. At March 31, 2008, the Companys cumulative one-year interest
 rate gap (which is the difference between the amount of interest-earning assets
 maturing or repricing within one year and interest-bearing liabilities maturing
 or repricing within one year), was negative $31.4 million, or negative 0.38% of
 total assets. The Banks approved policy limit is plus or minus 20%. A gap
 is considered positive when the amount of interest rate sensitive assets exceeds
 the amount of interest rate sensitive liabilities. A gap is considered negative
 when the amount of interest rate sensitive liabilities exceeds the amount of interest
 rate sensitive assets. During a period of rising interest rates, a negative gap
 would tend to adversely affect net interest income while a positive gap would tend
 to result in an increase in net interest income. Conversely, during a period of
 falling interest rates, a negative gap would tend to result in an increase in net
 interest income while a positive gap would tend to adversely affect net interest
 income.

Income Simulation AnalysisIncome simulation analysis
 considers the maturity and repricing characteristics of assets and liabilities,
 as well as the relative sensitivities of these balance sheet components over a range
 of interest rate scenarios. Tested scenarios include instantaneous rate shocks,
 rate ramps over a six-month or one-year period, static rates, non-parallel shifts
 in the yield curve and a forward rate scenario. The simulation analysis is used
 to measure the exposure of net interest income to changes in interest rates over
 a specified time horizon, usually a three-year period. Simulation analysis involves
 projecting future balance sheet structure and interest income and expense under
 the various rate scenarios. The Companys internal guidelines on interest rate
 risk specify that for a range of interest rate scenarios, the estimated net interest
 margin over the next 12 months should decline by less than 12% as compared to the
 forecasted net interest margin in the base case scenario. However, in practice,
 interest rate risk is managed well within these 12% guidelines.For the base
 case rate scenario the flat yield curve as of March 31, 2008 was utilized. This
 yield curve was utilized due to the recent excessive volatility in the rates markets.
 As of March 31, 2008, the Companys estimated exposure as a percentage of estimated
 net interest income for the next twelve-month period as compared to the forecasted
 net interest income in the base case scenario are as follows:

|                                                               |  | Percentage
 change inestimated net interest marginover twelve months
|-------------------------------------------------------------- |  | --------------------------------------------------------------------
|                                                              
|200 basis
 point twelve month ramp upwards in interest rates   |  | 2.38%                                                               
|100 basis
 point twelve month ramp downwards in interest rates |  | -1.96%                                                              
|                                                              

As of March 31, 2008, a downward twelve
 month ramp of 100 basis points was a realistic representation of the risk of falling
 rates as the Federal Reserve was reducing rates to increase market liquidity. For
 an increase in rates, an upward twelve month ramp of 200 basis points is also a
 relevant representation of potential risk given the possibility of the economy rebounding
 due to the recent reductions in the federal funds rate and the potential for the
 government stimulus package to stimulate demand in the second half of the year.
Based on the scenarios above, net interest income would increase slightly in the
 12-month period after an upward movement in rates, and would decrease slightly after
 a downward movement in rates. Computation of prospective effects of hypothetical
 interest rate changes are based on a number of assumptions including the level of
 market interest rates, the degree to which non-maturity deposits react to changes
 in market rates, the expected prepayment rates on loans and investments, the degree
 to which early withdrawals occur on time deposits and other deposit flows. As a
 result, these computations should not be relied upon as

34




indicative
 of actual results. Further, the computations do not reflect any actions that management
 may undertake in response to changes in interest rates.

