**Exhibit
      99.1**





**PRESS
      RELEASE**






















**Naugatuck
      Valley Financial Corporation Reports Second Quarter
      Earnings**


**And
      Announces Cash Dividend for the Quarter Ended June 30,
      2007**





Naugatuck,
      CT, July 19,
      2007.  Naugatuck Valley Financial Corporation (the “Company”) (NASDAQ
      Global Market: “NVSL”), the parent company of Naugatuck Valley Savings and Loan
      (the “Bank”), announced net income of $312,000 for the quarter ended June 30,
      2007 versus net income of $413,000 for the quarter ended June 30, 2006, a
      decrease of $101,000 or 24.5%.  In addition, for the six month period
      ended June 30, 2007, the Company announced net income of $587,000 compared
      to
      net income of $884,000 for the six months ended June 30,
      2006.  Earnings per share for the quarter and six months ended June
      30, 2007 were $.04 and $.08 respectively, compared to $.06 and $.12 for the
      quarter and six months ended June 30, 2006.





Net
      interest income for the quarter
      ended June 30, 2007 totaled $2.84 million compared to $2.89 million for the
      quarter ended June 30, 2006, a decrease of $52,000 or 1.8%. For the six month
      period ended June 30, 2007, net interest income totaled $5.73 million compared
      to $5.77 million for the six months ended June 30, 2006, a decrease of $37,000
      or 0.64%.  Net interest income in the three and six month periods was
      relatively flat although the Company experienced an increase in the average
      balances of interest earning assets of 16.1% in the three month period and
      an
      increase of 16.8% in the six month period, combined with an increase in the
      average rate earned on these assets of 24 basis points and 31 basis points
      during the same periods over the 2006 rates.  The increase in interest
      earning assets for the three month period is attributed primarily to an increase
      in the loan portfolio.  The average balances in the loan portfolio
      increased by 19.6% and 19.9% during the three and six month
      periods.  The largest increases were in the commercial portfolio
      followed by the residential mortgage portfolio.  The increase in
      interest income was offset by an increase in interest
      expense.  Interest expense increased by $1.1 million, or 52.1% in the
      three month period and increased by $2.3 million, or 56.7% in the six month
      period due to rising rates on deposits and borrowings along with increases
      in
      the average balances of deposits and borrowings.  The average balances
      of deposits increased by 18.8% and 19.7% in the three and six month periods
      respectively.  The average balance of borrowings increased by 15.1%
      and 16.3% over the same periods.  The Company experienced increases of
      76 basis points and 82 basis points in the average rates paid on deposits and
      borrowing in the three and six month periods respectively.  The
      largest increases in deposits were in certificates of deposit, checking accounts
      and money market accounts, partially offset by a decrease in savings
      accounts.





Non
      interest income was $606,000 for the quarter ended June 30, 2007 compared to
      $470,000 for the quarter ended June 30, 2006, an increase of 28.9%. For the
      six
      months ended June 30, 2007, the increase was 24.9% to $1.1 million compared
      to
      $905,000 for the period ended June 30, 2006.  The largest increase in
      non interest income was in income from investment advisory services with an
      increase of $66,000 in the three month period and an increase of $97,000 in
      the
      six month period along with increases in fees for services related to deposit
      accounts and fees for other services in both periods, all as a result
      of











growth
      of
      the products in these areas.  The company also experienced gains on
      the sale of investments in both 2007 periods.





Non
      interest expense was $3.1 million for the quarter ended June 30, 2007 compared
      to $2.8 million for the quarter ended June 30, 2006.  For the six
      months ended June 30, 2007 non-interest expense was $6.2 million compared to
      $5.5 million for the six months ended June 30, 2006.  The increases in
      both periods were primarily the result of increases in compensation costs,
      office occupancy expenses and computer processing costs over the 2006
      periods.  All of these increases are largely related to the opening of
      three new branch offices in the third quarter of 2006.





Total
      assets were $429.3 million at June 30, 2007 compared to $413.9 million at
      December 31, 2006, an increase of $15.4 million or 3.7%.  Total
      liabilities were $379.2 million at June 30, 2007 compared to $362.8 million
      at
      December 31, 2006.  Deposits at June 30, 2007 were $307.8 million, an
      increase of $15.1 million or 5.2% over December 31, 2006.  The
      increase in deposits was primarily due to the opening of the three new branch
      offices.  Borrowed funds increased from $68.5 million at December 31,
      2006 to $69.7 million at June 30, 2007.  The increases in deposits and
      borrowings were primarily used to fund growth in loans.





Total
      stockholders’ equity was $50.1 million at June 30, 2007 compared to $51.1
      million at December 31, 2006, due to net income of $587,000 for the six month
      period, dividends of $299,000 paid to stockholders, stock repurchases of $1.0
      million, a net increase to the unrealized loss on available for sale securities
      of $362,000 and $82,000 in capital adjustments related to the Company’s 2005
      Equity Incentive Plan.  At June 30, 2007, the Bank’s regulatory
      capital exceeded the levels required to be categorized as “well capitalized”
under applicable regulatory capital guidelines.





In
      addition, on July 17, 2007, the Board of Directors of the Company declared
      a
      cash dividend for the quarter ended June 30, 2007, of $.05 per share to
      stockholders of record on August 6, 2007.  Payment of the cash
      dividend will be made on or about September 1, 2007.  Naugatuck Valley
      Mutual Holding Company, the Company’s mutual holding company, will waive receipt
      of the dividend.





