UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended        March 31, 1998
                              --------------------------------------------------
                                                  or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

   Commission file Number               000-23419
                         -------------------------------------------------------
                                        NMBT CORP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                <C>
                    Delaware                                                 06-1496548
--------------------------------------------------------------     --------------------------------
(State or other jurisdiction of incorporation or organization)     (I.R.S. Employer Identification No.)

     55 Main Street, New Milford, Connecticut                                06776-2400
--------------------------------------------------------------     --------------------------------
       (Address of principal executive offices)                              (ZIP Code)
</TABLE>

Registrant's telephone number, including area code          (860) 355-1171
                                                  ------------------------------

   INDICATE  BY CHECK MARK  WHETHER  THE  REGISTRANT  (1) HAS FILED ALL  REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. [ X ] Yes [ ] No

   The number of shares of Common Stock,  par value $.01 per share,  outstanding
as of April 11, 1998 was 2,640,258.


<PAGE>



NMBT CORP
Form 10Q
March 31, 1998

                                                           
                                TABLE OF CONTENTS
                                -----------------
                              
<TABLE>
<CAPTION>

                                                                                                     Page
<S>                                                                                                 <C>
PART I-FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         Consolidated Statements of Condition (Unaudited)
                  March 31, 1998 and December 31, 1997                                                   3

         Consolidated Statements of Operations (Unaudited)
                  Three Months Ended March 31, 1998 and March 31, 1997                                   4

         Consolidated Statements of Comprehensive Income (Unaudited)
                  Three Months Ended March 31, 1998 and March 31, 1997                                   5

         Consolidated Statements of Cash Flows (Unaudited)
                  Three Months Ended March 31, 1998 and March 31, 1997                                   6

         Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
                  Three Months Ended March 31, 1998 and March 31, 1997                                   7

         Notes to Consolidated Financial Statements                                                      8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                  12

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                     15


PART II- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                                              15

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            16

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                                               16

SIGNATURES                                                                                              17
</TABLE>


                                       2

<PAGE>


                                    NMBT CORP
                CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                --------------------- ---------------------
                                                                                     MARCH 31,            DECEMBER 31,
                                                                                --------------------- ---------------------
                                                                                        1998                  1997
                                                                                --------------------- ---------------------
                                                                                 Dollars in thousands, except share data

ASSETS
<S>                                                                                          <C>                   <C>    
Cash and due from banks                                                                      $22,796               $18,737
Interest-bearing deposits                                                                     11,565                 4,025
---------------------------------------------------------------------------------------------------------------------------
        Cash and cash equivalents                                                             34,361                22,762
---------------------------------------------------------------------------------------------------------------------------

Securities:
Available for sale, at fair value (amortized cost of $46,062 in 1998                          46,508                48,129
   and $47,556 in 1997)
Held to maturity, at amortized cost (fair value of $40,084 in 1998                            39,849                35,876
   and $36,240 in 1997)
---------------------------------------------------------------------------------------------------------------------------
        Total securities                                                                      86,357                84,005
---------------------------------------------------------------------------------------------------------------------------

Loans                                                                                        224,442               223,909
Less allowance for loan losses                                                                 3,680                 3,537
---------------------------------------------------------------------------------------------------------------------------
        Loans, net                                                                           220,762               220,372
---------------------------------------------------------------------------------------------------------------------------

Real estate owned, net                                                                            51                   212
Premises and equipment, net                                                                    3,717                 3,706
Excess of cost over fair value of net assets acquired, net                                       447                   506
Accrued interest and other assets                                                              5,341                 5,003
---------------------------------------------------------------------------------------------------------------------------

        Total assets                                                                        $351,036              $336,566
===========================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
        Noninterest-bearing checking                                                         $40,408               $36,999
        Interest-bearing checking                                                             88,325                88,501
        Savings                                                                               62,389                60,782
        Time deposits under $100                                                              81,922                81,902
        Time deposits $100 or more                                                            19,170                17,411
---------------------------------------------------------------------------------------------------------------------------
        Total deposits                                                                       292,214               285,595
---------------------------------------------------------------------------------------------------------------------------

Advances from Federal Home Loan Bank of Boston (FHLB)                                         30,236                23,145
Accrued interest and other liabilities                                                         2,453                 2,496
---------------------------------------------------------------------------------------------------------------------------
        Total liabilities                                                                    324,903               311,236
---------------------------------------------------------------------------------------------------------------------------

Stockholders' equity:
        Common stock, $0.01 par value
        Shares authorized:    8,000,000
        Shares outstanding:  1998 - 2,640,258;  1997 - 2,614,858                                  26                    26
        Additional paid-in capital                                                            17,779                17,378
        Retained earnings                                                                      8,034                 7,548
        Accumulated other comprehensive income                                                   294                   378
---------------------------------------------------------------------------------------------------------------------------
        Total stockholders' equity                                                            26,133                25,330
---------------------------------------------------------------------------------------------------------------------------

        Total liabilities and stockholders' equity                                          $351,036              $336,566
===========================================================================================================================
</TABLE>

See notes to financial statements.


