UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 10-Q

(Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
      EXCHANGE ACT OF 1934

For the transition period from ______________ to _____________

                         Commission file number: 0-50876

                     NAUGATUCK VALLEY FINANCIAL CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 UNITED STATES                                   65-1233977
------------------------------------------------             -------------------
(State or other jurisdiction of incorporation or              (I.R.S. Employer
                 organization)                               Identification No.)

333 CHURCH STREET, NAUGATUCK, CONNECTICUT                           06770
-----------------------------------------                         ----------
(Address of principal executive offices)                          (Zip Code)

                                 (203) 720-5000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
              ----------------------------------------------------
              (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 such shorter  period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

Yes |X| No |_|

      Indicate by check mark whether the registrant is an accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes |_| No |X|

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act).

Yes |_| No |X|

      As of November 1, 2005,  there were 7,604,375  shares of the  registrant's
common stock outstanding.

<PAGE>

                     NAUGATUCK VALLEY FINANCIAL CORPORATION

                                Table of Contents

<TABLE>
<CAPTION>
Part I. Financial Information                                                               Page No.
<S>                                                                                             <C>
         Item 1. Financial Statements (Unaudited)

                 Consolidated Statements of Financial Condition at September 30, 2005 and
                 December 31, 2004 .........................................................    3

                 Consolidated Statements of Income for the three and nine months ended
                 September 30, 2005 and 2004 ...............................................    4

                 Consolidated Statements of Cash Flows for the nine months ended
                 September 30, 2005 and 2004 ...............................................    5

                 Notes to Unaudited Consolidated Financial Statements ......................    6

         Item 2. Management's Discussion and Analysis of Financial Condition and Results
                 of Operations .............................................................    9

                 Liquidity and Capital Resources ...........................................   13

         Item 3. Quantitative and Qualitative Disclosures About Market Risk ................   15

         Item 4. Controls and Procedures ...................................................   16

Part II. Other Information

         Item 1. Legal Proceedings .........................................................   16

         Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ...............   16

         Item 3. Defaults Upon Senior Securities ...........................................   16

         Item 4. Submission of Matters to a Vote of Security Holders .......................   16

         Item 5. Other Information .........................................................   16

         Item 6. Exhibits ..................................................................   16

Signatures

Exhibits
</TABLE>

<PAGE>

                          Item 1. Financial Statements.


                                       2
<PAGE>

[LOGO] Naugatuck Valley
       Financial Corporation

Condensed Consolidated Statements of Financial Condition
(In thousands, except share data)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                                    September 30,    December 31,
                                                                        2005            2004
---------------------------------------------------------------------------------    ------------
                                                                            (Unaudited)
<S>                                                                   <C>             <C>
ASSETS
Cash and due from depository institutions                             $   5,727       $   7,552
Investment in federal funds                                               6,871              23
Investment securities                                                    58,924          36,264
Loans receivable, net                                                   238,326         203,820
Deferred income taxes                                                     1,184           1,042
Other assets                                                             18,784          16,748
                                                                      ---------       ---------

         Total assets                                                 $ 329,816       $ 265,449
                                                                      =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
   Deposits                                                           $ 231,922       $ 193,366
   Advances from Federal Home Loan Bank of Boston                        44,259          15,826
   Other liabilities                                                      2,923           4,686
                                                                      ---------       ---------

                Total liabilities                                       279,104         213,878
                                                                      ---------       ---------

Commitments and contingencies

Stockholders' Equity
   Common stock, $.01 par value; 25,000,000 shares authorized;
      7,604,375 shares issued and outstanding                                76              76
   Preferred stock, $.01 par value; 1,000,000 shares authorized;
      no shares issued or outstanding                                        --              --
   Paid-in capital                                                       33,116          33,089
   Retained earnings                                                     22,168          21,362
   Unearned ESOP shares                                                  (2,932)         (2,932)
   Unearned stock awards                                                 (1,551)             --
   Accumulated other comprehensive income (loss)                           (165)            (24)
                                                                      ---------       ---------

                Total stockholders' equity                               50,712          51,571
                                                                      ---------       ---------

         Total liabilities and stockholders' equity                   $ 329,816       $ 265,449
===============================================================================================
</TABLE>


                                       3
<PAGE>

[LOGO] Naugatuck Valley
       Financial Corporation

Consolidated Statements of Income
(In thousands, except share data)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                         Nine Months Ended      Three Months Ended
                                                           September 30,           September 30,
                                                       --------------------     -------------------
                                                         2005         2004        2005        2004
---------------------------------------------------------------------------------------------------
                                                                        (Unaudited)
<S>                                                    <C>          <C>         <C>         <C>
Interest and dividend income
Interest on loans                                      $  9,782     $ 8,266     $ 3,520     $ 2,859
Interest and dividends on investments and deposits        1,581       1,082         604         406
                                                       --------     -------     -------     -------
         Total interest income                           11,363       9,348       4,124       3,265
                                                       --------     -------     -------     -------

Interest expense
Interest on deposits                                      2,275       1,725         954         593
Interest on borrowed funds                                  997       1,069         413         349
                                                       --------     -------     -------     -------
         Total interest expense                           3,272       2,794       1,367         942
                                                       --------     -------     -------     -------

Net interest income                                       8,091       6,554       2,757       2,323

Provision for loan losses                                    32          --          --          --
                                                       --------     -------     -------     -------

Net interest income after provision for loan losses       8,059       6,554       2,757       2,323
                                                       --------     -------     -------     -------

Noninterest income
Loan fees and service charges                               679         660         237         232
Income from bank owned life insurance                       146         146          49          49
Income from investment advisory services                    160          97          60          32
Gain on sale of mortgages                                    --           5          --          --
Gain (loss) on sale of investments                           47        (156)         --        (180)
Other income                                                 71          46          28          17
                                                       --------     -------     -------     -------
         Total noninterest income                         1,103         798         374         150
                                                       --------     -------     -------     -------

Noninterest expense
Compensation, taxes and benefits                          4,364       3,351       1,546       1,148
Office occupancy                                          1,126         894         368         280
FHLB advances prepayment fee                                 --         498          --         498
Computer processing                                         473         403         170         133
Advertising                                                 425         239         119          66
Charitable contributions                                     30       1,573          11       1,539
Gain on foreclosed real estate, net                         (34)        (58)         (2)        (21)
Other expenses                                            1,120         745         384         249
                                                       --------     -------     -------     -------
         Total noninterest expense                        7,504       7,645       2,596       3,892
                                                       --------     -------     -------     -------

