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 ACT OF
      1934

                 For the Quarterly period ended: March 31, 2005

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

           For the transition period from ___________ to ___________.

                         Commission File Number: 0-28815

                     FIRST LITCHFIELD FINANCIAL CORPORATION
                     --------------------------------------
             (Exact name of Registrant as specified in its Charter)

           Delaware                                          06-1241321
           --------                                          ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation of organization)                               Identification No.)

   13 North Street, Litchfield, CT                             06759
   -------------------------------                             -----
(Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (860) 567-8752

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 past 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.

      Yes |X|     No |_|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |_| No |X|

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common equity,  as of the latest  practicable  date:  2,027,095 shares of Common
Stock, par value $.01 per share, were outstanding at April 28, 2005.


                                       1
<PAGE>

                     FIRST LITCHFIELD FINANCIAL CORPORATION
                                    FORM 10-Q
                                      INDEX

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>
Part I - Consolidated Financial Information

Item 1 - Financial Statements

        Consolidated Balance Sheets - March 31, 2005 (unaudited) and
        December 31, 2004 ......................................................      3

        Consolidated Statements of Income - Three months ended
        March 31, 2005 and 2004 (unaudited)  ...................................      4

        Consolidated Statements of Comprehensive Income - Three months ended
        March 31, 2005 and 2004 (unaudited) ....................................      5

        Consolidated Statements of Cash Flows - Three months ended
        March 31, 2005 and 2004 (unaudited) ....................................      6

        Notes to Consolidated Financial Statements .............................      7

        Item 2 - Management's Discussion and Analysis of Financial Condition
          and Results of Operations ............................................     12

        Item 3 - Quantitative and Qualitative Disclosures about Market Risk ....     20

        Item 4 - Controls and Procedures .......................................     20

Part II - Other Information

        Item 1 - Legal Proceedings .............................................     21

        Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds ...     21

        Item 3 - Defaults Upon Senior Securities ...............................     21

        Item 4 - Submission of Matters to a Vote of Security Holders ...........     21

        Item 5 - Other Information .............................................     21

        Item 6 - Exhibits ......................................................     22

Signatures .....................................................................     29
</TABLE>


                                       2
<PAGE>

FIRST LITCHFIELD FINANCIAL CORPORATION

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS                                                       March 31,         December 31,
                                                                                     2005               2004
                                                                                -------------      -------------
                                                                                 (Unaudited)
<S>                                                                             <C>                <C>
ASSETS
    Cash and due from banks                                                     $  13,803,251      $  12,222,713
                                                                                -------------      -------------
                                              CASH AND CASH EQUIVALENTS            13,803,251         12,222,713
                                                                                -------------      -------------
   Securities:
     Available for sale securities, at fair value                                 169,136,261        173,793,755
     Held to maturity securities (fair value $61,821-2005 and $70,196-2004)            62,768             70,946
                                                                                -------------      -------------
                                                       TOTAL SECURITIES           169,199,029        173,864,701
                                                                                -------------      -------------

   Federal Home Loan Bank stock, at cost                                            3,182,900          3,182,900
   Federal Reserve Bank stock, at cost                                                225,850            225,850
   Other restricted stock, at cost                                                     50,000             50,000

   Loans Receivable, net of allowance for loan losses of
                 $1,490,085 -2005, $1,389,947-2004
                                                              NET LOANS           225,645,049        217,028,751

   Premises and equipment, net                                                      2,856,805          2,769,827
   Deferred income taxes                                                            1,689,948            908,023
   Accrued interest receivable                                                      2,142,460          2,005,064
   Cash surrender value of insurance                                                8,999,491          8,906,407
   Other assets                                                                     2,795,815          3,140,511
                                                                                -------------      -------------

                                                           TOTAL ASSETS         $ 430,590,598      $ 424,304,747
                                                                                =============      =============

LIABILITIES
   Deposits:
     Noninterest bearing                                                        $  56,227,748      $  58,409,685
     Interest bearing                                                             242,964,673        242,437,694
                                                                                -------------      -------------
                                                         TOTAL DEPOSITS           299,192,421        300,847,379
                                                                                -------------      -------------

   Federal Home Loan Bank advances                                                 35,996,000         29,500,000
   Repurchase agreements with financial institutions                               59,900,000         59,900,000
   Repurchase agreements with customers                                             2,517,000            209,588
   Subordinated debt                                                                7,011,000          7,011,000
     Accrued expenses and other liabilities                                         2,145,482          2,291,107
                                                                                -------------      -------------

                                                      TOTAL LIABILITIES           406,761,903        399,759,074
                                                                                -------------      -------------
   Commitments & Contingencies                                                             --                 --

SHAREHOLDERS' EQUITY
   Preferred stock $.00001 par value; 1,000,000 shares authorized, no
     shares outstanding
   Common stock $.01 par value
     Authorized - 5,000,000 shares
     2005 - Issued - 2,132,481 shares, outstanding - 2,027,295 shares
     2004 - Issued - 2,130,843 shares, outstanding - 2,025,657 shares                  21,325             21,308
   Capital surplus                                                                 19,920,156         19,892,870
   Retained earnings                                                                7,328,666          6,555,092
   Less: Treasury stock at cost- 105,186 shares                                      (701,061)          (701,061)
   Accumulated other comprehensive loss-net unrealized loss
     on available for sale securities (net of taxes)                               (2,740,391)        (1,222,536)
                                                                                -------------      -------------
                                             TOTAL SHAREHOLDERS' EQUITY            23,828,695         24,545,673
                                                                                -------------      -------------

                             TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $ 430,590,598      $ 424,304,747
                                                                                =============      =============
</TABLE>

See Notes to Consolidated Financial Statements.


                                       3
<PAGE>

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended March 31,                                                   2005           2004
                                                                            ----------     ----------
<S>                                                                         <C>            <C>
INTEREST AND DIVIDEND INCOME
   Interest and fees on loans                                               $3,285,612     $2,681,592
                                                                            ----------     ----------

   Interest and dividends on securities:
      Mortgage-backed securities                                             1,035,293      1,149,977
      US Treasury and other securities                                         591,628        591,385
      State and municipal securities                                           195,669        161,795
      Corporate bonds and other securities                                      49,414         33,234
                                                                            ----------     ----------
           Total interest on securities                                      1,872,004      1,936,391
   Other interest income                                                         7,425          6,507
                                                                            ----------     ----------
                                                  TOTAL INTEREST INCOME      5,165,041      4,624,490
                                                                            ----------     ----------

INTEREST EXPENSE
   Interest on deposits:
      Savings                                                                   29,565         52,331
      Money market                                                             239,858        384,139
      Time certificates of deposit in denominations of $100,000 or more        163,646        177,081
      Other time certificates of deposit                                       344,182        469,091
                                                                            ----------     ----------
                                             TOTAL INTEREST ON DEPOSITS        777,251      1,082,642
   Interest on Federal Home Loan Bank advances                                 248,511        207,078
   Interest on repurchase agreements                                           426,947        237,868
   Interest on subordinated debt                                                96,025         73,329
                                                                            ----------     ----------
                                                 TOTAL INTEREST EXPENSE      1,548,734      1,600,917
                                                                            ----------     ----------
                                                    NET INTEREST INCOME      3,616,307      3,023,573
PROVISION FOR LOAN LOSSES                                                      100,623         90,000
                                                                            ----------     ----------
                                              NET INTEREST INCOME AFTER
                                              PROVISION FOR LOAN LOSSES      3,515,684      2,933,573
                                                                            ----------     ----------
NONINTEREST INCOME
   Banking service charges and fees                                            222,164        231,615
   Trust                                                                       228,673        188,220
   Other                                                                       162,966        149,831
                                                                            ----------     ----------
                                               TOTAL NONINTEREST INCOME        613,803        569,666
                                                                            ----------     ----------
NONINTEREST EXPENSE
   Salaries                                                                  1,128,474      1,075,099
   Employee benefits                                                           381,117        370,096
   Net occupancy                                                               185,491        179,510
   Equipment                                                                   101,460         94,297
   Legal fees                                                                   36,307         51,279
   Directors fees                                                               37,070         39,560
   Computer services                                                           203,709        213,268
   Supplies                                                                     43,809         43,912
   Commissions, services and fees                                               67,411         69,113
   Postage                                                                      31,501         38,934
   Advertising                                                                  64,310         99,215
   OREO & non-performing loan expenses-net                                          --          6,261
   Other                                                                       383,483        346,899
                                                                            ----------     ----------
                                              TOTAL NONINTEREST EXPENSE      2,664,142      2,627,443
                                                                            ----------     ----------

                                             INCOME BEFORE INCOME TAXES      1,465,345        875,796
PROVISION FOR INCOME TAXES                                                     407,710        222,741
                                                                            ----------     ----------
                                                             NET INCOME     $1,057,635     $  653,055
                                                                            ==========     ==========

INCOME PER SHARE
                                             BASIC NET INCOME PER SHARE     $      .52     $      .33
                                                                            ==========     ==========
                                           DILUTED NET INCOME PER SHARE     $      .52     $      .32
                                                                            ==========     ==========
   DIVIDENDS PER SHARE                                                      $      .14     $      .12
                                                                            ==========     ==========
</TABLE>

See Notes to Consolidated Financial Statements.


