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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Commission File Number: 000-50610

NEWALLIANCE BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

(203) 789-2767

(Registrant’s telephone number, including area code)

________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

There were no shares of the registrant’s Common Stock outstanding as of March 31, 2004.

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New Haven Savings Bank

Consolidated Balance Sheets

See accompanying notes to consolidated financial statements.

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New Haven Savings Bank

Consolidated Statements of Income

See accompanying notes to consolidated financial statements.

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New Haven Savings Bank

Consolidated Statements of Changes in Capital Accounts

For the Three Months Ended March 31, 2004

See accompanying notes to consolidated financial statements.

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New Haven Savings Bank

Consolidated Statement of Cash Flows

See accompanying notes to consolidated financial statements.

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New Haven Savings Bank

Notes to Unaudited Consolidated Interim Financial Statements

The Consolidated Interim Financial Statements include the accounts of New Haven Savings Bank (“the Bank”) and its subsidiaries. The Consolidated Interim Financial Statements and Notes thereto have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All significant intercompany transactions have been eliminated in consolidation. Amounts in prior period financial statements are reclassified whenever necessary to conform to current period presentations. The results of operations for the three months ended March 31, 2004 are not necessarily indicative of the results, which may be expected for the year as a whole.

The preparation of the Consolidated Interim Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the Consolidated Interim Financial Statements and the reported amounts of revenues and expenses for the periods presented. The actual results of New Haven Savings Bank could differ from those estimates. Material estimates that are susceptible to near-term changes include the determination of the allowance for loan losses, the valuation of mortgage servicing rights and the determination of the obligation for pension and other post retirement benefits. These Consolidated Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in NewAlliance Bancshares’ Annual Report on Form 10-K for the nine months ended December 31, 2003.

New Haven Savings Bank changed its fiscal year end to December 31 effective December 31, 2003.

On April 1, 2004 under the Bank’s Plan of Conversion (“the Plan”) pursuant to which the Bank converted from a state-chartered mutual bank to a state-chartered stock bank and the acquisitions of Connecticut Bancshares, Inc. (“Connecticut Bancshares”) and Alliance Bancorp of New England, Inc. (“Alliance”) was consummated. All of the outstanding common stock of the Bank was sold to a holding company, NewAlliance Bancshares, Inc. (“the Company”), which sold its stock pursuant to the Plan. All of the stock of the Company issued in the conversion was offered to eligible and supplemental eligible account holders, employee benefit plans of the Bank and certain other eligible subscribers in a subscription offering pursuant to subscription rights in order of priority as set forth in the Plan. The Company sold 102,493,750 shares of common stock at $10.00 per share in the conversion offering and issued 4,000,000 shares of common stock to the NewAlliance Foundation. The Bank established an Employee Stock Ownership Plan (“ESOP”) for the benefit of eligible employees, which became effective upon the conversion. The ESOP borrowed from NewAlliance Bancshares, Inc. the proceeds necessary to fund the purchase of 7% of the common stock issued. The ESOP did not purchase any shares in the conversion, but completed its purchases in the open market on April 19, 2004. The Bank expects to make annual contributions adequate to fund the payment of the regular debt service requirements attributable to the indebtedness of the ESOP. The Bank’s Plan provided for the establishment of an additional charitable foundation (NewAlliance Foundation) in connection with the conversion. The NewAlliance Foundation was funded with the above mentioned contribution of 4,000,000 shares of the Company’s common stock. This contribution resulted in the recognition of expense, equal to the fair value of the shares contributed, in the period in which the contribution was made net of tax benefits. The NewAlliance Foundation will be dedicated to charitable purposes within the Bank’s local community, including community development activities. The Bank has incurred conversion and merger related costs of $24.3 million through March 31, 2004. Of this amount, $8.0 million was expensed during the periods incurred in 2003 and 2004. The remainder, $16.3 million has been deferred and will be either 1) deducted from proceeds of the shares sold in the offering (conversion related expenses) or 2) included in goodwill (merger related charges). The Plan provided for the establishment, upon the completion of the conversion, of a special “liquidation account” for the benefit of eligible account holders in an amount equal to the surplus of the Bank as of the date of its latest balance sheet contained in the final prospectus used in connection with the conversion. Account holders who continue to maintain deposit accounts at the Bank would be entitled, on a complete liquidation of the Bank after the conversion, to an interest in the liquidation account prior to any payment to the stockholders of

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the Bank. The Bank’s surplus will be substantially restricted with respect to payment of dividends to stockholders due to the liquidation account. Subsequent to the offering, the Company and the Bank may not declare or pay dividends on, nor repurchase any of its shares of common stock, if the effect thereof would cause stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration, payment or repurchase would otherwise violate regulatory requirements.