Liquidity and Capital PositionLiquidity
 is the ability to meet current and future short-term financial obligations. The
 Company further defines liquidity as the ability to respond to the needs of depositors
 and borrowers as well as maintaining the flexibility to take advantage of investment
 opportunities. The Companys primary sources of funds consist of deposit inflows,
 loan repayments and sales, maturities, paydowns and sales of investment and mortgage-backed
 securities, borrowings from the Federal Home Loan Bank and repurchase agreements.
The Company has expanded its use of borrowings from the Federal Home Loan Bank
 to fund loan growth while managing interest rate risk and liquidity. At March 31,
 2008, total borrowings from the Federal Home Loan Bank amounted to $2.20 billion,
 exclusive of $8.6 million in purchase accounting adjustments, and the Company had
 the immediate capacity to increase that total to $2.39 billion. Additional borrowing
 capacity of approximately $797.4 million would be readily available by pledging
 eligible investment securities as collateral. Depending on market conditions and
 the Companys liquidity and gap position, the Company may continue to borrow
 from the Federal Home Loan Bank or initiate borrowings through the repurchase agreement
 market. At March 31, 2008 the Companys repurchase agreement lines of credit
 totaled $125.0 million, $100.0 million of which was available on that date.
The Companys most liquid assets are cash and due from banks, short-term investments
 and debt securities. The levels of these assets are dependent on the Companys
 operating, financing, lending and investment activities during any given period.
 At March 31, 2008, cash and due from banks, short-term investments and debt securities
 maturing within one year amounted to $308.7 million, or 3.77% of total assets.
NewAlliances main source of liquidity at the parent company level is dividends
 from NewAlliance Bank. The main uses of liquidity are payments of dividends to common
 stockholders, repurchase of NewAlliances common stock, and the payment of
 principal and interest to holders of trust preferred securities.Management believes
 that the cash and due from banks, short term investments and debt securities maturing
 within one year, coupled with the borrowing line at the Federal Home Loan Bank and
 the available repurchase agreement lines at selected broker dealers, provide for
 sufficient liquidity to meet its operating needs.At March 31, 2008, the Company
 had commitments to originate loans, unused outstanding lines of credit and standby
 letters of credit totaling $886.0 million. Management anticipates that it will have
 sufficient funds available to meet its current loan commitments. Time deposits maturing
 within one year from March 31, 2008 amount to $1.57 billion.At March 31, 2008,
 the Companys Tier 1 leverage ratio, a primary measure of regulatory capital
 was $845.1 million, or 11.2%, which is above the threshold level of $377.3 million,
 or 5% to be considered well-capitalized. The Tier 1 risk-based capital
 ratio stood at 18.9% and the Total risk-based capital ratio stood at 20.0%. The
 Bank also exceeded all of its regulatory capital requirements with leverage capital
 of $688.9 million, or 9.1% of average assets, which is above the required level
 of $301.1 million or 4.0%. The Tier 1 risk-based capital ratio was 15.5% and the
 Total risk-based capital ratio was 16.6%. These ratios qualify the Bank as a well
 capitalized institution under federal capital guidelines.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk


Quantitative
 and qualitative disclosures about the Companys market risk appears under Item
 2, Managements Discussion and Analysis of Financial Condition and Results
 of Operations, under the caption Management of Market and Interest Rate
 Risk on pages 33 through 35.


Item 4.   Controls and Procedures
The Companys management, including our Chief Executive Officer and Chief Financial Officer,
 has evaluated the effectiveness of our disclosure controls and procedures (as defined
 in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of March 31, 2008.
 Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer
 concluded that our disclosure controls and procedures are effective.Disclosure
 controls and procedures are our controls and other procedures that are designed
 to ensure that the information required to be disclosed by us in our reports filed
 or submitted under the Securities Exchange Act of 1934 (the Exchange Act)
 is recorded, processed, summarized and reported within the time periods specified
 in the Securities and Exchange Commissions rules and forms. Disclosure controls
 and procedures include, without limitation, controls and procedures designed to
 ensure that information required to be disclosed by us in our reports filed under
 the Exchange Act is accumulated and communicated to our

35




management,
 including the principal executive officer and principal financial officer, as appropriate
 to allow timely decisions regarding required disclosure in the first quarter 2008.
In addition, based on that evaluation, no change in the Companys internal
 control over financial reporting occurred during the quarter ended March 31, 2008
 that has materially affected, or is reasonably likely to materially affect, the
 Companys internal control over financial reporting.

Item 4T.   Controls and ProceduresNot applicable.

PART II - OTHER INFORMATION

Item 1.  Legal ProceedingsWe are not
 involved in any pending legal proceedings other than routine legal proceedings occurring
 in the ordinary course of business. We believe that those routine proceedings involve,
 in the aggregate, amounts which are immaterial to the financial condition and results
 of operations of NewAlliance Bancshares, Inc.

Item 1A.  Risk Factors

An investment
 in our common stock involves certain risks inherent to our business. The material
 risks and uncertainties that management believes affect the Company are described
 below. To understand these risks and to evaluate an investment in our common stock,
 you should read this entire report, including the following risk factors.If
 any of the following risks actually occur, the Companys financial condition
 and results of operations could be materially and adversely affected. If this were
 to happen, the value of the Companys common stock could decline significantly.