Income (loss) before provision (benefit)
   for income taxes                                       1,658        (293)        535      (1,419)

Provision (benefit) for income taxes                        299        (178)         (2)       (526)
                                                       --------     -------     -------     -------

         Net Income (Loss)                             $  1,359     $  (115)    $   537     $  (893)
                                                       --------     -------     -------     -------

Earnings per common share - Basic and Diluted          $   0.19         N/M     $  0.07         N/M
===================================================================================================
</TABLE>


                                       4
<PAGE>

[LOGO] Naugatuck Valley
       Financial Corporation

Consolidated Statements of Cash Flows
(In thousands)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                                                                   Nine Months Ended
                                                                                     September 30,
                                                                                 ---------------------
                                                                                   2005         2004
------------------------------------------------------------------------------------------------------
Cash flows from operating activities                                                  (Unaudited)
<S>                                                                              <C>          <C>
Net income (loss)                                                                $  1,359     $   (115)
Adjustments to reconcile net income to cash provided by operating activities:
      Provision for loan losses                                                        32           --
      Depreciation and amortization expense                                           516          494
      Charitable contribution of company stock                                         --        1,521
      Stock based compensation                                                         71           --
      Provision for deferred taxes                                                    (69)        (532)
      Net gain on sale of real estate owned                                           (46)         (68)
      Gain on sale of mortgages                                                        --           (5)
      Loans originated for sale                                                        --       (1,927)
      Proceeds from the sale of loans                                                  --        1,932
      (Gain) Loss on sale of investments                                              (47)         156
      (Increase) decrease in accrued income receivable                               (355)          31
      Increase (decrease) in deferred loan fees                                        25          (96)
      Increase in bank owned life insurance asset                                    (146)        (146)
      Decrease (increase) in other assets                                             122         (175)
      (Decrease) increase in other liabilities                                       (334)      55,293
                                                                                 --------     --------
                           Net cash provided by operating activities                1,128       56,363
                                                                                 --------     --------
Cash flows from investing activities
Proceeds from sales and maturities of available-for-sale securities                18,186       25,101
Proceeds from maturities of held-to-maturity securities                               285           --
Purchase of available-for-sale securities                                         (40,842)      (7,802)
Purchase of held-to-maturity securities                                              (500)      (3,610)
Purchase of Federal Home Loan Bank stock                                             (404)          --
Loan originations net of principal payments                                       (34,562)     (21,730)
Additions to foreclosed real estate                                                   (47)          --
Proceeds from the sale of foreclosed real estate                                      113          276
Purchase of property and equipment                                                 (1,746)        (892)
                                                                                 --------     --------
                               Net cash used by investing activities              (59,517)      (8,657)
                                                                                 --------     --------
Cash flows from financing activities
Net change in time deposits                                                        31,766       (2,340)
Net change in other deposit accounts                                                6,790       13,802
Advances from Federal Home Loan Bank                                               62,968       18,650
Repayment of advances from Federal Home Loan Bank                                 (34,535)     (28,623)
Net change in mortgagors' escrow accounts                                          (1,482)      (1,042)
Net proceeds from issuance of common stock                                             --       31,740
Contribution of proceeds to Naugatuck Valley Mutual Holding Company                    --         (100)
Payment to acquire common stock for ESOP                                               --       (2,981)
Stock repurchase for equity incentive plan                                         (1,720)          --
Dividends paid to stockholders                                                       (375)          --
                                                                                 --------     --------
                           Net cash provided by financing activities               63,412       29,106
                                                                                 --------     --------
Increase in cash and cash equivalents                                               5,023       76,812
Cash and cash equivalents at beginning of period                                    7,575        9,775
                                                                                 --------     --------
      Cash and cash equivalents at end of period                                 $ 12,598     $ 86,587
======================================================================================================
Cash paid during the period for:
   Interest                                                                      $  3,277     $  2,801
   Income taxes                                                                       588          454
</TABLE>


                                       5
<PAGE>

NOTE 1 - BASIS OF PRESENTATION

The  accompanying   condensed  consolidated  interim  financial  statements  are
unaudited  and include the accounts of Naugatuck  Valley  Financial  Corporation
(the "Company"),  Naugatuck  Valley Savings and Loan (the "Bank"),  and those of
Naugatuck Valley Mortgage  Servicing  Corporation,  a wholly owned subsidiary of
the Bank. The consolidated financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
("GAAP") for interim financial information and with the instructions to SEC Form
10-Q.  Accordingly,  they do not  include  all  the  information  and  footnotes
required by GAAP for complete financial statements. All significant intercompany
accounts and  transactions  have been  eliminated  in the  consolidation.  These
financial  statements  reflect,  in the opinion of Management,  all adjustments,
consisting  of  only  normal  recurring   adjustments,   necessary  for  a  fair
presentation  of  the  Company's  financial  position  and  the  results  of its
operations and its cash flows for the periods  presented.  Operating results for
the  three  and  nine  months  ended  September  30,  2005  are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2005.  These  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and notes thereto  included in the Company's
2004 Annual Report to Stockholders.

The year-end  condensed  balance  sheet data was derived from audited  financial
statements, but does not include all disclosures required by GAAP.

NOTE 2 - EARNINGS PER SHARE

Basic net income per  common  share is  calculated  by  dividing  the net income
available to common stockholders by the weighted-average number of common shares
outstanding  during the period.  Diluted net income per common share is computed
in a manner  similar  to basic net  income  per  common  share  except  that the
weighted-average number of common shares outstanding is increased to include the
incremental  common  shares (as computed  using the treasury  stock method) that
would have been outstanding if all potentially dilutive common stock equivalents
were issued during the period.  The Company's  common stock  equivalents  relate
solely to stock option and  restricted  stock awards.  Anti-dilutive  shares are
common stock equivalents with weighted-average  exercise prices in excess of the
weighted-average  market  value for the  periods  presented.  The Company had no
anti-dilutive  common  shares  outstanding  for the three months and nine months
ended  September  30, 2005.  Unallocated  common shares held by the ESOP are not
included  in the  weighted-average  number  of  common  shares  outstanding  for
purposes of calculating either basic or diluted net income per common share.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                      Nine Months Ended              Three Months Ended
                                                        September 30,                   September 30,
                                                 --------------------------      --------------------------
                                                    2005            2004            2005            2004
-----------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>             <C>             <C>
Net income                                       $    1,359      $     (115)     $      537      $     (893)

Weighted-average common shares outstanding:
   Basic                                          7,311,195             N/A       7,311,195             N/A
   Effect of dilutive stock options
      and restrictive stock awards                    7,609             N/A          22,827             N/A
                                                 ----------                      ----------
Diluted                                           7,318,804                       7,334,022

Net income per common share:
   Basic                                         $     0.19             N/A      $     0.07             N/A
   Diluted                                       $     0.19             N/A      $     0.07             N/A
</TABLE>

Per common share data is not  presented for the three months and the nine months
ended September 30, 2004, as the Company had no shares  outstanding prior to the
Company's initial public offering on September 30, 2004.