                                       3



<PAGE>



                                    NMBT CORP

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                                                                                -------------------------------------------
                                                                                   MARCH 31, 1998         MARCH 31, 1997
                                                                                --------------------- ---------------------
                                                                                Dollars in thousands, except per share data

INTEREST AND DIVIDEND INCOME
<S>                                                                                           <C>                   <C>   
Interest and fees on loans                                                                    $4,468                $4,309
U.S. Treasury and agency securities                                                            1,032                   926
Municipal securities                                                                             199                   112
Dividends on FHLB stock                                                                           28                    24
Interest-bearing deposits                                                                        102                    29
---------------------------------------------------------------------------------------------------------------------------
        Total interest and dividend income                                                     5,829                 5,400
---------------------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE
Interest-bearing checking                                                                        365                   293
Savings                                                                                          357                   369
Time deposits under $100                                                                       1,077                 1,064
Time deposits $100 or more                                                                       245                   202
FHLB advances and capital leases                                                                 391                   225
---------------------------------------------------------------------------------------------------------------------------
        Total interest expense                                                                 2,435                 2,153
---------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income                                                               3,394                 3,247
Provision for loan losses                                                                        141                   125
---------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income after provision for loan losses                               3,253                 3,122
---------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit accounts                                                              242                   249
Other service charges, commission and fees                                                        89                    82
Loan servicing fees                                                                               15                     9
Gain on sale of securities                                                                        51                     -
Net gain on sale of loans                                                                        145                    64
Other income                                                                                      26                    28
---------------------------------------------------------------------------------------------------------------------------
        Total noninterest income                                                                 568                   432
---------------------------------------------------------------------------------------------------------------------------

NONINTEREST EXPENSE
Compensation, payroll taxes and benefits                                                       1,469                 1,345
Occupancy                                                                                        257                   241
Furniture and equipment                                                                          188                   234
Data processing                                                                                   78                    54
Stationery, printing and supplies                                                                122                    83
Marketing, advertising and investor relations                                                    101                    98
Legal and professional fees                                                                       48                    63
Other general and administrative expense                                                         388                   283
---------------------------------------------------------------------------------------------------------------------------
        Total general and administrative expense                                               2,651                 2,401
Operations of real estate owned                                                                    1                    33
Amortization of intangible assets                                                                 59                    59
---------------------------------------------------------------------------------------------------------------------------
        Total noninterest expense                                                              2,711                 2,493
---------------------------------------------------------------------------------------------------------------------------

Income before provision for income taxes                                                       1,110                 1,061
Provision for income taxes                                                                       414                   427
---------------------------------------------------------------------------------------------------------------------------
Net income                                                                                      $696                  $634
===========================================================================================================================
Basic earnings per share                                                                       $0.26                 $0.24
Diluted earnings per share                                                                     $0.25                 $0.23
---------------------------------------------------------------------------------------------------------------------------
Average shares outstanding                                                                     2,632                 2,588
Average shares and share equivalents outstanding                                               2,807                 2,718
---------------------------------------------------------------------------------------------------------------------------
Cash dividends per share                                                                       $0.08                 $0.05
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to financial statements.


                                       4
<PAGE>


                                    NMBT CORP

           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS ENDED
                                                                    -------------------------------------------------------
In thousands                                                              MARCH 31, 1998              MARCH 31, 1997
------------------------------------------------------------------- --------------------------- ---------------------------
<S>                                                                 <C>           <C>     <C>                 <C> 
Net Income                                                                                $696                        $634
Other comprehensive income, net of tax:
   Unrealized gains (losses) on securities:
      Unrealized holding losses arising during period                      ($50)                      ($216)
      Less: reclassification adjustment for gains included in              
            net income                                                      (34)                           - 
                                                                    -------------               -------------
Other comprehensive income                                                                (84)                      ($216)
                                                                                  -------------               -------------
Comprehensive income                                                                      $612                        $418
                                                                                  =============               =============
</TABLE>


See notes to financial statements.




