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 September 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 October
31, 1999 was 6,935,311.







The total number of pages in this report is 19.


                                    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--September 30, 1999 (unaudited) and
                December 31, 1998                                                                                          3

                Consolidated Statements of Income--three and nine months ended September 30, 1999
                and 1998 (unaudited)                                                                                       4

                Consolidated Statements of Cash Flows--nine months ended September 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                                                                                         16
 Item 1.        Legal Proceedings                                                                                         16
 Item 2.        Changes in Securities                                                                                     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, Financial Statement Schedules and Reports on Form 8-K                                           17

                SIGNATURES                                                                                                18
</TABLE>


                                    Page -2-
<PAGE>



                          Part I--FINANCIAL INFORMATION

                          Item 1. Financial Statements

                       NEW ENGLAND COMMUNITY BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                             September 30,            December 31,
                                                                                                      1999                    1998
(thousands of dollars)                                                                         (Unaudited)

<S>                                                                                            <C>                     <C>
ASSETS:
     Cash and due from banks                                                                   $    36,737             $    39,279
     Short-term investments                                                                          5,849                  12,080
     Federal funds sold                                                                             19,750                   1,485
                                                                                               -----------             -----------
        Cash and cash equivalents                                                                   62,336                  52,844
     Interest bearing deposits with banks                                                              595                     694
     Securities held-to-maturity                                                                     4,207                   5,675
     Securities available-for-sale                                                                 185,992                 191,867
     Federal Home Loan Bank stock, at cost                                                           5,020                   4,881

     Loans outstanding                                                                             516,618                 515,980
        Less: allowance for possible loan losses                                                   (10,204)                (10,092)
                                                                                               -----------             -----------
           Net loans                                                                               506,414                 505,888
     Loans held-for-sale                                                                             2,937                   7,721
     Premises and equipment                                                                         13,181                  13,932
     Other real estate owned                                                                         1,680                   1,636
     Goodwill                                                                                        4,552                   4,847
     Other assets                                                                                   25,712                  13,902
                                                                                               -----------             -----------
Total Assets                                                                                   $   812,626             $   803,887
                                                                                               ===========             ===========

LIABILITIES:
     Deposits:
        Noninterest bearing                                                                    $   142,434             $   160,876
        Interest bearing                                                                           469,147                 503,202
                                                                                               -----------             -----------
           Total deposits                                                                          611,581                 664,078
     Short-term borrowings                                                                         101,117                  34,848
     Long-term debt                                                                                 25,585                  27,279
     Other liabilities                                                                               3,184                   4,332
                                                                                               -----------             -----------
Total Liabilities                                                                                  741,467                 730,537

SHAREHOLDERS' EQUITY:
     Common stock, $0.10 par value, authorized 20,000,000 shares:
       September 30, 1999,  7,064,000 outstanding;
       December 31, 1998,  7,031,000 outstanding                                                       706                     703
     Additional paid-in capital                                                                     61,614                  61,811
     Retained earnings                                                                              14,060                   9,452
     Treasury Stock -September 30, 1999, 136,000 shares                                             (2,681)
     Net unrealized gain (loss) on securities available-for-sale                                    (2,540)                  1,384
                                                                                               -----------             -----------
Total Shareholders' Equity                                                                          71,159                  73,350
                                                                                               -----------             -----------
Total Liabilities & Shareholders' Equity                                                       $   812,626             $   803,887
                                                                                               ===========             ===========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                    Page -3-
<PAGE>



                       NEW ENGLAND COMMUNITY BANCORP, INC.
                   CONSOLIDATED INCOME STATEMENTS (Unaudited)

<TABLE>
<CAPTION>
                                                                             Nine Months Ended                 Three Months Ended
                                                                                September 30,                      September 30,
(thousands of dollars; except per share data)                               1999             1998              1999             1998
====================================================================================================================================
<S>                                                                    <C>              <C>                <C>               <C>
INTEREST INCOME:
     Loans, including fees                                             $  33,124        $  36,027           $10,974          $11,829
     Securities:
         Taxable interest                                                  7,651            8,192             2,614            2,727
         Interest exempt from federal income taxes                           551              339               185              200
         Dividends                                                           811              138               250               47
     Federal funds sold and other interest                                   620              327               317               99
                                                                       ---------        ---------          --------          -------
         Total interest income                                            42,757           45,023            14,340           14,902

INTEREST EXPENSE:
     Deposits                                                             12,074           15,229             3,899            4,938
     Borrowed funds                                                        3,007            1,984             1,217              755
                                                                       ---------        ---------          --------          -------
         Total interest expense                                           15,081           17,213             5,116            5,693

Net interest income                                                       27,676           27,810             9,224            9,209
Provision for possible loan losses                                           478            1,192               145              387
                                                                       ---------        ---------          --------          -------
Net interest income after provision for possible loan losses              27,198           26,618             9,079            8,822