                                       6
<PAGE>

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting Standards Board revised Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" ("SFAS 123R"). This Statement eliminates the alternative intrinsic
value method of accounting,  in accordance with the Accounting  Principles Board
Opinion No. 25,  "Accounting  for Stock Issued to Employees" for recognizing the
cost of employee services received in share-based payment transactions,  thereby
reflecting  the economic  consequences  of those  transactions  in the financial
statements.  SFAS 123R  requires  all  entities  to follow  the same  accounting
standard and account for such transactions  using the  fair-value-based  method.
This Statement  does not address the  accounting  for employee  stock  ownership
plans. On March 29, 2005, the SEC staff issued Staff Accounting Bulletin No. 107
("SAB 107").  SAB 107 expresses the views of the SEC staff  regarding  SFAS 123R
and certain  rules and  regulations  and provides the SEC's views  regarding the
valuation of share-based payment arrangements for public companies. On April 14,
2005, the Securities and Exchange  Commission  (the "SEC") delayed the effective
date for SFAS 123R,  which allows  companies to implement  the  statement at the
beginning of their first fiscal year beginning  after June 15, 2005. The Company
has elected to comply with SFAS 123R beginning  with the period ended  September
30, 2005.  See Note 6 - Equity  Incentive Plan for details on the impact of SFAS
123R on the Company's financial statements.

In May 2005,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standard  No.  154,   "Accounting   Changes  and  Error
Corrections" ("SFAS 154"). This Statement replaces  Accounting  Principles Board
Opinion No. 20 ("APB 20"),  "Accounting  Changes"  and  Statement  of  Financial
Accounting  Standard No. 3, "Reporting  Accounting  Changes in Interim Financial
Statements,"  and changes the  requirements for the accounting for and reporting
of a change in accounting  principle.  In accordance  with the prior guidance of
APB 20, most voluntary changes in an accounting  principle required  recognizing
the cumulative  effect of a change in accounting  principle in net income in the
period of change. SFAS 154 requires retrospective  application to prior periods'
financial statements for the direct effects of a change in accounting principle,
unless it is impracticable to determine  either the  period-specific  effects of
the cumulative effect of the change.  Indirect effects of a change in accounting
principle  should be  recognized in the period of  accounting  change.  SFAS 154
carries  forward the guidance of APB 20 relating to the reporting for correction
of an error in  previously  issued  financial  statements,  change in accounting
estimate and the justification  requirement for a change in accounting principle
on the basis of  preferability.  Provisions of this  statement are effective for
accounting  changes made in the fiscal years  beginning after December 15, 2005.
At this time,  the Company is  uncertain  how the  application  of SFAS 154 will
impact  prior  period  financial  statements  for the  implementation  of future
accounting pronouncements.

NOTE 4 - COMPREHENSIVE INCOME

Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income,"  establishes  standards for disclosure of  comprehensive
income,  which  includes  net income and any  changes in equity  from  non-owner
sources  that are not recorded in the income  statement  (such as changes in the
net  unrealized  gain/loss  on  available-for-sale  securities).  The purpose of
reporting  comprehensive  income is to report a measure of all changes in equity
that result from recognized transactions and other economic events of the period
other than transactions  with owners in their capacity as owners.  The Company's
one source of other  comprehensive  income is the net unrealized  gain (loss) on
its available-for-sale securities.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                               Nine Months Ended           Three Months Ended
                                                 September 30,               September 30,
                                             ---------------------       ---------------------
                                               2005          2004          2005          2004
----------------------------------------------------------------------------------------------
                                                               (In thousands)
<S>                                          <C>           <C>           <C>           <C>
Net income (loss)                            $ 1,359       $  (115)      $   537       $  (893)

Net unrealized (loss) gain on
   securities available for sale
   during the period, net of tax                (141)          (96)         (104)          322
                                             -------       -------       -------       -------

      Total Comprehensive Income (Loss)      $ 1,218       $  (211)      $   433       $  (571)
==============================================================================================
</TABLE>


                                       7
<PAGE>

NOTE 5 - CRITICAL ACCOUNTING POLICIES

The Company considers  accounting policies involving  significant  judgments and
assumptions  by management  that have,  or could have, a material  impact on the
carrying  value  of  certain  assets  or on  income  to be  critical  accounting
policies.  The  Company  considers  the  following  to  be  critical  accounting
policies: allowance for loan losses and deferred income taxes.

Allowance  for Loan Losses.  Determining  the amount of the  allowance  for loan
losses  necessarily  involves a high degree of judgment.  Management reviews the
level of the allowance on a quarterly  basis, at a minimum,  and establishes the
provision  for loan  losses  based  on the  composition  of the loan  portfolio,
delinquency  levels,  loss experience,  economic  conditions,  and other factors
related to the collectibility of the loan portfolio.

Although the Company  believes  that it uses the best  information  available to
establish the allowance for loan losses,  future  additions to the allowance may
be necessary  based on estimates  that are  susceptible to change as a result of
changes  in  economic  conditions  and other  factors.  The  Company  engages an
independent  review of its commercial  loan  portfolio  annually and adjusts its
loan ratings  based upon this  review.  In addition,  the  Company's  regulatory
authorities,  as an integral  part of their  examination  process,  periodically
review the Company's  allowance for loan losses.  Such an agency may require the
Company to recognize  adjustments to the allowance  based on its judgments about
information available to it at the time of its examination.

Deferred  Income  Taxes.  The  Company  uses the asset and  liability  method of
accounting  for  income  taxes.  Under  this  method,  deferred  tax  assets and
liabilities  are  recognized  for the future tax  consequences  attributable  to
differences  between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. If current available information
raises  doubt as to the  realization  of the  deferred  tax assets,  a valuation
allowance is established. Deferred tax assets and liabilities are measured using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary differences are expected to be recovered or settled. The Company
exercises   significant   judgment  in  evaluating  the  amount  and  timing  of
recognition of the resulting tax liabilities and assets,  including  projections
of future taxable income. These judgments and estimates are reviewed continually
as regulatory and business factors change.