As of the close of trading on April 1, 2004 shareholders of Connecticut Bancshares received $52.00 in cash for each share of Connecticut Bancshares stock owned at that date for total consideration paid at closing of $579.4 million and $31.2 million for the cancellation of options. Shareholders of Alliance as of the close of trading on April 1, 2004 who elected to receive cash received $25.01 per Alliance share or a total of approximately $192,000 in cash. Those who elected to receive stock received 2.501 shares of NewAlliance Bancshares stock for each Alliance share or a total of 7,664,986 shares. These financial statements do not reflect the operations of either Connecticut Bancshares or Alliance.

FASB Interpretation No. 46 (revised December 2003) “Consolidation of Variable Interest Entities”, (FIN 46R) addresses consolidation by business enterprises of variable interest entities. FIN 46R expands upon existing accounting guidance that addresses when a company should include in its financial statements the assets, liabilities and activities of another entity. Under previous guidance, a company generally included another entity in its consolidated financial statements only if it controlled the entity through voting interests. The Interpretation requires a variable interest entity to be consolidated by a company if that company is the primary beneficiary of that entity. The primary beneficiary is subject to a majority of the risk of loss from the variable interest entities activities, or is entitled to receive a majority of the variable interest entities residual returns, or both. The Bank has interests in 1) limited partnerships in certain low income housing projects that generate tax credits, 2) makes investments in companies that construct, acquire and rehabilitate local real estate projects and 3) is a limited partner in SBIC limited partnerships that make equity and debt investments in individual companies. The Bank has evaluated all of the variable interest entities with which it is associated and based upon that evaluation; no variable interest entities meeting the definition of a primary beneficiary were identified. Therefore the adoption of FIN 46R as of March 31, 2004 did not have a material effect on its financial position or results of operations.

SFAS No. 132 (revised December 2003) “Employers Disclosures about Pensions and Other Postretirement Benefits” (FAS 132R). This statement changes the disclosure requirements for pension plans and other postretirement plans. This Statement retains the disclosures required by the original SFAS 132 and requires additional disclosures about the assets, obligations, cash flows and net periodic benefit cost of defined benefit pension and other postretirement plans. In addition, this Statement requires interim period disclosure of the components of net periodic benefit cost and contributions if significantly different from previously reported amounts. The Bank has adopted the provisions of this statement effective December 31, 2003. See Note 6 for the additional disclosures required by this statement.

SFAS No. 149 (April 2003). “Amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities”, (SFAS 149). This statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under FASB Statement No. 133, as well as amends certain other existing FASB pronouncements. In general, SFAS 149 is effective for derivative transactions entered into or modified and for hedging relationships designated after June 30, 2003. The adoption of this standard had no impact on the consolidated financial statements of New Haven Savings Bank.

SFAS No. 150 (May 2003). “Accounting For Certain Financial Instruments with Characteristics of Both Liabilities and Equity”, (SFAS 150). This Statement establishes standards for classifying and measuring certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. The provisions of SFAS 150 became effective June 1, 2003, for all financial instruments created or modified after May 31, 2003, and otherwise became effective as of July 1, 2003. The adoption of this standard had no effect on the consolidated financial statements of the Bank.