                                       4
<PAGE>

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

<TABLE>
<CAPTION>
Three months ended March 31,                                                             2005             2004
                                                                                     -----------      -----------
<S>                                                                                  <C>              <C>
Net income                                                                           $ 1,057,635      $   653,055
Unrealized holding (losses) gains on securities:
       Unrealized holding (losses) gains arising during the period, net of taxes      (1,517,855)         298,057
                                                                                     -----------      -----------

Comprehensive (loss) income                                                          $  (460,220)     $   951,112
                                                                                     ===========      ===========
</TABLE>

See Notes to Consolidated Financial Statements.


                                       5
<PAGE>

FIRST LITCHFIELD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
Three months ended March 31,                                                  2005              2004
                                                                          ------------      ------------
<S>                                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                $  1,057,635      $    653,055
Adjustments to reconcile net income to net cash
  provided by operating activities:
       Amortization and accretion of premiums and discounts
          on investment securities, net                                         85,237            59,384
       Provision for loan losses                                               100,623            90,000
       Depreciation and amortization                                            97,006            86,157
       Deferred tax benefit on stock options exercised                          11,250                --
       Loss on disposals of bank premises and equipment                             --               917
       Gain from the sale of foreclosed real estate                                 --           (45,138)
       Increase in accrued interest receivable                                (137,396)         (148,372)
       Decrease in other assets                                                344,696           149,186
       Increase in cash surrender value of insurance                           (93,084)          (79,443)
       (Increase) decrease in deferred loan origination costs                  (34,602)           79,655
       Decrease in accrued expenses and other liabilities                     (146,093)         (248,494)
                                                                          ------------      ------------

          Net cash provided by operating activities                          1,285,272           596,907
                                                                          ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Available for sale securities:
       Proceeds from maturities and principal payments                       5,272,477         6,418,817
       Purchases                                                            (3,000,000)      (32,292,634)
Held to maturity mortgage-backed securities:
       Proceeds from maturities and principal payments                           8,178            10,902
Net increase in loans                                                       (8,682,319)         (845,318)
Proceeds from sale of foreclosed real estate                                        --           345,138
Purchase of bank premises and equipment                                       (183,984)         (131,542)
                                                                          ------------      ------------

        Net cash used in investing activities                               (6,585,648)      (26,494,637)
                                                                          ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in savings, money market and demand deposits        (3,913,192)        9,450,498
Net increase (decrease) in certificates of deposit                           2,258,234        (3,844,278)
Net increase (decrease) in short term Federal Home Loan Bank advances       11,496,000        (4,700,000)
Proceeds from Federal Home Loan Bank advances                                4,000,000                --
Repayments on Federal Home Loan Bank advances                               (9,000,000)               --
Net increase in repurchase agreements with financial institutions                   --        24,200,000
Net increase in repurchase agreements with customers                         2,307,412                --
Proceeds from the exercise of stock options                                     16,052           161,474
Dividends paid on common stock                                                (283,592)         (227,160)
                                                                          ------------      ------------

       Net cash provided by financing activities                             6,880,914        25,040,534
                                                                          ------------      ------------

       Net increase (decrease)  in cash and cash equivalents                 1,580,538          (857,196)

CASH AND CASH EQUIVALENTS, at beginning of period                           12,222,713        12,702,308
                                                                          ------------      ------------

CASH AND CASH EQUIVALENTS, at end of period                               $ 13,803,251      $ 11,845,112
                                                                          ============      ============

SUPPLEMENTAL INFORMATION

Cash paid during the period for:
       Interest on deposits and borrowings                                $  1,526,063      $  1,614,636
                                                                          ============      ============
       Income taxes                                                       $        500      $        600
                                                                          ============      ============

Non cash investing and financing activities:
       Accrued dividends declared                                         $    284,061      $    230,497
                                                                          ============      ============
</TABLE>

See Notes to Consolidated Financial Statements.


                                       6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    The consolidated  balance sheet at December 31, 2004 has been derived from
      the audited financial statements at that date, but does not include all of
      the information and footnotes required by accounting  principles generally
      accepted  in  the  United   States  of  America  for  complete   financial
      statements.

2.    The accompanying  unaudited  consolidated financial statements and related
      notes have been  prepared  pursuant  to the rules and  regulations  of the
      Securities and Exchange Commission.  Accordingly,  certain information and
      footnote disclosures normally included in financial statements prepared in
      accordance with  accounting  principles  generally  accepted in the United
      States  of  America  have  been   omitted   pursuant  to  such  rules  and
      regulations.  The  accompanying  financial  statements  and related  notes
      should be read in conjunction with the audited financial statements of the
      Company and notes thereto for the fiscal year ended December 31, 2004.

      These  financial  statements  reflect,  in the opinion of Management,  all
      adjustments,  consisting of only normal recurring  adjustments,  necessary
      for a fair  presentation  of the  Company's  financial  position  and  the
      results of their operations and its cash flows for the periods  presented.
      The results of  operations  for the three  months ended March 31, 2005 are
      not  necessarily  indicative  of the  results  of  operations  that may be
      expected for all of 2005.

3.    The  Company is  required  to present  basic  income per share and diluted
      income  per share in its  statements  of  income.  Basic  income per share
      amounts are computed by dividing net income by the weighted average number
      of common shares outstanding. Diluted income per share assumes exercise of
      all potential common stock in weighted average shares outstanding,  unless
      the effect is  antidilutive.  The  Company is also  required  to provide a
      reconciliation of the numerator and denominator used in the computation of
      both basic and diluted income per share.

      The following is information about the computation of net income per share
      for the  three  month  periods  ended  March 31,  2005 and 2004.  The 2004
      information  has been  restated  to give  retroactive  effect to all stock
      dividends for the periods presented.

<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                 March 31, 2005
                                                    ----------------------------------------
                                                       Net                         Per Share
                                                      Income         Shares         Amount
                                                    ----------     ----------     ----------
<S>                                                 <C>             <C>           <C>
      Basic Net Income Per Share
        Income available to common shareholders     $1,057,635      2,027,259     $      .52
                                                                                  ==========
      Effect of Dilutive Securities
        Options Outstanding                                 --         22,397
      Diluted Net Income Per Share
        Income available to common shareholders     ----------     ----------
        plus assumed conversions                    $1,057,635      2,049,656     $      .52
                                                    ==========     ==========     ==========

<CAPTION>
                                                                 March 31, 2004
                                                    ----------------------------------------
                                                       Net                         Per Share
                                                      Income         Shares         Amount
                                                    ----------     ----------     ----------
<S>                                                 <C>             <C>           <C>
      Basic Net Income Per Share
        Income available to common shareholders     $  653,055      2,003,579     $      .33
                                                                                  ==========
      Effect of Dilutive Securities
        Options Outstanding                                 --         32,273
      Diluted Net Income Per Share
        Income available to common shareholders     ----------     ----------
        plus assumed conversions                    $  653,055      2,035,852     $      .32
                                                    ==========     ==========     ==========
</TABLE>


                                       7
<PAGE>

4.   Other comprehensive income, which is comprised solely of the change in
     unrealized gains and losses on available for sale securities, is as
     follows:

<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                            March 31, 2005
                                                                             ---------------------------------------------

                                                                              Before-Tax          Tax           Net-of-Tax
                                                                                Amount           Effect           Amount
                                                                             -----------      -----------      -----------
<S>                                                                          <C>              <C>              <C>
Unrealized holding losses arising during the period                          $(2,299,780)     $   781,925      $(1,517,855)
Less: reclassification adjustment for amounts recognized in net income                --               --               --
                                                                             -----------      -----------      -----------

Unrealized holding losses on available for sale securities, net of taxes     $(2,299,780)     $   781,925      $(1,517,855)
                                                                             ===========      ===========      ===========

<CAPTION>
                                                                                            March 31, 2005
                                                                             ---------------------------------------------

                                                                              Before-Tax          Tax           Net-of-Tax
                                                                                Amount           Effect           Amount
                                                                             -----------      -----------      -----------
<S>                                                                          <C>              <C>              <C>
Unrealized holding gains arising during the period                           $   451,602      $  (153,545)     $   298,057
Less: reclassification adjustment for amounts recognized in net income                --               --               --
                                                                             -----------      -----------      -----------

Unrealized holding gains on available for sale securities, net of taxes      $   451,602      $  (153,545)     $   298,057
                                                                             ===========      ===========      ===========
</TABLE>

The Bank has a  noncontributory  defined  benefit pension plan (the "Plan") that
covers  substantially  all employees who have  completed one year of service and
have  attained  age 21.  The  benefits  are  based on years of  service  and the
employee's  compensation  during the last five years of  employment.  The Bank's
funding  policy is to  contribute  amounts  to the Plan  sufficient  to meet the
minimum funding requirements set forth in ERISA, plus such additional amounts as
the Bank may  determine  to be  appropriate  from  time to time.  The  actuarial
information has been calculated  using the projected unit credit method.  During
the first quarter of 2005,  the Bank's  pension plan was curtailed as the Bank's
Board of Directors  approved the  cessation of benefit  accruals  under the Plan
effective  April 30, 2005.  Because of this action,  for the Plan year beginning
November 15, 2004, no contributions will be made by the Bank.