NOTE 6 - EQUITY INCENTIVE PLAN

At the  annual  meeting of  stockholders  on May 5,  2005,  stockholders  of the
Company  approved  the  Naugatuck  Valley  Financial   Corporation  2005  Equity
Incentive Plan (the "Incentive Plan"). Under the Incentive Plan, the Company may
grant up to 372,614 stock options and 149,045 shares of restricted  stock to its
employees,  officers  and  directors  for an  aggregate  amount of up to 521,659
shares of the Company's  common stock for issuance upon the grant or exercise of
awards.  Both  incentive  stock options and  non-statutory  stock options may be
granted under the Incentive Plan.

On July 26, 2005, the Company  awarded 352,624 options to purchase the Company's
common stock and 139,712  shares of  restricted  stock.  Stock option awards are
granted with an exercise price equal to the market price of the Company's  stock
at the date of grant ($11.10) with maximum term of ten years.  Both stock option
and  restricted  stock  awards  vest  at 20% per  year  beginning  on the  first
anniversary of the date of grant.

Stock  options  and  restricted   stock  awards  are  considered   common  stock
equivalents for the purpose of computing earnings per share on a diluted basis.

The  Company  has  elected to comply  with the  Financial  Accounting  Standards
Board's SFAS No.123(R),  "Share Based Payment",  beginning with the period ended
September 30, 2005,  prior to the mandatory  compliance  date for the Company of
January 1, 2006.  In  accordance  with  Statement  No.123  (R),  the Company has
recorded  share-based  compensation  expense related to outstanding stock option
and restricted  stock awards based upon the fair value at the date of grant over
the vesting period of such awards on a  straight-line  basis.  The fair value of
each  restricted  stock  allocation,  based on the  market  price at the date of
grant, is recorded to unearned stock awards.  Compensation  expenses  related to
unearned  restricted  shares are amortized to  compensation,  taxes and benefits
expense over the vesting period of the restricted  stock awards.  The fair value
of each  stock  option  award  is  estimated  on the  date of  grant  using  the
Black-Scholes  option pricing method which includes several  assumptions such as
volatility,  expected dividends, expected term and risk-free rate for each stock
option award. The Company recorded  share-based  compensation expense of $71,341
for the three and nine months ended  September 30, 2005 in  connection  with the
stock option and restricted stock awards.


                                       8
<PAGE>

The weighted-average  fair value of stock options granted on July 26, 2005 using
the Black-Scholes option pricing method was $2.53 per share. Assumptions used to
determine  the  weighted-average  fair value of stock  options  granted  were as
follows:

                        Dividend yield:            1.44%
                        Expected volatility:      11.47%
                        Risk-free rate:            4.18%
                        Expected life in years:     6.5

NOTE 7 - DIVIDENDS

On July 25, 2005, the Company's  Board of Directors  declared a cash dividend of
$0.04 per  outstanding  common  share,  which was paid on September 1, 2005,  to
stockholders of record as of the close of business on August 5, 2005.  Naugatuck
Valley Mutual Holding  Company,  the Company's  mutual holding  company  parent,
waived  receipt of its  dividend  upon  non-objection  from the Office of Thrift
Supervision ("OTS").

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

This discussion  should be read in conjunction  with the Company's  Consolidated
Financial  Statements  for the year ended  December  31,  2004  included  in the
Company's 2004 Annual Report to Stockholders.

Forward-Looking Statements

This report  contains  forward-looking  statements that are based on assumptions
and may describe future plans, strategies and expectations of the Company. These
forward-looking  statements  are  generally  identified  by  use  of  the  words
"believe", "expect", "intend",  "anticipate",  "estimate",  "project" or similar
expressions.  The Company's  ability to predict  results or the actual effect of
future plans or strategies is inherently  uncertain.  Factors which could have a
material  adverse effect on the  operations of the Company and its  subsidiaries
include,  but are not  limited  to,  changes in  interest  rates,  national  and
regional economic conditions,  legislative and regulatory changes,  monetary and
fiscal policies of the U.S. government,  including policies of the U.S. Treasury
and the  Federal  Reserve  Board,  the quality  and  composition  of the loan or
investment  portfolios,  demand for loan products,  deposit flows,  competition,
demand for  financial  services in the  Company's  market area,  changes in real
estate  market  values in the  Company's  market  area,  and changes in relevant
accounting  principles and guidelines.  Additional  factors are discussed in the
Company's  2004  Annual  Report  to  Stockholders  on Form  10-K  under  "Item 1
Business-Risk  Factors".  These risks and uncertainties  should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. Except as required by applicable law or regulation, the Company
does not  undertake,  and  specifically  disclaims  any  obligation,  to release
publicly  the result of any  revisions  that may be made to any  forward-looking
statements to reflect events or  circumstances  after the date of the statements
or to reflect the occurrence of anticipated or unanticipated events.

Comparison of Financial Condition at September 30, 2005 and December 31, 2004

Total assets  increased by $64.4 million,  or 24.3% to $329.8 million during the
period from  December  31,  2004 to  September  30,  2005,  primarily  due to an
increase in loans of $34.5 million,  an increase in investments of $22.7 million
and an increase in cash and cash  equivalents of $5.0 million.  The increases in
loans and  investments  were  primarily  funded by  increases  in  deposits  and
borrowings.  The  increase  in  loans  primarily  reflects  an  increase  in our
commercial mortgages, one-to-four family mortgages and home equity loans.

Total  liabilities  were $279.1 million at September 30, 2005 compared to $213.9
million at December 31, 2004.  Deposits at September  30, 2005  increased  $38.6
million, or 19.9%, over December 31, 2004 due to increased  advertising and more
aggressive pricing. Advances from the Federal Home Loan Bank of Boston increased
from $15.8 million to $44.3  million.  The increases in deposits and  borrowings
were used primarily to fund loans and investments.

Total stockholders'  equity decreased from $51.6 million at December 31, 2004 to
$50.7 million at September 30, 2005. The decrease in equity was primarily due to
$1.7  million  in  capital  adjustments  related to the  Company's  2005  Equity


                                       9
<PAGE>

Incentive Plan,  year-to-date  dividends of $375,000 paid to stockholders  and a
net  increase  to  the  unrealized  loss  on  available-for-sale  securities  of
$141,000, offset by net income of $1.4 million for the nine month period.

Comparison  of Operating  Results For the Three and Nine Months Ended  September
30, 2005 and 2004

General.  For the three months  ended  September  30, 2005,  the Company had net
income of $537,000 compared to a net loss of $893,000 for the three months ended
September  30,  2004.  Net income  increased to $1.4 million for the nine months
ended  September  30, 2005 from a net loss of $115,000 for the nine months ended
September  30, 2004.  The  increases in both  periods were  primarily  due to an
increase  in net  interest  income,  an  increase  in  noninterest  income and a
decrease in noninterest expense.

