Exhibit
99.1





PRESS
RELEASE




















Naugatuck
Valley Financial Corporation Reports 65.7% Increase in Earnings


And
Announces an Increased Cash Dividend for the Quarter Ended March 31,
2008





Naugatuck, CT, April 22,
2008.  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 $454,000 for the quarter ended March 31,
2008 versus net income of $274,000 for the quarter ended March 31, 2007, an
increase of $180,000 or 65.7%.  Earnings per share for the quarters
ended March 31, 2008 and March 31, 2007 were $.06 and $.04,
respectively.





In addition, the Board of Directors of
the Company today declared a cash dividend for the quarter ended March 31, 2008,
of $.06 per share to stockholders of record on May 5, 2008.  Payment
of the cash dividend will be made on or about June 1, 2008.  Naugatuck
Valley Mutual Holding Company, the Company’s mutual holding company, has waived
receipt of the dividend.





John C. Roman, President and CEO
commented: “We have continued to build shareholder value through growth, expense
control and maintenance of strong credit quality.  We are pleased to
announce an increase in our dividend as a result of our improved
earnings.”





Net interest income for the quarter
ended March 31, 2008 totaled $3.3 million compared to $2.9 million for the
quarter ended March 31, 2007, an increase of $413,000 or 14.3%.  The
increase in net interest income is due to an increase in the average balances of
interest earning assets of 14.4% while the average rate earned on these assets
remained constant.  The increase in interest earning assets is
attributed primarily to an increase in the loan portfolio.  The
average balances in the loan portfolio increased by 17.9%.  The
largest increases were in the commercial mortgage portfolio followed by the
residential mortgage portfolio, due in part to an additional lender who was
hired in 2007.  The increase in interest income was partially offset
by an increase in interest expense.  Interest expense increased by
$449,000, or 14.5% due to an increase in the average balances of deposits and
Federal Home Loan Bank borrowings.  The average balances of deposits
increased by 10.5% and the average balance of borrowings increased by 35.0%
while the average rates paid on these deposits and borrowings decreased by 2
basis points.  The increases were primarily used to fund increased
loan demand.  The largest increases in deposits were in certificates
of deposit, followed by a smaller increase in money market accounts, partially
offset by decreases in checking accounts and savings accounts.  The
increase in certificates of deposit was due primarily to competitive rate
promotional accounts.





The Bank
recorded an increase in the provision for loan losses from $51,000 for the three
months ended March 31, 2007 to $162,000 for the three months ended March 31,
2008 due to the increasing size of the loan portfolio, a change in the mix of
the portfolio towards commercial loans which are generally riskier than
one-to-four family loans, and general economic conditions.





Noninterest
income was $627,000 for the quarter ended March 31, 2008 compared to $524,000
for the quarter ended March 31, 2007, an increase of 19.7%. The largest
increases in noninterest income was in gain on sale of investments, followed by
fees for services related to deposit accounts and income from investment
advisory services. The increases in fee income were as a result of product
growth in these areas.





Noninterest
expense was $3.2 million for the quarter ended March 31, 2008 compared to $3.1
million for the quarter ended March 31, 2007.  The increase was
primarily the result of increases in compensation costs, computer processing
costs, director’s compensation and office occupancy over the 2007
period.  The increases were partially offset by a decrease in
advertising expense.





Total
assets were $492.2 million at March 31, 2008 compared to $462.5 million at
December 31, 2007, an increase of $29.7 million or 6.4%.  Total
liabilities were $441.9 million at March 31, 2008 compared to $412.1 million at
December 31, 2007.  Deposits at March 31, 2008 were $334.4 million, an
increase of $9.1 million or 2.8% over December 31, 2007.  Borrowed
funds increased from $85.1 million at December 31, 2007 to $105.9 million at
March 31, 2008.  The increases in deposits and borrowings were
primarily used to fund growth in loans.





Total
stockholders’ equity was $50.3 million at March 31, 2008 compared to $50.5
million at December 31, 2007, due to net income of $454,000 for the three month
period, dividends of $142,000 paid to stockholders, stock repurchases of $1.0
million, a net decrease to the unrealized loss on available for sale securities
of $506,000 and $54,000 in capital adjustments related to the Company’s 2005
Equity Incentive Plan.  At March 31, 2008, the Bank’s regulatory
capital exceeded the levels required to be categorized as “well capitalized”
under applicable regulatory capital guidelines.