At its November 25, 2003 meeting, the Emerging Issues Task Force (EITF) ratified the consensus reached with regard to Issue 03-1 “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”. The consensus provides guidance regarding the meaning of other-than-temporary impairment and its application to investments accounted for under Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities. The consensus also requires certain quantitative and qualitative disclosures relating to investments with unrealized losses that have not been recognized as other-than-temporary impairments.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law. The Act expands Medicare primarily by adding a prescription drug benefit for Medicare-eligible retirees starting in 2006. The Act provides employers currently sponsoring prescription drug programs for Medicare-eligible retirees with a range of options for complying with the new government-sponsored program to potentially reduce program cost. The impact of the Act on the

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Bank’s accumulated pension benefit obligation and net periodic postretirement benefit cost has not been included. Specific authoritative guidance on the accounting for the federal subsidy is pending and guidance, when issued, could require the Bank to change previously reported information. Pursuant to guidance from the FASB under Staff Position SFAS No. 106-1 “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”, the Bank has chosen to defer recognition of the potential effects of the Act.

On March 9, 2004, the United States Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 105 – Application of Accounting Principles to Loan Commitments (“SAB 105”). SAB 105 summarizes the views of the SEC staff regarding the application of generally accepted accounting principles to loan commitments accounted for as derivative instruments. The SEC staff believes that in recognizing a loan commitment, entities should not consider expected future cash flows related to the associated servicing of the loan until the servicing asset has been contractually separated from the underlying loan by sale or securitization of the loan with the servicing retained. The provisions of SAB 105 are applicable to all loan commitments accounted for as derivatives and entered into subsequent to March 31, 2004. The adoption of SAB 105 will not have a material impact on the Bank’s consolidated results of operations or financial position, as the Bank’s current accounting treatment for such loan commitments is consistent with the provisions of SAB 105.

A summary of available for sale securities follows:

At March 31, 2004, the net unrealized gain on securities available for sale of $8.2 million, net of income taxes of $2.8 million, is included in accumulated other comprehensive income of $5.4 million in equity. At December 31, 2003, the net unrealized gain on securities available for sale of $1.2 million, net of income taxes of $416,000, is included in accumulated other comprehensive income of $829,000 in equity.

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A summary of deposits by account types is as follows:

Interest expense on deposits, by account type, is summarized as follows:

Pension Plans

The Bank has a non-contributory defined benefit retirement plan (the “Plan”) covering substantially all employees who have attained age 21 and completed 1,000 hours of service in a consecutive twelve-month period. Participants in the Plan become vested in their accrued benefit upon completing five years of service. Participants also become vested in their accrued benefit upon attainment of their “normal retirement age” (as described in the Plan) or upon incurring a disability. The Plan provides a monthly benefit upon retirement based on years of service and compensation during the highest paid consecutive five years of employment. Pension costs are funded as accrued and include amortization of prior service cost over 30 years.

The Bank also has a supplemental retirement plan (the “Supplemental Plan”) that provides benefits for certain key executive officers. Benefits under the Supplemental Plan are based on a predetermined formula as more fully described in the pension document. The benefits under the Supplemental Plan are reduced by other benefits as defined in the pension document. The liability arising from this plan is being accrued over the participants’ remaining period of services so that at the expected retirement date, the present value of the annual payments will have been expensed.

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New Haven Savings Bank has amended the supplemental plan in connection with its conversion to a stock bank to freeze the accrual of benefits. Because future benefits were reduced, this event resulted in a gain of $943,000 being recorded in the three months ending March 31, 2004. New Haven Savings Bank adopted a new supplemental executive retirement plan as of December 31, 2003.

Other Postretirement Benefit Plans

The Bank sponsors a health care plan and a life insurance plan (the “Postretirement Plan”) for the benefit of full-time employees who meet minimum age and service requirements. Benefits under the Postretirement Plan are limited to a fixed dollar amount and are based on a predetermined formula as more fully described in the plan document. The cost of providing retiree health care and other postretirement benefits is recognized over the period the employee renders service to the Bank.

The table below presents the net periodic benefit cost of the above-mentioned Qualified Pension Plan, Supplemental Pension Plan and Other Postretirement Benefits.

Components of Net Periodic Benefit Cost

Three Months Ended March 31,

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The following tables summarize components of other comprehensive income and the related tax effects for the three month periods ended March 31, 2004 and 2003.