NONINTEREST INCOME:
     Service charges, fees and commissions                                 3,304            3,047             1,098            1,013
     Investment securities gains, net                                        (67)           1,504              (566)              87
     Mortgage banking revenues                                             2,312            2,280               653              913
     Other                                                                   193              211                68               46
                                                                       ---------        ---------          --------          -------
         Total noninterest income                                          5,742            7,042             1,253            2,059

NONINTEREST EXPENSE:
     Salaries and employee benefits                                       11,546           11,749             3,708            3,942
     Occupancy                                                             2,196            2,086               717              675
     Furniture and equipment                                               1,500            1,474               473              487
     Outside services                                                      1,129            1,571               349              573
     Postage and supplies                                                    923              854               275              242
     Losses, writedowns, expenses - other real estate owned                  168             (100)               22               14
     Amortization of goodwill                                                354              294               119               99
     Loss on sale of portfolio loans                                                          715
     Mergers & restructuring provisions                                      600            3,593                75            3,593
     Other                                                                 4,458            3,082             1,301              750
                                                                       ---------        ---------          --------          -------
         Total noninterest expense                                        22,874           25,318             7,039           10,375
                                                                       ---------        ---------          --------          -------
Income before taxes                                                       10,066            8,342             3,293              506
Income taxes                                                               3,477            3,637             1,049              426
                                                                       ---------        ---------          --------          -------
Net Income                                                             $   6,589        $   4,705          $  2,244          $    80
                                                                       =========        =========          ========          =======

Net income per share--Basic                                            $    0.95        $    0.67          $   0.32          $  0.01
Net income per share--Diluted                                          $    0.93        $    0.65              0.32          $  0.01

Weighted average shares of Common Stock outstanding--Basic                 6,940            7,046             6,915            7,038
Weighted average shares of Common Stock outstanding--Diluted               7,218            7,218             7,106            7,147
</TABLE>

        The accompanying notes are an integral part of these statements.



                                    Page -4-
<PAGE>



                       NEW ENGLAND COMMUNITY BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                              Nine Months Ended
                                                                                                                September 30,
(thousands of dollars)                                                                                   1999                  1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>                   <C>
OPERATING ACTIVITIES:
     Net income                                                                                     $   6,589             $   4,705
     Adjustment for noncash charges (credits):
       Provision for depreciation and amortization                                                        786                 1,173
       Losses from sale or disposal and provisions to reduce the carrying value
          of other real estate owned, net                                                                 105                  (257)
       Securities gains, net                                                                              (67)               (1,504)
       Accretion of discounts and amortization of premiums on bonds, net                                  (72)                  189
       Amortization of goodwill and other intangibles                                                     354                   294
       Provision for possible loan losses                                                                 478                 1,192
       (Gain) loss on sale of portfolio loans, net                                                                              715
       (Increase) decrease other assets, net                                                           (7,485)               (1,479)
       Decrease (increase) in loans held-for-sale                                                      (4,784)               (7,033)
       (Decrease) increase in accrued interest payable and other liabilities, net                      (1,009)               (1,182)
                                                                                                    ---------             ---------
              Net cash provided by (used for) operating activities                                      4,463                (3,187)

FINANCING ACTIVITIES:
     Net decrease in noninterest-bearing accounts                                                     (18,442)               (8,020)
     Net decrease in interest-bearing accounts                                                        (34,055)              (29,333)
     Net increase in short-term borrowings                                                             66,269                10,522
     Net increase (decrease) in long-term borrowings                                                   (1,694)                7,340
     Proceeds from issuance of common stock                                                                                     437
     Purchases of common stock for treasury                                                            (2,681)
     Cash dividends paid                                                                               (2,524)               (1,595)
                                                                                                    ---------             ---------
              Net cash used for financing activities                                                   (6,873)              (20,649)

INVESTING ACTIVITIES:
     Loans originated, net of principal collections                                                    (2,358)               (2,604)
     Proceeds from sale of portfolio loans                                                                                   11,988
     Net (increase) decrease in interest-bearing time deposits                                             99                   (99)
     Purchases of Federal Home Loan Bank Stock                                                           (139)
     Purchases of securities available-for-sale                                                       (80,082)              (70,773)
     Proceeds from sales of securities available-for-sale                                              11,994                21,355
     Proceeds from maturities of securities available-for-sale                                         67,038                41,591
     Proceeds from maturities of securities held-to-maturity                                            1,468                 4,701
     Proceeds from sales of other real estate owned                                                       693                 3,123
     Purchases of premises and equipment, net                                                            (529)               (1,755)
     Sales of premises and equipment                                                                                             49
     Capitalization of expenditures on other real estate owned                                            (28)                 (275)
                                                                                                    ---------             ---------
              Net cash provided by (used for) investing activities                                     (1,844)                7,301
                                                                                                    ---------             ---------
     Increase (decrease) in cash and cash equivalents                                                   9,492               (16,535)
     Cash and cash equivalents, beginning of period                                                    52,844                61,315
                                                                                                    ---------             ---------
     Cash and cash equivalents, end of period                                                       $  62,336              $ 44,780
                                                                                                    =========              ========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                    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.