                                       5
<PAGE>




                                    NMBT CORP

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                                                                                -------------------------------------------
                                                                                   MARCH 31, 1998        MARCH 31, 1997
                                                                                --------------------- ---------------------
                                                                                               In thousands
OPERATING ACTIVITIES
<S>                                                                                        <C>                  <C>
Net Income                                                                                      $696                  $634
Adjustments to reconcile net income to net cash provided by
   Operating activities:
   Depreciation and amortization                                                                 189                   241
   Provision for loan losses                                                                     141                   125
   Net amortization of securities                                                                 47                    33
   Realized securities gains, net                                                                (51)                    -
   Loans originated for sale                                                                 (11,425)               (4,752)
   Proceeds from loans sold, net                                                              11,801                 4,994
   Gains from loans sold, net                                                                   (145)                  (64)
   Realized gains from real estate owned, net                                                    (21)                   (8)
   Net increase in interest receivable                                                           (13)                 (267)
   Net (increase) decrease in other assets                                                      (172)                  112
   Net increase in interest payable                                                               63                    39
   Net increase (decrease) in other liabilities                                                  (97)                  369
---------------------------------------------------------------------------------------------------------------------------
   Net cash provided by operating activities                                                   1,013                 1,456
---------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of held to maturity (HTM) securities                                                (10,000)               (2,996)
Net loan originations                                                                           (860)                 (285)
Purchases of available for sale (AFS) securities                                              (8,552)               (3,869)
Net purchases of premises and equipment                                                         (142)                 (103)
Proceeds from sales of real estate owned                                                         170                   (10)
Proceeds from maturities of AFS securities                                                     7,712                   256
Proceeds from maturities of HTM securities                                                     5,995                 1,046
Proceeds from sales of AFS securities                                                          2,370                     -
Purchases of FHLB stock                                                                            -                  (136)
---------------------------------------------------------------------------------------------------------------------------
   Net cash used for investing activities                                                     (3,307)               (6,097)
---------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase in advances from FHLB                                                             7,091                   256
Net increase in time deposits                                                                  1,779                 6,326
Net increase (decrease) in checking and savings deposits                                       4,840                (2,316)
Cash dividends                                                                                  (210)                 (129)
Net proceeds from exercise of stock options                                                      401                     -
Other                                                                                             (8)                  (17)
---------------------------------------------------------------------------------------------------------------------------
   Net cash provided by financing activities                                                  13,893                 4,120
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                                              11,599                  (521)
Cash and cash equivalents, beginning of period                                                22,762                23,990
---------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                                     $34,361               $23,469
===========================================================================================================================

CASH PAID DURING PERIOD
Interest to depositors and creditors                                                          $2,372                $2,115
Income taxes                                                                                     449                     -

NON-CASH TRANSFERS
Transfer of loans to real estate owned                                                             -                   350
Net change in unrealized gains (losses) on AFS securities                                       (672)                 (216)
Financed portion of sales of real estate owned                                                    12                   129
</TABLE>

See notes to financial statements.




                                       6
<PAGE>





                                    NMBT CORP

     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          ACCUMULATED
                                                                             OTHER                   ADDITIONAL
                                           COMPREHENSIVE     RETAINED    COMPREHENSIVE    COMMON      PAID-IN        SHARES
In thousands                   TOTAL          INCOME         EARNINGS        INCOME        STOCK      CAPITAL     OUTSTANDING
-------------------------------------------------------------------------------------------------------------------------------

<S>                        <C>           <C>           <C>                   <C>          <C>         <C>              <C>  
JANUARY 1, 1997                  $22,565                    $5,195                $146         $26      $17,198          2,588
Comprehensive income
   Net income                        634        $634           634
   Other comprehensive
   income, net of tax
      Unrealized losses on          (216)       (216)
        securities
                                         ------------
   Other comprehensive                          
     income                                     (216)                             (216)
                                         ============
Comprehensive income                            $418
                                         ============
Cash dividends                      (129)                     (129)
                           --------------            --------------------------------------------------------------------------
MARCH 31, 1997                   $22,854                    $5,700                ($70)         $26      $17,198          2,588
                           ==============            ==========================================================================


JANUARY 1, 1998                  $25,330                    $7,548                $378          $26      $17,378          2,615
Comprehensive income
   Net income                        696        $696           696
   Other comprehensive     
   income, net of tax
     Unrealized losses               
     securities, net of
     reclassification
     adjustment (see
     disclosure)                     (84)        (84)
                                         ------------
   Other comprehensive                           
       income                                    (84)                              (84)
                                         ------------
Comprehensive income                            $612
                                         ============
Proceeds from exercise               
of stock options                     401                                                                    401             25
Cash dividends                      (210)                     (210)
                           --------------            --------------------------------------------------------------------------
MARCH 31, 1998                   $26,133                    $8,034                $294         $26      $17,779          2,640
                           ==============            ==========================================================================

DISCLOSURE OF RECLASSIFICATION AMOUNT:
Unrealized holding losses arising during period                                   ($50)
Less: reclassification adjustment for gains included in net income                 (34)
                                                                        --------------
Net unrealized losses on securities                                               ($84)
                                                                        ==============
</TABLE>


See notes to financial statements.
                                       7

<PAGE>



NMBT CORP
Form 10Q
March 31, 1998


NMBT CORP
NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1.  BASIS OF PRESENTATION

NMBT CORP (the Company), a Delaware Corporation formed in November, 1997, is the
bank holding company for NMBT (formerly The New Milford Bank & Trust Company), a
state-chartered  commercial bank. The Company's activity is currently limited to
the holding of NMBT's outstanding common stock.

