CBT Passes $100 Million in Assets; Strong Growth in Loans

The Connecticut Bank and Trust Company, (Nasdaq: CTBC),
reported total assets reached $112 million at June 30, 2006, an
increase of $26 million or 30% compared to $86 million a year ago.
Loans outstanding increased $45.2 million or 119% to $83 million at
June 30, 2006 compared to $38 million one year ago.
   President and CEO David A. Lentini stated "To pass the $100
million mark in assets in just nine quarters of operation is very
gratifying and indicates our acceptance into the marketplace. Loan
growth remains strong with more and more commercial firms choosing CBT
as their financial services partner."
   The results for the quarter ended June 30, 2006 improved $213,000
or 19% to a loss of $908,000 or $0.25 per share, compared to a loss of
$1,121,000 or $0.59 per share for the same period in 2005. For the six
months ended June 30, 2006, the net loss was $1,784,000 or $.50 per
share compared to a loss of $2,085,000 or $1.10 per share for same
period in 2005. The per-share results for the second quarter of 2006
reflect the issuance of 1.65 million shares of CBT common stock issued
in September 2005.
   Results of Operations. The results for the second quarter of 2006
were impacted by significant growth in net interest income. Net
interest income rose $416,000, or 76%, to $965,000 for the quarter
ended June 30, 2006 compared to $549,000 for the quarter ended June
30, 2005. For the six months ended June 30, 2006, net interest income
amounted to $1,903,000, an increase of $885,000 or 87% compared to
$1,018,000 in the first half of 2005. The growth in loans and an
increase in the net interest margin to 3.86% in this quarter from
2.95% in the same period last year, were the main drivers of this
performance. The operating results also reflect an increase of
$181,000 in noninterest expenses to $1,720,000 for the quarter ended
June 30, 2006 compared to $1,539,000 in the second quarter of 2005.
For the first half of 2006, noninterest expenses were $3,470,000
compared to $2,863,000 in the first half of 2005. This increase
includes costs related to the opening and operation of the new banking
centers in Vernon and Newington and staff additions in Lending,
Operations and Administration.
   Balance Sheet Performance. Loans outstanding increased $26.0
million to $83.0 million at June 30, 2006 in connection with our most
successful quarter of loan production to date. Total assets were
$112.0 million at the end of the quarter compared to $96.9 million at
December 31, 2005. Total deposits were $75.8 million at June 30, 2006,
increasing $5.1 million or 7.3% from $70.7 million at December 31,
2005. Stockholders' equity at June 30, 2006 was $23.0 million compared
to $25.0 million at December 31, 2005 primarily reflecting the second
quarter 2006 operating loss and a decrease in the estimated market
value of the Bank's available for sale securities portfolio.
   Asset Quality. The allowance for loan losses at June 30, 2006 was
$1,136,000 compared to $876,000 at December 31, 2005 and represented
1.37% and 1.53% of loans outstanding for the respective dates. The
loans classified as nonaccrual amounted to $9,000 and there were no
loans past due 30 days or more at June 30, 2006.
   Recent News. Following our successful opening in Vernon at the
start of this year, in June work was completed on renovations for
CBT's fifth Banking Center. It is located at 66 Cedar Street, in
Newington, CT, and opened July 10th. During the quarter, Management
began finalizing plans to renovate the space formally occupied by
Arthur's Drug in Windsor, CT. This office is expected to open in
January 2007.
   Also during the quarter, CBT established an office of Raymond
James Financial Services, Inc, ("RJFS") in the Glastonbury Banking
Center. Through this facility CBT customers have easy access to a full
range of non-deposit investments such as bonds, stocks and annuities.
CEO Lentini noted, "At CBT we know the importance of providing choices
to both our business and personal customers in reaching their
financial objectives. Additional RJFS locations are planned in the
year ahead."
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                       Selected Performance Data
----------------------------------------------------------------------
                                   Three months ended
----------------------------------------------------------------------
Dollar values in      March    June    Sept.   Dec.   March     June 
 thousands              31,     30,     30,     31,     31,      30,
except per share       2005    2005    2005    2005    2006     2006
----------------------------------------------------------------------
Total assets (EOP)   $77,357 $86,132 $99,589 $96,875 $99,016 $112,462

Net operating loss     $(964)$(1,121)  $(861)  $(622)  $(877)   $(908)
Net interest margin     2.62%   2.95%   2.97%   3.69%   4.19%    3.86%
Ratio of total 
 stockholders'
 equity to total
 assets (EOP)          16.70%  14.12%  25.84%  25.85%  24.25%   20.47%
Average shares
 outstanding           1,889   1,905   1,968   3,567   3,567    3,567
Loss per share (1)    $(0.51) $(0.59) $(0.44) $(0.17) $(0.25)  $(0.25)
Book value per share
 (EOP)                 $6.84   $6.35   $7.21   $7.02   $6.73    $6.45
Allowance for loan 
 losses to
 total loans (EOP)      1.17%   1.33%   1.45%   1.53%   1.36%    1.37%

(1) Issuance of Shares in Sept. 2005.