Changes in Interest Rates and Spreads
 Could Have an Impact on Earnings and Results of Operations, Which Could Have a Negative
 Impact on The Value of NewAlliance Stock.NewAlliances earnings and financial condition are dependent to a large degree upon net
 interest income, which is the difference between interest earned from loans and
 investments and interest paid on deposits and borrowings. The narrowing of interest
 rate spreads, meaning the difference between interest rates earned on loans and
 investments and the interest rates paid on deposits and borrowings, could adversely
 affect NewAlliances earnings and financial condition. The Company cannot predict
 with certainty or control changes in interest rates. Regional and local economic
 conditions and the policies of regulatory authorities, including monetary policies
 of the Federal Reserve Board, affect interest income and interest expense. The Company
 has ongoing policies and procedures designed to manage the risks associated with
 changes in market interest rates.However, changes in interest rates still may
 have an adverse effect on NewAlliances profitability. For example, high interest
 rates could also affect the amount of loans that we originate, because higher rates
 could cause customers to apply for fewer mortgages, or cause depositors to shift
 funds from accounts that have a comparatively lower cost, to accounts with a higher
 cost or experience customer attrition due to competitor pricing. If the cost of
 interest-bearing deposits increases at a rate greater than the yields on interest-earning
 assets increase, net interest income will be negatively affected. Changes in the
 asset and liability mix may also affect net interest income. Similarly, lower interest
 rates cause higher yielding assets to prepay and floating or adjustable rate assets
 to reset to lower rates. If the Bank is not able to reduce its funding costs sufficiently,
 due to either competitive factors or the maturity schedule of existing liabilities,
 then the Banks net interest margin will decline.

Credit Market Conditions May Impact NewAlliances InvestmentsSignificant
 credit market anomalies may impact the valuation and liquidity of the Companys
 investment securities. The problems of numerous primary security dealers have reduced
 market liquidity, increased normal bid-asked spreads and increased the uncertainty
 of market participants. Such illiquidity could reduce the market value of the Companys investments, even those with no apparent credit exposure.

NewAlliances Business Strategy
 of Growth Through Acquisitions Could Have an Impact on Earnings and Results of Operations
 That May Negatively Impact the Value of NewAlliance Stock.In recent
 years, NewAlliance has focused, in part, on acquisitions. Over the past four years,
 the Company has acquired four banking institutions, a non-depository trust company
 and a registered investment advisory firm. From time to time in the ordinary course
 of business, the Company engages in preliminary discussions with potential acquisition
 targets. As of the date of this filing, there are no binding or definitive agreements,
 plans, arrangements, or understandings for such acquisitions by the Company. Although
 our business strategy includes both internal expansion and acquisitions, there can
 be no assurance that, in the future, we will successfully identify suitable acquisition
 candidates, complete acquisitions successfully, integrate acquired operations into
 our existing operations or expand into new markets. Further, there can be no assurance
 that acquisitions will not

36




have an adverse effect upon our operating
 results while the operations of the acquired businesses are being integrated into
 our operations. In addition, once integrated, acquired operations may not achieve
 levels of profitability comparable to those achieved by our existing operations,
 or otherwise perform as expected. Further, transaction-related expenses may adversely
 affect our earnings. These adverse effects on our earnings and results of operations
 may have a negative impact on the value of our stock.

If The Goodwill That
 The Company Has Recorded in Connection With Its Acquisitions Becomes Impaired, It
 Could Have a Negative Impact on The Companys Profitability.Applicable
 accounting standards require that the purchase method of accounting be used for
 all business combinations. Under purchase accounting, if the purchase price of an
 acquired company exceeds the fair value of the companys net assets, the excess
 is carried on the acquirers balance sheet as goodwill. At December 31, 2007,
 the Company had approximately $531.2 million of goodwill on its balance sheet. Companies
 must evaluate goodwill for impairment at least annually. Write-downs of the amount
 of any impairment, if necessary, are to be charged to the results of operations
 in the period in which the impairment occurs. There can be no assurance that future
 evaluations of goodwill will not result in findings of impairment and related write-downs,
 which may have a material adverse effect on NewAlliances financial conditions
 and results of operations.