                                    Page -6-
<PAGE>



NOTE 3 - DISCLOSURE FOR STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S>                                                                        <C>                 <C>
Schedule of noncash investing and financing activities:
     Loans charged off, net of recoveries                                  $366                $2,981
     Real estate acquired through foreclosure                               814                 1,331
     Income tax paid                                                      3,793                 3,097
     Interest paid                                                       13,766                14,612
</TABLE>

                          Part I--FINANCIAL INFORMATION

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

RECENT EVENTS

     On June 30, 1999, NECB Board of Directors approved an agreement and plan of
merger with Webster  Financial Corp.,  Waterbury,  Connecticut.  Shareholders of
record  September 24, 1999 were sent a proxy on or about October 4, 1999. At the
special  meeting  of  shareholders  held  November  9,  1999 a  majority  of the
outstanding  voting  shares of NECB voted in favor of the proposed  transaction.
Pending final approval from the Office of Thrift Supervision, the transaction is
expected to be completed before year-end.

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  serviced loan  portfolio.  As noted in Note 2 above,
the  acquisitions  of Olde Port and South Windsor were accounted for as poolings
of interests. As such, all prior period results have been restated as though the
companies had been combined as of the earliest periods presented.

     NECB  reported  net income for the  quarter  ended  September  30,  1999 of
$2,244,000  or  $$0.32  per  share  (diluted).  While  this  is an  increase  of
$2,164,000  from the $80,000 or $0.01 per share reported in the third quarter of
1998,  several special actions  occurred to create this unusual result.  In 1998
the Company  incurred a significant  merger  related charge and in 1999 selected
fixed rate  investments  were sold at a loss.  Adjusted to exclude these actions
and their related tax affect,  net income for the quarter is $2,659,000 or $0.37
per share (diluted) compared to $2,707,000, or $0.38 per diluted share, reported
in the same quarter of 1998. This is a decrease of $48,000 or 2%.

     The onetime  charges in 1998 related to the  acquisitions  of Olde Port and
South Windsor  amounted to $2,627,000,  net of related tax benefits.  Charges to
net income for mergers and acquisitions  result from post-closing  restructuring
costs and costs associated with completing the transactions--including fees paid
to  advisors,   attorneys  and  expenses   related  to  proxy  and  registration
statements.  For the third quarter of 1999,  special  charges were $340,000 from
the sale of investments and $75,000 related to the pending  acquisition,  net of
related tax benefit. These events are summarized below:

<TABLE>
<CAPTION>
(Amounts in thousands)

Quarter-ended September 30,                                               1999              1998
-------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>
  Results as reported.........................................        $    2,244       $       80
    Plus:
          loss from sale of bonds (net of related tax benefit)               340
          merger related charges (net of related tax benefit)                 75            2,627
                                                                      ----------       ----------
      Net income from operations..............................        $    2,659       $    2,707
                                                                      ==========       ==========
</TABLE>


     Through  the first  nine  months of 1999,  returns  on  average  assets and
average  equity for the nine  months  ended  September  30,  1998 were 1.24% and
13.66%, respectively,  compared to 1.15% and 12.22%, respectively,  for the same
period a year earlier.  Including the onetime  charges,  net income  amounted to
$4,705,000,  or $0.65 per diluted share,  compared to  $4,769,000,  or $0.69 per
diluted share, during the same period last year.

     During  the first  nine  months  of 1999,  net  interest  income on a fully
taxable-equivalent  basis totaled  $28,121,000  compared to $28,162,000 in 1998.
Provisions for loan losses were reduced to $478,000 from  $1,192,000  during the
same period in 1998.



                                    Page -7-
<PAGE>

Noninterest  income  decreased  $1,300,000,  from the previous year's total, and
amounted to  $5,742,000.  Gains from the sale of  securities  which  amounted to
$1,504,000  in 1998 were replaced by a modest loss of $67,000 for the first nine
months of 1999. Mortgage banking revenues rose a modest $32,000 thus far in 1999
while core banking fees increased a strong 8.4% or $257,000. Noninterest expense
totaled  $22,874,000  in 1999  compared to  $25,318,000  in 1998.  The  decrease
primarily  resulted  from  decrease in merger and  acquisition  charges in 1999.
These  charges  amounted to $3,593,000 in 1998 and $600,000 in 1999. An $828,000
charge was taken early in 1999 related to the formation of a Passive  Investment
Corporation.  This  expense  has been offset by a reduction  in  provisions  for
Connecticut state income tax through September 30, 1999.

