SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D. C. 20549

                                    FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


        For Quarter Ended June 30, 1999    Commission File Number 0-14550


                       NEW ENGLAND COMMUNITY BANCORP, INC.

                     DELAWARE                     06-1116165



                                OLD WINDSOR MALL
                                  P.O. BOX 130
                           WINDSOR, CONNECTICUT 06095


                            Telephone: (860) 610-3600


Indicate by check mark whether  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  twelve  months,   and  (2)  has  been  subject  to  such  filing
requirements for the past 90 days.
YES    X           NO
   --------



The number of shares of common stock of the  registrant  outstanding  as of July
31, 1999 was 7,036,494.


The total number of pages in this report is xx.



                                    Page -1-
<PAGE>


<TABLE>
<CAPTION>

                                                 NEW ENGLAND COMMUNITY BANCORP, INC.

                                                          TABLE OF CONTENTS

<S>                     <C>                                                                                        <C>
         Part I.        FINANCIAL INFORMATION                                                                 Page No.
         Item 1.        Financial Statements:

                        Consolidated Balance Sheets--June 30, 1999 (unaudited) and
                        December 31, 1998                                                                            3

                        Consolidated Statements of Income--three and six months ended June30, 1999
                        and 1998 (unaudited)                                                                         4

                        Consolidated Statements of Cash Flows--six months ended June 30, 1999
                        and 1998 (unaudited)                                                                         5

                        Notes to Consolidated Financial Statements                                                   6

         Item 2.        Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                                                        7

        Part II.        OTHER INFORMATION                                                                           19

         Item 6.        Exhibits, Financial Statement Schedules and Reports on Form 8-K                             16

                        SIGNATURES                                                                                  17
</TABLE>


                                    Page -2-
<PAGE>

                          Part I--FINANCIAL INFORMATION

                          Item 1. Financial Statements

                       NEW ENGLAND COMMUNITY BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
(Thousands of dollars; except share data)
                                                                                                  June 30,              December 31,
                                                                                                      1999                      1998
                                                                                               (Unaudited)
====================================================================================================================================
<S>                                                                                            <C>                     <C>
ASSETS:
     Cash and due from banks                                                                   $    33,040             $    39,279
     Short-term investments                                                                          3,270                  12,080
     Federal funds sold                                                                              7,208                   1,485
                                                                                               -----------             -----------
        Cash and cash equivalents                                                                   43,518                  52,844
     Interest bearing deposits with banks                                                              595                     694
     Securities held-to-maturity                                                                     4,122                   5,675
     Securities available-for-sale                                                                 204,512                 191,867
     Federal Home Loan Bank stock, at cost                                                           4,881                   4,881

     Loans outstanding                                                                             518,459                 515,980
        Less: allowance for possible loan losses                                                  (10,282)                (10,092)
                                                                                               -----------             -----------
           Net loans                                                                               508,177                 505,888
     Loans held-for-sale                                                                             6,730                   7,721
     Premises and equipment                                                                         13,454                  13,932
     Other real estate owned                                                                         1,641                   1,636
     Goodwill                                                                                        4,651                   4,847
     Other assets                                                                                   16,117                  13,902
                                                                                               -----------             -----------
Total Assets                                                                                   $   808,398             $   803,887
                                                                                               ===========             ===========

LIABILITIES:
     Deposits:
        Noninterest bearing                                                                    $   146,856             $   160,876
        Interest bearing                                                                           496,928                 503,202
                                                                                               -----------             -----------
           Total deposits                                                                          643,784                 664,078
     Short-term borrowings                                                                          56,788                  34,848
     Long-term debt                                                                                 35,252                  27,279
     Other liabilities                                                                               2,982                   4,332
                                                                                               -----------             -----------
Total Liabilities                                                                                  738,806                 730,537

SHAREHOLDERS' EQUITY:
     Common stock, $0.10 par value, authorized 20,000,000 shares:
       June 30, 1999,  7,036,000 outstanding;
       December 31, 1998,  7,031,000 outstanding                                                       704                     703
     Additional paid-in capital                                                                     61,921                  61,811
     Retained earnings                                                                              11,869                   9,452
     Treasury Stock -June 30, 1999, 136,000 shares                                                 (2,681)
     Net unrealized gain (loss) on securities available-for-sale                                   (2,221)                   1,384
                                                                                               -----------             -----------
Total Shareholders' Equity                                                                          69,592                  73,350
                                                                                               -----------             -----------
Total Liabilities & Shareholders' Equity                                                       $   808,398             $   803,887
                                                                                               ===========             ===========

                       The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>

                                    Page -3-

<PAGE>



                       NEW ENGLAND COMMUNITY BANCORP, INC.
                         CONSOLIDATED INCOME STATEMENTS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                              Six Months Ended                 Three Months Ended
                                                                                  June 30,                          June 30,
(thousands of dollars; except per share data)                               1999             1998              1999           1998
====================================================================================================================================
<S>                                                                    <C>              <C>                <C>              <C>
INTEREST INCOME:
     Loans, including fees                                             $  22,150        $  24,198          $ 11,083         $11,994
     Securities:
         Taxable interest                                                  5,037            5,080             2,720           2,600
         Interest exempt from federal income taxes                           366              408               185             274
         Dividends                                                           561              207               226              45
     Federal funds sold and other interest                                   303              228                86             107
                                                                       ---------        ---------          --------         -------
         Total interest income                                            28,417           30,121            14,300          15,020

INTEREST EXPENSE:
     Deposits                                                              8,175           10,291             3,947           5,086
     Borrowed funds                                                        1,790            1,229             1,000             650
                                                                       ---------        ---------          --------         -------
         Total interest expense                                            9,965           11,520             4,947           5,736
Net interest income                                                       18,452           18,601             9,353           9,284
Provision for possible loan losses                                           333              805               168             366
                                                                       ---------        ---------          --------         -------

Net interest income after provision for possible loan losses              18,119           17,796             9,185           8,918

NONINTEREST INCOME:
     Service charges, fees and commissions                                 2,206            2,034             1,129           1,088
     Investment securities gains, net                                        499            1,417               324             175
     Mortgage banking revenues                                             1,659            1,367               902             826
     Other                                                                   125              165                55              87
                                                                       ---------        ---------          --------         -------
         Total noninterest income                                          4,489            4,983             2,410           2,176