Net Interest Income. Net interest income increased  $434,000,  or 18.7%, to $2.8
million for the three  months  ended  September  30, 2005 and  increased by $1.5
million, or 23.4%, to $8.1 million for the nine months ended September 30, 2005.
The increase in net interest income during both the three and nine month periods
was the result of a 16.8%  increase in the average  balance of interest  earning
assets in both  periods,  along with an increase  in the average  rate earned on
these assets of 42 basis points in the three month period and 22 basis points in
the nine month period over the 2004 rates. The increases in interest income were
partially offset by an increase in interest expense.  Interest expense increased
by 45.1% in the three month  period and by 17.1% in the nine month period due to
rising  rates on  deposits  along with  increases  in the  average  balances  of
deposits and borrowings.

The following table  summarizes  changes in interest income and interest expense
for the three and nine months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                             Three Months                      Nine Months
                                         Ended September 30,               Ended September 30,
                                         -------------------               -------------------
                                           2005       2004     % change      2005       2004     % change
                                          ------     ------    --------     ------     ------    --------
                                                              (Dollars in thousands)
<S>                                       <C>        <C>        <C>         <C>        <C>        <C>
Interest income:
   Loans                                  $3,520     $2,859      23.12%     $9,782     $8,266      18.34%
   Fed Funds sold                             15         72     -79.17%         46         96     -52.08%
   Investment securities                     562        320      75.63%      1,461        955      52.98%
   Federal Home Loan Bank stock               27         14      92.86%         74         31     138.71%
                                          ------     ------                 ------     ------
      Total interest income                4,124      3,265      26.31%     11,363      9,348      21.56%
Interest expense:
   Certificate accounts                      779        448      73.88%      1,814      1,341      35.27%
   Regular savings accounts                  107         66      62.12%        234        162      44.44%
   Checking and Now accounts                  10         11      -9.09%         32         36     -11.11%
   Money market savings accounts              58         68     -14.71%        195        186       4.84%
                                          ------     ------                 ------     ------
      Total interest-bearing deposits        954        593      60.88%      2,275      1,725      31.88%
   FHLB advances                             413        349      18.34%        997      1,069      -6.74%
                                          ------     ------                 ------     ------
      Total interest expense               1,367        942      45.12%      3,272      2,794      17.11%
                                          ------     ------                 ------     ------
      Net interest income                 $2,757     $2,323      18.68%     $8,091     $6,554      23.45%
                                          ======     ======                 ======     ======
</TABLE>


                                       10
<PAGE>

The following table summarizes average balances and average yields and costs for
the three and nine months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                                  Three Months Ended September 30,              Nine Months Ended September 30,
                                                    2005                   2004                   2005                   2004
                                             ------------------     ------------------     ------------------     ------------------
                                             Average     Yield/     Average     Yield/     Average     Yield/     Average     Yield/
                                             Balance      Cost      Balance      Cost      Balance      Cost      Balance      Cost
                                             -------     ------     -------     ------     -------     ------     -------     ------
                                                                               (Dollars in thousands)
<S>                                          <C>          <C>       <C>          <C>       <C>          <C>       <C>          <C>
Interest-earning assets
   Loans                                     $231,196     6.09%     $195,817     5.84%     $217,825     5.99%     $187,003     5.89%
   Fed Funds sold                               2,157     2.78%       18,688     1.54%        2,081     2.95%        9,780     1.31%
   Investment securities                       57,685     3.90%       34,765     3.68%       49,783     3.91%       34,323     3.71%
   Federal Home Loan Bank stock                 2,530     4.27%        2,080     2.69%        2,368     4.17%        1,873     2.21%
                                             --------               --------               --------               --------

      Total interest-earning assets          $293,568     5.62%     $251,350     5.20%     $272,057     5.57%     $232,979     5.35%
                                             ========               ========               ========               ========

Interest-bearing liabilities
   Certificate accounts                      $105,907     2.94%     $ 85,231     2.10%     $ 93,002     2.60%     $ 85,709     2.09%
   Regular savings accounts & escrow           52,918     0.81%       66,875     0.39%       50,075     0.62%       51,484     0.42%
   Checking and NOW accounts                   41,191     0.10%       37,622     0.12%       38,433     0.11%       35,195     0.14%
   Money market savings accounts               23,628     0.98%       28,265     0.96%       26,373     0.99%       26,726     0.93%
                                             --------               --------               --------               --------

      Total interest-bearing deposits         223,644     1.71%      217,993     1.09%      207,884     1.46%      199,114     1.16%
   FHLB advances                               41,561     3.97%       32,249     4.33%       34,890     3.81%       30,789     4.63%
                                             --------               --------               --------               --------

      Total interest-bearing liabilities     $265,205     2.06%     $250,241     1.51%     $242,774     1.80%     $229,903     1.62%
                                             ========               ========               ========               ========
</TABLE>

Interest and dividend income increased $859,000,  or 26.3%, for the three months
ended  September  30, 2005 as a result of an increase in the average  balance of
interest-earning  assets to $293.6  million  from $251.4  million  along with an
increase in the average  yield on  interest-earning  assets from 5.20% to 5.62%.
Interest and dividend income also increased for the nine month period, from $9.3
million  to $11.4  million,  again as a result  of an  increase  in the  average
balance of interest-earning  assets from $233.0 million to $272.1 million, along
with an increase in the average  yield to 5.35% from 5.57%.  Interest on federal
funds sold decreased  during the three and nine months ended  September 30, 2005
due to a decrease in the average  balances,  partially  offset by an increase in
the average  yield.  The average  balances in the 2004  periods  included  funds
associated with the stock issuance.

Provision for Loan Losses.  The following  table  summarizes the activity in the
allowance  for loan losses and  provision for loan losses for the three and nine
months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                           Three Months Ended         Nine Months Ended
                                              September 30,             September 30,
                                           -------------------      --------------------
                                             2005        2004         2005         2004
                                           -------     -------      -------      -------
                                                          (In thousands)
<S>                                        <C>         <C>          <C>          <C>
      Allowance at beginning of period     $ 1,877     $ 1,825      $ 1,829      $ 1,810
      Provision for loan losses                 --          --           32           --

      Charge-offs                               --         (26)          (3)         (46)
      Recoveries                                 1          15           20           50
                                           -------     -------      -------      -------
         Net recoveries (charge-offs)            1         (11)          17            4
                                           -------     -------      -------      -------
      Allowance at end of period           $ 1,878     $ 1,814      $ 1,878      $ 1,814
                                           =======     =======      =======      =======
</TABLE>

The Company did not record a provision for loan losses in the three month period
while a  provision  of $32,000  was  recorded  for the nine month  period  ended
September  30, 2005.  There were no  provisions  made in the 2004  periods.  The
provisions  in 2005 are due  primarily to increased  balances in the  commercial
loan portfolio.