The interim unaudited consolidated financial statements of the Company have been
prepared in conformity with generally accepted  accounting  principles.  Certain
financial  information  that is normally  included in the  financial  statements
prepared in accordance with generally accepted accounting principles,  but which
is not required for interim reporting  purposes,  has been condensed or omitted.
In preparing the interim  financial  statements,  Management is required to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  as of the date of the balance  sheet and  revenues and expenses for
the period. Actual results could differ significantly from those estimates.

In the opinion of Management,  the accompanying  interim unaudited  consolidated
financial  statements  contain all adjustments  (consisting of normal  recurring
adjustments)  necessary to present fairly the Company's financial position as of
March 31,  1998,  and the results of its  operations  and its cash flows for the
three months then ended. The results of operations for the periods shown are not
necessarily  indicative  of the  results  to be  expected  for the  year  ending
December 31, 1998. The accompanying  interim  unaudited  consolidated  financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1997 Annual Report.

NOTE 2.  SECURITIES

The aggregate  amortized cost and estimated fair values of securities  available
for sale at March 31, 1998 and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                        MARCH 31, 1998
------------------------------------------------------------------------------------------------------------------
                                                                    GROSS            GROSS        
                                                 AMORTIZED       UNREALIZED        UNREALIZED        ESTIMATED    
Dollars in thousands                               COST             GAINS            LOSSES          FAIR VALUE
------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                  <C>               <C>          <C>    
U.S. Treasury and agency securities                   $24,058              $77               $19          $24,116
Municipal securities                                   18,488              378                14           18,852
Mortgage-backed securities                              1,756               24                 -            1,780
------------------------------------------------------------------------------------------------------------------
Total debt securities                                  44,302              479                33           44,748
FHLB Stock                                              1,760                -                 -            1,760
------------------------------------------------------------------------------------------------------------------
Total securities available for sale                   $46,062             $479               $33          $46,508
==================================================================================================================
</TABLE>

                                       8

<PAGE>

NMBT CORP
Form 10Q
March 31, 1998


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                        DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------
                                                                     GROSS            GROSS         
                                                AMORTIZED          UNREALIZED        UNREALIZED        ESTIMATED  
Dollars in thousands                              COST               GAINS            LOSSES          FAIR VALUE  
------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>               <C>          <C>    
U.S. Treasury and agency securities                   $24,615              $99               $19          $24,695
Municipal securities                                   16,968              418                 1           17,385
Mortgage-backed securities                              4,213               80                 4            4,289
------------------------------------------------------------------------------------------------------------------
Total debt securities                                  45,796              597                24           46,369
FHLB Stock                                              1,760                -                 -            1,760
==================================================================================================================
Total securities available for sale                   $47,556             $597               $24          $48,129
==================================================================================================================
</TABLE>


The aggregate  amortized  cost and estimated  fair values of securities  held to
maturity at March 31, 1998 and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                        MARCH 31, 1998
------------------------------------------------------------------------------------------------------------------
                                                                   GROSS            GROSS         
                                              AMORTIZED         UNREALIZED        UNREALIZED         ESTIMATED  
Dollars in thousands                              COST             GAINS            LOSSES          FAIR VALUE
------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>              <C>           <C>    
U.S. Treasury and agency securities                   $19,395              $84              $104          $19,375
Mortgage-backed securities                             20,454              262                 7           20,709
------------------------------------------------------------------------------------------------------------------
Total securities held to maturity                     $39,849             $346              $111          $40,084
==================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                      DECEMBER 31, 1998
------------------------------------------------------------------------------------------------------------------
                                                                   GROSS            GROSS         
                                              AMORTIZED         UNREALIZED        UNREALIZED         ESTIMATED  
Dollars in thousands                              COST             GAINS            LOSSES          FAIR VALUE
------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>               <C>          <C>    
U.S. Treasury and agency securities                   $13,492              $96               $33          $13,555
Mortgage-backed securities                             22,384              310                 9           22,685
------------------------------------------------------------------------------------------------------------------
Total securities held to maturity                     $35,876             $406               $42          $36,240
==================================================================================================================
</TABLE>


Securities  with a carrying  value of $3.0 million and $5.0 million were pledged
as  collateral  for public  deposits as of March 31, 1998 and December 31, 1997,
respectively.