NONINTEREST EXPENSE:
     Salaries and employee benefits                                        7,838            7,807             3,974           4,012
     Occupancy                                                             1,479            1,411               712             664
     Furniture and equipment                                               1,027              987               557             561
     Outside services                                                        780              998               482             570
     Postage and supplies                                                    648              612               352             315
     Losses, writedowns, expenses - other real estate owned                  146             (114)              112             (36)
     Amortization of goodwill                                                235              195               137              97
     Loss on sale of portfolio loans                                                          715
     Mergers & restructuring provivions                                    1,353              190               525             190
     Other                                                                 2,329            2,142             1,406             997
                                                                       ---------        ---------          --------         -------
         Total noninterest expense                                        15,835           14,943             8,257           7,370
                                                                       ---------        ---------          --------         -------
Income before taxes                                                        6,773            7,836             3,338           3,724
Income taxes                                                               2,428            3,211             1,175           1,595
                                                                       ---------        ---------          --------         -------
Net Income                                                             $   4,345        $   4,625          $  2,163         $ 2,129
                                                                       =========        =========          ========         =======
Net income per share--Basic                                            $    0.62        $    0.66          $   0.31         $  0.30
Net income per share--Diluted                                          $    0.61        $    0.64          $   0.31         $  0.29
Weighted average shares of
  Common Stock outstanding--Basic                                          6,953            7,050             6,901           7,057
Weighted average shares of
  Common Stock outstanding--Diluted                                        7,105            7,254             7,068           7,244

                       The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>



                                                              Page -4-
<PAGE>


<TABLE>
<CAPTION>
                       NEW ENGLAND COMMUNITY BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
(Thousands of dollars)                                                                                            Six Months Ended
                                                                                                                     June 30,
                                                                                                          1999                  1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                   <C>                  <C>
OPERATING ACTIVITIES:
     Net income                                                                                         $4,345               $4,625
     Adjustment for noncash charges (credits):
       Provision for depreciation and amortization                                                         714                  698
       Losses from sale or disposal and provisions to reduce the carrying value
          of other real estate owned, net                                                                   58                 (253)
       Securities losses (gains), net                                                                     (499)              (1,417)
       Accretion of discounts and amortization of premiums on bonds, net                                   (22)                  54
       Amortization of goodwill and other intangibles                                                      235                  195
       Provision for possible loan losses                                                                  333                  805
       Loss on sale of portfolio loans, net                                                                                     715
       (Increase) decrease in other assets, net                                                          3,313               (2,200)
       Decrease (increase) in loans held-for-sale                                                          991               (4,755)
       (Decrease) increase in other liabilities, net                                                    (1,325)                 273
                                                                                                     ----------            --------
              Net cash provided by (used for) operating activities                                       8,143               (1,260)
                                                                                                     ---------             ---------

FINANCING ACTIVITIES:
     Net decrease in noninterest-bearing accounts                                                      (14,020)              (6,140)
     Net decrease in interest-bearing accounts                                                          (6,274)             (14,855)
     Net increase in short-term borrowings                                                              21,940                7,734
     Net increase in long-term borrowings                                                                7,973                7,289
     Proceeds from issuance of common stock                                                               (139)                 413
     Cash dividends paid                                                                                (1,537)              (1,037)
                                                                                                     ---------             ---------
              Net cash used for financing activities                                                     5,262               (6,596)
                                                                                                     ---------             ---------

INVESTING ACTIVITIES:
     Loans originated, net of principal collections                                                     (3,684)              (1,614)
     Decrease in interest-bearing time deposits                                                             99                   87
     Proceeds from sale of portfolio loans                                                                                   10,157
     Purchases of securities available-for-sale                                                        (67,375)             (53,122)
     Proceeds from sales of securities available-for-sale                                                2,042               18,884
     Proceeds from maturities of securities available-for-sale                                          45,797               28,289
     Proceeds from maturities of securities held-to-maturity                                             1,553                2,039
     Proceeds from sales of other real estate owned                                                        586                2,774
     Purchases of premises and equipment, net                                                           (1,755)                (803)
     Sales of premises and equipment                                                                         6                   49
     Capitalization of expenditures on other real estate owned                                                                 (342)
                                                                                                     ---------             --------
              Net cash provided by (used for) investing activities                                     (22,731)               6,398
                                                                                                     ----------            --------
     Decrease in cash and cash equivalents                                                              (9,326)              (1,458)
     Cash and cash equivalents, beginning of period                                                     52,844               61,030
                                                                                                     ---------             --------
     Cash and cash equivalents, end of period                                                         $ 43,518             $ 59,572
                                                                                                      ========             ========

                                        The accompanying notes are an integral part of these
                                                 consolidated financial statements.
</TABLE>

                                                              Page -5-
<PAGE>


                       NEW ENGLAND COMMUNITY BANCORP, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

     The accompanying  condensed interim financial  statements are unaudited and
include the accounts of New England  Community  Bancorp,  Inc. (the "Company" or
"NECB") and its  subsidiaries,  New England Bank and Trust Company ("New England
Bank"), The Equity Bank ("Equity Bank"),  Community Bank ("Community Bank"), and
Olde  Port  Bank  (together  the  "Subsidiaries").  The  consolidated  financial
statements have been prepared in accordance with generally  accepted  accounting
principles for interim  financial  information and with the  instructions to SEC
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete financial statements.

     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.  These  financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1998 Annual Report on Form 10-K.

NOTE 2 - MERGERS AND ACQUISITIONS

     During the third quarter of 1998, NECB completed two acquisitions.

     On, July 10, 1998,  Olde Port Bank & Trust  Company  ("Olde  Port"),  a New
Hampshire   state-chartered  bank  and  trust  company,   became  NECB's  fourth
wholly-owned  banking  subsidiary.  NECB acquired  Olde Port by issuing  585,986
shares of the Company's common stock for all of the outstanding common shares of
Olde Port and all fully vested and exercisable stock options.

     On August 14, 1998, NECB acquired Bank of South Windsor ("South  Windsor"),
of South  Windsor,  Connecticut,  by issuing  1,270,720  shares of the Company's
common  stock for all of the  outstanding  common  shares of South  Windsor.  In
conjunction  with  the  transaction,   shares  of  South  Windsor  common  stock
beneficially owned by NECB were cancelled and retired.

     The  acquisitions  of Olde Port and South  Windsor  were  accounted  for as
poolings of interests  and, as such, all prior period results have been restated
as though the companies had been combined as of the earliest period presented.

NOTE 3 - DISCLOSURE FOR STATEMENTS OF CASH FLOWS

Schedule of noncash investing and financing activities:
     Loans charged off, net of recoveries                   $143       $2,718
     Real estate acquired through foreclosure                649          952


                                    Page -6-
<PAGE>



                          Part I--FINANCIAL INFORMATION

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

     The Company's  earnings are largely  dependent upon net interest income and
noninterest  income from its  community  banking  operations--with  net interest
income providing the majority of the Company's revenues.  Net interest income is
the difference between interest earned on the loan and investment portfolios and
interest  paid on deposits and other  sources of funds.  Noninterest  revenue is
primarily derived from service charges,  fees and commissions related to deposit
accounts and the Company's service loan portfolio. As discussed in Note 2 above,
the acquisitions of South Windsor and Olde Port were accounted for as pooling of
interests. As such, all prior results have been restated as though the companies
had been combined as of the earliest period presented.