                                       11
<PAGE>

The  following  table  provides   information  with  respect  to  the  Company's
nonperforming  assets at the dates indicated.  The Company acquired one property
through  foreclosure  in April 2005. The Company did not have any accruing loans
past due 90 days or more at the dates presented.

<TABLE>
<CAPTION>
                                                  At September 30,  At December 31,
                                                        2005             2004         % change
                                                  ----------------  ---------------   ---------
                                                               (Dollars in thousands)
<S>                                                    <C>              <C>            <C>
      Nonaccrual loans                                 $   260          $   596        -56.38%
      Real estate owned                                     46               68        -33.03%
                                                       -------          -------
               Total nonperforming assets              $   306          $   664        -53.98%
                                                       =======          =======

      Total nonperforming loans to total loans            0.11%            0.29%       -62.07%

      Total nonperforming loans to total assets           0.08%            0.22%       -63.64%

      Total nonperforming assets to total assets          0.09%            0.25%       -64.00%
</TABLE>

Noninterest  Income.  The following table summarizes  noninterest income for the
three and nine months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                                      Three Months                        Nine Months
                                                  Ended September 30,                 Ended September 30,
                                                  -------------------                 -------------------
                                                    2005       2004       % Change      2005       2004       % Change
                                                   ------     ------      --------     ------     ------      --------
                                                                         (Dollars in thousands)
<S>                                                <C>        <C>         <C>          <C>        <C>         <C>
      Loan fees and service charges                $  237     $  232         2.16%     $  679     $  660         2.88%
      Income from bank owned life insurance            49         49         0.00%        146        146         0.00%
      Gain on sale of mortgages                        --         --          N/A          --          5      -100.00%
      Gain (loss) on sale of investments               --       (180)     -100.00%         47       (156)     -130.13%
      Income from investment advisory services         60         32        87.50%        160         97        64.95%
      Other income                                     28         17        64.71%         71         46        54.35%
                                                   ------     ------                   ------     ------
         Total                                     $  374     $  150       149.33%     $1,103     $  798        38.22%
                                                   ======     ======                   ======     ======
</TABLE>

Noninterest  income increased 149.3% during the three months ended September 30,
2005  primarily as a result of a $180,000 loss on the sale of investments in the
2004  period,  combined  with an  increase in income  from  investment  advisory
services to $60,000 from  $32,000,  or 87.5%,  in the 2005  period.  Noninterest
income  increased  by 38.2%  during the nine  months  ended  September  30, 2005
primarily as a result of an increase in the gain on the sale of  investments  in
the 2005 period  versus a loss on the sale of  investments  in the 2004  period,
combined with an increase in income from investment advisory services and income
from loan fees and  charges.  The  increase in income from  investment  advisory
services is a result of the program  becoming  more mature  along with  enhanced
cross-selling efforts on behalf of the employees.


                                       12
<PAGE>

Noninterest Expense. The following table summarizes  noninterest expense for the
three and nine months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                                  Three Months                           Nine Months
                                              Ended September 30,                    Ended September 30,
                                              --------------------                   --------------------
                                               2005          2004       % Change       2005         2004      % Change
                                              -------      -------      --------     -------      -------     --------
                                                                       (Dollars in thousands)
<S>                                           <C>          <C>          <C>          <C>          <C>          <C>
      Compensation, taxes and benefits        $ 1,546      $ 1,148        34.67%     $ 4,364      $ 3,351        30.23%
      Office occupancy                            368          280        31.43%       1,126          894        25.95%
      Computer processing                         170          133        27.82%         473          403        17.37%
      Advertising                                 119           66        80.30%         425          239        77.82%
      Charitable contributions                     11        1,539       -99.29%          30        1,573       -98.09%
      FHLBB advances prepayment fee                --          498      -100.00%          --          498      -100.00%
      Gain on foreclosed real estate, net          (2)         (21)      -90.48%         (34)         (58)      -41.38%
      Other expenses                              384          249        54.22%       1,120          745        50.34%
                                              -------      -------                   -------      -------
         Total                                $ 2,596      $ 3,892       -33.30%     $ 7,504      $ 7,645        -1.84%
                                              =======      =======                   =======      =======
</TABLE>

Noninterest  expense decreased in both the three and nine months ended September
30, 2005 primarily as a result of a $1.5 million charitable contribution expense
associated with the  establishment  and funding of the Naugatuck  Valley Savings
and Loan Foundation  along with the $498,000  prepayment fee paid to the Federal
Home Loan Bank of Boston for early payoff of $9.6 million in  borrowings  in the
2004 periods. In both the three and nine month periods ended September 30, 2005,
the Company experienced increases in compensation, taxes and benefits along with
increases in office occupancy expenses, computer processing and advertising. The
increase in these  expenses is  primarily a result of the opening of the Seymour
branch office in January 2005 and the relocation of the Shelton branch office in
July 2005.  During this period the  Company  also began to amortize  share-based
compensation  awards that were  granted  under the 2005 equity  incentive  plan.
Other expenses increased due to increases in legal fees, supervisory examination
fees,  internal and external  auditing fees along with expenses  associated with
being a public company.

Liquidity and Capital Resources

Liquidity  is the  ability  to meet  current  and  future  short-term  financial
obligations.  The Company's primary sources of funds consist of deposit inflows,
loan repayments, maturities and sales of investment securities and advances from
the  Federal  Home  Loan  Bank  of  Boston.   While   maturities  and  scheduled
amortization of loans and securities are predictable  sources of funds,  deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.

Each quarter the Company  projects  liquidity  availability  and demands on this
liquidity for the next 90 days. The Company regularly adjusts its investments in
liquid  assets  based upon our  assessment  of (1)  expected  loan  demand,  (2)
expected deposit flows, (3) yields  available on  interest-earning  deposits and
securities,  and (4) the objectives of our  asset/liability  management program.
Excess  liquid  assets are  invested  generally  in  interest-earning  deposits,
federal funds, short- and  intermediate-term  U.S. Government agency obligations
and to a lesser extent, municipal securities.