     Total  assets  at  September  30,  1999  were   $812,626,000   compared  to
$803,887,000  at December  31, 1998.  Loans  outstanding  at September  30, 1999
amounted to $516,618,000  compared to  $515,980,000 at December 31, 1998.  Total
deposits amounted to $611,581,000 at September 30, 1999 compared to $664,078,000
at December 31, 1998. Short-term borrowings (primarily repurchase agreements and
advances  from the  Federal  Home Loan Bank)  increased  substantially  totaling
$101,117,000 compared to $34,848,000 at December 31, 1998.

     Shareholders'  equity increased $2,191,000 from $73,350,000 at December 31,
1998 to $71,159,000 at  quarter-end.  At September 30, 1999, the ratio of equity
to total assets  equaled  8.76%.  When goodwill  resulting from the Equity Bank,
Manchester  State Bank and Community  Bank  acquisitions  is excluded,  tangible
equity capital is reduced to $66,607,000,or 8.24% of total assets. The resulting
tangible  book value per share  amounted to $9.61 at September 30, 1999 compared
to $9.74 at December 31, 1998.  The stock  repurchase  program  conducted in the
first quarter of 1999 resulted in a $0.20 per share reduction in net book value.


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

     The  provisions  for possible loan losses in the third quarter of 1999 were
$145,000  compared to $387,000 in the  comparable  period in 1998.  Despite this
reduction in provisions, the allowance for loan losses increased $112,000 during
the first  nine  months  of 1999.  The  absence  of  overall  growth in the loan
portfolio  and the high  quality  of the loan  portfolio  lessened  the need for
additional  funding.  The ratio of nonperforming  assets to total assets equaled
1.07% of total assets at September 30, 1999 compared to 0.87% a year earlier.

     Noninterest  income  declined  in the  third  quarter  of 1999 and  totaled
$1,253,000  compared to $2,059,000  in the third  quarter of 1998.  The $806,000
decrease  resulted  primarily  resulted from the $566,000 loss from the sales of
investment  securities and $260,000 decrease in mortgage banking  revenues.  The
securities  losses  resulted when  management sold selected lower yielding fixed
rate bonds to invest  the  proceeds  in higher  yielding  investments  currently
available in the market.  This followed the recent rise in market interest rates
following  the actions of the Federal Open Markets  Committee to increase  short
term  rates 25 basis  points on two  occasions  recently.  The  higher  yielding
investments are expected to increase  future interest  revenues by more than the
loss incurred. Mortgage banking revenues decreased following the announcement of
the merger with Webster  Financial as borrowers showed a reluctance to apply for
credit with the change pending.  This slowdown was followed  quickly by the loss
of several key  origination  staff which  further  added to the  slowdown.  Core
banking fees increase $85,000 during the quarter reflecting  continued growth in
sale of commercial banking services.

     Noninterest  expense  totaled  $7,039,000  in the  third  quarter  of  1999
compared to $10,375,000  in 1998.  The  $3,336,000  decrease is largely from the
absence   of   major   merger   and   acquisition   charges   in   1999.   Gross
acquisition-related  expense  totaled  $3,593,000 in the quarter ended September
30, 1998 compared to $75,000 in same period this year.  Excluding these charges,
and  other  non-operating  transactions  such  as the  costs  of  OREO  property
ownership  and the loss  resulting  from the sale of fixed  rate  bonds,  NECB's
efficiency  ratio equaled  61.1% for the third quarter of 1999 compared to 59.2%
for the same period in 1998. The efficiency  ratio measures how much a dollar of
revenue costs to produce.

     For the three months ended  September  30, 1999,  the Company  reported net
income of $2,244000,  or $0.32 per diluted share,  compared to $80,000, or $0.01
per diluted share, for the same period of 1998.


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.  Excess
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.



                                    Page -8-
<PAGE>



<TABLE>
<CAPTION>
(Amounts in thousands)

Three Months Ended September 30,                                              1999             1998             % Change
------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>               <C>                 <C>
Interest income (financial statements)                                      $ 14,340         $ 14,902            (3.8%)
Tax equivalent adjustment                                                        117              148           (20.9%)
                                                                            --------         --------
  Total interest income (on an FTE basis)                                     14,457           15,050            (3.9%)
Interest expense                                                              (5,116)          (5,693)          (10.1%)
                                                                            --------         --------
Net interest income (on an FTE basis)                                       $  9,341         $  9,357            (1.7%)
                                                                            ========         ========
</TABLE>

     For the third  quarter  of 1999,  net  interest  income on an FTE basis was
$9,341,000,  a 1.7% decrease over the  $9,357,000  in the  comparable  period in
1998.  NECB faced  intense  pressure  to reduce  interest  rates on both new and
existing  loans  throughout  much of 1999.  The impact upon the third quarter of
1999  was  minimized  by  increasing  the use of low  cost  borrowed  funds  and
expanding the size of the investment  portfolio resulting virtually no change in
the net interest income for the period compared to the year earlier. .