                                       9

<PAGE>

NMBT CORP
Form 10Q
March 31, 1998

NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
In thousands                                           MARCH 31, 1998              DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------
LOANS
<S>                                                            <C>                           <C>     
Real estate                                                    $188,918                      $188,868
Commercial and industrial                                        16,686                        17,818
Installment and education                                         8,476                         8,994
Construction and development                                      9,588                         7,299
Cash reserve and credit cards                                       774                           930
------------------------------------------------------------------------------------------------------
Total Loans                                                    $224,442                      $223,909
======================================================================================================
</TABLE>


Changes in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
In thousands                                                              MARCH 31, 1998           DECEMBER 31, 1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                        <C>   
Allowance for loan losses at beginning of year                                      $3,537                     $3,212
Provision for loan losses charged against income                                       141                        582
Transfer to liability for estimated losses from off-balance                              -                        (20)
sheet credit instruments
Loan losses, net of recoveries                                                           2                       (237)
----------------------------------------------------------------------------------------------------------------------
Allowance for loan losses at end of period                                          $3,680                     $3,537
======================================================================================================================
</TABLE>


Loans to executive officers,  principal  stockholders,  directors,  companies of
which directors are principal  owners,  and individuals  directly  related to or
affiliated with directors and executive  officers  aggregated  $3.10 million and
$2.50 million at March 31, 1998 and December 31, 1997, respectively.

NOTE 4.  EARNINGS PER SHARE

Effective  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting  Standards No. 128 (SFAS 128), "Earnings Per Share". SFAS establishes
standards  for  computing  and  presenting  earnings  per  share.  SFAS  128  is
applicable  to all United  States  entities  with  publicly held common stock or
potential common stock. The statement requires  disclosure of basic earnings per
share (i.e.  common stock  equivalents are not considered) and diluted  earnings
per share (i.e. common stock equivalents are considered using the treasury stock
method) on the face of the statement of operations,  along with a reconciliation
of the numerator and denominator of basic and diluted  earnings per share.  SFAS
128  replaces  Accounting  Principles  Board  No.  15,  issued  by the  American
Institute of Certified Public  Accountants,  as the  authoritative  guidance for
calculation and disclosure of earnings per share.

Basic  earnings  per share are  computed by dividing  net income by the weighted
average number of common shares  outstanding  during the period. The computation
of diluted  earnings per share is similar to the  computation  of basic earnings
per share  except that the  denominator  is  increased  to include the number of
additional  common  shares  that would  have been  outstanding  if the  dilutive
potential common shares,  consisting  solely of stock options,  had been issued.
Weighted  average common shares  outstanding used to calculate basic and diluted
earnings  per share for the

                                       10

<PAGE>

three-month periods ended March 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
             In thousands                                           MARCH 31, 1998         MARCH 31, 1997
             --------------------------------------------------- ---------------------- ----------------------
             Weighted average common shares:
             <S>                                                         <C>                    <C>  
             Basic                                                     2,632                  2,588
             Effect of stock options                                     175                    130
             Diluted                                                   2,807                  2,718
</TABLE>



NOTE 5.  COMPREHENSIVE INCOME

On January 1, 1998,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  No.  130  (SFAS  130),  "Reporting  Comprehensive  Income".  SFAS 130
requires the  reporting of  comprehensive  income in addition to net income from
operations.  Comprehensive  income  is  a  more  inclusive  financial  reporting
methodology  that includes  disclosure  of certain  financial  information  that
historically has not been recognized in the calculation of net income.

The Company held  securities  classified as available for sale at March 31, 1998
and December 31, 1997, which had unrealized  gains. The before-tax and after-tax
amounts for these unrealized gains, as well as the tax  (expense)/benefits,  are
summarized as follows:
<TABLE>
<CAPTION>

                                                    MARCH 31, 1998                                 DECEMBER 31, 1997
                                                          TAX                                             TAX        
                                       BEFORE           (EXPENSE)/                        BEFORE       (EXPENSE)/
In thousands                             TAX             BENEFIT      AFTER TAX             TAX         BENEFIT      AFTER TAX
--------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>           <C>             <C>                 <C>          <C>             <C> 
Unrealized holding gains                   $497          ($169)          $328                $573         ($195)          $378
Reclassification adjustment 
for gains included in net 
income                                      (51)            17            (34)                  -             -              - 
--------------------------------------------------------------------------------------------------------------------------------
Accumulated other              
comprehensive income                       $446          ($152)          $294                $573         ($195)          $378
================================================================================================================================
</TABLE>


                                       11
<PAGE>

NMBT CORP
Form 10Q
March 31, 1998

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

GENERAL
-------
   The Company,  a Delaware  corporation  formed in 1997, is the registered bank
holding  company for NMBT  (formerly  The New Milford Bank & Trust  Company),  a
wholly owned subsidiary.  NMBT, headquartered in New Milford,  Connecticut, is a
state-chartered  bank and trust company founded in 1975. The Company's  activity
is currently limited to the holding of NMBT's  outstanding common stock. NMBT is
the Company's only subsidiary and its primary investment.  The net income of the
Company is presently derived entirely from the business of NMBT.