The   Company's   most  liquid  assets  are  cash  and  cash   equivalents   and
interest-bearing  deposits.  The levels of these assets depend on our operating,
financing,  lending  and  investing  activities  during  any  given  period.  At
September 30, 2005, cash and cash equivalents  totaled $12.6 million,  including
federal funds of $6.9  million.  Securities  classified  as  available-for-sale,
which  provide  additional  sources  of  liquidity,  totaled  $58.8  million  at
September 30, 2005. At September 30, 2005, the Company had the ability to borrow
a total of $107.2  million from the Federal  Home Loan Bank of Boston,  of which
$44.3 million was  outstanding.  At September 30, 2005, the Company had arranged
overnight  lines of credit of $2.5  million  with the Federal  Home Loan Bank of
Boston. The Company had no overnight advances  outstanding with the Federal Home
Loan Bank of Boston.  In addition,  at September  30, 2005,  the Company had the
ability to borrow $2.0 million  from a  correspondent  bank.  The Company had no
advances outstanding on these lines at September 30, 2005.


                                       13
<PAGE>

At September 30, 2005,  the Company had  commitments  of $18.0 million in unused
home equity lines of credit,  $3.2 million in unadvanced  commercial lines, $6.1
million in mortgage  commitments,  $3.8 million in commercial loan  commitments,
$16.4 million in unadvanced  construction mortgage commitments,  $3.2 million in
letters  of  credit  and  $94,000  in  overdraft  line of  credit  availability.
Certificates  of deposit due within one year of September 30, 2005 totaled $54.4
million,  or 23.5% of total  deposits.  If these deposits do not remain with us,
the Company  will be required to seek other  sources of funds,  including  other
certificates of deposit and our available  lines of credit.  Depending on market
conditions,  the Company may be required to pay higher rates on such deposits or
other  borrowings than are currently paid on the  certificates of deposit due on
or before  September 30, 2006. Based on past  experience,  however,  the Company
believes that a significant  portion of our  certificates of deposit will remain
with us. The Company has the ability to attract and retain deposits by adjusting
the interest rates offered.

Historically,  the  Company  has  remained  highly  liquid,  with our  liquidity
position increasing substantially over the past two fiscal years. The Company is
not aware of any trends and/or  demands,  commitments,  events or  uncertainties
that could result in a material decrease in liquidity.  The Company expects that
all of our liquidity needs, including the contractual  commitments stated above,
the estimated  costs of our branch  expansion plans and increases in loan demand
can be met by our currently available liquid assets and cash flows. In the event
loan demand was to increase at a pace greater than  expected,  or any unforeseen
demand or commitment were to occur, we could access our borrowing  capacity with
the Federal Home Loan Bank of Boston.  The Company  expects  that our  currently
available  liquid  assets and our ability to borrow  from the Federal  Home Loan
Bank of Boston would be sufficient  to satisfy our  liquidity  needs without any
material adverse effect on our liquidity.

The Company's primary investing  activities are the origination of loans and the
purchase of securities. For the nine months ended September 30, 2005 the Company
originated  $69.5  million of loans,  including  renewals  and  refinances,  and
purchased $41.3 million of securities. These activities were funded primarily by
the   proceeds   from   sales   and   maturities   of   available-for-sale   and
held-to-maturity  securities of $18.5 million,  an increase of deposits of $38.6
million  and net  advances  from the  Federal  Home Loan Bank of Boston of $28.4
million.

Financing  activities  consist  primarily of activity in deposit accounts and in
Federal Home Loan Bank advances. The Company experienced a net increase in total
deposits of $38.6 million for the nine months ended September 30, 2005.  Deposit
flows are affected by the overall level of interest  rates,  the interest  rates
and products  offered by us and our local  competitors  and other  factors.  The
Company  generally  manages the pricing of our deposits to be competitive and to
increase  core  deposit   relationships.   Occasionally,   the  Company   offers
promotional rates on certain deposit products in order to attract deposits.  The
Company  experienced  a net increase in Federal Home Loan Bank advances of $28.4
million for the nine months ended  September 30, 2005.  The increases in deposit
accounts and Federal Home Loan Bank advances  primarily funded our investing and
lending activities.

The Company is not  subject to  separate  regulatory  capital  requirements.  At
September 30, 2005, the Bank was subject to the regulatory capital  requirements
of the Office of Thrift Supervision, including a risk-based capital measure. The
risk-based  capital  guidelines  include  both a  definition  of  capital  and a
framework for calculating risk-weighted assets by assigning balance sheet assets
and off-balance sheet items to broad risk categories. At September 30, 2005, the
Bank exceeded all of its regulatory capital requirements. The Bank is considered
"well capitalized" under regulatory guidelines.

Off-Balance Sheet Arrangements

In the  normal  course of  operations,  the  Company  engages  in a  variety  of
financial  transactions that, in accordance with generally  accepted  accounting
principles,  are not recorded in our financial  statements.  These  transactions
involve,  to varying degrees,  elements of credit,  interest rate, and liquidity
risk. Such  transactions  are used primarily to manage  customers'  requests for
funding and take the form of loan commitments,  unused lines of credit,  amounts
due on construction loans,  amounts due on commercial loans,  commercial letters
of credit and commitments to sell loans.

For  the  nine  months  ended  September  30,  2005,  we did not  engage  in any
off-balance-sheet  transactions  reasonably  likely to have a material effect on
our financial condition, results of operations or cash flows.


                                       14
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Qualitative  Aspects of Market Risk.  The  Company's  most  significant  form of
market  risk is  interest  rate risk.  The Company  manages  the  interest  rate
sensitivity of its interest-bearing  liabilities and interest-earning  assets in
an effort to  minimize  the  adverse  effects of changes  in the  interest  rate
environment.  Deposit accounts typically react more quickly to changes in market
interest  rates  than  mortgage  loans  because  of the  shorter  maturities  of
deposits.  As a result,  sharp increases in interest rates may adversely  affect
the Company's earnings while decreases in interest rates may beneficially affect
the  Company's  earnings.  To reduce the  potential  volatility of the Company's
earnings,  the  Company  has  sought to  improve  the match  between  assets and
liability  maturities  (or  rate  adjustment  periods),   while  maintaining  an
acceptable interest rate spread, by originating  adjustable-rate  mortgage loans
for  retention  in the loan  portfolio,  variable-rate  home  equity  lines  and
variable-rate commercial loans and by purchasing  variable-rate  investments and
investments  with  expected  maturities  of less  than  10  years.  The  Company
currently does not participate in hedging programs, interest rate swaps or other
activities   involving  the  use  of  off-balance  sheet  derivative   financial
instruments.