NewAlliance May Experience Higher Levels of Loan
 Losses Due to Recent Growth.NewAlliances growth strategy depends on
 generating an increasing level of loans to produce an acceptable return to our stockholders.
 We will also need to accomplish this loan growth while maintaining low loan losses
 in our portfolio. We expect growth to occur in markets that are relatively new to
 us, including central and western Massachusetts through our recent acquisition of
 Westbank. As such, NewAlliances allowance for loan losses may need to be increased,
 or may be deemed insufficient by various regulatory agencies. Such agencies may
 require the Bank to recognize an increase to the allowance for loan losses. Any
 increases in the allowance for loan losses will result in a decrease in net income
 and, possibly capital, and may have a material adverse effect on NewAlliances
 financial condition and results of operations. See the sections titled Allowance
 for Loan Losses and Classification of Assets and Loan Review in
 Item 7, Managements Discussion and Analysis of Financial Condition and Results
 of Operation, located in the Companys most recent Annual Report on Form 10-K
 for further discussion related to the process for determining the appropriate level
 of the allowance for loan losses.

NewAlliance May Experience Higher Levels
 of Loan Losses Due to Economic Conditions.NewAlliances business is
 subject to periodic fluctuations based on national and local economic conditions.
 These fluctuations are not predictable, cannot be controlled and may have a material
 adverse impact on the Companys operations and financial condition. For example,
 recent declines in housing activity including declines in building permits, housing
 starts and home prices may make it more difficult for our borrowers to sell their
 homes or refinance their debt. Sales may also slow, which could strain the resources
 of real estate developers and builders. Many analysts are now predicting the U.S.
 Economy is in or will experience a recession in the near term. This could affect
 employment levels and the ability of our borrowers to service their debt. The Bank
 may suffer higher loan losses as a result of these factors and the resulting impact
 on our borrowers.

Strong Competition Within NewAlliances Market Areas
 May Limit Growth and Profitability.Competition in the banking and financial
 services industry is intense. In our market areas, we compete with commercial banks,
 savings institutions, mortgage brokerage firms, credit unions, finance companies,
 mutual funds, insurance companies, and brokerage and investment banking firms operating
 locally and elsewhere. As we grow, we will be expanding into market areas where
 we may not be as well known as other institutions that have been operating in those
 areas for some time. In addition, regional, super regional and national interstate
 banking institutions have become increasingly active in our market areas. Many of
 these competitors, in particular the regional, super regional and national institutions,
 have substantially greater resources and lending limits than we have and may offer
 certain services that we do not or cannot efficiently provide. Our profitability
 depends upon our continued ability to successfully compete in our market areas.
 The greater resources and deposit and loan products offered by some of our competitors
 may limit our ability to grow profitably.

NewAlliance May Not Pay You Dividends
 if NewAlliance is Not Able to Receive Dividends From Its Subsidiary, NewAlliance
 Bank.Cash dividends from NewAlliance Bank and our liquid assets are our
 principal sources of funds for paying cash dividends on our common stock. Unless
 we receive dividends from NewAlliance Bank or choose to use our liquid assets, we
 may not be able to pay dividends. NewAlliance Banks ability to pay us dividends
 is subject to its ability to earn net income and to meet certain regulatory requirements.

NewAlliance is Subject To Extensive Government Regulation and SupervisionNewAlliance, primarily through NewAlliance Bank and certain non-bank subsidiaries,
 is subject to extensive federal and state regulation and supervision. Banking regulations
 are primarily intended to protect customers, depositors funds, federal deposit
 insurance funds and the banking system as a whole, not stockholders. These regulations
 affect the Companys lending practices, capital structure, investment practices,
 dividend policy and growth, among other things. Congress and federal regulatory

37




agencies continually review banking laws,
 regulations and policies for possible changes. Changes to statutes, regulations
 or regulatory policies, including changes in interpretation or implementation of
 statutes, regulations or policies, could affect the Company in substantial and unpredictable
 ways. Such changes could subject the Company to additional costs, limit the types
 of financial services and products we may offer and/or increase the ability of non-banks
 to offer competing financial services and products, among other things. Failure
 to comply with laws, regulations or policies could result in sanctions by regulatory
 agencies, civil money penalties and/or reputation damage, which could have a material
 adverse effect on the Companys business, financial condition and results of
 operations. While NewAlliance has policies and procedures designed to prevent any
 such violations, there can be no assurance that such violations will not occur.
 See the section captioned Supervision and Regulation in Item 1. of the
 Companys most recent annual report on Form 10-K for further information.

