NewAlliance Reports Fourth Quarter Earnings of $9.6 Million, or$0.10 Per Share; Full Year 2008 Earnings of $45.3 Million, or$0.4

Tier 1 Capital Remains Strong at 11.05%, Superior Credit Quality Continues

Media Contact:
Judith E. Falango
First Vice President
NewAlliance Bank
203-789-2814

New Haven, Connecticut, January 27, 2009 – NewAlliance Bancshares, Inc. (“NewAlliance” or the “Company”) (NYSE: NAL), the holding company for NewAlliance Bank, today released the results of its operations for the fourth quarter and full year of 2008. Net income and earnings per share for the quarter were $9.6 million and $0.10, respectively, compared to $10.9 million and $0.11 per share during the fourth quarter of 2007.

Net income for the full year was $45.3 million, or $0.45 per share. For the year ended December 31, 2007 the Company reported earnings of $23.8 million, or $0.23 per share. 2007 earnings were impacted by the loss recorded related to the restructuring of the securities portfolio, merger related charges, and a tax reserve adjustment. A detailed financial summary follows the text of this release.

The Company also announced that its Board of Directors voted today to pay a quarterly dividend of $0.07 per share on February 18, 2009 to shareholders of record on February 6, 2009. This will be the Company’s 19th consecutive quarterly dividend paid.

President and Chief Executive Officer Peyton R. Patterson stated, “The banking industry experienced unprecedented turmoil in 2008. NewAlliance faced these headwinds in a position of strength - with strong credit quality, excellent liquidity and healthy capital levels. This strength allows us to focus on building our customer base and lending to businesses and consumers in the Connecticut and Massachusetts markets that we know best. Keys to our results were increasing our net interest margin and maintaining rigorous expense controls.”

Capital Management

Total shareholder’s equity was $1.38 billion at December 31, 2008. The Company has maintained an excellent Tier 1 leverage ratio of 11.05% as compared to 10.92% at December 31, 2007. The ratio was 11.03% in the prior quarter. An institution is considered “well capitalized” if its Tier 1 leverage ratio is 5.0%. The Company repurchased 1.7 million shares during the year at an average price of $12.33 and paid a cash dividend of $0.07 during the quarter and $0.275 during the year.

Commenting on the Capital Purchase Program of the United States Treasury’s Troubled Asset Relief Program (“TARP”), which has gained increasing media scrutiny since its implementation, Ms. Patterson said “We did not apply for TARP funds due to our hallmark of maintaining excellent capital ratios – at December 31, 2008 the Company’s Tier 1 leverage ratio was more than double the 5% benchmark. Additionally, the TARP would place restrictions on common share dividend increases, dilute our existing shareholders through the grant of warrants, restrict share repurchases and reduce EPS and ROE. We believe our current capital structure is the best means to increase shareholder return over the long term and we have sufficient capital to exploit any market disruption among our competitors and pursue opportunistic acquisitions to enhance shareholder value.”

Credit Quality

Asset quality remained strong during the fourth quarter ended December 31, 2008. Nonperforming loans to total loans were 0.77% as compared to 0.71% in the prior quarter and nonperforming assets to total assets were 0.49% as compared to 0.44% for the same period. Net charge-offs experienced a slight increase of approximately $240,000 to $3.1 million and when combined with the strong asset quality ratios resulted in the Company recording a $3.8 million provision during the quarter, a decrease of $400,000 from the quarter ended September 30, 2008.

“Our growth has been guided by our historically rigorous credit standards and our asset quality indicators bear this out. Despite persistent stubborn credit problems that are taking their toll on many of our competitors we have steered a course that has avoided the loan quality problems that have inundated much of our industry. Most of the charge-offs we have experienced are in commercial construction loans for residential development which represent a very small percentage (0.95%) of our total loan portfolio. While we are not immune to problem loans we believe our risk management practices and underwriting standards are our core strengths which bode well in such uncertain economic times. However, if the economic environment deteriorates further as many have predicted this will impact our loan losses and increase our credit reserves,” said Don Chaffee, Executive Vice President and Chief Credit Officer.