   On November 25, 1997, NMBT completed a change in its corporate structure with
the formation of its parent holding company, NMBT CORP. The Company provides the
capability to offer comprehensive banking services through NMBT and may provide,
through NMBT and any other  subsidiaries that NMBT CORP may acquire,  additional
banking  and  other  permissible   non-banking  services.  The  holding  company
structure  provides the Company with maximum  flexibility in pursuing  financial
opportunities.

FORWARD-LOOKING STATEMENTS
--------------------------
The  Company  has  made,  and may  continue  to  make,  various  forward-looking
statements  with respect to earnings,  credit  quality and other  financial  and
business matters for periods  subsequent to March 31, 1998. The Company cautions
that these forward-looking statements are subject to numerous assumptions, risks
and   uncertainties,   and  that  statements   relating  to  subsequent  periods
increasingly  are  subject  to  greater  uncertainty  because  of the  increased
likelihood  of changes in underlying  factors and  assumptions.  Actual  results
could differ materially from forward-looking statements.

In  addition  to those  factors  previously  disclosed  by the Company and those
factors  identified  elsewhere herein,  the following factors could cause actual
results to differ materially from such forward-looking  statements:  competitive
pressures on loan and deposit  product  pricing;  other actions of  competitors;
changes in economic conditions;  the extent and timing of actions of the Federal
Reserve  Board;  customer  deposit  disintermediation;   changes  in  customers'
acceptance  of NMBT's  products  and  services;  and the  extent  and  timing of
legislative and regulatory actions and reform.

The Company's forward-looking statements speak only as of the date on which such
statements  are made.  By making any  forward-looking  statements,  the  Company
assumes no duty to update them to reflect new, changing or unanticipated  events
or circumstances.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------

Net income for the three  months  ended March 31, 1998  increased  9.7% to $0.69
million, or $0.25 diluted earnings per share, as compared to net income of $0.63
million,  or $0.23 diluted  earnings per share, for the three months ended March
31, 1997.  Basic  earnings  per share was $0.26 for the quarter  ended March 31,
1998,  as compared to $0.24 for the same period in 1997.  All earnings per share
amounts  reflect a change in  accounting  principle  adopted  during the quarter
ended December 31, 1997.

Net interest and dividend  income  (interest  and dividend  income less interest
expense)  before  provision for  estimated  loan losses for the first quarter of
1998 increased by $0.15 million or 4.5%, from the first quarter of 1997. The net
interest  spread,   the  difference  between  the  yield  earned  on  loans  and
investments and the rate paid on deposits and borrowings, was 4.5% for the three
months ended March 31, 1998, and 4.8% for the three months

                                       12

<PAGE>

NMBT CORP
Form 10Q
March 31, 1998

ended March 31, 1997.  The increase in net  interest  income is a reflection  of
growth in interest-earning  assets and was accomplished despite a contraction in
the interest rate spread caused by seasonal  factors,  customer demand for fixed
rate loans and increased price competition for loans and deposits.

Management estimates the allowance for loan losses based on an evaluation of the
Company's  past loan  experience,  known and  inherent  risks in the  portfolio,
estimated  value of  underlying  collateral,  and current  economic  conditions.
Establishing  the  allowance  for loan losses  involves  significant  management
judgments utilizing the best information  available at the time. Those judgments
are  subject  to further  review by various  sources,  including  the  Company's
regulators. Adjustments to the allowance for loan losses may be necessary in the
future based on changes in economic and real estate market  conditions,  further
information  obtained  regarding  known problem  loans,  the  identification  of
additional  problem loans,  and other factors.  The provision for estimated loan
losses for the first  quarter of 1998 was $0.14  million as  compared to a $0.12
million provision for the same period in 1997. The increased provision is due to
growth in the loan portfolio.  In  management's  judgment the allowance for loan
losses is adequate to absorb probable losses in the existing portfolio.

Also contributing to the Company's  improved  financial  performance was a 31.3%
increase in noninterest income, comparing the first quarter of 1998 to the first
quarter  of 1997,  due to  strong  activity  in the  mortgage  banking  area and
increased fee income.