Components of net periodic benefit cost for the three months ended March 31:

                                                   2005            2004
                                                 --------        --------
      Service cost                               $     --        $ 64,889
      Interest cost                                52,516          48,050
      Expected return on plan assets              (58,310)        (56,573)
      Amortization of unrealized loss              13,222          11,009
                                                 --------        --------
      Net periodic benefit cost                  $  7,428        $ 67,375
                                                 ========        ========

6. The Bank is a member of the Federal  Home Loan Bank of Boston (the  "FHLBB").
As a member of the FHLBB, the Bank has access to a preapproved line of credit of
up to 2% of its total  assets and the  capacity to borrow up to 30% of its total
assets.  In accordance with an agreement with the FHLBB, the Bank is required to
maintain  qualified  collateral,  as defined in the FHLBB  Statement of Products
Policy,  free and clear of liens,  pledges and  encumbrances  for the  advances.
FHLBB stock and certain loans which aggregate approximately 100% of the


                                       8
<PAGE>

outstanding  advance are used as collateral.  Federal Home Loan Bank advances as
of March 31, 2005 are as follows:

                                    due 4/1/05          1,496,000 @ 2.60%
                                    due 7/27/05         6,000,000 @ 2.91%
                                    due 8/29/05         2,500,000 @ 2.40%
                                    due 8/29/05         2,500,000 @ 2.48%
                                    due 12/8/05         2,000,000 @ 2.36%
                                    due 2/10/06         3,000,000 @ 3.39%
                                    due 7/18/06         4,500,000 @ 2.33%
                                    due 7/16/07         4,500,000 @ 2.59%
                                    due 8/27/07         5,000,000 @ 3.76%
                                    due 7/18/08         4,500,000 @ 3.27%
                                                      -----------
                                        Total         $35,996,000
                                                      ===========

      As of March 31, 2005, the Bank had borrowings under repurchase  agreements
      with financial  institutions  totaling  $59,900,000.  This amount includes
      borrowings:

                                    due  4/26/05         4,700,000 @ 1.81%
                                    due 12/27/05         7,000,000 @ 3.08%
                                    due  1/30/06         3,000,000 @ 2.10%
                                    due  1/31/06         5,000,000 @ 3.32%
                                    due  1/28/07         4,000,000 @ 3.60%
                                    due  2/19/07        10,000,000 @ 2.74%
                                    due  2/25/07         4,650,000 @ 2.40%
                                    due 10/27/07         7,000,000 @ 3.26%
                                    due  7/28/08         5,000,000 @ 3.25%
                                    due  7/31/08         5,000,000 @ 3.27%
                                    due  2/25/09         4,550,000 @ 3.20%
                                                       -----------
                                        Total          $59,900,000
                                                       ===========

7. A reconciliation of the anticipated  income tax expense (computed by applying
the Federal  statutory income tax rate of 34% to the income before taxes) to the
provision  for  income  taxes as  reported  in the  statements  of  income is as
follows:

<TABLE>
<CAPTION>
For the three months ended March 31,
                                                              2005                 2004
                                                        ---------------      ----------------
<S>                                                     <C>          <C>     <C>           <C>
Provision for income taxes at statutory Federal rate    $ 498,217    34%     $ 297,771     34%
Increase (decrease) resulting from:
   Tax exempt income                                      (98,544)   (7)       (82,496)   (10)
   Nondeductible interest expense                           4,174     1          3,606      1
   Other                                                    3,863     0          3,860      1
                                                        -------------------------------------
Provision for income taxes                              $ 407,710    28%     $ 222,741     26%
                                                        =====================================
</TABLE>

8. The amortized cost,  gross  unrealized  gains,  gross  unrealized  losses and
approximate fair values of securities which are classified as available for sale
and held to maturity at March 31, 2005 and December 31, 2004 are as follows:


                                       9
<PAGE>

<TABLE>
<CAPTION>
AVAILABLE FOR SALE                                                March 31, 2005
                                        ------------------------------------------------------------------
                                                             Gross            Gross
                                          Amortized       Unrealized        Unrealized           Fair
                                            Cost             Gains            Losses             Value
                                        -------------    -------------     -------------     -------------
<S>                                     <C>              <C>               <C>               <C>
Debt Securities:
   U.S. Treasury securities             $   5,293,178    $       4,413     $     (57,201)    $   5,240,390
   U.S. Government Agency securities       46,980,484               --        (1,296,169)       45,684,315
   State and Municipal Obligations         18,067,543          274,512           (80,760)       18,261,295
   Corporate and Other Bonds                3,005,903               --            (5,903)        3,000,000
                                        -------------    -------------     -------------     -------------

                                           73,347,108          278,925        (1,440,033)       72,186,000
                                        -------------    -------------     -------------     -------------

Mortgage-Backed Securities:
   GNMA                                     6,583,772           44,225           (14,464)        6,613,533
   FNMA                                    60,127,458            3,136        (2,203,668)       57,926,926
   FHLMC                                   31,230,032           10,190          (830,420)       30,409,802
                                        -------------    -------------     -------------     -------------
                                           97,941,262           57,551        (3,048,552)       94,950,261
                                        -------------    -------------     -------------     -------------

Marketable Equity Securities                2,000,000               --                --         2,000,000
                                        -------------    -------------     -------------     -------------

Total available for sale securities     $ 173,288,370    $     336,476     $  (4,488,585)    $ 169,136,261
                                        =============    =============     =============     =============

<CAPTION>
                                                                 December 31, 2004
                                        ------------------------------------------------------------------
                                                             Gross            Gross
                                          Amortized       Unrealized        Unrealized           Fair
                                            Cost             Gains            Losses             Value
                                        -------------    -------------     -------------     -------------
<S>                                     <C>              <C>               <C>               <C>
Debt Securities:
   U.S. Treasury securities             $   5,292,694    $      15,742     $     (30,915)    $   5,277,521
   U.S. Government Agency securities       43,962,574           44,262          (828,456)       43,178,380
   State and Municipal Obligations         18,078,583          573,799           (13,259)       18,639,123
   Corporate and Other Bonds                3,007,856               --           (13,856)        2,994,000
                                        -------------    -------------     -------------     -------------

                                           70,341,707          633,803          (886,486)       70,089,024
                                        -------------    -------------     -------------     -------------

Mortgage-Backed Securities:
   GNMA                                     6,999,501           35,965           (12,548)        7,022,918
   FNMA                                    63,486,399            6,439        (1,250,920)       62,241,918
   FHLMC                                   32,818,476           48,630          (427,211)       32,439,895
                                        -------------    -------------     -------------     -------------
                                          103,304,376           91,034        (1,690,679)      101,704,731
                                        -------------    -------------     -------------     -------------

Marketable Equity Securities                2,000,000               --                --         2,000,000
                                        -------------    -------------     -------------     -------------

Total available for sale securities     $ 175,646,083    $     724,837     $  (2,577,165)    $ 173,793,755
                                        =============    =============     =============     =============

<CAPTION>
HELD TO MATURITY                                                   March 31, 2005
                                        ------------------------------------------------------------------
                                                             Gross            Gross
                                          Amortized       Unrealized        Unrealized           Fair
                                            Cost             Gains            Losses             Value
                                        -------------    -------------     -------------     -------------
<S>                                     <C>              <C>               <C>               <C>
Mortgage-Backed Securities:
   GNMA                                 $      55,258    $          --     $        (947)    $      54,311
   FHLMC                                        7,510               --                --             7,510
                                        -------------    -------------     -------------     -------------
Total held to maturity securities       $      62,768    $          --     $        (947)    $      61,821
                                        =============    =============     =============     =============

<CAPTION>
                                                                  December 31, 2004
                                        ------------------------------------------------------------------
                                                             Gross            Gross
                                          Amortized       Unrealized        Unrealized           Fair
                                            Cost             Gains            Losses             Value
                                        -------------    -------------     -------------     -------------
<S>                                     <C>              <C>               <C>               <C>
Mortgage-Backed Securities:
   GNMA                                 $      58,564    $          --     $        (750)    $      57,814
   FHLMC                                       12,382               --                --            12,382
                                        -------------    -------------     -------------     -------------
Total held to maturity securities       $      70,946    $          --     $        (750)    $      70,196
                                        =============    =============     =============     =============
</TABLE>

At March 31, 2005,  gross  unrealized  holding  losses on available for sale and
held  to  maturity  securities  totaled  $4,489,532.   Of  the  securities  with
unrealized  losses,  there  were  twenty-seven  securities  that  have been in a
continuous  unrealized  loss position for a period of twelve months or more. The
unrealized  losses on these  securities  totaled  $3,560,188  at March 31, 2005.
Management  does not believe  that any of the  unrealized  losses are other than
temporary as they


                                       10
<PAGE>

relate to debt and  mortgage-backed  securities issued by U.S. Government and U.
S. Government  sponsored  agencies,  and are due to changes in the interest rate
environment.  The  Company  has both the  intent  and the  ability to hold these
securities  until maturity or until the fair value fully recovers.  In addition,
management  considers the issuers of the securities to be financially  sound and
the Company will receive all contractual principal and interest related to these
investments.  As a result, management believes that these unrealized losses will
not have a negative impact on future earnings or a permanent  effect on capital.
However,  Management  periodically evaluates investment alternatives to properly
manage the overall balance sheet. The timing of sales and reinvestments is based
on various factors, including management's evaluation of interest rate risks and
liquidity needs.

