<PAGE>



FORM 10-Q
--------------------------------------------------------------------------------

United States Securities and Exchange Commission
Washington, DC 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
 of 1934
For the Quarterly Period Ended September 30, 2001
Commission File Number 001-13405

ALLIANCE BANCORP OF NEW ENGLAND, INC.

Incorporated in the State of Delaware
IRS Employer Identification Number 06-1495617
Address and Telephone:
       348 Hartford Turnpike, Vernon, Connecticut 06066, (860) 875-2500

Securities registered pursuant to Section 12(b) of the Act: Common Stock -- $.01
par value, which is registered on the American Stock Exchange.

Alliance Bancorp of New England (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days.

As of November 10, 2001, Alliance Bancorp of New England had 2,337,100 shares of
common stock outstanding.

TABLE OF CONTENTS                                                           Page

Table       Consolidated Selected Financial Data..............................2
Part I      Financial Information
Item 1      Financial Statements
                Consolidated Balance Sheets...................................3
                Consolidated Income Statements................................4
                Consolidated Statements of Changes in Shareholders' Equity....5
                Consolidated Statements of Cash Flows.........................6
                Notes to Consolidated Financial Statements....................7
Item 2      Management's Discussion and Analysis
                of Financial Condition and Results of Operations.............10
                Special Note Regarding Forward-Looking Statements............10
Item 3      Quantitative and Qualitative Disclosures About Market Risk.......14
Part II     Other Information................................................16
Table       Average Balance Sheet and Interest Rates ........................17
Signatures  .................................................................18



Alliance Bancorp of New England, Inc.            1           Third Quarter, 2001

<PAGE>



                      Alliance Bancorp of New England, Inc.
                Consolidated Selected Financial Data (Unaudited)
<TABLE>
<CAPTION>


                                                          As of and for the three months    As of and for the nine months
                                                                ended September 30,              ended September 30,
                                                          -----------------------------------------------------------------
                                                                 2001            2000            2001             2000
---------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>              <C>             <C>              <C>
For the Period (in thousands)
Net interest income                                           $  2,974         $  3,144        $  9,073         $  8,857
Provision for loan losses                                           75               92             209              234
Service charges and other income                                   385              352           1,114            1,076
Net gain (loss) on securities and assets                             7              (84)            (33)             (15)
Non-interest expense                                             2,195            2,168           6,474            6,411
Net income                                                    $    821         $    814        $  2,468         $  2,381
---------------------------------------------------------------------------------------------------------------------------
Per Share
Earnings - basic                                              $   0.35         $   0.35        $   1.06         $   1.03
Earnings - diluted                                                0.34             0.34            1.03             1.01
Dividends declared                                                0.075            0.07            0.225            0.20
Book value                                                        9.33             6.96            9.33             6.96
Common stock price:
High                                                             14.00             9.38           14.00             9.38
Low                                                              11.80             6.50            8.37             6.50
Close                                                            11.90             9.13           11.90             9.13
---------------------------------------------------------------------------------------------------------------------------
At Period End (in millions)
Total assets                                                  $  374.6         $  340.9        $  374.6         $  340.9
Total loans                                                      249.6            221.7           249.6            221.7
Other earning assets                                             102.5             96.9           102.5             96.9
Deposits                                                         302.6            272.5           302.6            272.5
Borrowings                                                        48.5             50.1            48.5             50.1
Shareholders' equity (a)                                          21.8             16.2            21.8             16.2
---------------------------------------------------------------------------------------------------------------------------
Operating Ratios (in percent)
Return on average equity, annualized                             15.16%           21.18%          16.59%           20.69%
Return on average assets, annualized                              0.89             0.97            0.93             0.97
Net interest margin, annualized (b)                               3.56             4.15            3.74             4.05
Equity % total assets (period end)                                5.82             4.76            5.82             4.76
Dividend payout ratio                                            21.33            20.05           21.27            19.49
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(a)  Shareholders' equity includes accumulated other comprehensive income
     (loss), which consists of unrealized gains (losses) on investment
     securities, net of taxes.
(b)  Ratio expressed as fully taxable equivalent.

Alliance Bancorp of New England, Inc.            2           Third Quarter, 2001



<PAGE>


                      Alliance Bancorp of New England, Inc.
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                       September 30, 2001     December 31, 2000
(in thousands except share data)                                          (Unaudited)             (Audited)
--------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                     <C>
Assets
     Cash and due from banks                                                 $  12,195               $  10,684
     Short-term investments                                                     19,230                  19,503
--------------------------------------------------------------------------------------------------------------
         Total cash and cash equivalents                                        31,425                  30,187

     Securities available for sale (at fair value)                              69,917                  53,392

     Securities held to maturity (at amortized cost),
         fair value of $13,138 in 2001 and $22,188 in 2000                      13,357                  23,013

     Residential mortgage loans                                                 61,947                  58,280
     Commercial mortgage loans                                                  77,962                  73,865
     Other commercial loans                                                     41,284                  38,706
     Consumer loans                                                             39,122                  35,679
     Government guaranteed loans                                                29,262                  21,794
--------------------------------------------------------------------------------------------------------------
         Total loans                                                           249,577                 228,324
     Less: Allowance for loan losses                                            (3,615)                 (3,400)
--------------------------------------------------------------------------------------------------------------
         Net loans                                                             245,962                 224,924

     Premises and equipment, net                                                 5,505                   5,834
     Foreclosed assets, net                                                         --                      --
     Accrued interest income receivable                                          2,958                   3,189
     Cash surrender value of life insurance                                      2,860                   2,745
     Other assets                                                                2,622                   4,894
--------------------------------------------------------------------------------------------------------------
         Total assets                                                        $ 374,606               $ 348,178
==============================================================================================================

Liabilities and Shareholders' Equity
     Demand deposits                                                         $  32,534               $  30,293
     NOW deposits                                                               32,788                  32,033
     Money market deposits                                                      42,750                  38,716
     Savings deposits                                                           53,123                  46,849
     Time deposits                                                             141,413                 132,625
--------------------------------------------------------------------------------------------------------------
         Total deposits                                                        302,608                 280,516