Noninterest  expenses were up 8.7% from the first quarter of the previous  year,
due  principally  to the opening of the  Southbury  Office and  formation of the
holding  company.  In  addition,  the bank has added staff to handle  increasing
mortgage volume.  This increased  mortgage activity has been an important factor
in the continued growth in the Company's overall prosperity. From March 31, 1997
to March 31, 1998,  total assets have grown 13.0%,  loans grew 6.1% and deposits
have grown 8.2%. These growth rates have contributed to increased overhead.

Total assets increased 4.3% to $351.04 million as of March 31, 1998 from $336.57
million as of December 31, 1997. Deposits grew by $6.62 million and Federal Home
Loan Bank net advances of $7.09 million were taken enabling the  continuation of
the Company's leverage strategy.

In  late  1997,  NMBT  opened  its  tenth  full  service  office  in  Southbury,
Connecticut.  This is the  bank's  first  office  in New Haven  County  and NMBT
intends to look for other  Fairfield  County and New Haven County  locations for
further expansion. The opening of the Southbury Office and the completion of the
reorganization  to a holding  company  structure have caused a temporary drag on
earnings as the cost of these changes are absorbed.  It is anticipated  that the
Southbury Office will be profitable within the next twelve months.

IMPAIRED LOANS
--------------

The recorded  investment in loans considered to be impaired was $4.05 million at
March 31, 1998,  and $3.59  million at December 31, 1997,  and consists of loans
for which an allowance of $0.43 million and $0.38 million,  for the same periods
respectively, has been established. Income recorded on impaired loans during the
first  three  months  of 1998 for the  portion  of this  period  that  they were
impaired  was $0.03  million,  none of which was  recognized  on the cash basis.
Average  investment in impaired  loans during this same period of 1998 was $4.07
million  as  compared  to  $3.15  million  during  the  first  quarter  of 1997.
Nonaccruing loans at March 31, 1998,  included $2.50 million of loans considered
to be impaired, as compared with $2.22 million at December 31, 1997.


                                       13

<PAGE>

NMBT CORP
Form 10Q
March 31, 1998


NONPERFORMING ASSETS
--------------------

Nonperforming  loans consist  principally  of residential  and commercial  loans
collateralized  by real estate and real  estate  acquired  through  foreclosures
(real estate owned). Nonperforming assets and relevant ratios were as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Dollars in thousands                                                              MARCH 31, 1998         DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>                       <C>   
Total nonperforming loans                                                                 $3,280                    $3,208
Real estate owned                                                                             51                       212
---------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets                                                                $3,331                    $3,420
===========================================================================================================================

Total nonperforming loans/Total loans                                                       1.46%                     1.43%
Total nonperforming assets/Total assets                                                     0.95%                     1.02%
Allowance for loan losses/Total nonperforming loans                                       112.19%                   110.23%
</TABLE>



LIQUIDITY MANAGEMENT
--------------------

For  information  about  the  Company's  liquidity  position,  see  Management's
Discussion  and Analysis in its 1997 Annual  Report to  Stockholders,  which was
also  incorporated  into the  Company's  Annual  Report  to the  Securities  and
Exchange  Commission on Form 10K. There has been no material change in that data
since it was reported.

CAPITAL
-------

At March 31,  1998,  the Company  had $26.13  million in  stockholders'  equity,
compared with $25.33 million at December 31, 1997.  The growth in  stockholders'
equity  from  the  end of 1997  reflected  a $0.08  million  adjustment  for the
decrease in unrealized gains on securities available for sale in accordance with
SFAS 115,  proceeds of $0.40  million  from the exercise of stock  options,  the
retention of $0.69  million in net  earnings,  less the cash  dividends  paid on
February 9, 1998, totaling $0.21 million.

The following  reflects the Company's  capital ratios (which exclude  intangible
assets and the SFAS 115 adjustment):


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Dollars in thousands                            MARCH 31, 1998           DECEMBER 31, 1997           REGULATORY MINIMUM
------------------------------------------------------------------------------------------------------------------------
Risk-based capital ratios:
<S>                                              <C>                         <C>                               <C>
   Tier 1 capital ratio                                 12.36%                      12.19%                        4.00%
   Total capital ratio                                  13.62%                      13.45%                        8.00%

Leverage ratio                                           7.56%                       7.36%                        3.00%

Tier 1 capital                                        $25,363                     $24,428
Total risk-based capital                              $27,945                     $26,948
Total risk-adjusted assets                           $205,217                    $200,322
</TABLE>

For further information about the Company's capital, see Management's Discussion
and  Analysis  in its  1997  Annual  Report  to  Stockholders,  which  was  also
incorporated  into the Company's  Annual Report to the  Securities  and Exchange
Commission on Form 10K.