9. A summary of the Bank's loan  portfolio  at March 31, 2005 and  December  31,
2004 is as follows:

                                                       2005            2004
            Real estate--residential mortgage     $ 152,410,573   $ 148,661,814
            Real estate--commercial mortgage         33,355,645      33,655,103
            Real estate--construction                15,954,323      11,596,972
            Commercial                               19,047,996      17,910,953
            Installment                               6,014,798       6,315,197
            Other                                       118,656          80,118
                                                  -------------   -------------
                             TOTAL LOANS            226,901,991     218,220,157
            Net deferred loan origination costs         233,143         198,541
            Allowance for loan losses                (1,490,085)     (1,389,947)
                                                  -------------   -------------
                             NET LOANS            $ 225,645,049   $ 217,028,751
                                                  =============   =============

10. A summary of the Bank's  deposits at March 31, 2005 and December 31, 2004 is
as follows:

<TABLE>
<CAPTION>
                                                                    2005            2004
                                                                ----------------------------
<S>                                                             <C>             <C>
            Noninterest bearing:
                Demand                                          $ 56,227,748    $ 58,409,685
                                                                ------------    ------------
            Interest bearing:
                Savings                                           57,076,126      57,934,199
                Money market                                      97,712,587      98,585,769
                Time certificates of deposit in
                  denominations of $100,000 or more               31,199,180      25,823,673
                Other time certificates of deposit                56,976,780      60,094,053
                                                                ------------    ------------
                     Total Interest bearing deposits             242,964,673     242,437,694
                                                                ------------    ------------
                                              TOTAL DEPOSITS    $299,192,421    $300,847,379
                                                                ============    ============
</TABLE>

Included  in  deposits  as  of  March  31,  2005  and   December  31,  2004  are
approximately  $3,219,000 $4,318,000,  respectively,  of brokered deposits which
have varying maturities through September 2006.


                                       11
<PAGE>

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

GENERAL

First Litchfield Financial  Corporation (the "Company"),  a Delaware corporation
formed in 1988, is the one-bank  holding  company for The First National Bank of
Litchfield  (the "Bank"),  a national bank supervised and examined by the Office
of the  Comptroller  of the  Currency  (the  "OCC").  The Bank is the  Company's
primary subsidiary and only source of income. The Bank has two subsidiaries, The
Lincoln  Corporation  and Litchfield  Mortgage  Service  Corporation,  which are
Connecticut  corporations.  The  purpose of The Lincoln  Corporation  is to hold
property such as real estate,  personal property,  securities,  or other assets,
acquired by the Bank through  foreclosure  or otherwise to compromise a doubtful
claim or  collect  a debt  previously  contracted.  The  purpose  of  Litchfield
Mortgage Service  Corporation is to operate as a passive  investment  company in
accordance with Connecticut law.

Both the Company and the Bank are headquartered in Litchfield,  Connecticut. The
Bank is a full-service  commercial bank serving both  individuals and businesses
generally  within  Litchfield  County  Connecticut.  Deposits  are insured up to
specific limits of the Federal Deposit  Insurance Act by the Bank Insurance Fund
("BIF"), which is administered by the Federal Deposit Insurance Corporation (the
"FDIC").  The Bank's lending activities include loans secured by residential and
commercial  mortgages.   Other  loan  products  include  consumer  and  business
installment  lending, as well as other secured and nonsecured lending.  The Bank
has seven  banking  locations  located in the towns of  Torrington,  Litchfield,
Washington,  Marble Dale,  Goshen and Roxbury,  Connecticut.  The newest banking
facility, located in downtown Torrington,  Connecticut, opened in March of 2003.
In February of 2005 the Bank  submitted an application to the OCC to open a full
service  branch in Canton,  Connecticut.  In 1975,  the Bank was  granted  Trust
powers by the OCC.  The Bank's Trust  Department  provides  trust and  fiduciary
services to  individuals,  nonprofit  organizations  and  commercial  customers.
Additionally,  the Bank offers  nondeposit  retail  investment  products such as
mutual  funds,  annuities and insurance  through its  relationship  with Infinex
Investments, Inc.

During the second quarter of 2003, the Company formed a statutory  trust,  First
Litchfield Statutory Trust I. The Company owns 100% of the Trust's common stock.
The Trust  has no  independent  assets or  operations  and  exists  for the sole
purpose of issuing trust  securities and investing the proceeds in  subordinated
debentures  issued by the  Company.  On June 26, 2003 the Trust issued its first
series of trust preferred securities.

As of March 31, 2005, the Company had total assets of $430,590,598  which was an
increase of  approximately  $6.3 million or 1.5% from year-end 2004 total assets
of  $424,304,747.  The increase in assets  resulted mainly from increases in the
loan  portfolio.  This growth was funded  primarily by  increases in  borrowings
through Federal Home Loan Bank Advances.

The following  discussion and analysis of the Company's  consolidated  financial
condition  and  results of  operations  should be read in  conjunction  with the
consolidated financial statements and notes to the financial statements.


                                       12
<PAGE>

FINANCIAL CONDITION

Total assets as of March 31, 2005 were  $430,590,598,  an increase of $6,285,851
or 1.5% from year-end 2004 total assets of $424,304,747.

During the first quarter of the 2005, the composition of earning assets began to
shift  from the  securities  portfolio  to the  loan  portfolio.  This  shift is
consistent  with  Management's  intent to fully  utilize the earning  assets and
community  lending capacity of the Bank. The increase in assets was primarily in
the loan  portfolio  which  increased by $8,616,298 or 4.0% from year-end  2004.
Total loans as of March 31, 2005 were  $225,645,049  as compared to the year-end
2004  level  of  $217,028,751.   The  residential   mortgage  portfolio  totaled
$152,410,573  which was an increase of $3,748,759  or 2.52% from year-end  2004.
Growth in these mortgage products was primarily in fixed rate loans.  Commercial
mortgages  totaled  $33,355,645  remaining within 1% of their year-end  balance.
During the first quarter of 2005, construction mortgages increased by $4,357,351
or 37.57%.  The  increase in the  construction  mortgage  portfolio  was in both
residential and commercial  real estate loans.  This growth is the result of the
popularity of the construction to permanent  mortgage product as well commercial
calling  efforts  in our local  and  contiguous  markets.  The  commercial  loan
portfolio  increased  by  $1,137,043  or 6.35% from its year-end  2004  balance.
Again, this growth is attributed to commercial calling efforts.

As of March 31, 2005 the securities  portfolio totaled  $169,199,029  which is a
2.68%  decrease from the year-end  2004  balance.  The decrease in the portfolio
resulted   primarily  from  principal   payments  received  on   mortgage-backed
securities.  Liquidity  from  these  securities  was  utilized  to fund the loan
portfolio growth. During the first quarter of 2005 there was one U.S. Government
agency bond purchase which resulted in the slight increase in these securities.

Cash  and  cash  equivalents  totaled  $13,803,251,  which  is  an  increase  of
$1,580,538 or 12.9% from year-end 2004.

Total  liabilities  were  $406,761,903  as of March 31,  2005  compared to total
liabilities of  $399,759,074  as of year-end  2004.  During the first quarter of
2005,  deposits  decreased  $1,654,958  or .55%.  Demand  deposits  declined  by
$2,181,937 or 3.74%, which is indicative of normal daily  fluctuations.  Similar
decreases  were also  experienced  in both  savings and money  market  deposits.
Certificates of deposits below $100,000 in  denomination  declined by $3,117,273
or 5.19%. Lack of consumer interest in illiquid deposit investments continues to
erode these  deposits.  Certificates  of deposits above $100,000 in denomination
increased by $5,375,507 or 20.82%.  This growth is primarily the result of short
term deposits from local municipalities.

During the first  quarter of 2005,  earning  asset  growth was funded  primarily
through Federal Home Loan Bank advances.  These borrowings  increased $6,496,000
or 22.02%. Borrowing throughout the first quarter occurred on an overnight basis
as well as on both  longer and  shorter  contractual  terms.  Considerations  of
interest  levels,  yield curve and the  Company's  current and future  liquidity
needs determined the funding structures utilized.

RESULTS OF OPERATIONS

Summary

Net income for the Company  for the first  quarter of 2005  totaled  $1,057,635.
These  earnings  are $404,580 or 62.0% above  earnings for the first  quarter of
2004, which totaled  $653,055.  Basic and diluted income per share for the first
quarter of 2005 were $.52,  compared  to basic


                                       13
<PAGE>

and  diluted  income  per share of $.33 and $.32,  respectively,  earned for the
first  quarter of 2004.  For the first  quarter  of 2005,  the return on average
equity for the Company  totaled  17.06%  compared to 11.50% earned for the first
quarter of 2004.

Net Interest Income

Net interest  income is the single  largest  source of the Company's net income.
Net interest income is defined as the difference  between  interest and dividend
income from earning  assets,  primarily  loans and  investment  securities,  and
interest expense on deposits and borrowed money.  Interest income is the product
of the average balances  outstanding on loans,  securities and  interest-bearing
deposit  accounts  multiplied by their  effective  yields.  Interest  expense is
similarly  calculated as the result of the average balances of  interest-bearing
deposits and borrowed funds multiplied by the average rates paid on those funds.
Other  components  of  operating  income  are the  provision  for  loan  losses,
noninterest income such as service charges and trust fees,  noninterest expenses
and income taxes.