Overview

New Haven Savings Bank (the “Bank”) offers a range of personal and business products through our 36 branch offices, ATMs, 24-hour phone access and online banking. We offer business and retail loans and, deposits, brokerage services, trust and insurance products. We are headquartered in New Haven and our offices are located in New Haven and Middlesex Counties, Connecticut.

In 2003 we organized NewAlliance Bancshares, Inc. (the “Company”), a Delaware business corporation, in connection with the proposed conversion of the Bank from mutual to capital stock form. On April 1, 2004 we completed the planned conversion from a mutual bank to a stock bank and simultaneously completed the planned acquisitions of Connecticut Bancshares, Inc., the holding company of Savings Bank of Manchester and Alliance Bancorp of New England, Inc., the holding company of Tolland Bank – located in Manchester and Vernon, Connecticut, respectively. At March 31, 2004, Connecticut Bancshares had $2.56 billion in assets and Alliance Bancorp had $430.1 million in assets.

The Bank’s conversion resulted in the Company owning all of the Bank’s outstanding capital stock. The Bank is now a wholly-owned subsidiary of the Company, a bank holding company regulated by the Federal Reserve Board. On April 1, 2004 the Bank changed its name to NewAlliance Bank.

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The conversion and acquisitions will have a significant impact on the Company by more than doubling the assets and deposits of the new institution and by expanding the branch network to 74 branches by the addition of 38 branches in Hartford, Tolland and Windham Counties. The Bank’s assets totaled $4.23 billion at quarter end, up $1.69 billion, or 66.6%, from the December 31, 2003 balance, driven by the Bank’s planned conversion. At March 31, 2004 the Bank held $1.70 billion in deposits for purchase of the Company’s stock, including $678.8 million returned to subscribers subsequent to the April 1, 2004 closing, as the subscription offering was oversubscribed.

These financial statements do not reflect the operations of either Connecticut Bancshares or Alliance.

Forward Looking Statements

This report, presented by the Company and its authorized officials, may contain certain forward looking statements regarding the Company’s prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of said safe harbor provisions.

Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the word “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project”, or similar expressions. The Company’s ability to predict results or the actual effects of its plans or strategies, including the Bank’s conversion to a stock savings bank and acquisitions of Connecticut Bancshares and Alliance, is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in market interest rates, loan prepayment rates, general economic conditions, legislation, and regulation; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; changes in the quality or composition of the loan or investment portfolios; changes in deposit flows, competition, and demand for financial services, and loan, deposit and investment products in the Company’s local markets; changes in accounting principles and guidelines; war or terrorist activities; the ability to successfully integrate the Connecticut Bancshares and Alliance franchises and retain their customers and employees; the ability to successfully implement the Company’s re-branding initiative for “NewAlliance”; and other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the Company’s operations, pricing and services.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Critical Accounting Policies

The accounting policies followed by the Bank and its subsidiaries conform with accounting principles generally accepted in the United States of America and with general practices within the banking industry.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. We believe that our most critical accounting policies upon which our financial condition depends, and which involve the most complex subjective decisions or assessment relate to income taxes, pension and other post retirement benefits, intangible assets, mortgage servicing rights, the allowance for loan losses, other than temporary impairment of securities and amortization and accretion on investment securities.

Comparison of Operating Results for the Three Months Ended March 31, 2004 and 2003

Earnings Summary. Net income decreased by $3.9 million, or 66.1% to $2.0 million for the quarter ended March 31, 2004 from $5.8 million for the three months ended at March 31, 2003. This decline is primarily attributable to an increase of $4.6 million in non-interest expenses, a decrease of $1.6 million in non-interest income and an increase of $300,000 in the provision for loan losses partially offset by an increase of $475,000 in net interest income and a decrease of $2.1 million in income taxes due to the lower income.

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Net Interest Income Analysis

Net Interest Income. Net interest income for the quarter ended March 31, 2004 was $19.0 million, compared to $18.6 million for the same period in the prior year. This $475,000, or 2.6%, increase is primarily due to an increase of approximately $4.1 million in net income due to balance changes, offset by a decrease of approximately $3.6 million in net interest income due to rate changes.