----------------------------------------------------------------------
                       Selected Performance Data
----------------------------------------------------------------------
                                                       Year ended
----------------------------------------------------------------------
Dollar values in thousands                           June 30, June 30,
except per share                                       2005     2006
----------------------------------------------------------------------

Total assets (EOP)                                   $86,132 $112,462

Net operating loss                                   $(2,085) $(1,784)
Net interest margin                                     2.77%    4.02%
Ratio of total stockholders'
 equity to total assets (EOP)                          14.12%   20.47%
Average shares outstanding                             1,897    3,567
Loss per share (1)                                    $(1.10)  $(0.50)
Book value per share (EOP)                             $6.35    $6.45
Allowance for loan losses to
 total loans (EOP)                                      1.33%    1.37%

(1) Issuance of Shares in Sept. 2005.
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   Statements contained in this release, which are not historical
facts, may be considered forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties which could cause
actual results to differ materially from those currently anticipated,
due to a number of factors which include without limitation the
effects of future economic conditions, governmental fiscal and
monetary policies, legislative and regulatory changes, changes in the
interest rates, the effects of competition, and other factors that
could cause actual results to differ materially from those provided in
any such forward-looking statements.

   See financial statements accompanying this release for additional
data.

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                THE CONNECTICUT BANK AND TRUST COMPANY
                            BALANCE SHEETS
                             June 30, 2006
                        (Dollars in Thousands)

                                ASSETS
                                          June   December      June 
                                           30,      31,         30,
                                          2006     2005        2005
                                      (Unaudited)          (Unaudited)
                                      ----------- -------- -----------
Cash and due from banks                   $4,596   $1,406      $2,296
Interest bearing asset                        25        -           -
Federal funds sold                            50   11,027      13,939
                                      ----------- -------- -----------
          Cash and cash equivalents        4,671   12,433      16,235

Securities available for sale             21,083   23,908      29,502
Federal Reserve Bank stock, at cost          770      766         529
Federal Home Loan Bank stock, at cost        533      125           -

Loans                                     83,069   57,140      37,919
Less: allowance for loan losses           (1,136)    (876)       (506)
                                      ----------- -------- -----------
Loans, net                                81,933   56,264      37,413

Premises and equipment, net                2,036    2,079       1,796
Accrued interest receivable                  497      390         322
Other assets                                 939      910         335
                                      ----------- -------- -----------
Total Assets                            $112,462  $96,875     $86,132
                                      =========== ======== ===========

 LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits                                 $75,877  $70,740     $73,113
Short term borrowings                     10,591      442         286
Long term debt                             2,450        -           -
Other liabilities                            525      648         573
                                      ----------- -------- -----------
          Total liabilities               89,443   71,830      73,972
                                      ----------- -------- -----------

Stockholders' equity;
  Common stock, $1.00 par value;
   10,000,000 shares authorized;
   3,567,450 shares issued and
   outstanding at June 30, 2006 and 
   December 31, 2005, 1,913,250 as 
   of June 30, 2005                        3,567    3,567       1,914
  Common stock warrants                      853      853         853
  Additional paid-in capital              29,553   29,536      16,478
  Restricted stock unearned
   compensation                             (523)    (618)       (666)
  Retained deficit                        (9,540)  (7,756)     (6,273)
  Accumulated other comprehensive loss      (891)    (537)       (146)
                                      ----------- -------- -----------
          Total stockholders' equity      23,019   25,045      12,160
                                      ----------- -------- -----------
Total Liabilities and Stockholders'
 Equity                                 $112,462  $96,875     $86,132
                                      =========== ======== ===========


                THE CONNECTICUT BANK AND TRUST COMPANY
                 Consolidated Statements of Operations

                                 Three Months Ended   Six Months Ended
                                      June 30,             June 30,
                                ------------------   -----------------
                                    2006     2005       2006     2005
                                --------- --------   -------- --------
(Dollars in thousands except        (Unaudited)          (Unaudited)
   share data)
  Interest and dividend income:
    Interest and fees on loans    $1,386     $539     $2,534     $928
    Debt securities                  239      317        499      676
    Dividends                         11        8         29       16
    Federal funds sold                 1       63         16      110
                                --------- --------   -------- --------
      Total interest and
       dividend income             1,637      927      3,078    1,730
                                --------- --------   -------- --------
  Interest expense:
    Deposits                         530      377        948      710
    Borrowed funds                   142        1        227        2
                                --------- --------   -------- --------
      Total interest expense         672      378      1,175      712
                                --------- --------   -------- --------
  Net interest income                965      549      1,903    1,018
    Provision for loan losses        178      147        260      267
                                --------- --------   -------- --------
      Net interest income, 
       after provision for 
       loan losses                   787      402      1,643      751
                                --------- --------   -------- --------
  Non-interest income:
    Service charges and fees          25       19         43       30
    Net losses from sales of
     available-for-sale
     securities                        -       (3)         -       (3)
                                --------- --------   -------- --------
      Total non-interest income       25       16         43       27
                                --------- --------   -------- --------
  Non-interest expenses:
    Salaries and benefits            928      657      1,834    1,295
    Occupancy and equipment          287      216        563      410
    Data processing                   40       37         82       73
    Marketing                        158      283        430      503
    Professional services            146      191        253      305
    Other general and
     administrative                  161      155        308      277
                                --------- --------   -------- --------
     Total non-interest expenses   1,720    1,539      3,470    2,863
                                --------- --------   -------- --------
  Net loss                         $(908) $(1,121)   $(1,784) $(2,085)
                                ========= ========   ======== ========
  Net loss per share:
  Basic                           $(0.25)  $(0.59)    $(0.50)  $(1.10)
  Diluted                         $(0.25)  $(0.59)    $(0.50)  $(1.10)
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