Net interest  income is comprised  of the  following  for the three months ended
March 31,

                                                      2005             2004
                                                   -----------      -----------

Interest and dividend income                       $ 5,165,041      $ 4,624,490
Tax-equivalent adjustments                              95,032           78,607
Interest expense                                    (1,548,734)      (1,600,917)
                                                   -----------      -----------

Net interest income                                $ 3,711,339      $ 3,102,180
                                                   ===========      ===========

The following table presents the Company's average balance sheets (computed on a
daily basis), net interest income, and interest rates for the three months ended
March 31, 2005 and 2004.  Average loans outstanding  include  nonaccruing loans.
Interest income is presented on a tax-equivalent  basis which reflects a federal
tax rate of 34% for all periods presented.

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL

<TABLE>
<CAPTION>
                                             Three months ended March 31, 2005              Three months ended March 31, 2004
                                        -------------------------------------------    -------------------------------------------
                                                            Interest                                       Interest
                                           Average           Earned/         Yield/       Average           Earned/         Yield/
                                           Balance            Paid            Rate        Balance            Paid            Rate
                                        -------------     -------------      ------    -------------     -------------      ------
<S>                                     <C>               <C>                 <C>      <C>               <C>                 <C>
Assets
Interest Earning Assets:
Loans                                   $ 223,545,000     $   3,286,022       5.88%    $ 191,839,000     $   2,682,153       5.59%
Investment Securities                     177,607,000         1,966,626       4.43%      180,361,000         2,014,437       4.47%

Other interest earning assets               2,875,000             7,425       1.03%        2,880,000             6,507        .90%
                                        -------------     -------------                -------------     -------------

Total interest earning assets             404,027,000         5,260,073       5.21%      375,080,000         4,703,097       5.02%
                                                          -------------       ----                       -------------       ----

Allowance for loan losses                  (1,426,000)                                    (1,164,000)
Cash and due from banks                    14,272,000                                     11,704,000
Bank premises and equipment                 2,826,000                                      2,828,000
Net unrealized (loss) gain on
  securities                               (2,200,000)                                        91,000
Other assets                               14,704,000                                     12,675,000
                                        -------------                                  -------------

Total Average Assets                    $ 432,203,000                                  $ 401,214,000
                                        =============                                  =============

Liabilities and Shareholders' Equity
Interest Bearing Liabilities:
Savings deposits                        $  57,964,000            29,565        .20%    $  54,043,000            52,331        .39%
Money Market deposits                     100,325,000           239,858        .96%      111,156,000           384,139       1.38%
Time deposits                              86,618,000           507,828       2.35%       93,833,000           646,172       2.75%
Borrowed funds                            103,523,000           771,483       2.98%       72,056,000           518,275       2.88%
                                        -------------     -------------                -------------     -------------

Total interest bearing liabilities        348,430,000         1,548,734       1.78%      331,088,000         1,600,917       1.93%
                                                          -------------       ----                       -------------       ----

Demand deposits                            57,157,000                                     47,002,000
Other liabilities                           1,813,000                                        418,000
Shareholders' Equity                       24,803,000                                     22,706,000
                                        -------------                                  -------------

Total liabilities and equity            $ 432,203,000                                  $ 401,214,000
                                        =============                                  =============

Net interest income                                       $   3,711,339                                  $   3,102,180
                                                          =============                                  =============
Net interest spread                                                           3.43%                                          3.09%
                                                                              ====                                           ====
Net interest margin                                                           3.67%                                          3.31%
                                                                              ====                                           ====
</TABLE>


                                       14
<PAGE>

RATE/VOLUME ANALYSIS

                                              3/31/05 Compared to 3/31/04
                                              Increase (Decrease) Due to
                                        ---------------------------------------

                                         Volume          Rate            Total
                                        ---------      ---------      ---------

Interest earned on:
Loans                                   $ 460,664      $ 143,205      $ 603,869
Investment securities                     (30,590)       (17,221)       (47,811)
Other interest income                         (12)           930            918
                                        ---------      ---------      ---------
Total interest earning assets             430,062        126,914        556,976
                                        ---------      ---------      ---------

Interest paid on:
Deposits                                  (56,412)      (248,979)      (305,391)
Borrowed money                            233,877         19,331        253,208
                                        ---------      ---------      ---------
Total interest bearing liabilities        177,465       (229,648)       (52,183)
                                        ---------      ---------      ---------

Increase in net interest income         $ 252,597      $ 356,562      $ 609,159
                                        =========      =========      =========

Tax-equivalent  net  interest  income  for the  first  quarter  of 2005  totaled
$3,711,339,  an increase of $609,159 or 19.6% from the first quarter of 2004. Of
the $609,159  increase in net interest income,  $252,597 is due to the increased
volume of earning  assets and  $356,562  is due to the  improvement  in the rate
spread between earning assets and funding liabilities.

Average  earning  assets  for the first  quarter of 2005  totaled  $404,027,000,
$28,947,000  or 7.72%  greater than the average of earning  assets for the first
quarter of 2004.  This increase in earning  assets,  specifically  mortgages and
commercial loans,  contributed to an additional $252,597 in net interest income.
Additional net interest  income of $356,562  resulted from an improved  interest
rate spread. The net interest margin increased by 36 basis points from the first
quarter  of 2004.  The yield on earning  assets  increased  19 basis  points and
resulted in additional interest income of $126,914.  This increase was primarily
due to  higher  interest  rates  earned  in the loan  portfolio  due to a higher
interest rate  environment.  The decrease in overall  funding costs  resulted in
additional  net  interest  income  of  $229,648.   Costs  of  interest   bearing
liabilities,  specifically  deposits,  declined by 15 basis points over the same
period.  The total  rate paid on all  interest  bearing  deposits  for the first
quarter of 2005 was 1.27%,  down 40 basis points  compared to the first  quarter
2004 cost of 1.67%.  This  decrease  was due to  management's  ability to reduce
rates paid on core deposits  during 2004 as well as to longer term time deposits
repricing at lower rates.  Interest  costs related to borrowed  funds  increased
slightly due to the higher interest rate environment.

Provision for Loan Losses

The provision  for loan losses for the first  quarter of 2005 totaled  $100,623,
which is an  increase of $10,623  over the  provision  for the first  quarter of
2004.  The provision for loan losses is determined  quarterly and assessed along
with the adequacy of the loan loss  reserve.


                                       15
<PAGE>

Management's  decision  to increase  the  provision  is based upon an  increased
emphasis in commercial lending, as well as its analysis of non-performing loans,
their collateral and cautious economic expectations in the local market.

During the first quarter of 2005, the Company  recorded net  charge-offs of $485
compared  to first  quarter  2004 net  charge-offs  of  $45,030.  First  quarter
charge-offs  and  recoveries  for both years were related  primarily to consumer
loans,  specifically in the indirect dealer loan program which was discontinued.
The decrease in net charge-offs between years is the result of the significantly
lower balance of that portfolio as well as the Bank's collection efforts.

Noninterest Income

Noninterest  income for the first quarter of 2005 totaled  $613,803,  increasing
$44,137 or 7.75% from the first quarter 2004 income of $569,666. The income from
banking  service  charges and fees  decreased  by $9,451 or 4.08% from the first
quarter of 2004.  This  decrease is primarily  due to a slightly  lower level of
deposit overdraft  charges and account  maintenance fees. Trust income increased
$40,453 or 21.49% from the first quarter of 2004.  Contributing to this increase
is  a  higher  level  of  investments  under  management.   Also,  there  was  a
nonrecurring  fee rebate incurred during the first quarter of 2004 which reduced
trust income for that period.  Other  noninterest  income totaled  $162,966,  an
increase of $13,135 or 8.77% from the first  quarter of 2004.  Increased  income
was due to higher fees from the Bank's  retail sales of  non-deposit  investment
products.  Offsetting  this increase was the $45,138 gain recorded from the sale
of OREO property  during the first quarter of 2004.  There were no similar gains
during 2005.

Noninterest Expense

First quarter 2005 noninterest expense totaled  $2,664,142,  increasing 1.40% or
$36,699 from the first quarter 2004 expense of $2,627,443. Salaries and benefits
expense  increased by $64,396  reflecting  slightly  higher  staffing and salary
levels and significantly increased health insurance,  pension and other benefits
costs. In answer to the continued increases in benefit costs, the Bank curtailed
its defined benefit pension plan effective April 30, 2005.  Although this action
will have no impact in 2005 earnings,  Management  anticipates  that this action
will mitigate  future cost  increases.  Advertising  expense totaled $64,310 and
decreased  by  35.18%  from the  first  quarter  2004 due  mostly  to  timing of
promotional  events  scheduled to occur during the year as well as to lower fees
for  service  paid to the  outside  agencies.  Legal fees  decreased  $14,972 or
29.20%.  Costs  for  external  computer  services  decreased  by $9,559 or 4.48%
reflecting changes in ancillary processors, services and account activity.

Other  noninterest  expenses  increased  by  $36,584,  or 10.55%  from the first
quarter  of 2004.  This is due to costs for  computer  software  related  to new
products  and  technology.  Additionally,  fees  paid for  insurance  and  audit
services  increased  from first quarter 2004 due to the Company's  growth and to
regulatory environment.  Offsetting some of these increases were decreased costs
for computer  consulting,  postage,  seminars and travel.  Most of the decreased
costs  are  temporary  in  nature  and are  related  to the  timing  of  various
activities throughout the year.