Interest Income. Interest income for the quarter ended March 31, 2004 was $27.1 million, compared to $26.7 million for the quarter ended March 31, 2003, an increase of $354,000, or 1.3%. Substantially all of the increase in interest income resulted from an increase in the average balance on interest-earning assets of $547.6 million partially offset by a decrease of 88 basis points on the rate earned. The increase in the average balance was primarily due to funds received in anticipation of the pending stock offering and were primarily concentrated in investment securities. The decrease on the rate earned was due to the Bank investing in short-term low yielding assets due to the liquidity needs of the then pending acquisitions. Management expects the yield on interest-earning assets to increase after the acquisitions as investments are liquidated to fund the purchase of Connecticut Bancshares or are redeployed into higher yielding investment vehicles. Interest income on loans decreased $1.1 million, or 5.8%, from $18.3 million for the quarter ended March 31, 2003. The decrease was due to a 102 basis point decline in the average yield due to the lower interest rate environment, partially offset by a $140.8 million increase in the average balance of loans outstanding. Interest income on mortgage-backed securities increased $1.4 million, or 20.6%, due to a 30 basis point increase in the average yield on these securities and an $85.9 million increase in the average balance. The increase in yield was due to a decrease in prepayment speeds which resulted in less

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premium amortization this period versus the same period a year ago. The increase in the average balance of mortgage-backed securities was due to the more favorable yields offered on these securities for comparable risk.

Interest Expense. Interest expense decreased $121,000, or 1.5%, to $8.0 million for the quarter ended March 31, 2004 from $8.1 million for the same period in 2003. The decrease was primarily due to a 44 basis point decrease on the rate paid on interest bearing liabilities, partially offset by a $541.4 million increase in the average balance of these liabilities. Interest expense on certificates of deposit decreased $1.2 million, or 33.0% due to a 46 basis point decrease in the rate paid and a $100.3 million decrease in the average balance. The decrease in the rate paid was due to the lower market rate environment. The decrease in the average daily balance was the result of management’s strategy of reducing reliance on higher cost certificates of deposit, particularly from non-core deposit customers. Interest expense on savings, NOW and money market accounts decreased $172,000, or 5.8%, due to a 37 basis point decrease in the rate paid, partially offset by a $454.0 million increase in the average balance on these deposits. The decrease in rate paid was due to the lower rate environment, while the increase in average balance was primarily due to balance increases from funds received in anticipation of the pending stock offering. Interest expense on FHLB advances and other borrowings increased $1.2 million, or 78.5%, from $1.6 million for the quarter ended March 31, 2003 to $2.8 million for the same period in 2004. The increase is due primarily to a $187.7 million increase in the average balance for these borrowings partially offset by an 86 basis point decrease in the cost of these funds. The increase in the average balance of FHLB advances was due to using the advances to fund purchases of mortgage-backed securities and match fund certain fixed rate loans.

Provision for Loan Losses. The provision for loan losses is based on management’s periodic assessment of the adequacy of the loan loss allowance which, in turn, is based on such interrelated factors as the composition of the loan portfolio and its inherent risk characteristics; the level of non-performing loans and charge-offs, both current and historic; local economic conditions, the direction of real estate values; and current trends in regulatory supervision.

The Bank recorded a $300,000 provision for the quarter ended March 31, 2004 compared to $0 for the same period in 2003. Management performs a monthly review of the loan portfolio and based on this review determines the level of the provision necessary to maintain an adequate loan loss allowance. The primary factors that influenced the increase in the provision were the rise in net charge-offs and the growth in the loan portfolio. The increase in charge-offs mainly reflects the default of one borrower in the amount of $2.0 million. At March 31, 2004, the allowance for loan losses was $15.9 million, which represented 734.3% of non-performing loans and 1.2% of total loans. This compared to the allowance for loan losses of $18.9 million at March 31, 2003 representing 482.7% of non-performing loans and 1.6% of total loans.

For additional information about the allowance for loan losses, please see the discussion of “Allowance For Loan Losses” beginning on page 20.

Non-Interest Income. Non-interest income decreased $1.6 million, or 28.2%, to $4.0 million for the three months ended March 31, 2004. The principal categories of non-interest income are as follows: