1. Outlook 2006: Banking January 5, 2006 William M. Samuelson, SVP, Director of Business and Professional Banking

2. 2 Jobs: Connecticut & Nationwide CT 2004 = 4.9% US 2004 = 5.5% CT 11/2005 = 5.1% US 11/2005 = 5.0% CT remains #1 in per-capita income –However, CT Personal Income increased 5.3% in 2005, 37 th in the nation in income growth –CT ranked 20 th in ”Economic Competitiveness” study (MA #1, RI #41)* *Suffolk University’s Beacon Hill Institute study 1.

3. 3 Key Interest Rates Current WSJ Prime = 7.25% –One Year Ago… WSJ Prime = 5.25% Current 10 Yr Treasury = 4.39% –One Year Ago…10 Yr Treasury = 4.22% Short v. Long Term Rates…. Inverted Yield Curve 2.

4. 4 Consumer/Business Confidence Energy prices ……..Katrina & related issues Housing prices continue to rise…..bubble? Quality/educated workforce Future rate hikes….will they continue? Unemployment……remains relatively low Can Business Investment help avoid a slowdown?* –2/3 of companies surveyed plan to increase capital spending by 8-9% –Exports are expected to rise –Depleted inventories need to be restored *Baruch College and Financial Executives International Study 3.

5. 5 Business Borrowing Demand for Borrowing remains relatively high Credit standards have eased Bank competition remains intense for borrowers Rate, fees and structure are negotiable Some banks are committing to business startups and expansion v. mature borrowers Relationships remain key…..we think! 4.