Naugatuck
      Valley Savings and Loan is headquartered in Naugatuck, Connecticut with eight
      other branches in Southwest Connecticut. The Bank is a community-oriented
      financial institution dedicated to serving the financial service needs of
      consumers and businesses within its market area.





This
      release contains “forward-looking statements” which may describe future plans
      and strategies, including our expectations of future financial results.
      Management’s ability to predict results or the effect of future plans or
      strategies is inherently uncertain. Factors that could affect our actual results
      include market interest rate trends, the general regional and national economic
      market, our ability to control costs and expenses, actions by our competitors
      and their pricing, loan delinquency rates, and changes in federal and state
      regulation. As we have no control over these factors, they should be considered
      in evaluating any forward-looking statements and undue reliance should not
      be
      placed on such statements.  Except as required by applicable law or
      regulation, Naugatuck Valley Financial Corporation disclaims any obligation
      to
      update such forward-looking statements.














**SELECTED
                  FINANCIAL CONDITION DATA****June
                  30,**
              
              
              **December
                  31,****2007**
              
              
              **2006***(Unaudited)**(in
                  thousands)***ASSETS**Cash
                  and due from depository institutions
              
              $
              8,958
              
              
              $
              7,911Investment
                  in federal funds
              
              
              2,626
              
              
              
              31Investment
                  securities
              
              
              63,781
              
              
              
              70,267Loans
                  receivable, net
              
              
              326,625
              
              
              
              308,376Deferred
                  income taxes
              
              
              1,636
              
              
              
              1,450Other
                  assets
              
              
              25,670
              
              
              
              25,820**Total
                  assets**
              
              $
              429,296
              
              
              $
              413,855**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**LiabilitiesDeposits
              
              $
              307,757
              
              
              $
              292,693Borrowed
                  funds
              
              
              69,742
              
              
              
              68,488Other
                  liabilities
              
              
              1,743
              
              
              
              1,590**Total
                  liabilities**
              
              
              379,242
              
              
              
              362,771Total
                  stockholders' equity
              
              
              50,054
              
              
              
              51,084**Total
                  liabilities and stockholders' equity**
              
              $
              429,296
              
              
              $
              413,855





**SELECTED
                  OPERATIONS DATA****Three
                  Months Ended**
              
              
              **Six
                  Months Ended****June
                  30,**
              
              
              **June
                  30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Total
                  interest income
              
              $
              6,030
              
              
              $
              4,990
              
              
              $
              12,013
              
              
              $
              9,777Total
                  interest expense
              
              
              3,189
              
              
              
              2,097
              
              
              
              6,285
              
              
              
              4,012Net
                  interest income
              
              
              2,841
              
              
              
              2,893
              
              
              
              5,728
              
              
              
              5,765Provision
                  for loan losses
              
              
              -
              
              
              
              68
              
              
              
              51
              
              
              
              130Net
                  interest income after provision for loan losses
              
              
              2,841
              
              
              
              2,825
              
              
              
              5,677
              
              
              
              5,635Noninterest
                  income
              
              
              606
              
              
              
              470
              
              
              
              1,130
              
              
              
              905Noninterest
                  expense
              
              
              3,096
              
              
              
              2,812
              
              
              
              6,159
              
              
              
              5,452Income
                  before provisionfor
                  income taxes
              
              
              351
              
              
              
              483
              
              
              
              648
              
              
              
              1,088Provision
                  for income taxes
              
              
              39
              
              
              
              70
              
              
              
              61
              
              
              
              204Net
                  Income
              
              $
              312
              
              
              $
              413
              
              
              $
              587
              
              
              $
              884Earnings
                  per common share - basic and diluted
              $
              0.04
              
              $
              0.06
              
              
              $
              0.08
              
              $
              0.12













**SELECTED
                  FINANCIAL RATIOS****For
                  the Three Months****SELECTED
                  PERFORMANCE RATIOS: (1)**
              
              **Ended
                  June 30,****2007**
              
              
              **2006**Return
                  on average assets
              
              
              0.29
              %
              
              
              0.45
              %Return
                  on average equity
              
              
              2.44
              
              
              
              3.17Interest
                  rate spread
              
              
              2.70
              
              
              
              3.22Net
                  interest margin
              
              
              2.89
              
              
              
              3.41Efficiency
                  ratio (2)
              
              89.59
              
              
              83.38
 
 **ASSET
                  QUALITY RATIOS:**
              
              **At
                  June 30,**
              
              **At
                  December 31,****2007**
              
              
              **2006***(Dollars
                  in thousands)*Allowance
                  for loan losses
              
              $
              2,073
              
              
              $
              2,071Allowance
                  for loan losses as a percent of total loans
              
              
              0.63
              %
              
              
              0.67
              %Allowance
                  for loan losses as a percent ofnonperforming
                  loans
              
              
              233.18
              
              
              
              103.03Net
                  charge-offs to average loansoutstanding
                  during the period
              
              
              -
              
              
              
              -Nonperforming
                  loans
              
              $
              889
              
              
              $
              2,010Nonperforming
                  loans as a percent of total loans
              
              
              0.27
              
              
              
              0.65Nonperforming
                  assets
              
              $
              889
              
              
              $
              2,010Nonperforming
                  assets as a percent of total assets
              
              0.21
              
              
              0.49
 
 (1)
                  All applicable quarterly ratios reflect annualized
                  figures.(2)
                  Represents non interest expense (less intangible
                  amortization)divided
                  by the sum of net interest income and noninterest income.








Contact:
      Naugatuck Valley Financial Corporation


John
      C.
      Roman or Lee R.
      Schlesinger


1-203-720-5000