     NECB reported net income for the second quarter of 1999 of  $2,163,000,  or
$0.31 per  diluted  share,  compared to net income of  $2,129,000,  or $0.29 per
diluted share, reported in 1998. This represented an increase of $34,000 or 1.6%
compared to net income  reported in the previous  year. On an earnings per share
basis,  second  quarter 1999 net income  increased 7% from the second quarter of
1998.  Returns on assets ("ROA") and equity ("ROE")  improved from 1998 and were
1.38%  and  14.97%,  respectively,  for  1999  compared  to  1.18%  and  13.18%,
respectively, for the comparative period in 1998.

     Net interest income on a fully  taxable-equivalent  ("FTE") basis increased
$59,000 and totaled  $9,493,000  for the quarter ended June 30, 1999 compared to
$9,434,000  for the same period in 1998.  The  increase in net  interest  income
resulted  from volume  related  increases of $242,000  partially  offset by rate
related  decreases of $183,000.  While  overall,  interest  rates were generally
lower,  the net interest margin rose slightly from 5.16% in 1998 to 5.17% in the
quarter just ended. The average rate earned on earning assets decreased 44 basis
points while the average rate paid for the use of interest  bearing  liabilities
decreased 56 basis points.

     The provisions for possible loan losses were $168,000  compared to $366,000
in the comparable period in 1998. The $198,000 decrease occurred as loan quality
remained strong and total loans outstanding rose a modest $2 million.

     Noninterest income,  excluding security gains, increased $85,000 the second
quarter  including a $76,000 increase in mortgage banking  revenues.  Securities
gains, meanwhile,  increased $149,000.  Income from service charges rose $41,000
while all other income decreased $32,000.

     Noninterest  expense  totaled  $8,257,000  in the  second  quarter  of 1999
compared to $7,370,000 in 1998.  Both periods  included  unusual events which do
not recur on a regular basis. In 1999 a $525,000 charge was taken related to the
announced acquisition of NECB by Webster Financial Corporation, while a $190,000
expense was recorded in the second quarter of 1998 related to NECB's acquisition
of Olde Port.  When these  actions  are  excluded,  other  noninterest  expenses
amounted to  $7,732,000  in the second  quarter of 1999 compared to $7,180,000 a
year  earlier.  NECB's  efficiency  ratio,  which  measures how much a dollar of
revenue costs to produce, equaled 63.62% for the second quarter of 1999 compared
to 62.12% for the same period in 1998.  This increase  resulted  primarily  from
costs related to preparation for Y2k readiness and the expanded  operating basis
that includes our mortgage  banking  subsidiary  and a new full service  banking
branch by Olde Port Bank.

     Loans  outstanding  at June 30, 1999 amounted to  $518,459,000  compared to
$515,980,000  at December 31, 1998.  Total deposits  amounted to $643,784,000 at
June 30, 1999 compared to $664,078,000 at December 31, 1998. NECB's deposit base
typically  reaches its highest  levels at year-end  with net ouflows  during the
first  quarter  and a return to net growth  throughout  the balance of the year.
NECB  increased  its  use of  alternative  funding  sources  by  increasing  its
short-term  borrowings  since the start of 1999 to  $56,788,000 at June 30, 1999
compared to $34,848,000 at year-end 1998.

     At June 30, 1999,  shareholders'  equity was  $69,592,000  and  represented
8.61% of total assets.  In February 1999 NECB  announced a program to repurchase
up to 5%, or approximately  350,000 shares, of the Company's  outstanding shares
of common  stock.  A total of 135,500  shares  have been  acquired at an average
price of $19.79 per share.  Unrealized  gain on  securities  available  for sale
decreased  $3,605,000  during  the first  half of 1999 and ended  with a loss

                                    Page -7-

<PAGE>

of $2,221,000,  as a moderate rise in interest rates reduced the market value of
debt instruments.  When goodwill resulting from several previous acquisitions is
excluded,  tangible  equity  capital is reduced to $64,941,000 or 8.03% of total
assets.  The resulting  tangible book value per share  amounted to $9.41 at June
30, 1999 compared to $9.74 at December 31, 1998.

RESULTS OF OPERATIONS--THREE MONTHS ENDED JUNE 30, 1999 AND 1998

     For the three months ended June 30, 1999,  the Company  reported net income
of $2,163,000,  or $0.31 per diluted share, compared to $2,129,000, or $0.29 per
diluted share, for the same period of 1998. The quarter included a net charge of
$525,000  arising from  expenses  incurred in  conjunction  with the sale of the
Company.  During  the  quarter  ended  June 30,  1998 a charge of  $190,000  was
recognized  by  Olde  Port  related  to its  acquisition  by  NECB.  When  these
transactions are excluded, core operating income amounted to $2,688,000 or $0.38
per diluted  share in 1999 and  $2,319,000  or $0.32 per diluted  share in 1998.
This  represents  a 16% increase in net  operating  income and a 19% increase in
operating earnings per diluted share.

NET INTEREST INCOME

     The principal earning asset of the Company is its loan  portfolio--which is
comprised of loans to finance  operations of businesses located primarily within
its market  area,  mortgage  loans to finance  the  purchase or  improvement  of
properties  used by businesses and mortgage and personal  loans to  individuals.
Representing  approximately a quarter of the Company's  earning  assets,  NECB's
investment  portfolio  also plays an  important  part in the  management  of the
Company's  balance sheet.  While providing a source of revenue,  these funds are
used to provide  reserves and meet the  liquidity  needs of the  Company.  These
reserves  are  available to meet the  borrowing  needs of the  communities  NECB
serves.  For the following  discussion,  interest income is presented on a fully
taxable-equivalent ("FTE") basis. FTE interest income restates reported interest
income on tax exempt loans and  securities as if such interest were taxed at the
statutory Federal income tax rate of 34% for all periods presented.

(Amounts in thousands)

THREE MONTHS ENDED JUNE 30,                    1999         1998       % CHANGE
-------------------------------------------------------------------------------
Interest income (financial statements)        $14,300      $15,020      (4.8)%
Tax equivalent adjustment                         140          150      (6.7)%
                                            ---------     --------
  Total interest income (on an FTE basis)      14,440       15,170      (4.8)%
Interest expense                               (4,947)      (5,086)     (2.7)%
                                            ---------     --------
Net interest income (on an FTE basis)       $   9,493     $  9,434       0.6 %
                                            =========     ========

     For the  second  quarter of 1999 net  interest  income on an FTE basis rose
$59,000,  or 0.6% when compared to the same period in 1998. A key factor in this
increase in 1999 was management's ability to offset the effect of lower rates on
new and renewed  loans and the effect of early  payoffs of fixed rate loans with
higher than current market rates.  This was  accomplished  by reducing  interest
expense for funds used to support  these  assets and the  investment  portfolio.
Modest  reductions  in rates  paid to  selected  deposit  accounts  and  reduced
dependence upon higher cost time deposits were the chief ingredients.