     Borrowings                                                                 48,500                  46,700
     Other liabilities                                                           1,690                   2,847
--------------------------------------------------------------------------------------------------------------
         Total liabilities                                                     352,798                 330,063

     Preferred stock ( $.01 par value; 100,000 shares
         authorized, none issued)                                                   --                      --
     Common stock ($.01 par value; authorized 4,000,000
         shares; issued 2,537,699 in 2001 and 2,531,699 in 2000;
         outstanding 2,337,100 in 2001 and 2,331,100 in 2000)                       25                      25
     Additional paid-in capital                                                 11,566                  11,516
     Retained earnings                                                          16,142                  14,198
     Accumulated other comprehensive loss, net                                  (2,816)                 (4,515)
     Treasury stock (200,599 shares)                                            (3,109)                 (3,109)
--------------------------------------------------------------------------------------------------------------
         Total shareholders' equity                                             21,808                  18,115
--------------------------------------------------------------------------------------------------------------
         Total liabilities and shareholders' equity                          $ 374,606               $ 348,178
==============================================================================================================

</TABLE>

See accompanying notes to consolidated financial statements
Alliance Bancorp of New England, Inc.            3           Third Quarter, 2001



<PAGE>



                      Alliance Bancorp of New England, Inc.
                   Consolidated Income Statements (Unaudited)
<TABLE>
<CAPTION>

                                                                  Three Months Ended                 Nine Months Ended
                                                                    September 30,                      September 30,
                                                          --------------------------------------------------------------------
(in thousands except share data)                                 2001             2000             2001              2000
------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>              <C>             <C>             <C>
Interest Income
     Loans                                                  $   4,708        $   4,647        $  14,340         $  12,671
     Debt securities                                            1,276            1,258            3,834             3,826
     Dividends on equity securities                               229              273              743               826
     Short-term investments                                       144              289              310               812
------------------------------------------------------------------------------------------------------------------------------
         Total interest and dividend income                     6,357            6,467           19,227            18,135
------------------------------------------------------------------------------------------------------------------------------

Interest Expense
     Deposits                                                   2,624            2,604            7,982             7,325
     Borrowings                                                   759              719            2,172             1,953
------------------------------------------------------------------------------------------------------------------------------
         Total interest expense                                 3,383            3,323           10,154             9,278
------------------------------------------------------------------------------------------------------------------------------

Net Interest Income                                             2,974            3,144            9,073             8,857

Provision For Loan Losses                                          75               92              209               234
------------------------------------------------------------------------------------------------------------------------------
     Net interest income after provision for loan losses        2,899            3,052            8,864             8,623

Non-Interest Income
     Service charges and other income                             385              352            1,114             1,076
     Net gain (loss) on securities                                  7              (84)             (42)               20
     Net gain (loss) on assets                                      -                -                9               (35)
------------------------------------------------------------------------------------------------------------------------------
         Total non-interest income                                392              268            1,081             1,061

Non-Interest Expense
     Compensation and benefits                                  1,207            1,205            3,496             3,499
     Occupancy                                                    180              175              520               525
     Data processing services and equipment                       265              322              788               886
     Office and insurance                                         145              128              414               400
     Purchased services                                           213              194              724               580
     Other                                                        185              144              532               521
------------------------------------------------------------------------------------------------------------------------------
         Total non-interest expense                             2,195            2,168            6,474             6,411
------------------------------------------------------------------------------------------------------------------------------
     Income before income taxes                                 1,096            1,152            3,471             3,273
     Income tax expense                                           275              338            1,003               892
------------------------------------------------------------------------------------------------------------------------------
         Net Income                                         $     821        $     814        $   2,468         $   2,381
==============================================================================================================================

Per Share Data
     Basic earnings per share                               $    0.35        $    0.35        $    1.06         $    1.03
==============================================================================================================================
     Diluted earnings per share                             $    0.34        $    0.34        $    1.03         $    1.01
==============================================================================================================================

     Average basic shares outstanding                       2,333,862        2,331,100        2,332,016         2,320,193
     Average additional dilutive shares                        99,704           38,243           69,644            37,728
------------------------------------------------------------------------------------------------------------------------------
     Average diluted shares                                 2,433,566        2,369,343        2,401,660         2,357,921
==============================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements
Alliance Bancorp of New England, Inc.            4           Third Quarter, 2001



<PAGE>



                      Alliance Bancorp of New England, Inc.
     Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
<TABLE>
<CAPTION>

                                                                                      Accumulated
                                                        Additional                          other
Nine Months ended September 30                Common       paid-In      Retained    comprehensive     Treasury
(in thousands)                                 stock       capital      earnings           (loss)        stock         Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>         <C>          <C>          <C>            <C>          <C>
2000
----
Balance, December 31, 1999                      $ 25      $ 11,429     $  11,618      $ (5,616)     $ (3,109)     $ 14,347
Comprehensive income
     Net income                                                            2,381                                     2,381
     Unrealized loss on securities,
     net of reclassification adjustment                                                   (133)                       (133)
                                                                                                               -------------
Comprehensive income                                                                                                 2,248
Dividends declared and paid                                                 (466)                                     (466)
Issuance of shares pursuant to exercise
of stock options                                                87                                                      87
----------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 2000                     $ 25      $ 11,516     $  13,533      $ (5,749)     $ (3,109)     $ 16,216
============================================================================================================================

2001
----
Balance, December 31, 2000                      $ 25      $ 11,516     $  14,198      $ (4,515)     $ (3,109)     $ 18,115
Comprehensive income
     Net income                                                            2,468                                     2,468
     Unrealized gain on securities,
     net of reclassification adjustment                                                  1,699                       1,699
                                                                                                               -------------
     Comprehensive income                                                                                            4,167
Dividends declared and paid                                                 (524)                                     (524)
Issuance of shares pursuant to
     exercise of stock options                                  50                                                      50
============================================================================================================================
Balance, September 30, 2001                     $ 25      $ 11,566     $  16,142      $ (2,816)     $ (3,109)     $ 21,808
============================================================================================================================