Income Taxes

The first quarter 2005 provision for income taxes totaled $407,710,  which is an
increase of $184,969 from the first quarter of 2004.  The increase in income tax
expense is the result of higher  taxable  income as well as an  increase  in the
Company's  effective tax rate.  The


                                       16
<PAGE>

Company's  effective  tax rate for the first quarter of 2005 was 28% compared to
that of 26% for the first  quarter of 2004.  The increase in the  effective  tax
rate is due to a proportionately  lower  non-taxable  income from both State and
Municipal investments as well as that from bank owned life insurance.

LIQUIDITY

Management's  objective  is to ensure  continuous  ability to meet cash needs as
they arise.  Such needs may occur from time to time as a result of  fluctuations
in loan  demand  and the level of total  deposits.  Accordingly,  the Bank has a
liquidity  policy that provides  flexibility  to meet cash needs.  The liquidity
objective is achieved through the maintenance of readily  marketable  investment
securities as well as a balanced flow of asset maturities and prudent pricing on
loan and deposit products.

The Bank is a member of the Federal Home Loan Bank system which provides  credit
to its  member  banks.  This  enhances  the  liquidity  position  of the Bank by
providing a source of  available  overnight  as well as  short-term  borrowings.
Additionally, federal funds, borrowings through the use of repurchase agreements
and the sale of mortgage  loans in the  secondary  market are  available to fund
short term cash needs.

As of March 31, 2005, the Company had $74,262,187 in loan commitments and credit
lines  outstanding.  Since some commitments are expected to expire without being
drawn upon, the total commitment amount therefore does not necessarily represent
all future cash  requirements.  The funding of these commitments are anticipated
to  be  through  deposits,  loan  and  security  amortizations  and  maturities.
Management  believes  liquidity is adequate to meet its present and  foreseeable
needs.

CAPITAL

At March 31,  2005,  total  shareholders'  equity was  $23,828,695  compared  to
$24,545,673  at December 31, 2004.  From a regulatory  perspective,  the capital
ratios of the Company  and the Bank place each entity in the  "well-capitalized"
categories  under  applicable  regulations.  The various  capital  ratios of the
Company and the Bank are as follows as of March 31, 2005:

                                            Minimum
                                         Regulatory
                                     Capital Levels    The Company      The Bank
                                     --------------    -----------      --------
TIER 1:
  Leverage capital ratio                         4%          7.72%         7.06%

  Risk-based capital ratio                       4%         14.21%        12.99%

  Total risk-based capital ratio                 8%         14.84%        13.63%

ALLOWANCE FOR LOAN LOSSES AND CRITICAL ACCOUNTING POLICIES

In the ordinary course of business,  the Bank has made a number of estimates and
assumptions  relating  to the  reporting  results of  operations  and  financial
condition in preparing its financial  statements in conformity  with  accounting
principles  generally  accepted in the United States of America.  Actual results
could differ significantly from those estimates under different  assumptions and
conditions.  The Company believes the following  discussion addresses the Bank's
only critical  accounting policy,  which is the policy that is most important to
the portrayal


                                       17
<PAGE>

of the Bank's  financial  results  and  requires  management's  most  difficult,
subjective  and  complex  judgments,  often  as a  result  of the  need  to make
estimates about the effect of matters that are inherently uncertain.

The Bank makes  provisions for loan losses on a quarterly basis as determined by
a continuing  assessment of the adequacy of the  allowance for loan losses.  The
Bank performs an ongoing review of loans in accordance  with an individual  loan
rating system to determine  the required  allowance for loan losses at any given
date. The review of loans is performed to estimate potential exposure to losses.
Management's judgment in determining the adequacy of the allowance is inherently
subjective  and is  based  on an  evaluation  of the  known  and  inherent  risk
characteristics  and size of the loan  portfolios,  the  assessment  of  current
economic and real estate  market  conditions,  estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination  reports and  evaluations  of  impaired  loans,  and other  relevant
factors.  Loans, including impaired loans, are charged against the allowance for
loan losses when management  believes that the  uncollectibility of principal is
confirmed.  Any  subsequent  recoveries  are credited to the  allowance for loan
losses when received.  In connection with the determination of the allowance for
loan losses and the  valuation of  foreclosed  real estate,  management  obtains
independent appraisals for significant properties, when considered necessary.

The allowance  consists of specific,  general and  unallocated  components.  The
specific  component  relates to loans that are  classified  as either  doubtful,
substandard  or special  mention.  For such loans  that are also  classified  as
impaired,  an  allowance  is  established  when the  discounted  cash  flows (or
collateral value or observable  market price) of the impaired loan is lower than
the carrying value of that loan.  The general  component  covers  non-classified
loans  and is based on  historical  loss  experience  adjusted  for  qualitative
factors.  An  unallocated  component is maintained to cover  uncertainties  that
could affect management's estimate or probable losses. The unallocated component
of the allowance  reflects the margin of imprecision  inherent in the underlying
assumptions.

There were no material changes in loan  concentration or loan quality that had a
significant  effect on the  allowance for loan losses  calculation  at March 31,
2005. In addition,  there were no material changes in the estimation methods and
assumptions  used in the Company's  allowance for loan losses  calculation,  and
there were no material  reallocations  of the allowance among different parts of
the loan portfolio.

At March 31, 2005, the allowance for loan losses was equivalent to 103% of total
non-performing  assets as compared  with 73% of total  non-performing  assets at
December 31, 2004. This ratio was favorably impacted during the first quarter of
2005 due to several  residential  mortgages  that were removed  from  nonaccrual
status.  The ratio of the  allowance for loan losses to total loans at March 31,
2005 was .66% as compared to .64% as of December 31, 2004.

Changes in the  allowance  for loan losses for the periods  ended March 31, 2005
and 2004 are as shown below:

For the three months ended March 31,                   2005             2004
                                                   -----------      -----------

Balance at beginning of the year                   $ 1,389,947      $ 1,149,454
Provision for loan losses                              100,623           90,000
Loans charged off                                       (7,007)         (56,313)
Recoveries of loans previously charged off               6,522           11,283
                                                   -----------      -----------

Balance at end of period                           $ 1,490,085      $ 1,194,424
                                                   ===========      ===========


                                       18
<PAGE>

The following table  summarizes the Bank's OREO, past due and nonaccrual  loans,
and nonperforming assets as of March 31, 2005 and December 31, 2004.

                                            March 31, 2005     December 31, 2004
                                            --------------     -----------------

Nonaccrual loans                              $1,442,130           $1,634,999

Other real estate owned                               --                   --
                                              ----------           ----------

Total nonperforming assets                    $1,442,130           $1,634,999
                                              ==========           ==========

Loans past due in excess of 90 days and
  accruing interest                           $       --           $       --
                                              ==========           ==========

Potential Problem Loans

As of March 31, 2005, there were no potential  problem loans not disclosed above
which  cause  management  to  have  serious  doubts  as to the  ability  of such
borrowers to comply with their present loan repayment terms.

OFF BALANCE SHEET ARRANGEMENTS

The Company is a party to financial  instruments with off-balance  sheet risk in
the normal course of business to meet the financing  needs of its customers such
as letters of credit.  In the opinion of  management,  these  off-balance  sheet
arrangements are not likely to have a material effect on the Company's financial
condition, results of operation, or liquidity.

At March 31,  2005,  there have been no  significant  changes  in the  Company's
off-balance sheet arrangements from December 31, 2004.

FORWARD-LOOKING STATEMENTS

This Quarterly Report and future filings made by the Company with the Securities
and Exchange  Commission,  as well as other filings,  reports and press releases
made or  issued  by the  Company  and the  Bank,  and  oral  statements  made by
executive  officers  of  the  Company  and  Bank,  may  include  forward-looking
statements  relating  to  such  matters  as (a)  assumptions  concerning  future
economic and business  conditions and their effect on the economy in general and
on the  markets  in  which  the  Company  and  the  Bank  do  business,  and (b)
expectations  for  increased  revenues  and  earnings  for the  Company and Bank
through growth resulting from acquisitions,  attractions of new deposit and loan
customers   and  the   introduction   of  new   products  and   services.   Such
forward-looking  statements are based on assumptions  rather than  historical or
current facts and, therefore,  are inherently uncertain and subject to risk. For
those  statements,  the  Company  claims the  protection  of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.

The Company  notes that a variety of factors  could cause the actual  results or
experience  to  differ   materially  from  the  anticipated   results  or  other
expectations described or implied by such forward-looking  statements. The risks
and uncertainties that may affect the operations,  performance,  development and
results of the Company's and Bank's business include the following: (a) the risk
of adverse changes in business  conditions in the banking industry generally and
in the  specific  markets  in  which  the  Bank  operates;  (b)  changes  in the
legislative and regulatory  environment  that negatively  impact the Company and
Bank through increased operating expenses;  (c) increased competition from other
financial  and  nonfinancial  institutions;  (d)  the  impact  of  technological
advances;  and (e)  other  risks  detailed  from  time to time in the


                                       19
<PAGE>

Company's filings with the Securities and Exchange Commission. Such developments
could have an adverse  impact on the Company and the Bank's  financial  position
and results of operation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The main components of market risk for the Company are equity price risk, credit
risk,  interest rate risk and  liquidity  risk.  The  Company's  common stock is
traded on the Over the Counter  ("OTC")  Bulletin Board under the symbol "FLFL".
As a result,  the value of its common  stock may  fluctuate  or respond to price
movements relating to the banking industry or other indicia of investment.