     The net interest  margin  measures the  difference in yield on, and the mix
of,  interest-earning assets and interest-bearing  liabilities.  As shown in the
table below,  the margin for the quarter ended June 30, 1999  increased to 5.17%
from 5.16% in 1998.  The yield on earning  assets was reduced by 44 basis points
and  equaled  7.86%  compared  to  8.30%,   while  the  average  rate  paid  for
interest-bearing  liabilities decreased 56 basis points to 3.47% for the quarter
ended June 30, 1999 compared to 4.03% a year earlier.

                                    Page -8-

<PAGE>


AVERAGE BALANCES/INTEREST EARNED OR PAID/RATES
<TABLE>
<CAPTION>
Three Months Ended                                                                 June 30, 1999                   June 30, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average            Average      Average             Average
(Amounts in Thousands)                                                   Balance  Interest     Rate      Balance   Interest     Rate
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>           <C>       <C>      <C>          <C>        <C>
ASSETS:
   Short-term investments                                                  9,527   $   117    4.93%       12,415    $   106    3.42%
   Investment securities:
      Securities held-to-maturity                                          4,056        49    4.85%       13,166        162    4.94%
      Securities available-for-sale                                      202,681     3,191    6.31%      174,474      2,872    6.60%
   Mortgages held for sale                                                 4,481        73    6.53%       11,658        197    6.78%
   Loans (A)                                                             515,997    11,010    8.56%      521,006     11,833    9.11%
                                                                      ----------   -------             ---------    -------
      Total interest-earning assets                                      736,742    14,440    7.86%      732,719     15,170    8.30%

   Allowance for loan losses                                            (10,200)                        (11,871)
   Cash and due from banks                                                24,023                          35,522
   Other assets                                                           33,567                          29,642
                                                                      ----------                       ---------
Total Assets                                                            $784,132                        $786,012
                                                                        ========                        ========

LIABILITIES:
   Regular savings deposits                                           $  157,270   $   655    1.67%     $149,676    $   810    2.17%
   NOW account deposits                                                   83,886       270    1.29%       73,595        257    1.40%
   Money market deposits                                                   1,819        10    2.20%        5,307         22    1.66%
                                                                      ----------   -------             ---------    -------
      Total savings deposits                                             242,976       935    1.54%      228,578      1,089    1.91%
   Time deposits                                                         245,245     3,012    4.93%      289,436      4,051    5.61%
   Short-term borrowings                                                  54,772       542    3.97%       26,944        197    2.93%
   Long-term borrowings                                                   29,193       458    6.29%       25,704        399    6.23%
                                                                      ----------   -------             ---------    -------
      Total interest-bearing liabilities                                 572,186     4,947    3.47%      570,661      5,736    4.03%

   Demand deposits                                                       136,014                         141,686
   Other liabilities                                                       3,911                           3,073
                                                                      ----------                       ---------
      Total Liabilities                                                  712,112                         715,421
   Equity                                                                 72,021                          70,591
                                                                      ----------                       ---------
Total Liabilities & Equity                                              $784,132                        $786,012
                                                                        ========                        ========

Net interest income--FTE basis                                                     $ 9,493                          $ 9,434
Less adjustment for
     Tax-exempt income                                                                (140)                            (150)
                                                                                   -------                          -------
Net interest income                                                                $ 9,353                          $ 9,284
                                                                                   =======                          =======
Net interest margin                                                                           5.17%                            5.16%
Net interest spread                                                                           4.39%                            4.27%

(A) AVERAGE LOANS INCLUDE NONACCRUING LOANS.
</TABLE>

RATE/VOLUME ANALYSIS

     Changes in net interest income are divided into two components--the changes
resulting   from  the  changes  in  average   balances  of  earning  assets  and
interest-bearing  liabilities  (or "volume") and the changes in the rates earned
or paid on those balances.  The changes in interest income and interest  expense
attributable  to changes in both volume and rate,  which  cannot be  segregated,
have been allocated proportionately to the absolute values of the changes due to
volume and rate. The following table is presented on an FTE basis.

                                    Page -9-
<PAGE>


<TABLE>
<CAPTION>
                                                                                                                 Change due to
                                                                                            Total                  CHANGE IN:
                                                                                         Increase              --------------------
(AMOUNTS IN THOUSANDS)                                                                 (DECREASE)               RATE         VOLUME
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>               <C>              <C>
INTEREST EARNED ON:
Short-term investments                                                                   $     11          $     46         $   (35)
Securities held to maturity                                                                  (113)               (3)           (110)
Securities available for sale                                                                 319              (125)            444
Mortgages held for sale                                                                      (124)               (7)           (117)
Loans                                                                                        (823)             (716)           (107)
                                                                                             -----         ---------           -----
Total interest-earning assets                                                            $   (730)         $   (805)        $    75
                                                                                          --------          --------         ------

INTEREST PAID ON:
Regular savings deposits                                                                 $   (155)         $   (187)        $    32
NOW account deposits                                                                           13               (20)             33
Money market deposits                                                                         (12)                7             (19)
                                                                                         ---------         --------         -------
     Total savings deposits                                                                  (154)             (200)             46
Time deposits                                                                              (1,039)             (496)           (543)
Short-term borrowings                                                                         345                70             275
Long-term borrowings                                                                           59                 4              55
                                                                                         --------          --------         -------
Total interest-bearing liabilities                                                           (789)             (622)           (167)
                                                                                         ---------         ---------        --------
Net interest income change                                                               $     59          $   (183)        $   242
                                                                                         ========          ========         =======

</TABLE>

NONINTEREST INCOME

    For the  quarter  ended  June  30,  1999,  noninterest  income  amounted  to
$2,410,000, compared to $2,176,000 reported for the second quarter in 1998. NECB
reported realized gains from the sale of securities during the second quarter of
1999 of $324,000  compared to $175,000 in the second  quarter of 1998.  Mortgage
banking  revenues  increased  a modest  $76,000 as when  compared  to the second
quarter of 1998. Rising interest rates dampened sales during the quarter causing
New England community Mortgage Corp, NECB's production unit to fall short of its
targeted production.

    Service  charges,  fees and  commissions  increased  $41,000  in the  second
quarter of 1999  primarily  from  increases  in selected  priced  services.  The
popularity of our relationship account ("New England Gold") tended to soften the
increase in revenue as customers  opting for this service can avoid certain fees
by grouping their accounts within this program.


NONINTEREST EXPENSE

Noninterest  expenses  amounted  to  $8,257,000  for the second  quarter of 1999
compared to  $7,370,000  in the same quarter last year.  Included in this year's
total expense was a $525,000 charge related to the announced acquisition of NECB
by Webster  Financial  Corp.  The second quarter of 1998 included a nonrecurring
expense of $190,000 by Olde Port Bank related to its  acquisition by NECB.  When
these  nonrecurring  transactions  and the expenses  related to  management  and
liquidation  of  foreclosed  properties  and the  amortization  of goodwill  are
excluded,  the core  operating  expenses  are  $7,483,000  in 1999  compared  to
$7,119,000  a year  earlier.  This  represents  an increase of $364,000 or 5.1%.
NECB's efficiency  ratio,  which measures how much a dollar of net revenue costs
to produce,  equaled 63.6% for the second  quarter of 1999 compared to 62.1% for
the same period in 1998.