Disclosure of reclassification amount

Nine months ended September 30 (in thousands)                                               2001                    2000
----------------------------------------------------------------------------------------------------------------------------
Unrealized holding gain (loss) arising during
     the period net of income tax expense (benefit)
     of $886 and ($65), respectively                                                     $ 1,646                  $ (120)
Less reclassification adjustment for net gains
     (losses) included in net income net of income
     tax expense (benefit) of ($11) and $7,
     respectively                                                                             53                     (13)
----------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on securities                                                 $ 1,699                  $ (133)
============================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements
Alliance Bancorp of New England, Inc.            5           Third Quarter, 2001



<PAGE>


                      Alliance Bancorp of New England, Inc.
                Consolidated Statements of Cash Flows (Unaudited)

                                                         Nine months ended
                                                            September 30,
                                                        --------------------
(in thousands)                                            2001         2000
----------------------------------------------------------------------------
Operating Activities:
     Net income                                         $  2,468    $  2,381
     Adjustments to reconcile net income to
     net cash provided by operating activities:
         Provision for loan losses                           209         234
         Depreciation and amortization                       382         446
         Net loss (gain) on securities                        42         (20)
         Net (gain) loss on assets                            (9)         35
         Decrease (increase) in loans held for sale          461        (315)
         (Decrease) increase in other liabilities         (1,155)        457
         Decrease in other assets                          1,636          40
----------------------------------------------------------------------------
         Net cash provided by operating activities         4,034       3,258

Investing Activities:
     Securities available for sale:
         Proceeds from repayments and maturities             358       6,863
         Proceeds from sales of securities                 5,178       2,302
         Purchases of securities                         (14,934)     (5,172)
     Securities held to maturity:
         Proceeds from amortization and maturities         4,885       2,265
     Net increase in loans                               (21,708)    (29,908)
     Increase in foreclosed assets, net                       --         (25)
     Proceeds from the sale of premises and equipment        194          --
     Purchases of premises and equipment                    (187)       (451)
----------------------------------------------------------------------------
         Net cash used in investing activities           (26,214)    (24,126)

Financing Activities:
     Net increase in interest-bearing deposits            19,851      16,005
     Net increase in demand deposits                       2,241       5,098
     Proceeds from FHLB advances                              --       6,000
     Net increase in borrowings                            1,800       4,536
     Stock options exercised                                  50          87
     Cash dividends paid                                    (524)       (466)
----------------------------------------------------------------------------
         Net cash provided by financing activities        23,418      31,260
----------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                    1,238      10,392
Cash and cash equivalents at beginning of the period      30,187      22,612
----------------------------------------------------------------------------
Cash and cash equivalents at end of the period          $ 31,425    $ 33,004
============================================================================

Supplemental Information On Cash Payments
     Interest expense                                   $ 10,198    $  8,968
     Income tax expense                                    1,300       1,002

Supplemental Information On Non-cash Transactions
     Net loans transferred to foreclosed assets              206          78
     Securities transferred to held to maturity            7,045          --
     Securities transferred to available for sale         11,883       1,030


See accompanying notes to consolidated financial statements
Alliance Bancorp of New England, Inc.            6           Third Quarter, 2001



<PAGE>



Notes to Consolidated Financial Statements (unaudited)


Note 1. Basis of Presentation and Description

The consolidated financial statements have been prepared and presented in
conformity with accounting principles generally accepted in the United States of
America. Unless otherwise noted, all dollar amounts presented in the financial
statements and note tables are rounded to the nearest thousand dollars, except
share data. Certain prior period amounts have been reclassified to conform with
current financial statement presentation.

Alliance Bancorp of New England, Inc. ("Alliance" or the "Company") uses the
accrual method of accounting for all material items of income and expense. The
Company is required to make certain estimates and assumptions in preparing these
statements. The most significant estimates are those necessary in determining
the allowance for loan losses, the valuation of foreclosed assets, and the
determination of fair values of financial instruments. Factors affecting these
estimates include national economic conditions, the level and trend of interest
rates, local market conditions, and real estate trends and values.

The quarterly consolidated financial statements are unaudited. However, in the
opinion of Management, all material adjustments, consisting primarily of normal
recurring accruals, necessary for a fair presentation of the consolidated
financial statements have been included. Operating results for any interim
period are not necessarily indicative of results for any other interim period or
for the entire year.

Management's Discussion and Analysis of Financial Condition and Results of
Operations accompany these consolidated financial statements. These consolidated
interim financial statements and notes should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.

Alliance is a one bank holding company, chartered in Delaware. Alliance owns
100% of the stock of Tolland Bank (the "Bank"), a Connecticut chartered savings
bank. Alliance also wholly owns Alliance Capital Trust I ("Trust I"), a Delaware
chartered trust which issued $3.5 million in privately offered trust preferred
securities. Proceeds from this issuance were invested in subordinated notes
issued by Alliance, which invested the note proceeds in new common stock issued
by the Bank. Alliance also wholly owns Alliance Capital Trust II ("Trust II"), a
Delaware chartered trust which issued $3.5 million in privately offered trust
preferred securities. Proceeds from the issuance of Trust II were invested in
subordinated notes issued by Alliance, which invested the note proceeds in a
capital contribution to the Bank.

Tolland Bank provides consumer and commercial banking services from its nine
offices located in and around Tolland County, Connecticut. The Bank's deposits
are insured up to the applicable limits by the Federal Deposit Insurance
Corporation ("FDIC"). Tolland Bank wholly owns Tolland Investment Corporation
("TIC"), a passive investment corporation chartered in Connecticut to own and
service real estate secured loans purchased from the Bank. The Bank also wholly
owns a Connecticut chartered corporation named Asset Recovery Systems, Inc.
("ARS"), which is a real estate liquidation subsidiary. The consolidated
financial statements include Alliance, Trust I, Trust II, Tolland Bank, TIC, and
ARS. All significant intercompany accounts and transactions have been eliminated
in consolidation.

