NewAlliance Bancshares, Inc.
Board of Directors

Audit, Compliance & CRA Committee Charter
For the purposes of this Charter, the term "Bank" shall include NewAlliance Bank and NewAlliance Bancshares, Inc., its parent holding company, as appropriate. The Audit, Compliance & CRA Committee of the Board of Directors of the Bank shall operate within the terms of reference set out in this Charter.

Audit, Compliance and CRA Committee Mandate
The Audit, Compliance & CRA Committee (the "Committee") assists the Board in its oversight of internal accounting and operational controls, regulatory compliance and Community Reinvestment Act activities of the Bank and its subsidiaries. The Committee's mandate includes the following:

  1. To assist the Board of Directors with its oversight of the integrity of the Bank's financial statements, financial reporting, processes and systems of internal controls regarding finance, accounting and legal compliance;
  2. To select and appoint the Bank's independent auditors and internal auditors, pre-approve all audit and non-audit services to be provided, and establish the fees and other compensation to be paid to the independent and internal auditors;
  3. To monitor the independence and performance of the Bank's independent auditors and internal auditing function;
  4. To provide oversight of the Bank's risk management activities by reviewing the accounting, financial reporting and internal controls practices, as well as the Compliance Policy, Compliance Program, CRA Program and Fair Lending Program of the Bank;
  5. To establish procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Bank's employees regarding accounting, internal controls or auditing matters;
  6. To ensure appropriate Bank management action is taken to address existing or potential control issues brought to the attention of the Committee by the Bank's personnel, internal or external auditors, or regulators.

In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full power to retain outside counsel or other experts for this purpose.

Audit, Compliance and CRA Committee Organization

Committee Members
The Audit, Compliance & CRA Committee shall consist of at least three non-employee members of the Bank's Board of Directors appointed annually by the Board of Directors who are generally knowledgeable in financial and auditing matters, including at least one member with accounting or related financial management expertise. Each member shall be free of any relationships that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgment. Applicable laws and regulations shall be followed in evaluating a member's independence. No member of the Committee shall be a "large customer" of the Bank or represent a "large customer". The Governance Committee of the Board of Directors shall annually recommend directors for membership on the Committee.

Each member of the Committee shall diligently attempt to increase his/her knowledge of the Bank's operations, and laws and regulations governing the Bank and its operations.

Committee Meetings
The Committee shall meet at least quarterly. The Committee shall maintain a free and open communication with the external auditors, the internal auditors and management. At meetings attended by outsourced internal auditors and/or external auditors, a portion of the meeting shall be reserved for the Committee to meet in executive session with these parties. The Committee may meet in executive session with various Bank officers in order to assist in the identification of significant risks and regulatory compliance issues.

Audit, Compliance and CRA Committee Responsibilities

Financial Reporting

Annual Financial Statements
The Committee shall review with management and the independent auditors the Bank's annual financial statements prior to filing or release, including any certification, report, opinion or review rendered by management or the independent auditors in connection therewith. In conducting its review, the Committee shall discuss with the independent auditors their views and judgments on the integrity of such statements or reports, including a discussion of the matters required to be communicated to the Committee in accordance with SAS 61. The Committee shall make recommendations to the Board with respect to approving the financial statements for inclusion in the Bank's Annual Report.

Quarterly Financial Statements
The Committee shall review with management and the independent auditors the Bank's quarterly financial statements prior to filing or release, including any certification, report, opinion or review rendered by management or the independent auditors in connection therewith.

Financial Statements of Subsidiaries and Special Audits
The Committee shall review and discuss any separate audited financial statements completed for the Bank's subsidiaries or other special audits.

Financial Reporting Policies and Changes in Accounting Policies or Regulatory Requirements
The Committee relies on the expertise and knowledge of management, the internal auditors and the independent auditors in carrying out its oversight responsibilities. It is not the duty of the Committee to plan or conduct audits.

In the event of any disputes arising between management and the independent auditors in connection with the preparation of any of the Bank's financial statements or reports, the Committee shall ensure that these are resolved prior to the filing of the financial statements.

The Committee shall review and discuss with the independent auditors, internal auditors and management any new or significant changes in accounting policies or regulatory requirements and the implications of these on the Bank's financial reporting.