RESULTS OF OPERATIONS--SIX MONTHS ENDED JUNE 30, 1999 AND 1998

     Through  the  first  six  months  of 1999,  NECB  reported  net  income  of
$4,345,000  or $0.61 per  diluted  share,  a decrease  of  $280,000  compared to
$4,625,000  or $0.64  per  diluted  share for the same  period  last  year.  Net
interest income decreased $149,000 and noninterest income,  excluding securities
gains,  increased  $424,000.  Securities gains decreased  $918,000.  Noninterest
expenses  increased  $892,000  including  non-operating  expenses  of  $748,000.
Returns on average  assets and average  equity for the six months ended June 30,
1999 were 1.31% and  13.95%,  compared to 1.20% and 11.87% for the same period a
year earlier.

                                   Page -10-
<PAGE>

Net interest Income

     During  the  first  six  months  of 1999,  net  interest  income on a fully
taxable-equivalent  basis  decreased  $115,000  from the same period in 1998 and
totaled  $18,780,000.  The net interest margin decreased  slightly from 5.21% in
1998 to 5.19% this year.  Total average earning assets were virtually  unchanged
in 1999 when  compared to last year. Of  significance  was a decrease in average
loans outstanding and a corresponding increase in investment assets. The average
rate  earned in  earning  assets  decreased  45 basis  points in 1999.  This was
matched by a 46 basis point decrease in average rates paid for  interest-bearing
liabilities.  The  table  below  provides  details  of the  changes  in  average
balances, interst and rates for the first six months of 1999 compared to 1998.

AVERAGE BALANCES/INTEREST EARNED OR PAID/RATES
<TABLE>
<CAPTION>
SIX MONTHS ENDED                                                                   JUNE 30, 1999                   JUNE 30, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average            Average      Average             Average
(AMOUNTS IN THOUSANDS)                                                   BALANCE  INTEREST     RATE      BALANCE   INTEREST     RATE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>          <C>        <C>       <C>       <C>          <C>
ASSETS:
   Short-term investments                                                 15,338      $398    5.23%       10,686       $228    4.30%
   Investment securities:
      Securities held-to-maturity                                          5,073       144    5.72%       12,342        329    5.38%
      Securities available-for-sale                                      190,433     6,053    5.41%      170,443      5,660    6.70%
   Mortgages held for sale                                                 4,867       162    6.71%        7,825        268    6.91%
   Loans (A)                                                             514,633    21,988    8.62%      529,905     23,930    9.11%
                                                                      ----------   -------    -----    ---------    -------    -----
      Total interest-earning assets                                      730,344    28,745    7.94%      731,201     30,415    8.39%

   Allowance for loan losses                                             (10,194)                        (10,984)
   Cash and due from banks                                                30,367                          35,069
   Other assets                                                           33,546                          33,799
                                                                      ----------                       ---------
Total Assets                                                            $784,063                        $789,085
                                                                        ========                        ========

LIABILITIES:
   Regular savings deposits                                             $156,835   $ 1,528    1.96%     $148,264  $   1,600    2.18%
   NOW account deposits                                                   84,818       580    1.38%       79,435        582    1.48%
   Money market deposits                                                   1,851        26    2.83%        7,104        104    2.95%
                                                                      ----------   -------             ---------    -------
      Total savings deposits                                             243,504     2,134    1.77%      234,803      2,286    1.96%
   Time deposits                                                         248,854     6,041    4.90%      294,637      8,005    5.48%
   Short-term borrowings                                                  44,551       883    4.00%       22,404        434    3.91%
   Long-term borrowings                                                   29,991       907    6.10%       25,900        795    6.19%
                                                                      ----------   -------             ---------    -------
      Total interest-bearing liabilities                                 566,900     9,965    3.54%      577,744     11,520    4.02%

   Demand deposits                                                       140,149                         135,309
   Other liabilities                                                       3,942                           5,418
                                                                      ----------                       ---------
      Total Liabilities                                                  710,991                         718,471
   Equity                                                                 73,072                          70,614
                                                                      ----------                       ---------
Total Liabilities & Equity                                              $784,063                        $789,085
                                                                        ========                        ========

Net interest income--FTE basis                                                    $18,780                          $18,895
Less adjustment for
     Tax-exempt income                                                               (328)                            (294)
                                                                                  -------                          -------
Net interest income                                                               $18,452                          $18,601
                                                                                  =======                          =======
Net interest margin                                                                           5.19%                            5.21%
Net interest spread                                                                           4.39%                            4.37%

(A) AVERAGE LOANS INCLUDE NONACCRUING LOANS.
</TABLE>

                                   Page -11-
<PAGE>

RATE/VOLUME ANALYSIS

     Changes in net interest income are divided into two components--the changes
resulting   from  the  changes  in  average   balances  of  earning  assets  and
interest-bearing  liabilities  (or "volume") and the changes in the rates earned
or paid on those balances.  The changes in interest income and interest  expense
attributable  to changes in both volume and rate,  which  cannot be  segregated,
have been allocated proportionately to the absolute values of the changes due to
volume and rate. The following table is presented on an FTE basis.

                                   Page -12-
<PAGE>


<TABLE>
<CAPTION>
                                                                                                                 Change due to
                                                                                            Total                  CHANGE IN:
                                                                                         Increase                  ----------
(AMOUNTS IN THOUSANDS)                                                                 (DECREASE)               RATE          VOLUME
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>               <C>              <C>
INTEREST EARNED ON:
Short-term investments                                                                   $    170          $     49         $   121
Securities held to maturity                                                                  (185)               21            (206)
Securities available for sale                                                                 393              (242)            635
Mortgages held for sale                                                                      (106)               (8)            (98)
Loans                                                                                      (1,942)           (1,289)           (653)
                                                                                           -------         ---------           -----
Total interest-earning assets                                                            $ (1,670)         $ (1,469)        $  (201)
                                                                                          --------          --------         -------

INTEREST PAID ON:
Regular savings deposits                                                                 $    (72)         $   (156)        $    84
NOW account deposits                                                                           (2)              (39)             37
Money market deposits                                                                         (78)               (4)            (74)
                                                                                         ---------         ---------        -------
     Total savings deposits                                                                  (152)             (199)             47
Time deposits                                                                              (1,964)             (853)         (1,111)
Short-term borrowings                                                                         449                10             439
Long-term borrowings                                                                          112               (12)            124
                                                                                         --------          ---------        -------
Total interest-bearing liabilities                                                         (1,555)           (1,053)           (502)
                                                                                         ---------         ---------        --------
Net interest income change                                                               $   (115)         $   (416)        $   301
                                                                                         =========         ========         =======
</TABLE>


NONINTEREST INCOME

     Through  the  first  six  months  of  1999,   noninterest   income  totaled
$4,489,000,  compared to  $4,983,000  reported for the same period in 1998.  The
major  change  was a  $918,000  decrease  in gains  from the sale of  investment
securities. In 1998 the parent company recorded a gain of $898,000 from the sale
of  its  own  investment  securities.  Service  charges,  fees  and  commissions
increased  $172,000 or 8.5% to  $2,206,000  in the first half of this year.  The
increase resulted from selected price increases and increased volume of services
provided to our growing base of customers.  Mortgage Banking revenues  increased
$292,000 or 21.4% and amounted to  $1,659,000  for the six months ended June 30,
1999.