Fourth Quarter and Linked Quarter Selected Highlights:

Full Year Highlights

“NewAlliance Bank continues to distinguish itself for safety and soundness and as a place customers trust to bank. This is evidenced by the very strong momentum seen in our core business activities,” commented Ms. Patterson.

At December 31, 2008 NewAlliance Bancshares, the parent company of NewAlliance Bank, had $8.30 billion in assets and operated 89 banking offices in Connecticut and Massachusetts.

NewAlliance Bank provides a full range of consumer and commercial banking products and services, trust services and investment and insurance products and services. The Bank’s website is atwww.newalliancebank.com. Shareholders are particularly urged to monitor the Investor Relations section of the Company’s website.

NewAlliance will hold a conference call on fourth quarter earnings at 10 a.m. Eastern Time on Wednesday, January 28, 2009. The call is being webcast and will be available at the Investor Relations section of the Company’s website atwww.newalliancebank.com. Individuals can dial in to the call at 1-800-860-2442. The international dial-in number is 1-412-858-4600.

NewAlliance will hold a conference call on fourth quarter earnings at 10 a.m. Eastern Time on Wednesday, January 28, 2009. The call is being webcast and will be available at the Investor Relations section of the Company’s website atwww.newalliancebank.com. Individuals can dial in to the call at 1-800-860-2442. The international dial-in number is 1-412-858-4600.

A replay of the webcast and call will be available after 12 Noon on January 28 through February 11, 2009. To access the replay, dial 1-877-344-7529 or for international access dial 1-412-317-0088. The passcode for either replay number is 426588.

NewAlliance will also have a podcast available from its website a few hours after the call for those interested in downloading the conference call onto individual listening devices or laptops.

The Company also announced today that it will hold its Annual Meeting of Shareholders on Monday, April 20, 2009 at 10 a.m. at the Crowne Plaza Cromwell, 100 Berlin Road, Cromwell, Connecticut, for shareholders of record as of March 9, 2009. The meeting will also be available through a live webcast. Details on the webcast will be made available on the Company’s website,www.newalliancebank.com, at least two weeks prior to the Annual Meeting.

Note: In discussing financial results, management may refer to certain non-GAAP (Generally Accepted Accounting Principles) measures. The Company’s management believes these non-GAAP measurements, which generally exclude the effects of charges and expenses related to the consummation of mergers and acquisitions and costs related to the integration of merged entities, as well as other unusual events, are essential to a proper understanding of the operating results of the Company’s core business largely because the merger and acquisition related items and their impact on the Company’s performance are difficult to predict. These non-GAAP measurements are not a substitute for operating results determined in accordance with GAAP nor do they necessarily conform to non-GAAP performance measures that may be presented by other companies. A reconciliation of GAAP and non-GAAP information is included in this release.

Statements in this news release, if any, concerning future results, performance, expectations or intentions are forward-looking statements. Actual results, performance or developments may differ materially from forward-looking statements as a result of known or unknown risks, uncertainties and other factors, including those identified from time to time in the Company’s filings with the Securities and Exchange Commission, press releases and other communications. Actual results also may differ based on the Company’s ability to successfully maintain and integrate customers from acquisitions.

The Company intends any forward-looking statements to be covered by the Litigation Reform Act of 1995 and is including this statement for purposes of said safe harbor provisions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Except as required by applicable law or regulation, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date as of which such statements are made.

The Company’s capital strategy includes deployment of excess capital through acquisitions. The Company’s results reported above reflect the impact of acquisitions completed within the periods reported. Past and future acquisitions are expected to continue to impact the Company’s results in future periods.

Complete Financials

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News Source : NewAlliance Reports Fourth Quarter Earnings of $9.6 Million, or$0.10 Per Share; Full Year 2008 Earnings of $45.3 Million, or$0.45 Per Share