     The net interest margin is the ratio of net interest  income,  expressed on
on fully taxable  equivilent  basis,  and average  earning assets for the period
measured.  As shown  in the  table  below,  the  margin  for the  quarter  ended
September 30, 1999  decreased to 4.96% from 5.23% in 1998. The yield on the loan
portfolio  decreased  0.72% to 8.36% in the  quarter  ended  September  30, 1999
compared  to 9.08% for the same  period a year  ago.  The  average  yield on the
Company's  available-for-sale  investments  also decreased,  to 6.13% from 6.78%
last year. The average rate paid on  interest-bearing  liabilities  decreased 57
basis points and equaled 3.47% for the quarter ended September 30, 1999 compared
to 4.04% a year earlier.

CONSOLIDATED AVERAGE BALANCES/INTEREST EARNED OR PAID/RATES

<TABLE>
<CAPTION>
Three Months Ended                                                            September 30, 1999              September 30, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average            Average      Average             Average
(Amounts in thousands)                                                   Balance  Interest     Rate      Balance   Interest     Rate
<S>                                                                     <C>       <C>         <C>      <C>         <C>         <C>
ASSETS:
   Money market investments                                            $ 15,742       222     5.58%    $ 16,946    $   229     5.36%
   Investment securities
      Held-to-maturity                                                    2,987        58     7.76        6,523        128     7.79
      Available-for-sale                                                207,433     3,203     6.13      167,618      2,864     6.78
   Mortgages held for sale                                                4,974        91     7.26        7,890        130     6.54
   Loans (A)                                                            516,253    10,883     8.36      511,185     11,699     9.08
                                                                       --------   -------              --------    -------
      Total interest-earning assets                                     747,389    14,457     7.67%     710,162     15,050     8.41

   Allowance for loan losses                                            (10,212)                         (9,658)
   Cash and due from banks                                               30,768                          39,657
   Other assets                                                          35,128                          38,176
                                                                       --------                        --------
Total Assets                                                           $803,072                        $778,337
                                                                       ========                        ========

LIABILITIES:
   Regular savings deposits                                            $150,823      $802     2.11%    $160,693    $   959    2.37%
   NOW account deposits                                                  85,857       197     0.91       66,696        200    1.19
   Money market deposits                                                    691         6     3.45        2,052         13    2.51
                                                                       --------   -------              --------    -------
      Total savings deposits                                            237,370     1,005     1.68      229,441      1,172    2.03
   Time deposits                                                        240,949     2,894     4.77      275,064      3,766    5.43
   Short-term borrowings                                                 53,590       445     3.29       25,950        312    4.77
   Long-term borrowings                                                  52,514       772     5.83       28,140        443    6.25
                                                                       --------   -------              --------    -------
      Total interest-bearing liabilities                                584,422     5,116     3.47      558,595      5,693    4.04
   Demand deposits                                                      145,375                         136,936
   Other liabilities                                                      3,242                           9,425
                                                                       --------                        --------
      Total Liabilities                                                 733,039                         704,946
   Equity                                                                70,033                          73,391
                                                                       --------                        --------
Total Liabilities & Equity                                             $803,072                        $778,337
                                                                       ========                        ========

Net interest income--FTE basis                                                      $9,341                         $ 9,357
                                                                                    ======                         =======
Net interest margin                                                                           4.96%                           5.23%
Net interest spread                                                                           4.20%                           4.36%

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



                                    Page -9-
<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,  which  compares the three months ended
September 30, 1999 to September 30, 1998, is presented on a FTE basis.

<TABLE>
<CAPTION>
                                                                                                                 Change due to
                                                                                            Total                  Change in:
                                                                                         Increase         --------------------------
(amounts in thousands)                                                                 (Decrease)               Rate          Volume
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>               <C>               <C>
INTEREST EARNED ON:
Money market investments                                                                $     (7)         $      9          $   (16)
Investment securities
     Held to maturity                                                                        (70)               (1)             (69)
     Available for sale                                                                      339              (344)             683
Mortgages held for sale                                                                      (39)                9              (48)
Loans                                                                                       (816)             (933)             117
                                                                                        ---------         --------          -------
Total interest-earning assets                                                               (593)           (1,260)             667

INTEREST PAID ON:
Regular savings deposits                                                                $   (157)         $    (99)         $   (58)
NOW account deposits                                                                          (3)              (61)              58
Money market deposits                                                                         (7)                2               (9)
                                                                                        --------          --------          -------
     Total savings deposits                                                                 (167)             (158)              (9)
Time deposits                                                                               (872)             (408)            (464)
Short-term borrowings                                                                        133              (201)             334
Long-term borrowings                                                                         329               (55)             384
                                                                                        --------          ---------         -------
Total interest-bearing liabilities                                                          (577)             (822)             245
                                                                                        ---------         ---------         -------
Net interest income change                                                              $    (16)         $   (438)         $   422
                                                                                        =========         =========         =======
</TABLE>


NONINTEREST INCOME

     For the quarter ended  September 30, 1999,  noninterest  income amounted to
$1,253,000,  a decrease of $806,000  compared to the third quarter in 1998.  The
change was largely the result of a $566,000  loss  incurred on the sale of fixed
rate investments. This followed recent increases in market rates for such bonds.
The cash provided  from the sales can be reinvested at higher  current rates and
will result in  increased  earnings  in future  periods.  New England  Community
Mortgage  Corp.,  a wholly owned  subsidiary  of New England Bank  experienced a
significant reduction in volume of mortgages produced following the announcement
of the pending merger with Webster Bank. This reduced volume decreased  mortgage
revenues $250,000 to $653,000 for the quarter. Core banking fees rose $85,000 or
8% principally on increased sales of commercial banking services.