Earnings Releases

The Committee shall periodically discuss earnings press releases as well as the nature of financial information and earnings guidance provided to analysts and rating agencies.

Independent Auditors
The Committee shall select, appoint and oversee the work of the Bank's independent auditors in connection with the preparation and issuance of any audit or non audit report or related work. The independent auditors shall report directly to the Committee, who shall set the terms of their compensation and monitor their performance. The Committee shall also review the independent auditors' report regarding their independence and discuss all significant relationships they have with the Bank that could impair their independence. All audit and non-audit services to be provided to the Bank shall be pre-approved by the Committee. The Committee shall also approve the appointment of independent auditors performing separate audits on Bank subsidiaries or conducting other special audits, such as those required by government agencies or regulations, and the associated fees to be paid to the independent auditors for these services.

The Committee shall review with the independent auditors their planned scope of the audit plan and formally approve the audit plan. The Committee shall review the recommendations and Management's response to reports issued by the independent auditors, including the Bank's Management Letter. The independent auditors are required to communicate directly to the Committee on critical accounting principles and financial disclosure and reporting issues. The Committee shall also review the external auditors' annual peer review and disciplinary actions.

Internal Audit
The Committee shall oversee the selection of the Bank's internal auditors and the annual appointment of the Internal Audit Liaison. The Committee shall review any proposals for the appointment of outsourced internal auditors and associated fees and will formally approve the appointment of outsourced internal auditors. The Committee shall review and discuss significant issues that could impair the independence of the internal auditors, including any outsourced internal auditors and shall monitor the performance of the Bank's internal audit function. In addition, the Committee shall regularly review and update the Bank's Internal Audit Charter.

The Committee shall review with the internal auditors the planned scope of the internal audit program. The Committee shall review the recommendations and Management's response to reports issued by the internal auditors.

Internal Controls and Risk Management
The Committee shall review any significant matters regarding accounting, financial, operating, and MIS controls with Bank management, as well as with the independent auditors and internal auditors. In such discussions, the Committee shall inquire as to the degree of reliance that can be placed on detecting fraud or weaknesses in internal controls.

The Committee shall review certifications signed by the Chief Executive Officer and required by the Sarbanes-Oxley Act and discuss any deficiencies identified by management in the design or operation of the internal control systems which may be contained in the CEO/CFO certifications.

The Committee shall also review and discuss the Bankwide Risk Assessment Report and the Bank's Risk Management Policy and shall regularly review the minutes of the Bank's Risk Management Steering Committee. In addition, the Committee shall review with general counsel the status of legal matters that may have a material impact on the Bank's financial statements, compliance policies or inquiries from regulators as well as any complaints by employees (either past or present) made to the Connecticut Commission on Human Rights and Opportunities.

The Committee shall also establish procedures for the receipt, retention, response to and treatment of complaints, (including confidential, anonymous submissions by the Bank's employees), regarding accounting, internal controls or auditing matters and to ensure that Bank management takes appropriate action to address any such issues brought to the attention of the Committee by the Bank's personnel, internal or external auditors, or regulators. The Committee has authority to investigate matters brought to its attention through the Bank's Whistleblower Policy and shall also undertake any special reviews or procedures requested by the Board.

Compliance and CRA
The Committee shall review the Bank's Compliance Policy and Compliance Program and propose approval and any updates or modifications thereto to the full Board. The Committee shall review the Bank's results in lending for CRA purposes, as well as the compliance reporting made by the independent auditors, the compliance monitoring results, compliance training, CRA planning and regulatory examination results and responses and shall determine if any changes are needed to the Bank's CRA Assessment area.

Fair Lending
The Committee shall oversee the Bank's compliance with all fair lending laws and confirm that any complaints made to regulators regarding discrimination are acted upon. The Committee shall regularly review the Bank's Fair Lending Policy and propose approval and any updates or modifications to the policy to the full Board.

Proxy Disclosure
The Committee is responsible to prepare the report required by the rules of the SEC to be included in the Bank's annual proxy statement.

Other Matters

Charter Modifications/Updating
The Committee shall review this Charter annually and may recommend to the Governance Committee any proposed changes to this Charter for approval by the Board or Directors.

Committee Self-Assessment
The Committee shall perform an annual self-assessment of its performance to be included in an overall assessment report developed by the Governance Committee.