Alliance Bancorp of New England, Inc.            7           Third Quarter, 2001



<PAGE>

Note 2.  Securities
<TABLE>
<CAPTION>
                                                            Amortized        Unrealized       Unrealized              Fair
September 30, 2001 (in thousands)                                Cost             Gains           Losses             Value
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                <C>              <C>                <C>
Securities available for sale
U.S. Government and agency debt                           $     2,000       $        20      $         -       $     2,020
U.S. Agency mortgage-backed debt                                4,161                86                -             4,247
Trust preferred                                                27,578               386           (2,450)           25,514
Other corporate debt                                           24,018               279           (1,079)           23,218
Marketable equity                                              13,379                85             (827)           12,637
Non-marketable equity                                           2,281                 -                -             2,281
----------------------------------------------------------------------------------------------------------------------------
     Total available for sale                             $    73,417       $       856      $    (4,356)      $    69,917
============================================================================================================================
Securities held to maturity
U.S. Government and agency debt                           $     2,051       $        77      $         -       $     2,128
U.S. Agency mortgage-backed debt                                3,469                75                -             3,544
Other mortgage-backed debt                                      1,775                47                -             1,822
Other corporate debt                                            6,062                16             (434)            5,644
----------------------------------------------------------------------------------------------------------------------------
     Total held to maturity                               $    13,357       $       215      $      (434)      $    13,138
============================================================================================================================

                                                            Amortized        Unrealized       Unrealized              Fair
January 1, 2001 (in thousands)                                   Cost             Gains           Losses             Value
----------------------------------------------------------------------------------------------------------------------------
Securities available for sale
U.S. Government and agency debt                           $     2,000       $         -      $      (110)      $     1,890
U.S. Agency mortgage-backed debt                                1,505                 -                -             1,505
Trust preferred                                                27,608               235           (3,946)           23,897
Other corporate debt                                           16,010                34           (1,407)           14,637
Marketable equity                                              14,659               186           (1,206)           13,639
Non-marketable equity                                           2,281                 -                -             2,281
----------------------------------------------------------------------------------------------------------------------------
     Total available for sale                             $    64,063       $       455      $    (6,669)      $    57,849
============================================================================================================================
Securities held to maturity
U.S. Government and agency debt                           $     4,060       $        16      $         -       $     4,076
U.S. Agency mortgage-backed debt                                5,800                 2              (21)            5,781
Other mortgage-backed debt                                      2,354                 4                -             2,358
Other corporate debt                                            6,043                 -             (529)            5,514
----------------------------------------------------------------------------------------------------------------------------
     Total held to maturity                               $    18,257       $        22      $      (550)      $    17,729
============================================================================================================================

                                                            Amortized        Unrealized       Unrealized              Fair
December 31, 2000 (in thousands)                                 Cost             Gains           Losses             Value
----------------------------------------------------------------------------------------------------------------------------
Securities available for sale
U.S. Government and agency debt                           $     5,000       $        73      $      (110)      $     4,963
U.S. Agency mortgage-backed debt                                3,457                 5               (5)            3,457
Other mortgage-backed debt                                      2,093                10                -             2,103
Trust preferred                                                24,122               235           (3,461)           20,896
Other corporate debt                                            6,042                27              (16)            6,053
Marketable equity                                              14,659               186           (1,206)           13,639
Non-marketable equity                                           2,281                 -                -             2,281
----------------------------------------------------------------------------------------------------------------------------
     Total available for sale                             $    57,654       $       536      $    (4,798)      $    53,392
============================================================================================================================
Securities held to maturity
U.S. Government and agency debt                           $       986       $        16      $         -       $     1,002
U.S. Agency mortgage-backed debt                                3,850                 2              (21)            3,831
Other mortgage-backed debt                                        251                 4                -               255
Trust preferred                                                 3,098               114             (211)            3,001
Other corporate debt                                           14,828               223             (952)           14,099
----------------------------------------------------------------------------------------------------------------------------
     Total held to maturity                               $    23,013       $       359      $    (1,184)      $    22,188
============================================================================================================================
</TABLE>

Alliance Bancorp of New England, Inc.            8           Third Quarter, 2001


<PAGE>

As of January 1, 2001, in implementing the provisions of SFAS No. 133, the
Company redesignated securities from held to maturity to available for sale.
Securities with an amortized cost totaling $11.88 million, net of a transfer
adjustment of $1.57 million with a fair value totaling $11.59 million were
transferred to available for sale from held to maturity.


Note 3.  Nonperforming Loans
<TABLE>
<CAPTION>

                                                                                September 30,            December 31,
(in thousands)                                                                           2001                    2000
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                    <C>
Total nonaccruing loans                                                               $ 1,973                $ 1,130
Accruing loans past due 90 days or more                                                     -                      -
Impaired loans:
     Impaired loans - valuation allowance required                                      1,008                    945
     Impaired loans - no valuation allowance required                                   1,041                    233
-----------------------------------------------------------------------------------------------------------------------------
         Total impaired loans                                                         $ 2,049                $ 1,178
     Total valuation allowance on impaired loans                                          164                    112
     Commitments to lend additional funds for impaired loans                                -                      -

Note 4.  Allowance for Loan Losses

                                                                            Nine Months Ended       Nine Months Ended
                                                                                September 30,           September 30,
(in thousands)                                                                           2001                    2000
-----------------------------------------------------------------------------------------------------------------------------
Balance at beginning of year                                                          $ 3,400                 $ 3,200
Charge-offs                                                                               (91)                    (53)
Recoveries                                                                                 97                      69
Provision for loan losses                                                                 209                     234
-----------------------------------------------------------------------------------------------------------------------------
         Balance at end of period                                                     $ 3,615                 $ 3,450
=============================================================================================================================
</TABLE>


Note 5.  New Accounting Standards

In July 2001, the FASB issued SFAS No. 141, Business Combinations. This
statement addresses the financial accounting and reporting for business
combinations and supersedes APB Opinion No. 16, Business Combinations, and FASB
Statement No. 38, Accounting for Preacquisition Contingencies of Purchased
Enterprises. All business combinations initiated after June 30, 2001, are to be
accounted for under a single method, the purchase method. Use of the
pooling-of-interest method is no longer permitted after June 30, 2001.