The  Company  manages  interest  rate risk and  liquidity  risk  through an ALCO
Committee  comprised of senior  management  and other  officers.  The  committee
monitors  compliance  with the  Bank's  Asset/Liability  Policy  which  provides
guidelines to analyze and manage gap, which is the difference between the amount
of assets and the amounts of liabilities which mature or reprice during specific
time frames. The Company manages its interest-rate risk sensitivity  through the
use of a simulation  model that projects the impact of rate shocks,  rate cycles
and rate forecast estimates on net interest income.  These simulations take into
consideration factors such as maturities, reinvestment rates, prepayment speeds,
repricing  limits  and other  factors.  The  results  of these  simulations  are
compared to earnings  tolerance  limits set forth in the Bank's  Asset/Liability
Policy.

ITEM 4. CONTROLS AND PROCEDURES

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that information  required to be disclosed in the Company's  Exchange Act
report is recorded,  processed,  summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and  communicated  to the Company's  management,  including its Chief  Executive
Officer and Chief Financial Officer,  as appropriate,  to allow timely decisions
regarding  required  disclosure  based closely on the  definition of "disclosure
controls and  procedures"  in Rule  13a-15(e).  In designing and  evaluating the
disclosure controls and procedures,  management recognized that any controls and
procedures,  no  matter  how  well  designed  and  operated,  can  provide  only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit of
possible controls and procedures.

As of the end of the period covered by this report,  the Company  carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures.  Based on the  foregoing,  the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.

There are no changes in the Company's internal control over financial  reporting
that  occurred  during the Company's  first quarter of 2005 that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


                                       20
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings - Not applicable

Neither  the  Corporation  nor the  Bank (or any of  their  properties)  are the
subject of any material pending legal proceedings other than routine  litigation
that is  incidental  to  their  business  with  the  possible  exception  of the
following matter.

On September  9, 2003,  the Bank  commenced an action in Superior  Court for the
Judicial  District of Litchfield,  Connecticut in a matter  captioned "The First
National   Bank  of   Litchfield   v.  Theresa   Sullivan  and  John   Sullivan:
CV-03-0091476-S"  in an effort to collect principal and past due interest due on
two (2) loans,  which the Bank extended several years earlier and upon which the
Borrowers had defaulted.  The aggregate principal balance outstanding on the two
(2) loans was approximately $135,000. The Borrowers, who represent themselves as
pro se litigants in the  proceeding,  counterclaimed  against the Bank  alleging
that the Bank,  through  current  and  former  employees,  engaged in conduct in
violation of  covenants  of good faith and fair dealing  pursuant to both common
law and Connecticut statutes, that the Bank's conduct constitutes a violation of
the  Connecticut  Uniform Trade  Practices  Act. The Borrowers seek a variety of
unspecified  damages including money damages,  interest,  punitive damages,  and
"such other and further relief as the Court deems fair and just."

The Bank is conducting  discovery  with respect to the merits of the  underlying
action and counterclaim.  While the outcome of such litigation is unresolved, it
is not  expected  to  have  any  material  adverse  effect  upon  the  financial
statements of the Corporation.

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

Item 3. Defaults Upon Senior Securities - Not applicable

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

Item 5. Other Information - Not applicable


                                       21
<PAGE>

Item 6. Exhibits

      A.    Exhibits

                                  EXHIBIT INDEX

Exhibit
   No.      Exhibit
-------     -------

3.1         Certificate  of   Incorporation   of  First   Litchfield   Financial
            Corporation,  as amended.  Exhibit is  incorporated  by reference to
            Exhibit 3.1 set forth in the  Company's  Registration  Statement  on
            Form 10-SB as filed with the Securities  and Exchange  Commission on
            January 7, 2000.

3.2         Bylaws  of  First  Litchfield  Financial  Corporation,  as  amended.
            Exhibit is incorporated by reference to Exhibit 3.2 set forth in the
            Company's  Registration  Statement  on Form  10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

4.          Specimen  Common  Stock  Certificate.  Exhibit  is  incorporated  by
            reference  to  Exhibit  4. set forth in the  Company's  Registration
            Statement  on Form 10-SB as filed with the  Securities  and Exchange
            Commission on January 7, 2000.

10.1        1990 Stock Option Plan for Company's  President and Chief  Executive
            Officer, as amended. Exhibit is incorporated by reference to Exhibit
            10.1 set forth in the Company's Registration Statement on Form 10-SB
            as filed with the Securities  and Exchange  Commission on January 7,
            2000.

10.2        1994 Stock Option Plan for Officers and Outside  Directors.  Exhibit
            is  incorporated  by  reference  to  Exhibit  10.2 set  forth in the
            Company's  Registration  Statement  on Form  10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.3        Supplemental  Executive  Retirement  Agreement  between  Company and
            Jerome J. Whalen.  Exhibit is  incorporated  by reference to Exhibit
            10.3 set forth in the Company's Registration Statement on Form 10-SB
            as filed with the Securities  and Exchange  Commission on January 7,
            2000.

10.4        Change in Control  Agreement  between  Jerome J. Whalen and Company.
            Exhibit is  incorporated  by  reference to Exhibit 10.4 set forth in
            the Company's Registration Statement on Form 10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.5        Change in Control Agreement between Philip G. Samponaro and Company.
            Exhibit is  incorporated  by  reference to Exhibit 10.5 set forth in
            the Company's Registration Statement on Form 10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.6        Change in Control  Agreement between Carroll A. Pereira and Company.
            Exhibit is  incorporated  by  reference to Exhibit 10.6 set forth in
            the Company's Registration


                                       22
<PAGE>

            Statement  on Form 10-SB as filed with the  Securities  and Exchange
            Commission on January 7, 2000.

10.7        Change in Control  Agreement  between  John S.  Newton and  Company.
            Exhibit is  incorporated  by  reference to Exhibit 10.7 set forth in
            the Company's Registration Statement on Form 10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.8        Change in Control  Agreement  between  Revere H. Ferris and Company.
            Exhibit is  incorporated  by  reference to Exhibit 10.8 set forth in
            the Company's Registration Statement on Form 10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.9        Supplemental  Employee Retirement  Agreement between the Company and
            Walter Hunt.  Exhibit is  incorporated  by reference to Exhibit 10.9
            set forth in the Company's  Registration  Statement on Form 10-SB as
            filed with the  Securities  and  Exchange  Commission  on January 7,
            2000.

10.10       Deferred  Directors' Fee Plan.  Exhibit is incorporated by reference
            to Exhibit 10.10 set forth in the Company's  Registration  Statement
            on Form 10-SB as filed with the Securities  and Exchange  Commission
            on January 7, 2000.

10.11       Form  of   Employee   Change  in  Control   Agreement.   Exhibit  is
            incorporated  by  reference  to  Exhibit  10.11  set  forth  in  the
            Company's  Registration  Statement  on Form  10-SB as filed with the
            Securities and Exchange Commission on January 7, 2000.

10.12       Executive  Supplemental  Compensation  Agreement  dated November 21,
            2000  between  the  Company  and  Jerome  J.   Whalen.   Exhibit  is
            incorporated  by  reference  to  Exhibit  10.12  set  forth  in  the
            Company's  Annual  Report in Form  10-KSB for the fiscal  year ended
            December  31,  2000  as  filed  with  the  Securities  and  Exchange
            Commission on April 2, 2001.

10.13       Split Dollar Agreement with Salisbury Bank as Trustee dated November
            21, 2000.  Exhibit is incorporated by reference to Exhibit 10.13 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.14       The Rabbi  Trust  Agreement  with  Salisbury  Bank as Trustee  dated
            November 21, 2000.  Exhibit is  incorporated by reference to Exhibit
            10.14 set forth in the  Company's  Annual  Report in Form 10-KSB for
            the fiscal year ended December 31, 2000 as filed with the Securities
            and Exchange Commission on April 2, 2001.

10.15       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  Jerome J. Whalen and the Bank dated December 28,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.15 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.16       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement between Carroll A. Pereira and the Bank dated November 30,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.16 set
            forth in the  Company's  Annual


                                       23
<PAGE>

            Report in Form 10-KSB for the fiscal year ended December 31, 2000 as
            filed with the Securities and Exchange Commission on April 2, 2001.

10.17       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  Philip G.  Samponaro and the Bank dated December
            19, 2000.  Exhibit is incorporated by reference to Exhibit 10.17 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.18       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  Revere H. Ferris and the Bank dated November 30,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.18 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.19       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  John S. Newton and the Bank dated  December  21,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.19 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.20       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  Charles E. Orr and the Bank dated  November  29,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.20 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.21       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement between Patricia D. Werner and the Bank dated November 30,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.21 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.22       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  Clayton L. Blick and the Bank dated  December 4,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.22 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.23       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  George M. Madsen and the Bank dated  December 7,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.23 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.24       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  William J. Sweetman and the Bank dated  December
            20, 2000.  Exhibit is incorporated by reference to Exhibit 10.24 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.