NewAlliance May Not Be Able To Attract and
 Retain Skilled PeopleNewAlliances success depends, in large part,
 on its ability to attract and retain key people. Competition for the best people
 in most activities engaged in by the Company can be intense and we may not be able
 to hire people or to retain them. The unexpected loss of services of one or more
 of the Companys key personnel could have a material adverse impact on the
 business because of their skills, knowledge of the market, years of industry experience
 and the difficulty of promptly finding qualified replacement personnel.

NewAlliance
 Continually Encounters Technological ChangeThe financial services industry
 is continually undergoing rapid technological change with frequent introductions
 of new technology-driven products and services. The effective use of technology
 can increase efficiency and enable financial institutions to better serve customers
 and to reduce costs. However, some new technologies needed to compete effectively
 result in incremental operating costs. The Companys future success depends,
 in part, upon its ability to address the needs of its customers by using technology
 to provide products and services that will satisfy customer demands, as well as
 to create additional efficiencies in operations. Many of the Companys competitors
 have substantially greater resources to invest in technological improvements. The
 Company may not be able to effectively implement new technology-driven products
 and services or be successful in marketing these products and services to its customers.
 Failure to successfully keep pace with technological change affecting the financial
 services industry could have a material adverse impact on the Companys business
 and, in turn, its financial condition and results of operations.

NewAlliances Controls and Procedures May Fail or Be CircumventedManagement regularly
 reviews and updates the Companys internal controls, disclosure controls and
 procedures, and corporate governance policies and procedures. Any system of controls,
 however well designed and operated, is based in part on certain assumptions and
 can provide only reasonable, not absolute, assurances that the objectives of the
 system are met. Any failure or circumvention of the controls and procedures or failure
 to comply with regulations related to controls and procedures could have a material
 adverse effect on the Companys business, results of operations and financial
 condition.

Customer Information May be Obtained and Used FraudulentlyRisk of theft of customer information resulting from security breaches by third
 parties exposes the Company to reputation risk and potential monetary loss. The
 Company has exposure to fraudulent use of our customers personal information
 resulting from its general business operations and through customer use of financial
 instruments, such as debit cards. If a breach in security does occur in the marketplace
 and the financial data of our customers is compromised, the Company will react as
 quickly as possible to protect customer accounts and limit potential losses to the
 Company.

NewAlliances Stock Price Can be Volatile.NewAlliances stock price can fluctuate widely in response to a variety of factors including:

| |  | actual or
 anticipated variations in quarterly operating results;                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recommendations
 by securities analysts;                                                                                                                                    
| |  | new technology
 used, or services offered, by competitors;                                                                                                                  
| |  | significant
 acquisitions or business combinations, strategic partnerships, joint ventures or
 capital commitments by or involving the Company or the Companys competitors;
| |  | failure to
 integrate acquisitions or realize anticipated benefits from acquisitions;                                                                                       
| |  | operating
 and stock price performance of other companies that investors deem comparable to
 NewAlliance;                                                                   
| |  | news reports
 relating to trends, concerns and other issues in the financial services industry;                                                                             
| |  | changes in
 government regulations; and                                                                                                                                     
| |  | geopolitical
 conditions such as acts or threats of terrorism or military conflicts.                                                                                        

General market fluctuations, industry factors
 and general economic and political conditions and events, such as economic slowdowns
 or recessions, interest rate changes, credit loss trends or currency fluctuations
 could also cause NewAlliances stock price to decrease regardless of the Companys operating results.

38




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


(a) None.

(b) Not applicable.

(c) The
 following table sets forth information about the Companys stock repurchases
 for the three months ended March 31, 2008.

Issuer Purchases of Equity Securities

|                    |     | (a) Total
 Number of Shares Purchased |  | (b) Average Price Paid perShare (includes commission) |  | (c) Total
 Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | (d) Maximum
 Number (or Approximate Dollar Value) of Shares that may Yet Be Purchased Under the
 Plans or Programs
|------------------- | --- | ------------------------------------- |  | ----------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------
|Period              |     |                                       |  |                                                       |  |                                                                                       |  |                                                                                                                   
|January 1-31, 2008  | (1) | 109,880                               |  | $                11.52                                |  | 0                                                                                     |  | 4,856,913
 shares                                                                                                 
|February 1-29, 2008 |     | 0                                     |  | $                        -                            |  | 0                                                                                     |  | 4,856,913
 shares                                                                                                 
|March 1-31, 2008    | (2) | 151,344                               |  | $                11.38                                |  | 147,913                                                                               |  | 4,709,000
 shares                                                                                                 
|Total               |     | 261,224                               |  | $                11.44                                |  | 147,913                                                                               |  |                                                                                                                   