In July 2001, the FASB also issued SFAS No. 142, Goodwill and Other Intangible
Assets. This statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB Opinion No. 17,
Intangible Assets. This statement requires that goodwill no longer be amortized
to earnings but instead be reviewed at least annually for impairment. Impairment
losses would be charged to earnings when they occur. Amortization of goodwill
ceases upon adoption of SFAS No. 142, which for calendar year-end entities such
as Alliance will be on January 1, 2002. SFAS No. 142 requires that intangible
assets other than goodwill (such as core deposit intangibles) continue to be
amortized to expense over their estimated useful lives. Alliance has intangible
assets of $67 thousand at September 30, 2001; accordingly adoption of SFAS 142
is not expected to have a significant effect on the consolidated statements.

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This statement requires that the fair value
of a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. Under this statement, the liability is discounted and
the accretion expense is recognized using the credit-adjusted risk free interest
rate in effect when the liability was initially recognized. SFAS No. 143 is
effective for financial statements issued for fiscal years beginning after June
15, 2002. Earlier adoption is permitted. The Company does not expect that the
adoption of this statement will have a material impact on its consolidated
financial statements.

Alliance Bancorp of New England, Inc.            9           Third Quarter, 2001


<PAGE>

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment and
Disposal of Long-Lived Assets. This statement supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of. This statement requires that one accounting model be used for
long-lived assets to be disposed of. SFAS No. 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001 and interim
periods within those fiscal years. The provisions of this statement are to be
applied prospectively. The Company does not expect that the adoption of this
statement will have a material impact on its consolidated financial statements.

ITEM 2       MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS
             OF OPERATIONS



Special Note Regarding Forward-Looking Statements

This report contains certain "forward-looking statements". These forward-looking
statements, which are included in Management's Discussion and Analysis, describe
future plans or strategies and include the Company's expectations of future
financial results. The words "believe," "expect," "anticipate," "estimate,"
"project" and similar expressions identify forward-looking statements. The
Company's ability to predict results or the effect of future plans or strategies
or qualitative or quantitative changes based on market risk exposure is
inherently uncertain. Factors which could affect actual results include but are
not limited to change in general market interest rates, general economic
conditions, legislative/regulatory changes, fluctuations of interest rates,
changes in the quality or composition of the Company's loan and investment
portfolios, deposit flows, competition, demand for financial services in the
Company's markets, and changes in the accounting principles, policies, and
guidelines. These factors should be considered in evaluating the forward-looking
statements, and undue reliance should not be placed on such statements.

SUMMARY

Alliance Bancorp of New England, Inc., the holding company for Tolland Bank,
reported a 1.0% increase in earnings for the third quarter ended September 30,
2001, with net profit totaling $821 thousand ($.34 per share) compared to $814
thousand ($.34 per share) a year earlier.

Net income for the first nine months of 2001 increased by 3.7% to $2.47 million
($1.03 per share) compared to $2.38 million ($1.01 per share) in the same period
of 2000. The Board of Directors approved a quarterly cash dividend of seven and
a half cents per share, which will be payable on November 20, 2001 to
shareholders of record as of November 6, 2001.

Alliance has continued to pursue growth opportunities, producing loan growth at
a 12.4% annualized rate this year, with increased balances in all major loan
categories. For the first nine months, this growth has significantly offset the
effect of tighter margins resulting from the extraordinary interest rate
reductions this year. Management has maintained a careful focus on asset quality
in credit originations and administration, although indications are that the
national economic contraction has not yet significantly affected the customers'
debt service in the Company's markets.

Tolland Bank introduced new product and service enhancements throughout the
third quarter. The most significant accomplishment was the announcement that
Tolland Bank would be the exclusive provider of the Generations Gold Program-a
checking account for all generations. Previously a core deposit account for a
former local bank which was recently acquired, this club account offers
extensive member benefits including opportunities to save money with a roster of
local and national merchants. The Bank also introduced the EquitySelect
Advantage-the Complete HomeEquity Program. This equity program offers customers
both variable rate advances and fixed rate amortizing advances at their option.
Also, the Bank issued new VISA Check Cards to our customers, providing enhanced
integration with our checking account systems. Additionally, the Bank converted
most business cash management customers to its new WebLink internet based cash
management solution, which provides an improved blend of convenience and
functionality. All of these activities demonstrate the Company's ongoing focus
to providing superior products and services.

Alliance Bancorp of New England, Inc.            10          Third Quarter, 2001


<PAGE>


Net interest income declined by 5.4% in the third quarter of 2001, compared to
the same quarter of 2000. The net interest margin declined to 3.56% from 4.15%
during those same periods. The Bank's prime based loans have repriced down
simultaneously with the Federal Reserve's interest rate cuts, while deposit
repricings have occurred more slowly. For the first nine months of the year, net
interest income increased by 2.4% compared to the previous year. Service charges
and other income increased by 9.4% in the third quarter and by 3.5% for the year
to date, compared to 2000, primarily due to higher deposit account activity.
Non-interest expense increased by 1.2% for the quarter and 1.0% year-to-date,
including higher marketing and loan origination costs and lower systems costs.

Total assets were $375 million at September 30, 2001, an increase of 7.6% from
year-end 2000. Total regular loans increased by 6.7% over this period, while
purchased assets (including investment securities and purchased government
guaranteed loans) increased by 14.6%. Deposit growth totaled 7.9% over this
period, with increases recorded in all major categories.

The Bank had no foreclosed assets at September 30, 2001, and recorded net loan
recoveries of $6 thousand for the year-to-date. Nonaccruing loans totaled $2.0
million (0.53% of total assets) at September 30, 2001; this total was down from
$2.5 million at June 30, 2001, and up from the comparatively low level of $1.1
million at year-end 2000.

Shareholders' equity totaled $21.8 million at September 30, 2001, increasing by
20.4% from the year-end total. In addition to growth in retained earnings from
net income, shareholders' equity also benefited from a decrease in unrealized
securities losses, which provided additional net comprehensive income of $1.7
million for the first nine months of 2001. Book value per share was $9.33 at
September 30, 2001, compared to $7.77 at year-end 2000. Shareholders' equity
measured 5.8% of total assets at quarter-end, compared to 5.2% at year-end 2000.
Return on shareholders' equity measured 15.2% during the most recent quarter,
and 16.6% for the year-to-date. The Company's capital remained in excess of all
regulatory requirements.