The Bank's Asset/Liability Committee communicates,  coordinates and controls all
aspects of asset/liability  management.  The committee  establishes and monitors
the volume and mix of assets and funding  sources with the objective of managing
assets and funding sources.

Quantitative  Aspects of Market Risk. The Bank uses an interest rate sensitivity
analysis  prepared  by the Office of Thrift  Supervision  to review its level of
interest  rate risk.  This  analysis  measures  interest  rate risk by computing
changes in net portfolio value of the Bank's cash flows from assets, liabilities
and off-balance sheet items in the event of a range of assumed changes in market
interest  rates.  Net portfolio  value  represents the market value of portfolio
equity and is equal to the  market  value of assets  minus the  market  value of
liabilities,  with adjustments made for off-balance  sheet items.  This analysis
assesses the risk of loss in market risk sensitive instruments in the event of a
sudden and sustained  100 to 300 basis point  increase or 100 to 200 basis point
decrease  in market  interest  rates  with no effect  given to any steps that we
might  take to counter  the  effect of that  interest  rate  movement.  The Bank
measures  interest rate risk by modeling the changes in net portfolio value over
a variety of interest rate  scenarios.  The following  table,  which is based on
information that the Bank provides to the Office of Thrift Supervision, presents
the change in the Bank's net portfolio  value at June 30, 2005 (the most current
information  available) that would occur in the event of an immediate  change in
interest rates based on Office of Thrift Supervision assumptions, with no effect
given to any steps that the Bank might take to counteract that change.  The Bank
expects that its net portfolio  value at September  30, 2005 is consistent  with
the table below.

<TABLE>
<CAPTION>
    --------------------------------------------------------------------------------------
                                                                        Net Portfolio
                                                                        Value as % of
                                     Net Portfolio Value           Present Value of Assets
    Basis Point ("bp")      ------------------------------------   -----------------------
    Change in Rates         $ Amount     $ Change       % Change    NPV Ratio      Change
                            ------------------------------------   -----------------------
                                   (Dollars in thousands)
<S>                          <C>         <C>              <C>         <C>          <C>
         300 bp              37,898      (14,259)         -27%        12.79%       -3.73%
         200                 42,973       (9,184)         -18%        14.18%       -2.34%
         100                 47,963       (4,194)          -8%        15.49%       -1.03%
         0                   52,157           --           --         16.52%          --
         (100)               53,145          988            2%        16.68%        0.16%
         (200)               51,844         (313)          -1%        16.22%       -0.30%
    ======================================================================================
</TABLE>

The Office of Thrift  Supervision  uses certain  assumptions  in  assessing  the
interest rate risk of savings associations. These assumptions relate to interest
rates,  loan  prepayment  rates,  deposit decay rates,  and the market values of
certain assets under differing  interest rate scenarios,  among others.  As with
any method of measuring interest rate risk, certain shortcomings are inherent in
the method of analysis  presented in the foregoing table. For example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods to
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Also, the interest rates on certain types of assets and  liabilities may
fluctuate in advance of changes in market interest  rates,  while interest rates
on other types may lag behind  changes in market  rates.  Additionally,  certain
assets,  such as  adjustable-rate  mortgage  loans,  have features that restrict
changes in interest rates on a short-term  basis and over the life of the asset.
Further,  in the  event  of a  change  in  interest  rates,  expected  rates  of
prepayments  on loans and early  withdrawals  from  certificates  could  deviate
significantly from those assumed in calculating the table.


                                       15
<PAGE>

Item 4. Controls and Procedures.

The Company's  management,  including the Company's  principal executive officer
and  principal  financial  officer,  have  evaluated  the  effectiveness  of the
Company's  "disclosure controls and procedures," as such term is defined in Rule
13a-15(e)  promulgated  under the  Securities  Exchange Act of 1934, as amended,
(the  "Exchange  Act").  Based upon their  evaluation,  the principal  executive
officer and principal  financial  officer  concluded  that, as of the end of the
period covered by this report, the Company's  disclosure controls and procedures
were effective for the purpose of ensuring that the  information  required to be
disclosed  in the reports that the Company  files or submits  under the Exchange
Act with the  Securities  and Exchange  Commission  (the "SEC") (1) is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms,  and (2) is accumulated and communicated to the Company's
management,  including its principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure.

Part II - OTHER INFORMATION

Item 1. - Legal Proceedings.

The Company is not involved in any pending  legal  proceedings.  The Bank is not
involved in any pending legal  proceedings  other than routine legal proceedings
occurring in the ordinary course of business. Such routine legal proceedings, in
the  aggregate,  are believed by  management  to be  immaterial to its financial
condition and results of operations.

Item 2. -  Unregistered  Sales of Equity  Securities  and Use of  Proceeds.  Not
applicable

Item 3. - Defaults Upon Senior Securities. Not applicable

Item 4. - Submission of Matters to a Vote of Security Holders. Not applicable

Item 5. - Other Information. Not applicable

Item 6. - Exhibits.

  Exhibits -

      3.1         Charter of Naugatuck Valley Financial Corporation (1)

      3.2         Bylaws of Naugatuck Valley Financial Corporation (1)

      4.1         Specimen  Stock  Certificate  of  Naugatuck  Valley  Financial
                  Corporation (2)

      10.1        Naugatuck Valley  Financial  Corporation 2005 Equity Incentive
                  Plan (3)

      31.1        Rule 13a-14(a)/15d-14(a) Certification.

      31.2        Rule 13a-14(a)/15d-14(a) Certification.

      32          Section 1350 Certifications.

----------
(1)  Incorporated  by reference to the Company's  Form 10-Q for the three months
ended September 30, 2004.

(2)  Incorporated   herein  by  reference  to  the  Exhibits  to  the  Company's
Registration  Statement  on Form S-1,  as amended,  initially  filed on June 18,
2004.

(3)  Incorporated  herein by reference to Appendix C to the Proxy  Statement for
the 2005 Annual Meeting of Stockholders filed on April 1, 2005.


                                       16
<PAGE>

                                   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.

Naugatuck Valley Financial Corporation


Date: November 14, 2005                 by: /s/ John C. Roman
      -----------------                 --------------------------
                                        John C. Roman
                                        President and Chief Executive Officer


Date: November 14, 2005                 by: /s/ Lee R. Schlesinger
      -----------------                 --------------------------
                                        Lee R. Schlesinger
                                        Vice President and Treasurer
                                        (Principal Financial Officer)


                                       17