NONINTEREST EXPENSE

     Noninterest  expenses amounted to $15,835,000 during the first half of 1999
compared to $14,943,000  for the same period in 1998.  Included in these results
were nonrecurring charges related to mergers and organizational  restructurings.
In 1999 charges included  $525,000 related to the acquisition of NECB by Webster
Financial  Corp. and $828,000  related to the formation of a Passive  investment
corporation  by NECB.  Under  current  Connecticut  state  tax  guidelines  this
structure  provides NECB with  significant  tax benefits on an ongoing basis. In
1998 Olde  Port  incurred  nonrecurring  expenses  of  $190,000  related  to its
acquisition  by NECB.  When these  expenses and those related to management  and
disposal of foreclosed  properties and the amortization of goodwill are excluded
core operating expenses are $14,101,000 in 1999 compared to $13,997,000 in 1998.
The  table  below  indicates  the  effect  upon  operating  expenses,  caused by
nonrecurring expenses

(amounts in thousands)
     SIX MONTHS ENDED JUNE 30,            1999         1998          CHANGE
---------------------------------------------------------------------------
     Noninterest expenses                $15,835      $14,943         $892
     Less:
        Merger related expenses              525          190          335
        Restructuring                        828            0          828
        Sale of portfolio loans                0          715         (715)
        Foreclosed property expense          146         (114)         260
        Amortization of good will            235          195           40
                                             ---          ---           --
                           Subtotal        1,734          986          748
                                           -----          ---          ---
     Operating expense                   $14,101      $13,957         $144
                                         =======      =======         ====

                                   Page -13-
<PAGE>

Using operating expenses,  NECB's efficiency ratio for the six months ended June
30, 1999 is 61.5% compared to 59.4% for the six months ended June 30, 1998. This
increase  reflected the increased  investment  for a new banking center to serve
the community of Hampton,  New Hampshire and the operating  costs of New England
Community Mortgage Corp. which was formed in June, 1998.


                                   Page -14-
<PAGE>

FINANCIAL CONDITION

    Total  assets at June 30,  1999 were  $808.4  million,  an  increase of $4.5
million from December 31, 1998.  During the first half of 1999 loans outstanding
increased $2.5 million to $518.5 million while other earning assets, principally
the investment portfolio increased $6.9 million and non-earning assets decreased
$4.9  million.  The table below shows a comparison of loans  outstanding  at the
start of this year and June 30,  1999.  Our core  business  of serving the small
business  clients  in our  market  area  continues  to  expand.  Commercial  and
financial  loans rose $5.2 million while  commercial real estate loans increased
$13.6  million.  Earlier  this year  NECB  completed  the sale of a credit  card
portfolio  to the  Texas  Independent  Bank.  The $1.2  million  portfolio,  had
belonged to South Windsor prior to its acquisition last year.

(Amounts in thousands)
                                         June 30,       December 31,
                                           1999             1998
--------------------------------------------------------------------
Commercial and financial              $   152,140       $   146,962
Real estate:
    Construction                           20,043            23,862
    Residential                           116,512           123,446
    Commercial                            189,758           176,139
Consumer                                   40,006            45,571
                                      -----------       -----------
Loans outstanding                     $   518,459       $   515,980

    Securities  available for sale amounted to $204.5  million at June 30, 1999,
an  increase  of  $12.6  million  since  the  start  of  the  year.   Securities
held-to-maturity  decreased  $1.6 million  from  December 31, 1998 and ended the
second quarter of 1999 at $4.1 million.

    At June 30, 1999 other real estate owned amounted to $1.6 million or 0.2% of
total assets, virtually unchanged from the end of 1998. During the first half of
the year,  the Company  acquired  properties  with a value of  $649,000  through
foreclosure and disposed of properties with a market value of $586,000.

    Total  deposits,  which  constitute  the  principal  funding  source  of the
Company's assets, decreased $20.3 million from December 31, 1998 and amounted to
$643.8  million at June 30, 1999.  Seasonal  deposit  outflows  typically  reach
maximum  near the end of the  first  quarter  and then  increase  moderately  to
mid-year.  This year  follows that  pattern  with  Deposits  declining to $635.0
million at March 31st.  Short-term  borrowings,  primarily  customer  repurchase
agreements,  increased  $21.9  million  since the year  began and stood at $56.9
million at June 30, 1999.  NECB increased its long term  borrowings $8.0 million
during the first half of 1999 to $35.3 million at June 30, 1999.

    At mid-year total shareholders' equity stood at $69.6 million, a decrease of
$3.8 million since the start of the year.  Net income of $4.3 million,  less the
payment of the  increased  quarterly  dividends  of $0.24,  per share added $2.7
million  while $2.7  million was paid out to  repurchase  135,500  shares of the
Company's Common Stock under the buyback program announced in February. Finally,
the change in the market value of  investments  available for sale resulted in a
reduction in capital of $3.6 million.

SECURITIES HELD-TO-MATURITY

    Securities  held-to-maturity are shown in the Company's balance sheets on an
amortized  cost basis.  Amortized  cost is the  original  cost  adjusted for the
effect of accumulated  amortization  of premiums and accretion of discounts.  As
summarized  in the  table  below,  investments  in  securities  held-to-maturity
decreased  from $5.7  million at December  31, 1998 to $4.1  million at June 30,
1999.

                                   Page -15-
<PAGE>
<TABLE>
<CAPTION>
                                                                           JUNE 30, 1999                         DECEMBER 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Amortized                            Amortized
                                                                            Cost           Fair                  Cost           Fair
(AMOUNTS IN THOUSANDS)                                                     BASIS          VALUE                 BASIS          VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>                   <C>            <C>
Debt securities issued by the U.S. Treasury
   and other U.S. government agencies                                  $     500      $     501                $1,899         $1,914
Debt securities issued by states and
    political subdivisions of the states                                   2,838          2,890                 2,813          2,969
Mortgage-backed securities                                                   519            513                   672            678
Other debt securities                                                        265            267                   265            270
                                                                       ---------      ---------             ---------      ---------
                                                                       $   4,122         $4,171                $5,675         $5,831
                                                                       =========         ======                ======         ======
</TABLE>


SECURITIES AVAILABLE-FOR-SALE

    Securities  available-for-sale  are shown in the Company's balance sheets at
fair value.  The unrealized gain or loss resulting from such valuation,  reduced
by the effect of income taxes, is reflected as a separately  disclosed component
of shareholders' equity.