RESULTS OF OPERATIONS

Net Interest Income: Net interest income declined by $170 thousand (5.4%) in the
third quarter and increased by $216 thousand (2.4%) in the first nine months of
the year. Net interest income benefited from loan growth and has been negatively
affected by tightening of the net interest margin resulting from the decline in
short term interest rates in 2001.

Loan growth provided most of the growth in average earning assets. Average
earning assets increased by $30.3 million (9.6%) and by $30.0 million (9.8%) in
the third quarter and year-to-date, respectively. Total regular loans at
September 30, 2001 were $13.8 million (6.7%) higher than at the prior year-end,
with increases recorded in all major categories. Purchases of 100% government
guaranteed loans added another $7.5 million in growth to total loans for the
year-to-date. Loan originations benefited from supportive economic conditions in
the first half of the year, along with higher demand from consumer loan
products.

The prime rate of interest on loans declined by 4.00% from 9.50% to 5.50% in the
first nine months of 2001, following unusually aggressive monetary easing by the
Federal Reserve Board. The yield on loans declined by .91% in the third quarter
of 2001 compared to 2000, and the yield on total earning assets also declined by
 .90% in this period, reflecting lower yields on short and long term investments.
The cost of liabilities fell by .31% during this same period, reflecting the lag
in time account repricings and competitive factors in the retail deposit market.
The third quarter net interest margin declined by .59% year-to-year, reflecting
these changes. The nine month net interest margin declined by .31% also due to
these factors.

Alliance Bancorp of New England, Inc.            11          Third Quarter, 2001


<PAGE>


The Bank has an asset sensitive position for maturities under one year, which
means that net interest income may decrease when interest rates fall, depending
on a number of assumptions. This interest sensitivity was reflected in the
operating results discussed above. Interest rate sensitivity is further
discussed in the later discussion on Interest Rate Sensitivity.

Provision for Loan Losses: The provision is made to maintain the allowance for
loan losses at a level deemed adequate by management. The provision was little
changed in 2001, decreasing by $17 thousand and by $25 thousand in the third
quarter and year-to-date. At September 30, 2001, the allowance stood at $3.62
million, compared to $3.40 million at year-end 2000. Please see the later
discussion on the Allowance for Loan Losses.

Non-Interest Income: Non-interest income increased by $124 thousand (46.3%) in
the third quarter, or by $40 thousand (11.4%) excluding the effect of an $84
thousand loss on the sale of a security in 2000 which did not recur in 2001. For
the year-to-date, non-interest income increased by $20 thousand (1.9%), or by
$117 thousand (12.1%) excluding a $97 thousand nonrecurring credit received in
2000 related to interest on tax refunds.

The adjusted 11.4% and 11.0% third quarter and year-to-date gains noted above
resulted primarily from higher volumes of overdraft charges, commercial loan
fees, and debit card activity. Income also benefited from the implementation of
an ATM surcharge program in May, 2001 (there is no surcharging of customers of
the Bank or of other banks which belong to the SUM program).

Non-Interest Expense and Tax Expense: Non-interest expense increased by $27
thousand (1.2%) and by $63 thousand (1.0%) in the third quarter and
year-to-date. The only expense category with a significant year-to-date increase
was purchased services, which increased by $144 thousand, including a $62
thousand increase in the expense of credit reports and appraisals due to higher
loan volume, a $55 thousand increase in marketing and public relations expenses,
and costs of projects which are not expected to recur. For the year-to-date, a
$120 thousand increase in salary expense was offset by a $149 thousand increase
in deferred salary expense related to higher loan originations volumes. Data
processing costs declined by $98 thousand (11.1%) for this period, reflecting
the benefit of new processing contracts. The effective tax rate measured 25.1%
in the third quarter of 2001, compared to 29.3% in 2000, and included a $46
thousand benefit this year relating to a change in accounting method for federal
income tax purposes. The 2001 year-to-date effective tax rate of 28.9% increased
from 27.2% in 2000. This increase is due both to lower equity security income
eligible for the dividends received deduction and to the lack of a tax benefit
on the writedown of an equity security in the second quarter.

Comprehensive Income: Comprehensive income includes changes (after tax) in the
market valuation of investment securities available for sale. Comprehensive
income was $4.17 million in the first nine months of this year, compared to
$2.25 million in the same period of 2000. Please see the following discussion on
Investment Securities.

FINANCIAL CONDITION

Cash and Cash Equivalents: Total cash and equivalents increased by $1.2 million
(4.1%) in the first nine months of 2001. The Company had reinvested most of its
year-end liquid assets into longer term investments in the first quarter and was
utilizing short term borrowings in the second quarter. Due primarily to deposit
account growth, short-term investments rebounded to $19.2 million at September
30, 2001, near the $19.5 million level at year-end 2000. The third quarter 2001
yield on short term investments declined to 3.69% from 6.69% in the prior year
due to the aforementioned interest rate cuts.

Investment Securities: Total investment securities increased by $6.9 million
during the first nine months of the year, due to purchases of medium term
corporate bonds, collateralized mortgage obligations, and U.S. treasury and
agency securities.


Alliance Bancorp of New England, Inc.            12          Third Quarter, 2001


<PAGE>

As of January 1, 2001, in implementing the provisions of SFAS No. 133, the
Company redesignated securities from held to maturity to available for sale.
Securities with an amortized cost totaling $11.88 million, net of a transfer
adjustment of $1.57 million and with a fair value totaling $11.59 million were
transferred to available for sale from held to maturity. Securities that were
transferred were chosen primarily due to an expectation of increasing valuations
with the anticipated decline in interest rates. At the same time, securities
with an amortized cost totaling $7.04 million and a fair value totaling $7.13
million were transferred to held to maturity from available for sale. The net
impact on accumulated other comprehensive loss was an increase of $196 thousand.