                                       24
<PAGE>

10.25       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between H. Ray Underwood and the Bank dated  December 20,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.25 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.26       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between Bernice D. Fuessenich and the Bank dated December
            21, 2000.  Exhibit is incorporated by reference to Exhibit 10.26 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.27       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between Thomas A. Kendall and the Bank dated December 26,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.27 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.28       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  Ernest W. Clock and the Bank dated  December 26,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.28 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.29       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  Perley H. Grimes and the Bank dated December 27,
            2000.  Exhibit is  incorporated  by reference  to Exhibit  10.29 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2000 as filed  with the  Securities  and
            Exchange Commission on April 2, 2001.

10.30       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement between John H. Field and the Bank dated December 4, 2000.
            Exhibit is  incorporated  by reference to Exhibit 10.30 set forth in
            the Company's Annual Report in Form 10-KSB for the fiscal year ended
            December  31,  2000  as  filed  with  the  Securities  and  Exchange
            Commission on April 2, 2001.

10.31       Early  Retirement  Agreement  between Jerome J. Whalen and The First
            National  Bank  of  Litchfield  dated  April  2,  2002.  Exhibit  is
            incorporated  by  reference  to  Exhibit  10.31  set  forth  in  the
            Company's  10-QSB for the quarter ended March 31, 2002 as filed with
            the Securities and Exchange Commission on May 14, 2002.

10.32       Executive  Change in Control  Agreement  between Joseph J. Greco and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.32 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2002 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2002.

10.33       Executive Change in Control Agreement between Carroll A. Pereira and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.33 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2002 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2002.


                                       25
<PAGE>

10.34       Executive  Change in Control  Agreement  between Philip G. Samponaro
            and the Company and the Bank.  Exhibit is  incorporated by reference
            to Exhibit 10.34 set forth in the  Company's  10-QSB for the quarter
            ended  June 30,  2002 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2002.

10.35       Executive Change in Control Agreement between John S. Newton and the
            Company  and the Bank.  Exhibit  is  incorporated  by  reference  to
            Exhibit  10.35 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2002 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2002.

10.36       Executive Change in Control  Agreement  between Revere H. Ferris and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.36 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2002 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2002.

10.37       Form  of   Employee   Change  in  Control   Agreement.   Exhibit  is
            incorporated  by  reference  to  Exhibit  10.37  set  forth  in  the
            Company's  10-QSB for the quarter  ended June 30, 2002 as filed with
            the Securities and Exchange Commission on August 13, 2002.

10.37.1     The First National Bank of Litchfield Director Incentive  Retirement
            Agreement  between  Alan B. Magary and the Bank dated  December  19,
            2002.  Exhibit is  incorporated  by reference  to Exhibit  10.38 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2002 as filed  with the  Securities  and
            Exchange Commission on March 31, 2003.

10.38       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement between Gregory S. Oneglia and the Bank dated December 19,
            2002.  Exhibit is  incorporated  by reference  to Exhibit  10.39 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2002 as filed  with the  Securities  and
            Exchange Commission on March 31, 2003.

10.39       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  Joseph J. Greco and the Bank dated  December 19,
            2002.  Exhibit is  incorporated  by reference  to Exhibit  10.40 set
            forth in the  Company's  Annual Report in Form 10-KSB for the fiscal
            year  ended  December  31,  2002 as filed  with the  Securities  and
            Exchange Commission on March 31, 2003.

10.41       Executive  Change in Control  Agreement  between Joseph J. Greco and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.41 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2003 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2003.

10.42       Executive Change in Control Agreement between Carroll A. Pereira and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.42 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2003 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2003.

10.43       Executive Change in Control  Agreement  between Revere H. Ferris and
            the Company and the Bank.  Exhibit is  incorporated  by reference to
            Exhibit  10.43 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2003 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2003.


                                       26
<PAGE>

10.44       Executive Change in Control Agreement between John S. Newton and the
            Company  and the Bank.  Exhibit  is  incorporated  by  reference  to
            Exhibit  10.44 set forth in the  Company's  10-QSB  for the  quarter
            ended  June 30,  2003 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2003.

10.45       Executive  Change in Control  Agreement  between Philip G. Samponaro
            and the Company and the Bank.  Exhibit is  incorporated by reference
            to Exhibit 10.45 set forth in the  Company's  10-QSB for the quarter
            ended  June 30,  2003 as  filed  with the  Securities  and  Exchange
            Commission on August 13, 2003.

10.46       Form  of   Employee   Change  in  Control   Agreement.   Exhibit  is
            incorporated  by  reference  to  Exhibit  10.46  set  forth  in  the
            Company's  10-QSB for the quarter  ended June 30, 2003 as filed with
            the Securities and Exchange Commission on August 13, 2003.

10.47       Split  dollar  life  agreement  between  Joelene  E.  Smith  and the
            Company.  Exhibit is  incorporated by reference to Exhibit 10.47 set
            forth in the Company's 10-QSB for the quarter ended June 30, 2003 as
            filed with the  Securities  and  Exchange  Commission  on August 13,
            2003.

10.48       Split  dollar  life  agreement  between  Laura  R.  Szablak  and the
            Company.  Exhibit is  incorporated by reference to Exhibit 10.48 set
            forth in the Company's 10-QSB for the quarter ended June 30, 2003 as
            filed with the  Securities  and  Exchange  Commission  on August 13,
            2003.

10.49       Split  dollar life  agreement  between  Patricia A.  Carlson and the
            Company.  Exhibit is  incorporated by reference to Exhibit 10.49 set
            forth in the Company's 10-QSB for the quarter ended June 30, 2003 as
            filed with the  Securities  and  Exchange  Commission  on August 13,
            2003.

10.50       Split  dollar  life  agreement  between  Kathleen  McGarry  and  the
            Company.  Exhibit is  incorporated by reference to Exhibit 10.50 set
            forth in the Company's 10-QSB for the quarter ended June 30, 2003 as
            filed with the  Securities  and  Exchange  Commission  on August 13,
            2003.

10.51       Split  dollar  life  agreement  between  Cynthia  Showalter  and the
            Company.  Exhibit is  incorporated by reference to Exhibit 10.51 set
            forth in the Company's 10-QSB for the quarter ended June 30, 2003 as
            filed with the  Securities  and  Exchange  Commission  on August 13,
            2003.

10.52       Amended  and  Restated  Declaration  of Trust  of  First  Litchfield
            Statutory  Trust I. Exhibit is  incorporated by reference to Exhibit
            10.52 set forth in the  Company's  10-QSB for the quarter ended June
            30, 2003 as filed with the  Securities  and Exchange  Commission  on
            August 13, 2003.

10.53       Indenture  for  the  Company's  Floating  Rate  Junior  Subordinated
            Deferrable  Interest Debentures due 2033. Exhibit is incorporated by
            reference to Exhibit 10.53 set forth in the Company's 10-QSB for the
            quarter  ended  June 30,  2003 as  filed  with  the  Securities  and
            Exchange Commission on August 13, 2003.


                                       27
<PAGE>

10.54       The First National Bank of Litchfield Executive Incentive Retirement
            Agreement  between  Joelene E. Smith and the Bank dated December 22,
            2003.  Exhibit is  incorporated  by reference  to Exhibit  10.54 set
            forth in the Company's  10-KSB for the year ended  December 31, 2003
            as filed with the  Securities  and Exchange  Commission on March 30,
            2004.

10.55       Early Retirement Agreement between Philip G. Samponaro and The First
            National  Bank of  Litchfield  dated  January 26,  2004.  Exhibit is
            incorporated  by  reference  to  Exhibit  10.55  set  forth  in  the
            Company's  10-KSB for the year ended December 31, 2003 as filed with
            the Securities and Exchange Commission on March 30, 2004.

10.56       The First National Bank of Litchfield Director Incentive  Retirement
            Agreement between Kathleen A. Kelley and the Bank dated September 1,
            2004.  Exhibit is  incorporated  by reference  to Exhibit  10.56 set
            forth in the Company's  10-QSB for the quarter  ended  September 30,
            2004 as  filed  with  the  Securities  and  Exchange  Commission  on
            November 14, 2004.

10.57       Amendment  to  The  First  National  Bank  of  Litchfield   Director
            Incentive  Retirement  Agreement between Alan B. Magary and the Bank
            dated  August 26,  2004.  Exhibit is  incorporated  by  reference to
            Exhibit  10.57 set forth in the  Company's  10-QSB  for the  quarter
            ended  September 30, 2004 as filed with the  Securities and Exchange
            Commission on November 14, 2004.

21.         List of  Subsidiaries  of First  Litchfield  Financial  Corporation.
            Exhibit is  incorporated by reference to Exhibit 21 set forth in the
            Company's  10-K for the year ended  December  31, 2004 as filed with
            the Securities and Exchange Commission on March 31, 2005.

31.1        Certification of the Chief Executive Officer of the Company.

31.2        Certification of the Chief Financial Officer of the Company.

32.0        Certification of the Chief Executive Officer and the Chief Financial
            Officer of the Company,  pursuant to 18 U.S.C.  ss.1350,  as adopted
            pursuant to section 906 of the Sarbanes-Oxley Act of 2003.


                                       28
<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.

Dated: May 13, 2005                     FIRST LITCHFIELD FINANCIAL CORPORATION


                                        By:    /s/ Joseph J. Greco
                                            ----------------------------
                                            Joseph J. Greco, President and
                                            Chief Executive Officer


Dated: May 13, 2005                     By:    /s/ Carroll A. Pereira
                                            ----------------------------
                                            Carroll A. Pereira
                                            Principal Accounting Officer


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