On January 31, 2006, the Companys
 second stock repurchase plan was announced and provides for the repurchase of up
 to 10.0 million shares of common stock of the Company. There is no set expiration
 date for this plan.

|(1) |  | Represents
 shares of common stock withheld by the Company to satisfy tax withholding requirements
 on the vesting of restricted shares under the Companys 2005 Long-Term Compensation
 Plan.                 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) |  | Includes 3,431
 shares which represent common stock withheld by the Company to satisfy tax withholding
 requirements on the vesting of restricted shares under the Companys 2005 Long-Term
 Compensation Plan.

|Item 3.   Defaults Upon Senior Securities                     
|--------------------------------------------------------------
|None.                                                         
|                                                              
|Item 4.    Submission of Matters to a Vote of Security Holders

|(a) |  | The Company
 held its annual meeting on April 17, 2008 (Annual Meeting).                                                                                                                                                                                                                                                                                                                                           
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(b) |  | The following
 individuals were re-elected as directors for three-year terms at the Annual Meeting:
 Douglas K. Anderson, Roxanne J. Coady, John F. Croweak and Sheila B. Flanagan. The
 other continuing directors are: Carlton L. Highsmith, Robert J. Lyons, Jr., Eric
 A. Marziali, Julia M. McNamara, Peyton R. Patterson, Gerald B. Rosenberg, Joseph
 H. Rossi, Nathaniel D. Woodson and Joseph A. Zaccagnino.
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|(c) |  | There were
 108,741,712 shares of Common Stock eligible to be voted at the Annual Meeting and
 98,400,092 shares were represented at the meeting by the holders thereof, which
 constituted a quorum. The items voted upon at the Annual Meeting and vote for each
 proposal were as follows:                                                                                                                        

1. Election
 of directors for Three-Year Terms (Proposal 1)Director


For

WithheldDouglas K.
 Anderson


94,184,294

4,215,798Roxanne J.
 Coady


94,200,207

4,199,885John F. Croweak


94,047,590

4,352,502Sheila B.
 Flanagan


94,186,413

4,213,679


39




There were no abstentions
 or broker non-votes for any of the nominees.

2.	   Approval
 of the NewAlliance Bank Executive Incentive Plan (Proposal 2)

| | For        |  | Against    |  | Abstain  
| | ---------- |  | ---------- |  | ---------
|
| | 80,907,758 |  | 16,102,169 |  | 1,390,165
|

3.   Ratification of Appointment of PricewaterhouseCoopers, LLP as independent auditors
 of the Company for the fiscal year ending December 31, 2008 ( Proposal 3)

| | For        |  | Against   |  | Abstain
| | ---------- |  | --------- |  | -------
|
| | 96,885,522 |  | 1,053,548 |  | 461,022
|

Item 5.   Other InformationNone.

Item 6.   Exhibits

|Exhibit |  | 
|------- |  | 
|Number  |  | 
|3.1     |  | 
|3.2     |  | 
|4.1     |  | 
|10.1    |  | 
|10.2    |  | 
|10.2.1  |  | 
|10.3    |  | 
|10.4    |  | 
|10.5    |  | 
|10.6    |  | 
|10.7.1  |  | 
|10.7.2  |  | 
|10.7.3  |  | 
|10.7.4  |  | 
|10.7.5  |  | 