<TABLE>
<CAPTION>
                                                                                JUNE 30, 1999                   DECEMBER 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Amortized                            Amortized
                                                                            Cost           Fair                  Cost           Fair
(AMOUNTS IN THOUSANDS)                                                     BASIS          VALUE                 BASIS          VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>                   <C>             <C>
Marketable equity securities                                          $ 16,993       $ 17,348             $  29,826      $  30,369
Debt securities issued by the U.S. Treasury
   and other U.S. government agencies                                   98,438         96,163               102,029        102,937
Debt securities issued by states and
   political subdivisions of states                                     13,067         12,833                13,186         13,417
Corporation debt securities                                             18,432         18,013                10,610         10,727
Asset-based securities                                                                                          986          1,019
Mortgage-backed securities                                              61,272         60,155                32,950         33,398
                                                                      --------       --------              --------       --------
                                                                      $208,202       $204,512              $189,587       $191,867
                                                                      ========       ========              ========       ========
</TABLE>


NONPERFORMING ASSETS

     Nonperforming  assets ("NPAs") are assets on which income  recognition,  in
the form of principal and/or interest, has either ceased or is limited,  thereby
reducing the Company's earnings. Maintaining a low level of NPAs is important to
the ongoing  success of NECB.  The  Company's  comprehensive  credit  review and
approval  process is critical  to the  ability to  minimize  NPAs on a long-term
basis.  In addition to the  negative  impact on net  interest  income and credit
losses,  NPAs also increase  operating expenses due to the costs associated with
collection efforts.

     NPAs  include  nonaccrual  loans  and other  real  estate  owned  ("OREO").
Generally,  loans are placed in nonaccrual status when they are past due greater
than ninety days or the  repayment of interest or principal is  considered to be
in doubt. OREO consists of properties acquired through foreclosure  proceedings.
These  properties are recorded at the lower of the carrying value of the related
loans or the estimated fair market value less estimated  selling costs.  Charges
to the allowance for loan losses are made to reduce the carrying amount of loans
to the fair market value of the properties less estimated  selling expenses upon
reclassification  as OREO.  Subsequent  reductions,  if needed,  are  charged to
operating  income.  In addition to NPAs, the asset quality of the Company can be
measured by the amount of the provision,  charge-offs and several credit quality
ratios presented in the discussion  concerning "Provision and Allowance for Loan
Losses."

                                   Page -16-
<PAGE>


<TABLE>
<CAPTION>
(Amounts in thousands)
                                                                                    JUNE 30, 1999                   DECEMBER 31,1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>                <C>            <C>
Nonaccrual loans                                                                        $   6,524                         $   5,340
OREO                                                                                        1,641                             1,636
                                                                                        ---------                         ---------
Total nonperforming assets                                                              $   8,165                         $   6,976
                                                                                        =========                         =========

Loans past due in excess of ninety days and accruing interest                           $     209                         $     977

Activity in Nonperforming Assets
(Amounts in thousands)

SIX MONTHS ENDING JUNE 30,                                                                                     1999         1998(A)
-----------------------------------------------------------------------------------------------------------------------------------
December 31, 1998 and 1997                                                                                   $7,241          13,034
    Additions                                                                                                 4,528           1,671
    Reductions:
      Payments                                                                                               (2,438)           (821)
      Charge-offs and writedowns                                                                               (345)         (3,602)
      Loans returned to accruing status                                                                        (235)           (323)
      Sales                                                                                                    (586)         (2,774)
                                                                                                          ---------       ---------
Ending Balance, June 30, 1999 and 1998                                                                    $   8,165       $   7,185
                                                                                                          =========       =========
</TABLE>

(a) The unusually  large decrease in  nonperforming  assets was primarily to the
bulk sale in March 1998.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

         NECB's  allowance  for loan losses  represents  amounts  available  for
future  credit  losses.  Management  continually  assesses  the  adequacy of the
allowance  for loan  losses in  response  to current  and  anticipated  economic
conditions,  specific problem loans,  historical net charge-offs and the overall
risk profile of the loan portfolio.  Management allocates specific allowances to
individual  problem  loans  based upon its  analysis of the  potential  for loss
perceived to exist related to such loans. In addition to the specific allowances
for  individual  loans,  a portion of the  allowance is  maintained as a general
allowance.   The  amount  of  the  general   allowance  is  determined   through
management's  analysis  of the  potential  for loss  inherent in those loans not
considered  problem  loans.  Among the factors  considered by management in this
analysis  are the  number and type of loans,  nature  and  amount of  collateral
pledged to secure such loans and current economic conditions.  The allowance for
loan losses is not a precise amount but is derived from  judgments  based on the
above factors.

     The following  table  summarizes the activity in the allowance for possible
loan losses for the  quarters  ended June 30, 1999 and 1998.  The  allowance  is
maintained  at a  level  consistent  with  identified  loss  potential  and  the
perceived risk in the portfolio.

                                   Page -17-
<PAGE>

(In thousands)
SIX MONTHS ENDED JUNE 30,                                 1999         1998
----------------------------------------------------------------------------
Balance beginning of period                             $10,092      $12,081
Provisions charged to operations                            333          805
Recoveries on loans previously charged-off                  369          430
Charge-offs taken in conjunction with bulk
  loan sale (i.e., specific allocated reserves)                       (1,392)
Loans charged-off                                          (512)      (1,756)
                                                        -------      -------
Balance end of period                                   $10,282      $10,168
                                                        =======      =======

CAPITAL

    The Company endeavors to maintain an optimal amount of capital upon which an
attractive  return to shareholders  will be realized over the short and long run
while meeting all regulatory requirements for minimum levels of capital.

    As of June 30, 1999, the Company exceeded all regulatory  capital ratios and
each of the banking  subsidiaries  were categorized as "well  capitalized."  The
various capital ratios of the Company for June 30, 1999 and 1998 were:

                               MINIMUM LEVEL        1999          1998
                               -------------        ----          ----
Total Risk-Based...............      8%            13.2%         14.5%

Tier 1 Risk-Based..............      4%            11.9%         13.2%

Leverage.......................      4%             8.6%          9.1%


LIQUIDITY

    It is Management's  objective to ensure the continuous  ability to meet cash
needs as they  arise.  Such  needs  may  occur  from time to time as a result of
seasonal declines in deposit levels,  response to changes in interest rates paid
on deposits and interest rates charged for loans and  fluctuations in the demand
for the  Banks'  various  loan  products.  Accordingly,  the  Company  maintains
liquidity that provides the  flexibility  to meet its cash needs.  The liquidity
objective is achieved  through the maintenance of readily  marketable  assets as
well as a balanced  flow of asset  maturities  and  prudent  pricing on loan and
deposit agreements. The Company has alternative sources of liquidity,  including
repurchase  agreements  and  lines  of  credits  provided  by the  FHLBB  to the
Subsidiaries,  which together  provide the Company with  flexibility in managing
its liquidity position.  The maturities of investment  securities and cash flows
from the  repayments  of  outstanding  loans are expected to provide the Company
with adequate liquidity over the coming months.