NONINTEREST EXPENSE

     Noninterest  expenses  amounted to  $7,039,000  during the third quarter of
1999. This is a $3,336,000  decrease,  or 32%, over $10,375,000  reported during
the same quarter in 1998. Of this decrease, $3,518,000 is related to charges for
mergers  and  acquisitions.   Excluding  these  charges,   noninterest  expenses
increased $182,000, or 2.6%, over the quarter ended September 30, 1998.


RESULTS OF OPERATIONS--NINE MONTHS ENDED SEPTEMBER 30, 1999

     Through  the  first  nine  months  of 1999,  NECB  reported  net  income of
$6,589,000  or $0.95  diluted  share,  an  increase  of  $1,884,000  compared to
$4,705,000 or $0.67 per diluted  share for the same period last year.  These two
periods  were  afffected  by special  events  not  ordinarily  included  in bank
operations.  As the following table shows, when these  transactions are excluded
he net operating income through September 30, 1999 is $7,529,000, an increase of
$197,000 or 2.7% from the previous year.


                                   Page -10-
<PAGE>

<TABLE>
<CAPTION>
         Nine months ended September 30,                         1999              1998
         ---------------------------------------------------------------------------------
<S>                                                           <C>               <C>
                  Net income                                  $ 6,589           $ 4,705
                  Acquisition Charges                                             2,627
                  Merger with Webster                             600
                  Bond Sale                                       340
                                                              -------           -------
                  Net operating income                        $ 7,529           $ 7,332
                                                              =======           =======

Earning per share - Diluted                                   $  1.04           $  1.02
</TABLE>


The  increase in net income and earnings  per share  reflected in this  analysis
during the first nine months of 1999 includes the new revenues and cost  savings
achieved in  conjunction  with the Company's  acquisitions  and strong growth in
noninterest  income.  In  particular,  gains from the sale of mortgage loans and
gains from  investment  securities  rose sharply  compared to the previous year.
Provisions for loan losses decreased  modestly from 1997 and totaled  $1,192,000
in 1998  compared to  $1,327,000 a year  earlier.  Noninterest  expense  totaled
$25,318,000  in 1999  compared to  $20,521,000  in 1998.  Including  the onetime
charges, net income amounted to $4,705,000, or $0.67 per diluted share, compared
to $4,769,000, or $0.69 per diluted share, during the same period last year.

     During  the first  nine  months  of 1999,  net  interest  income on a fully
taxable-equivalent  basis decreased $41,000 and totaled $28,121,000  compared to
$28,162,000 in 1998.



                                   Page -11-
<PAGE>



<TABLE>
<CAPTION>
Net Interest Income
(amounts in thousands)

Nine Months Ended September 30,                                                1999             1998            % Change
------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                <C>              <C>
Interest income (financial statements)                                       $42,757            $45,023          (5.03)%
Tax equivalent adjustment                                                        445                352          26.42%
                                                                           ---------          ---------
Total interest income (on an FTE basis)                                       43,202             45,375          (4.79)%
Interest expense                                                             (15,081)           (17,213)        (12.39)%
                                                                           ---------          ---------
Net interest income (fully taxable equivalent)                             $  28,121          $  28,162          (0.15)%
                                                                           =========          =========
</TABLE>

NONINTEREST INCOME

     Through  the  first  nine  months  of 1999,  noninterest  income  decreased
$1,300,000 and totaled $5,742,000,  compared to $7,042,000 reported for the same
period in 1998.  During the first nine months of 1999, NECB realized a loss from
the sales of securities of $67,000, including the $566,000 loss discussed in the
third quarter.  This compared to gains of $1,504,000  through September 30, 1998
which included a gain of $898,000 from the sale of investment  securities  owned
by the parent company.

     Service  charges,  fees  and  commissions  also  increased   substantially,
totaling  $3,304,000  through the nine month period  ending  September 30, 1999.
This  represents  a  $257,000,  or 8.4%,  increase  compared  to the  $3,047,000
recorded  through the first nine months of 1998.  Increased sales volume of core
banking products,  especially  commercial  product sales, was chiefly the reason
for this increase.