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 news release may contain
forward-looking statements, which can be identified by the use of words such as
"believes," "expects," "anticipates," "estimates" or similar
expressions.  Such forward-looking statements and all other statements
that are not historic facts are subject to risks and uncertainties which could
cause actual results to differ materially from those currently anticipated due
to a number of factors.  These factors include, but are not limited
to, general economic conditions, changes in the interest rate environment,
legislative or regulatory changes that may adversely affect our business,
changes in accounting policies and practices, changes in competition and demand
for financial services, adverse changes in the securities markets, changes in
deposit flows and changes in the quality or composition of the Company's loan or
investment portfolios.  Additionally, other risks and uncertainties
may be described in the Company's annual report on Form 10-K, its quarterly
reports on Form 10-Q or its other reports as filed with the Securities and
Exchange Commission which are available through the SEC's website at
www.sec.gov.  Should one or more of these risks materialize, actual
results may vary from those anticipated, estimated or projected. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this press release.





Except as
may be required by applicable law or regulation, the Company assumes no
obligation to update any forward-looking statements.





SELECTED
      FINANCIAL CONDITION DATAMarch
      31,
              
              
              December
      31,2008
              
              
              2007(Unaudited)(In
      thousands)ASSETSCash
      and due from depository institutions
              
              $
              9,293
              
              
              $
              7,873Investment
      in federal funds
              
              
              4,203
              
              
              
              497Investment
      securities
              
              
              73,154
              
              
              
              66,454Loans
      receivable, net
              
              
              377,036
              
              
              
              359,831Deferred
      income taxes
              
              
              1,071
              
              
              
              1,332Other
      assets
              
              
              27,441
              
              
              
              26,540Total
      assets
              
              $
              492,198
              
              
              $
              462,527LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilitiesDeposits
              
              $
              334,367
              
              
              $
              325,269Borrowed
      funds
              
              
              105,901
              
              
              
              85,107Other
      liabilities
              
              
              1,638
              
              
              
              1,694Total
      liabilities
              
              
              441,906
              
              
              
              412,070Total
      stockholders' equity
              
              
              50,292
              
              
              
              50,457Total
      liabilities and stockholders' equity
              
              $
              492,198
              
              
              $
              462,527





SELECTED
      OPERATIONS DATAThree
      Months EndedMarch
      31,2008
              
              
              2007(Unaudited)(In
      thousands,except
      per share data)Total
      interest income
              
              $
              6,846
              
              
              $
              5,984Total
      interest expense
              
              
              3,546
              
              
              
              3,097Net
      interest income
              
              
              3,300
              
              
              
              2,887Provision
      for loan losses
              
              
              162
              
              
              
              51Net
      interest income after provision for loan losses
              
              
              3,138
              
              
              
              2,836Noninterest
      income
              
              
              627
              
              
              
              524Noninterest
      expense
              
              
              3,205
              
              
              
              3,064Income
      before provisionfor
      income taxes
              
              
              560
              
              
              
              296Provision
      for income taxes
              
              
              106
              
              
              
              22Net
      Income
              
              $
              454
              
              
              $
              274Earnings
      per common share - basic and diluted
              $
              0.06
              
              $
              0.04







SELECTED
      FINANCIAL RATIOSFor
      the Three MonthsSELECTED
      PERFORMANCE RATIOS: (1)
                
                Ended
      March 31,2008
                
                
                2007(Unaudited)Return
      on average assets
                
                
                0.38
                %
                
                
                0.26
                %Return
      on average equity
                
                
                3.56
                
                
                
                2.12Interest
      rate spread
                
                
                2.80
                
                
                
                2.78Net
      interest margin
                
                
                2.97
                
                
                
                2.97Efficiency
      ratio (2)
                
                81.41
                
                
                89.59ASSET
      QUALITY RATIOS:
                
                At
      March 31,
                
                
                At
      December 31,2008
                
                
                2007(Unaudited)(Dollars
      in thousands)Allowance
      for loan losses
                
                $
                2,325
                
                
                $
                2,163Allowance
      for loan losses as a percent of total loans
                
                
                0.61
                %
                
                
                0.60
                %Allowance
      for loan losses as a percent ofnonperforming
      loans
                
                
                233.20
                %
                
                
                222.99
                %Net
      charge-offs to average loansoutstanding
      during the period
                
                
                -
                
                
                
                -Nonperforming
      loans
                
                $
                997
                
                
                $
                970Nonperforming
      loans as a percent of total loans
                
                
                0.26
                %
                
                
                0.27
                %Nonperforming
      assets
                
                $
                997
                
                
                $
                970Nonperforming
      assets as a percent of total assets
                
                0.20
                %
                
                0.21
                %(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