                                       14

<PAGE>

NMBT CORP
Form 10Q
March 31, 1998

YEAR 2000
---------

The Company continues with its current plans to address the Year 2000 compliance
requirements.  Management  believes it remains on its current  schedule to be at
the  proper  stage  of  assessment,  remediation  and  testing  to be Year  2000
compliant,  by year-end 1998.  Further,  management  does not anticipate that it
will incur expenses in excess of $100,000,  although it may also need to replace
certain hardware and software, which costs would be capitalized.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Quantitative  and  qualitative  disclosure  about  market risk is  presented  at
December  31, 1997 in the  Company's  Annual  Report on Form 10-K filed with the
Securities  and  Exchange  Commission  on March  31,  1998.  There  have been no
material  changes in the  Company's  market risk at March 31, 1998,  compared to
December  31,  1997.  The  following  is an  update of the  discussion  provided
therein:

GENERAL. The Company's largest component of market risk continues to be interest
rate risk.  Virtually  all of this risk  continues  to reside at the bank level.
NMBT still is not subject to foreign currency  exchange or commodity price risk.
At March 31, 1998,  neither the Company nor NMBT owned any trading  assets,  nor
did they utilize hedging transactions such as interest rate swaps and caps.

ASSETS, DEPOSIT LIABILITIES AND BORROWINGS.  There have been no material changes
in the  composition of assets,  deposit  liabilities or borrowings from December
31, 1997 to March 31, 1998.

GAP ANALYSIS.  The one-year cumulative interest  sensitivity gap as a percentage
of total assets was $(28.8)  million,  or -8.22%,  at March 31, 1998,  down from
$(42.7)  million,  or -12.68%,  at December  31,  1997,  due  principally  to an
increase  in cash and  short-term  assets  which was  funded by an  increase  in
noninterest-bearing deposits.

INTEREST RATE RISK COMPLIANCE.  NMBT continues to monitor the impact of interest
rate  volatility  upon net interest income in the same manner as at December 31,
1997.  There  have been no changes in the board  approved  limits of  acceptable
variance in net interest  income and net portfolio  value at March 31, 1998, and
the projected  changes  continue to fall within the board approved limits at all
levels of potential interest rate volatility.

PART II-OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NMBT is a  defendant  in  certain  claims  and legal  actions  that arose in the
ordinary course of business.  In the opinion of management,  after  consultation
with legal counsel,  these  proceedings,  in the aggregate,  are not expected to
have  a  materially  adverse  effect  on  the  financial  position,  results  of
operations or liquidity of the Company.


                                       15

<PAGE>
NMBT CORP
Form 10Q
March 31, 1998





ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of the  Stockholders  was held on May 5, 1998.  There were no
solicitations  in opposition to any of the Board of Directors'  nominees for the
Board of  Directors or other  motions  acted on at the  Meeting.  The  following
matters were  considered  and voted on, as certified by the Judge of Election at
the Meeting:

1.   Ruth  Henderson,  Terry C.  Pellegrini  and Arthur C.  Weinshank  were each
     elected to serve as Directors  until the Annual Meeting of  Stockholders to
     be held in the year 2001 who, with the six Directors, Kevin L. Dumas, Louis
     A. Funk, Jr., Lawrence Greenhaus, Robert W. X. Martin, Walter G. Southworth
     and Harry H.  Taylor,  Jr.,  whose  terms of office  did not  expire at the
     Meeting,  constitute  the  full  Board.  All  nominees  received  at  least
     2,202,745, or 96.47%, votes cast FOR.

2.   An  Amendment  to the 1994 Stock  Option  Plan of the  Company's  operating
     subsidiary,  NMBT,  increasing the number of shares issuable  thereunder to
     600,000 was approved. Votes cast FOR this amendment were 1,755,293.

3.   The  Directors'  appointment  of  Deloitte  & Touche  LLP as the  Company's
     independent  auditors for the year ending December 31, 1998 was ratified by
     2,238,283 votes cast FOR.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (A)   EXHIBITS

                Exhibit 27.  Financial  Data Schedule  (included only with EDGAR
           filing).

     (B)   REPORTS ON FORM 8-K

                None

                                       16
<PAGE>

NMBT CORP
Form 10Q
March 31, 1998

                                   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.

                                                  NMBT CORP
                                 -----------------------------------------------
                                                 (Registrant)

   April 13, 1998                        s/ Jay C. Lent
---------------------------      -----------------------------------------------
         Date                       Jay C. Lent, Executive Vice President, Chief
                                      Financial Officer and Secretary



    April 13, 1998                      s/ Deborah L. Fish
---------------------------      -----------------------------------------------
         Date                       Deborah L. Fish, Treasurer


                                       17