NONINTEREST EXPENSE

     Noninterest  expenses amounted to $22,874,000  during the first nine months
of 1999 compared to  $25,318,000  for the same period in 1998.  During 1998 NECB
incurred merger related charges  $3,593,000  related to the acquisitions of Bank
of South Windsor and Olde Port Bank.  Generally  recurring expenses were flat to
lower  in  1999  reflecting   NECB's  ability  to  extract   benefits  from  its
acquisitions as scale economies and other efficiencies are achieved. This result
is especially  important when considering the expanded facilities  undertaken in
1999. These included Olde Port's first branch office, in Hampton, New Hampshire,
the  mortgage   company's  new  operations  in  New  Hampshire  and  Middlebury,
Connecticut.  NECB also  continued to invest in new  equipment  and  technology,
doubling item processing  capability and network  upgrades to increase  customer
service  capability.  Like all banking  organizations and most businesses,  NECB
also  invested  time and  resources in testing and  upgrading  equipment for Y2K
readiness.

FINANCIAL CONDITION

     Total  assets at  September  30, 1999 stood  at  $812,626,000,  compared to
$803,887,000 at year-end.  During the first nine months of 1999. These loans are
typically  sold in the secondary  market upon closing and, as such, do not serve
to increase  loans  outstanding.  With the downward  trend in interest  rates in
1998--the majority of which occurred in third quarter--the Company experienced a
moderate rise in prepayments which was accurately  forecasted by NECB's internal
interest  rate risk  models.  Loan demand  typically  softens  during the summer
months,  and this taken  together with increased  prepayments,  served to reduce
loans  outstanding.  On a year to date  basis,  when the effect of the March 30,
1998 bulk loan sale is excluded,  loans  outstanding  decreased  by  $2,438,000.
Loans consisted of the following:

<TABLE>
<CAPTION>
 (Amounts in thousands)
                                                                              September 30,    December 31,
                                                                                  1999             1998
<S>                                                                          <C>               <C>
Commercial and financial                                                     $   151,531       $   146,962
Real estate:
    Construction                                                                  18,820            23,862
    Residential                                                                  110,712           123,446
    Commercial                                                                   196,329           176,139
Consumer                                                                          39,226            45,571
                                                                             -----------       -----------
Gross loans outstanding                                                      $   516,618       $   515,980
                                                                             ===========       ===========
</TABLE>


     Securities  available-for-sale  decreased  from December 31, 1998 and ended
the third quarter at  $185,992,000  and  held-to-maturity  decreased and totaled
$4,207,000 at quarter end.

     Federal funds and short term investment  increased  $12,034,000 and totaled
$25,599,000 at quarter-end compared to $13,565,000 at December 31, 1998. Federal
funds, are overnight loans to other banks,  and short term  investments  include
investments  such as



                                   Page -12-
<PAGE>

money market funds, Commercial paper, and money market preferred stock. Together
these funds represent  excess reserves and are the Company's most liquid assets.
As such they are available to meet short-term cash flow needs of the Company and
its customers.

     Other real estate owned was virtually unchanged at $1,680,000,  or 0.21% of
total assets,  at September  30, 1999.  During the first nine months of the year
the Company acquired properties with a value of $814,000 through foreclosure and
disposed of properties with a market value of $693,000.

     Total  deposits,  which  constitute  the  principal  funding  source of the
Company's assets,  decreased  $52,497,000 from December 31, 1997 and amounted to
$611,581,000 at September 30, 1999. This decrease occurred principally in higher
cost time deposits with  relatively  short  maturities.  The deposits  decreased
approximately  $34,000,000 since the start of the year while noninterest bearing
transaction accounts decreased approximately  $18,000,000 from the year-end high
$160,000,000 to $142,000,000 at September 30, 1999.  NECB's  noninterest-bearing
transaction accounts historically achieve their highest levels at year-end.

     Total  shareholders'  equity was  $71,159,000  at September  30,  1999,  an
decrease  of  $2,191,000  over  December  31,  1998.  Equity  was  increased  by
$6,589,000  in net  income  and  $349,000  from  issuance  of  common  stock  in
conjunction  with employee  benefit  plans.  Equity was reduced by $2,524,000 in
dividends paid to shareholders, $3,924,000 from the change in unrealized holding
gains on securities  available-for-sale,  and $2,681,000  from the repurchase of
$135,500 of common stock now held in the Treasury.

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  $5,675,000  at December 31, 1998 to $4,207,000 at September 30,
1999.