At September 30, 2001, the total net unrealized loss on available for sale
securities (before tax) was $3.50 million, compared to $6.21 million at January
1, 2001. The net unrealized loss on held to maturity securities (before tax) was
$219 thousand, compared to $528 thousand at January 1, 2001. The unrealized loss
on the Company's securities declined during the year due primarily to improved
prices on trust preferred securities, which had a cost basis totaling $27.6
million at September 30, 2001. These securities are mostly publicly traded
investment grade securities. Their prices have benefited from the reduction in
interest rates, although the benefit was moderated by the steeper yield curve
and widening spreads for corporate securities.

At September 30, 2001, the Company owned five non-investment grade debt
securities with an unamortized total cost of $5.05 million, and with an
unrealized loss of $1.39 million. These were all previously investment grade
issues which were downgraded following merger/acquisition related activities.
The remaining debt securities were all investment grade rated. Included in the
non-investment grade issues was one security rated Caa by Moodys with an
unamortized cost of $1.03 million and an unrealized loss of $500 thousand. This
is a trust preferred issue of a national insurer which has instituted a recovery
plan; this issue has performed in accordance with its terms and was not deemed
impaired by the Company. The equity security portfolio included utility common
stocks with a fair value of $5.97 million and an unrealized loss of $118
thousand, and financial institution preferred stocks with a fair value of $6.71
million and an unrealized loss of $583 thousand.

The fully taxable equivalent yield on investment securities was 7.65% in the
most recent quarter, compared to 8.23% in the same quarter of 2000, primarily
reflecting the lower yields on securities purchased in the current year.
Corporate securities purchased this year have had maturities in the 3-10 year
range, with ratings of A or better. Securities purchased in 2001 totaled $14.9
million, while securities sold totaled $5.1 million.

Total Loans: Total loans increased by $21.3 million (9.3%) during the first nine
months of the year. Residential mortgage growth of 6.3% resulted from a decision
to retain more newly originated mortgages as part of the program to reinvest
funds from short term investments. Commercial loan growth of 5.9% benefited from
the strong pipeline through the end of last year. Commercial loan growth has
slowed from the 28.4% growth rate recorded last year, reflecting a slowdown in
economic conditions. Conversely, consumer loans grew by 9.6% this year, with
growth accelerating beginning in the fourth quarter of last year, after being
flat for the first three quarters of 2000. This primarily reflects increased
consumer demand for closed-end amortizing home equity loans. Government
guaranteed loans increased by 34.3% during the first nine months of this year.
These are 100% U.S. Government guaranteed SBA and USDA loans and loan
certificates purchased in the secondary market, and are viewed as alternatives
to purchases of investment securities. The yield on total loans measured 7.61%
in the third quarter of 2001, compared to 8.52% in the same quarter of 2000.
This decrease reflected the decline in the prime rate, along with lower yields
on government guaranteed loans, tighter lending spreads in the commercial loan
market, and lower yields in the consumer markets.

Nonperforming Assets: Nonperforming assets totaled $2.0 million (0.53% of total
assets) at September 30, 2001, consisting of nonaccruing loans. There were no
foreclosed assets at that date. Nonperforming assets increased by $0.9 million
compared to $1.1 million (0.32% of total assets) at the prior year-end. This
increase was due to $1.0 million of commercial loans which were nonaccruing but
which were current in their payments. Impaired loans totaled $2.1 million at
September 30, 2001, up from $1.2 million at year-end due to the above mentioned
commercial loans.



Alliance Bancorp of New England, Inc.            13          Third Quarter, 2001


<PAGE>

Allowance for Loan Losses: The allowance totaled $3.62 million at September 30,
2001, compared to $3.40 million at the prior year-end. The allowance measured
1.45% of total loans and 1.64% of regular loans (excluding government guaranteed
loans) at September 30, 2001, compared to 1.49% and 1.65% respectively at
year-end. Net loan recoveries totaled $6 thousand in the first nine months of
2001, consisting of gross chargeoffs totaling $91 thousand and gross recoveries
totaling $97 thousand. The valuation allowance on impaired loans was $164
thousand at September 30, 2001, compared to $112 thousand at year-end. The loan
loss allowance measured 183% of nonaccruing loans at quarter-end as compared to
301% at year-end 2000.

Deposits and Borrowings: Total deposits increased by $22.1 million (7.9%) during
the first nine months of the year, with increases recorded in all account
categories. Medium term borrowings of $3.0 million were booked in the most
recent quarter to fund commercial loan growth. The cost of deposits decreased to
3.97% during the third quarter of 2001, compared to 4.33% in the same quarter of
2000. This primarily reflected lower CD and money market account rates following
the reductions in short term rates which occurred during the first nine months
of the year. NOW and savings account rates were also reduced in response to
lower market interest rates. During 2001, the Bank conducted a transaction
account promotional program with travel coupons, similar to a program offered in
the previous year, which successfully generated deposit growth. The majority of
deposit growth has been in time accounts of one year or less and in savings
account balances, which is believed to be related to a higher liquidity
preference among customers in light of economic and capital markets conditions.

Interest Rate Sensitivity: The one year interest rate gap at September 30, 2001
approximated $10 million (2.8% of earning assets), compared to a liability
sensitive $(4) million gap at year-end 2000 (1.2% of earning assets). The
Company generally has a positive interest rate gap for maturities under one
year, making near-term earnings sensitive to interest rate decreases. At
year-end, the Company's interest sensitivity model indicated that net interest
income would decline in the event of a 200 basis point interest rate decrease.
During the first nine months of the year, short term interest rates declined by
400 basis points; ten year treasury rates declined only by about 10 basis
points. While the net interest margin has tightened, net interest income did not
decline in accordance with the model due to: the rapid reinvestment of short
term investments at the beginning of the year; the steepening of the yield curve
producing higher long term rates; continued strong loan growth; and reductions
in the rate paid on savings and NOW accounts. As a result of the reinvestments
and deposit rate adjustments, the Company has reduced the sensitivity of its
earnings at risk in a downward rate environment. The equity at risk in a
downward environment also was more favorable than the model, due to the steeper
yield curve and to improved pricing spreads on the portfolio of trust preferred
investment securities. At September 30, 2001, the Company expected to be within
its policy limits for earnings and equity at risk. The change from liability
sensitivity to asset sensitivity primarily reflects a change in the expectation
of callable borrowings, including $10 million which is presently callable and
another $7 million which is callable next year. These borrowings were
anticipated to be called, but due to present low interest rates, they are now
modeled as medium term (reflecting final maturities of 3-8 years). The Company
has endeavored to minimize its further exposure to short term rate decreases,
emphasizing lower risk medium term loans and investments which would not
excessively impact equity at risk in the event that interest rates increase. The
Company closely monitors its longer duration assets and will evaluate
opportunities to shorten the longest duration debt security investments
depending on market conditions.