40




|10.7.6  |  |  | (Intentionally
 deleted)                                                                                                                                                                                                                                    
|------- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.7.7  |  |  | Amended and
 Restated Employment Agreement between NewAlliance Bank and J. Edward Diamond, effective
 September 25, 2007 Incorporated herein by reference is Exhibit 10.7.7 filed with
 the Companys Quarterly report on Form 10-Q, filed November 8, 2007.
|10.7.8  |  |  | Amended and
 Restated Employment Agreement between NewAlliance Bank and Donald T. Chaffee, effective
 September 25, 2007. Incorporated herein by reference is Exhibit 10.7.8 filed with
 the Companys Current Report on Form 8-K, filed October 1, 2007.   
|10.7.9  |  |  | Employment
 Agreement between NewAlliance Bank and Paul A. McCraven, effective September 25,
 2007. Incorporated herein by reference is Exhibit 10.7.9 filed with the Companys Current Report on
Form 8-K, filed October 1, 2007.                          
|10.7.10 |  |  | Amended and
 Restated Employment Agreement between NewAlliance Bank and Koon-Ping Chan, effective
 September 25, 2007. Incorporated herein by reference is Exhibit 10.7.10 filed with
 the Companys Current Report on Form 8-K, filed October 1, 2007.     
|10.8.1  |  |  | Form of Stock
 Option Agreement (for outside directors). Incorporated herein by reference is Exhibit
 10.8.1 filed with the Companys Quarterly Report on Form 10-Q, filed August
 9, 2005.                                                                 
|10.8.2  |  |  | Form of Stock
 Option Agreement (for employees, including senior officers). Incorporated herein
 by reference is Exhibit 10.8.2 filed with the Companys Quarterly Report on
 Form 10-Q, filed August 9, 2005.                                              
|10.9.1  |  |  | Form of Restricted
 Stock Award Agreement (for outside directors). Incorporated herein by reference
 is Exhibit 10.9.1 filed with the Companys Quarterly Report on Form 10-Q, filed
 August 9, 2005.                                                       
|10.9.2  |  |  | Form of Restricted
 Stock Award Agreement (for employees, including senior officers). Incorporated herein
 by reference is Exhibit 10.9.2 filed with the Companys Quarterly Report on Form 10-Q, filed
 August 9, 2005.                                    
|10.10   |  |  | NewAlliance
 Bancshares, Inc. 2005 Long-Term Compensation Plan. Incorporated herein by reference
 is Exhibit 4.3 filed with the Companys Registration Statement on Form S-8,
 filed November 4, 2005.                                                      
|10.11   |  |  | Amendment
 Number One to the New Haven Savings Bank/NewAlliance Bank 2004 Supplemental Executive
 Retirement Plan. Incorporated herein by reference is Exhibit 10.11 filed with the
 Companys Annual Report on Form 10-K, filed March 1, 2007.             
|10.12   |  |  | Form of Indemnification
 Agreement for Directors and Certain Executive Officers. Incorporated herein by reference
 is Exhibit 10.12 filed with the Companys Annual Report on Form 10-K, filed
 March 1, 2007.                                              
|14      |  |  | Code of Ethics
 for Senior Financial Officers. Incorporated herein by reference is Exhibit 14 filed
 with the Companys Annual Report on Form 10-KT, filed March 30, 2004.                                                                                  
|21      |  |  | Subsidiaries
 of NewAlliance Bancshares, Inc. and NewAlliance Bank. Incorporated herein by reference
 is Exhibit 21 filed with the Companys Annual Report on Form 10-K, filed March
 1, 2007.                                                              
|31.1    |  |  | Certification
 of Peyton R. Patterson pursuant to the requirements of Section 13 or 15(d) of the
 Securities Exchange Act of 1934 (filed herewith).                                                                                                         
|31.2    |  |  | Certification
 of Merrill B. Blanksteen pursuant to the requirements of Section 13 or 15(d) of
 the Securities Exchange Act of 1934 (filed herewith).                                                                                                       
|32.1    |  |  | Certification
 of Peyton R. Patterson pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
 Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                           
|32.2    |  |  | Certification
 of Merrill B. Blanksteen pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
 to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                         

41




|SIGNATURES                                                                                                                                                                               |      |                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | --------------------------------------------------------------------------------------------------
|                                                                                                                                                                                         |      |                                                                                                   
|Pursuant to the requirements 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.
|                                                                                                                                                                                         |      |                                                                                                   
|NewAlliance Bancshares, Inc.                                                                                                                                                            
|                                                                                                                                                                                         |      |                                                                                                   
|                                                                                                                                                                                         | By:  | /s/ Merrill B. Blanksteen                                                                         
|                                                                                                                                                                                         |      |                                                                                                   
|                                                                                                                                                                                         |      | Merrill B. Blanksteen                                                                             
|                                                                                                                                                                                         |      | Executive Vice President, Chief Financial Officer and Treasurer      (principal financial officer)
|                                                                                                                                                                                         |      |                                                                                                   
|                                                                                                                                                                                         | Date | May 07, 2008                                                                                      

42