<TABLE>
<CAPTION>
                                                                           September 30, 1999                   December 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Amortized                            Amortized
                                                                            Cost           Fair                  Cost           Fair
(Amounts in thousands)                                                     Basis          Value                 Basis          Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                                                 <C>
Debt securities issued by the U.S. Treasury
   and other U.S. government agencies                                  $              $                     $   1,899      $   1,914
Debt securities issued by states and
    political subdivisions of the states                                   2,838          2,881                 2,813          2,969
Mortgage-backed securities                                                   509            500                   672            678
Other debt securities                                                        860            862                   265            270
                                                                       ---------      ---------             ---------      ---------
                                                                       $   4,207      $   4,243             $   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.  At September 30, 1999,  the net  unrealized  loss on
securities  available-for-sale  was  $4,116,000,  while at December 31, 1998 the
unrealized  gain was  $2,181,000.  As shown in the table below,  investments  in
securities  available-for-sale totaled $185,992,000 at September 30, 1999 versus
$191,867,000 at December 31, 1998:



                                   Page -13-
<PAGE>



<TABLE>
<CAPTION>
                                                                           September 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                                          $   13,077     $   12,924            $   29,826     $   30,369
Debt securities issued by the U.S. Treasury
   and other U.S. government agencies                                     99,494         94,029               102,029        102,937
Debt securities issued by states and political sub-divisions                   0              0                13,186         13,417
Corporation debt securities                                               16,648         16,206                10,610         10,727
Asset-based securities                                                    13,409         13,066                   986          1,019
Mortgage-backed securities                                                50,480         49,767                32,950         33,398
                                                                      ----------     ----------            ----------     ----------
                                                                      $  190,108     $  185,992            $  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."

<TABLE>
<CAPTION>
(Amounts in thousands)
                                                                               September 30, 1999                   December 31,1998
<S>                                                                                    <C>                             <C>
Nonaccrual loans                                                                       $    7,151                      $    5,340
OREO                                                                                        1,680                           1,636
                                                                                       ----------                      ----------
Total nonperforming assets                                                             $    8,831                      $    6,976
                                                                                       ==========                      ==========

Loans past due in excess of ninety days and accruing interest                          $       60                      $      977
</TABLE>

     NPAs  increased  $1,855,000  or 27% in the nine months ended  September 30,
1999.  Significantly,  at  quarter-end  NPAs  represented  1.09 percent of total
assets  compared to 0.87  percent of total  assets at December  31,  1998.  This
increase in nonperforming assets primarily resulted from

     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 possible  loan losses are made to reduce the  carrying  amount of
such loans to the fair market value of the  properties  less  estimated  selling
expenses upon reclassification as OREO. Subsequent  reductions,  when necessary,
are charged to operating income.



                                   Page -14-
<PAGE>



<TABLE>
<CAPTION>
Activity in Nonperforming Assets
(Amounts in thousands)
Nine Months ending September 30,                                                                              1999             1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                         <C>           <C>
December 31, 1998 and 1997                                                                                  $6,976        $  13,034
    Additions                                                                                                6,173            7,044
    Reductions:
       Loans returned to performing status                                                                    (362)
      Payments                                                                                              (2,324)            (868)
      Charge-offs and writedowns                                                                              (939)          (4,056)
      Sales, net                                                                                              (693)          (7,449)
                                                                                                         ---------        ---------
Ending Balance, September 30, 1999 and 1998                                                                 $8,831        $   7,735
                                                                                                            ======        =========
</TABLE>

PROVISION AND ALLOWANCE FOR LOAN POSSIBLE LOSSES

     NECB's allowance for possible 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
possible 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 September 30, 1999 and 1998. The allowance is
maintained  at a  level  consistent  with  identified  loss  potential  and  the
perceived risk in the portfolio.

<TABLE>
<CAPTION>
(In thousands)
Nine Months Ended September 30,                                                                             1999               1998
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                     <C>              <C>
Balance beginning of period                                                                             $ 10,092         $  12,081
Provisions charged to operations                                                                             478             1,192
Recoveries on loans previously charged-off                                                                   468               675
Charge-offs taken in conjunction with bulk loan sale (i.e., specific allocated reserves)                                    (1,392)
Loans charged-off                                                                                           (834)           (2,264)
                                                                                                        --------         ---------
Balance end of period                                                                                   $ 10,204         $  10,292
                                                                                                        ========         =========
</TABLE>

     Provisions  for possible loan losses  charged to  operations  for the first
nine months of 1999 were $478,000  compared to $1,192,000 for the same period in
1998. During the nine-month  period,  total charge-offs  decreased by $3,822,000
due to the  bulk  sale in 1998  and the  overall  improved  quality  of the loan
portfolio.

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

<TABLE>
<CAPTION>
                                                      Minimum Level                 1999                       1998
                                                      -------------                 ----                       ----
<S>                                                         <C>                    <C>                       <C>
Total Risk-Based............................                8%                     13.44%                    13.31%

Tier 1 Risk-Based...........................                4%                     12.18%                    12.06%

Leverage....................................                4%                      8.64%                     8.37%
</TABLE>


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



                                   Page -15-
<PAGE>

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 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.  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  completed  its  assessment  and made  accommodations  for
addressing the liquidity  concerns that our regulators have raised.  These plans
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  completed an extensive
consumer  education and  awareness  program  regarding  the  Company's  state of
preparedness.  The program included  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 express 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 -16-
<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 -17-
<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: November 10, 1999                      By:    s/s Anson C. Hal
                                             -----------------------------------
                                                    Anson C. Hall
                                                    Vice President and Treasurer



                                   Page -18-