YEAR 2000 READINESS

    In  preparation for December 31, 1999, the Company has developed a Year 2000
Plan (the "Plan") which has been approved by Senior management and the Boards of
Directors of NECB and each of its subsidiaries. The Plan was developed using the
guidelines   outlined  in  a  report  by  the  Federal  Financial   Institutions
Examination  Council (FFIEC),  The Effect of Year 2000 on Computer Systems.  The
Company  assigned  responsibility  for the Plan to the Year 2000 Coordinator who
reports to the Board of  Directors.  The  Coordinator  chairs a committee of key
managers providing constant oversight to the process of Year 2000 readiness. The
committee  reviews all actions  related to the  implementation  of the Plan. The
Plan  recognizes  that  the  Company's  operating,   processing  and  accounting
operations are computer reliant and could be affected by the Year 2000.

     The  Company is reliant on both  in-house  and third party  vendors for its
computer  output and  processing,  as well as other  significant  functions  and
services (e.g., securities safekeeping services, securities pricing information,
etc.).  The  Coordinator  completed an inventory  and  assessment  of all of the
Company's mission critical systems and completed both the renovation and testing
phases  of the  project.  In terms of the  third  party  vendors,  the Year 2000
Coordinator  is continuing to work with those to assess and test their Year 2000
readiness.   Management   presently  believes  that  these  vendors  are  taking
appropriate  steps to modify  existing  software  and  hardware  to ensure  that
critical systems will function properly. The most significant hurdle the Company
has encountered in verifying and testing all mission critical

                                   Page -18-
<PAGE>

third parties is the limited ability the Company has to  independently  test the
preparedness of its telephone system and electric power  providers.  The Company
has identified 67 mission  critical  (without which the Company cannot  operate)
and necessary  (applications  that the Company can use for a moderate  amount of
time without  requiring  Year 2000  compliance)  applications  operated by third
party vendors.  The list is reviewed  regularly to include new  applications  or
remove  unnecessary   applications.   Of  such  mission  critical  and  critical
applications, the Company has been informed that substantially all are Year 2000
compliant.  While the Company  has  received  assurances  from these third party
vendors as to  compliance,  their  assurances  are not guarantees and may not be
enforceable.  Many of the Company's existing older contracts with the vendors do
not include Year 2000  certifications  or  warranties.  Thus,  in the event such
vendor's  products  and/or  services are not actually Year 2000  compliant,  the
Company's recourse may be limited.

    If any required  modifications and conversions are not properly made, or are
not completed on a timely basis, there can be no assurance that potential system
interruptions or unanticipated  additional  expense incurred to obtain Year 2000
compliance would not have a material  adverse effect on the Company's  business,
financial condition, results of operations and business prospects. Nevertheless,
the Company does not believe that the costs or the consequences of incomplete or
untimely  resolution of its Year 2000 problems  represent a known material event
or uncertainty that is reasonably likely to affect its future financial results,
or cause its  reported  financial  information  not to be  indicative  of future
operating results or future financial condition.

    The Year  2000  readiness  also  affects  a  certain  limited  number of the
Company's customers, particularly in the areas of access to funds and additional
expense  incurred  to achieve  compliance.  The  Company  has adopted a plan for
evaluating  and  assessing the level of Year 2000  preparedness  of its large or
commercial credit customers.  While no assurance can be given that the Company's
customers will be Year 2000 compliant, management has taken steps to verify that
they are  adequately  addressing  or that they are not faced with  material Year
2000  Problems.  The  Company's  credit risk related to the Year 2000 Problem is
mitigated by the fact that only a few of such  borrowers use networked  computer
systems  or  data  centers  to  conduct  their  operations.   In  addition,   in
substantially  all cases the credit extended to such borrowers is collateralized
by real estate which  inherently  minimizes the Company's  exposure in the event
that some  borrowers  do  experience  problems or delays in  becoming  Year 2000
compliant.  The Company has already begun to assess and make  accommodations for
addressing the liquidity  concerns that our regulators have raised.  These plans
may  include  the  off-site  retention  of  extra  cash,  lines of  credit,  and
additional liquid investment  vehicles to provide the ability to maintain smooth
operations in the event of abnormal  withdrawals of funds by consumers concerned
with the effect of the Year 2000.  In  addition,  the Company has embarked on an
extensive consumer education and awareness program regarding the Company's state
of preparedness.  The program includes multiple correspondence and communication
pieces,  in-branch  materials and the like. The Company has its own company-wide
Year  2000  contingency  plan.  The  Company  has had a  comprehensive  business
interruption and disaster recovery  contingency plan for many years. The plan is
continually  updated.  The Company has developed even more specific  contingency
plans which  address  operational  policies and  procedures in the event of data
processing,  electric power supply and/or telephone service failures  associated
with the Year 2000. Such  contingency  plans are designed to provide  documented
actions to allow the Company to maintain and/or resume normal  operations in the
event of any failure in mission  critical or critical  applications.  Such plans
identify participants,  processes and equipment that will be necessary to permit
the Company to continue  operations.  Such plans may include providing  off-line
system processing,  back-up electrical and telephone systems,  and other methods
to ensure the Company's ability to continue to operate.

    The direct costs of  modifications  to the existing  software and  hardware,
staffing,  customer  awareness  and other  issues for  completing  the Year 2000
project have been and will continue to be expensed as incurred.

FORWARD LOOKING STATEMENTS

     Certain  statements  contained  in this  Quarterly  Report  on  Form  10-Q,
including those contained in this Item 1, are forward looking  statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and are thus
prospective. Such forward looking statements are subject to risks, uncertainties
and other factors  which could cause actual  results to differ  materially  from
future results  expressed or implied by such  statements.  Such factors include,
but are not limited to: changes in interest rates,  regulation,  competition and
the local and regional economy.

                                   Page -19-
<PAGE>

Part II:   Other Information

Item 1.    Legal Proceedings - None

Item 2.    Changes in Securities - None

Item 3.    Default Upon Senior Securities - None

Item 4.    Submission of Matters to a Vote of Security Holders - None

Item 5.    Other Information - None

Item 6.    Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a)      Exhibits
                  Exhibit Number                              Exhibit
                    27                                 Financial Data Schedule


                                   Page -20-
<PAGE>
                       NEW ENGLAND COMMUNITY BANCORP, INC.



                                   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.


                                             NEW ENGLAND COMMUNITY BANCORP, INC.
                                             -----------------------------------


Date:  August 14, 1999          By:
                                    --------------------------------------------
                                    Anson C. Hall
                                    Vice President and Treasurer

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