Liquidity and Cash Flows: The Bank's primary use of funds has been the
origination of new loans and the purchases of investment securities and
government guaranteed loans. The primary source of funds was deposit growth.
Borrowings, time deposits, and money market accounts are the primary sources of
liquidity for additional balance sheet growth. Short term investments,
securities available for sale, and government guaranteed loan certificates
provide additional sources of liquidity. The Company's primary source of funds
is dividends from the Bank, and its primary use of funds is dividends to
shareholders and to trust preferred security holders. The $19.2 million in short
term investments at September 30, 2001 was expected to decline in the fourth
quarter, while still remaining above customary levels.

Capital Resources: During the first nine months of 2001, shareholders' equity
increased by $3.7 million (20.4%) to $21.8 million, reflecting the contribution
of retained earnings and other comprehensive income. Excluding accumulated other
comprehensive income or loss, the annualized return on average equity measured
13.19% for the most recent quarter and 13.47% for the year-to-date. Total equity
measured 5.8% of total assets at quarter-end, compared to 5.2% at year-end 2000.
At quarter-end, both Alliance and Tolland Bank continued to report regulatory
capital ratios consistent with the "well capitalized" regulatory classification.


Alliance Bancorp of New England, Inc.           14           Third Quarter, 2001


<PAGE>


ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See discussion and analysis of quantitative and qualitative disclosures about
market risk provided in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 filed April 2, 2001. See also the discussion of Interest
Rate Sensitivity in Item 2 of this Form 10Q.


















Alliance Bancorp of New England, Inc.           15           Third Quarter, 2001




<PAGE>



PART II       OTHER INFORMATION

Item 1.       LEGAL PROCEEDINGS
              -----------------
              The Company is not involved in any material legal proceedings
              other than ordinary routine litigation incidental to its business.

Item 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS
              -----------------------------------------
              None.

Item 3.       DEFAULTS UPON SENIOR SECURITIES
              -------------------------------
              None.

Item 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              ---------------------------------------------------
              None.

Item 5.       OTHER INFORMATION
              -----------------
              None.

Item 6        EXHIBITS AND REPORTS ON FORM 8-K
              --------------------------------
              (a)      Exhibit index
              None.

              (b)      Reports on Form 8-K filed during the quarter ended
                       September 30, 2001.
                       i.  The Company did not file any reports on Form 8-K
                           during the quarter ended September 30, 2001.


Alliance Bancorp of New England, Inc.            16          Third Quarter, 2001


<PAGE>



Average Balance Sheet and Interest Rates - Fully Taxable Equivalent (FTE)
<TABLE>
<CAPTION>

(dollars in thousands)                                  Average Balance                        Rate (FTE Basis)
------------------------------------------------------------------------------------------------------------------------------
Quarters ended September 30                           2001            2000                      2001        2000
------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>                            <C>         <C>
Loans                                            $ 246,710       $ 217,548                      7.61%       8.52%
Securities available for sale                       69,009          54,995                      7.66        8.38
Securities held to maturity                         14,226          25,060                      7.60        7.89
Other earning assets                                16,703          18,750                      3.69        6.69
------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                          346,648         316,353                      7.43        8.33
Other assets                                        20,884          21,786
------------------------------------------------------------------------------------------------------------------------------
     Total assets                                $ 367,532       $ 338,139
==============================================================================================================================
Interest bearing deposits                        $ 262,520       $ 239,072                      3.97        4.33
Borrowings                                          48,338          46,602                      6.23        6.14
------------------------------------------------------------------------------------------------------------------------------
Interest bearing liabilities                       310,858         285,674                      4.32        4.63
Other liabilities                                   33,005          32,435
Shareholder's equity                                23,669          20,030
------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and equity                $ 367,532       $ 338,139
==============================================================================================================================
Net Interest Spread                                                                             3.11%       3.70%
Net Interest Margin                                                                             3.56%       4.15%



(dollars in thousands)                                  Average Balance                        Rate (FTE Basis)
------------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30                        2001            2000                      2001        2000
------------------------------------------------------------------------------------------------------------------------------
Loans                                            $ 241,573       $ 204,976                      7.93%       8.25%
Securities available for sale                       67,985          55,717                      7.84        8.15
Securities held to maturity                         15,947          26,482                      7.59        7.89
Other earning assets                                10,207          18,516                      4.42        6.37
------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                          335,712         305,691                      7.78        8.10
Other assets                                        20,713          20,858
------------------------------------------------------------------------------------------------------------------------------
     Total assets                                $ 356,425       $ 326,549
==============================================================================================================================
Interest bearing deposits                        $ 254,943       $ 233,472                      4.19        4.19
Borrowings                                          46,514          43,168                      6.24        6.04
------------------------------------------------------------------------------------------------------------------------------
Interest bearing liabilities                       301,457         276,640                      4.50        4.48
Other liabilities                                   32,047          30,631
Shareholder's equity                                22,921          19,278
------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and equity                $ 356,425       $ 326,549
==============================================================================================================================
Net Interest Spread                                                                             3.28%       3.62%
Net Interest Margin                                                                             3.74%       4.05%
</TABLE>



Alliance Bancorp of New England, Inc.            17          Third Quarter, 2001


<PAGE>



Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

                                       ALLIANCE BANCORP OF NEW ENGLAND, INC.





Date:        November 12, 2001         /s/ Joseph H. Rossi
                                       -------------------------
                                       Joseph H. Rossi
                                       President/CEO



Date:        November 12, 2001         /s/ David H. Gonci
                                       -------------------------
                                       David H. Gonci
                                       Senior Vice President/CFO



Alliance Bancorp of New England, Inc.            18          Third Quarter, 2001