To Our Shareholders:
     The Bank of Southern Connecticut (the "Bank"), the subsidiary of Southern Connecticut Bancorp, Inc. (the "Company"), completed its first full year of operation on December 31, 2002 and made great progress for a de novo commercial bank. As of December 31, 2002, the Bank completed fifteen months of operation since its opening on October 1, 2001.
     I am pleased to report that your Company has grown to $35,500,000 in total assets since its opening on October 1, 2001. From January 1, 2002 through December 31, 2002, assets grew from $17,400,000 to the $35,500,000.
     During the same period, deposits grew from $6,784,000 to $24,993,000. At this early stage of operations, percentage growth is not very meaningful, and accordingly, has not been presented. The breakdown of deposits, however, is meaningful as over $17,612,000 of the $24,993,000 of deposits are in demand deposit accounts and $6,402,000 of the deposits are in non-interest bearing accounts.
     Most important is the reception the Bank has received from the business community. During 2002, 237 commercial business accounts were opened as well as 57 commercial money market accounts, 11 regular commercial savings, and 13 commercial certificates of deposits. As of December 31, 2002, a total of 710 accounts were opened. Since our focus is to serve the business community, only 17 personal certificates of deposits over $100,000 were opened, totaling $2,554,000. This excellent deposit mix demonstrates that the Bank is not bidding for high cost, volatile funds. It also indicates that the business community recognizes the Bank as the business and merchant bank that we have set out to become.
     During the months of October and November 2001, subsequent to opening, nary a loan was underwritten as we carefully analyzed the credit worthiness of loan requests. During October and November 2001, we received requests for loans totaling $17,000,000 and $16,000,000 respectively. As a new bank, however, we chose to proceed cautiously in approving loans. The delay of approving loans delayed profitability. Funds from deposit accounts were invested in short-term investments, including Federal Funds while loan requests were reviewed. Federal Funds sold remained in the 1.5% range throughout the period. While the Bank's original feasibility study, conducted by an outside consulting firm prior to the Bank opening, assumed Federal Funds to be sold at 6.5% on average during our first full year of operation, the low interest rate environment kept the Federal Funds rate in the 1.5% range, thus negatively impacting earnings.
     During 2002, the Company incurred a net loss of $1,384,013. Typically, startup banks in Connecticut have lost money during the first 18 to 32 months of operations.
     Despite anticipated operating losses during the early stages of operations, the Bank remains one of the strongest capitalized banks in Connecticut. The Tier I Leverage Ratio is 23.76% compared with the regulatory requirement of 5%. The Tier I Risk Based Capital Ratio is 31.52% compared with a regulatory requirement of 6%. Finally, the total Risk Based Capital Ratio is 32.43% compared with a regulatory requirement of 10%. Therefore, all capital ratios exceed the regulatory requirements for well capitalized institutions.

On October 7, 2002, we opened our first branch office at 445 West Main Street, Branford. We are presently renovating a former Taco Bell site at 1475 Whalley Avenue, New Haven which will be our second branch office and third in our network. We expect to open the new office late in the first quarter of 2003. The Branford Office serves businesses in the shoreline area, especially Branford, North Branford, East Haven and Guilford, while the Amity Office will serve western New Haven, Woodbridge, Bethany, Seymour and parts of Orange. In an article in the Business Section of the New Haven Register dated April 24, 2002, John Carusone, President of the Bank Analysis Center, a Hartford-based industry consultant, said, "New banks that opened in the state were required to wait three years before they opened a new branch." Carusone further stated that, "Capital is king in this business." The Company raised more than $11,600,000 during its initial public offering in July of 2001. "The Department of Banking gave your Bank a strong vote of confidence by giving its approval to open two new offices before the Bank was one year old," Carusone concluded.
     In the fifteen months since opening, total loans have grown from zero to over $19,281,000. Based on management's assessment of economic conditions, and based on peer group data, the Bank established its allowance for loan losses at $232,000 as of December 31, 2002 or 1.2% of the total loan portfolio, which percentage is consistent with the percentage for all banks in Connecticut with assets of $100 million or less.
     The holding company, Southern Connecticut Bancorp, Inc., is opportunistically pursuing sites for other de novo bank locations as well as branch locations for consideration, subject to economic conditions.
     As expected, expenses will exceed revenues as we build our resources, our brand and our delivery channels in anticipation of long-term growth and profitability. The Board of Directors and Management are committed to building a strong infrastructure for future growth and profitability, as well as high quality, customer focused products and services.
     We have accomplished a great deal in fifteen months and are proud of our progress, accomplishments and growth. We are confident that our business model will succeed, and we will strive to increase shareholder value and provide a solid return on your investment.
     I would like to take this opportunity to thank a very strong and supportive Board of Directors, an excellent supporting staff, and especially you, the shareholder -- for giving us the financial support to get our Company moving. Come see us -- it's your bank -- we welcome your visit!

The Board of Directors of Southern Connecticut Bancorp, Inc. and The Bank of Southern Connecticut are pleased to announce that Michael M. Ciaburri has been elected President, Chief Operating Officer and Director of The Bank. Ciaburri began his banking career 20 years ago in 1983 in New York City and later trained in London, England. He graduated from the Stonier Graduate School of Banking, commercial banking's premier school now located at Georgetown University, and the School of Bank Administration at the University of Wisconsin. Both are three-year programs. Ciaburri is also a graduate of The Choate School in Wallingford, Connecticut and Manhattanville College in Purchase, New York.
     Ciaburri, with his former firms, Ciaburri Bank Strategies and Ciaburri and Company, the latter a boutique investment banking firm, was very instrumental in raising the Bancorp's initial capital. As a consultant to The Bank, he has also been responsible for much of the new business development of The Bank.
     The Board of Directors of The Bank of Southern Connecticut has also elected three new officers as the Bank has reached its first level of expansion. The appointments of Neal Chorney, Vice President and Branch Officer, Joseph P Nuzzo, Vice President, Commercial Lending and S. John Severson, Vice President, Marketing are effective immediately.

THE BANK OF SOUTHERN CONNECTICUT
BOARD OF DIRECTORS
2002-2003

*Juan Jose Alvarez de Lugo, Director
Arquin Decoraciones

*CarI R. Borrelli, Treasurer
All Brite Electric, Inc.

James S. Brownstein, Esq.
Kantrovitz & Brownstein

*Joseph V Ciaburri, Chairman and Chief Executive Officer
The Bank of Southern Connecticut

Michael M. Ciaburri, President and Chief Operating Officer
The Bank of Southern Connecticut

*G. Leon Jacobs, Tribal Manager
Mashantucket Pequot Tribal Nation

*Elmer F Laydon, President
Elmer F Laydon Construction Corp.

Janette J. Parker, Former Director
Connecticut Port Authority

W. Martyn Philpot, Jr., Esq.
Law Offices of Martyn Philpot, Jr.

Alfred J. Ranieri, Jr., MD

J. Daniel Sagarin, Esq.
Hurwitz & Sagarin

*Joshua H. Sandman, Vice President
Deitsch Plastic Co., Inc.

*AIphonse F Spadaro, Jr., Managing Principal, Levitsky & Berney PC.

*ALSO Director of Southern Connecticut Bancorp, Inc.

Bancorp Officers

Joseph V. Ciaburri, Chairman & Chief Executive Officer
Elmer F. Laydon, Vice Chairman
Rosemarie A. Romano, Corporate Secretary

Bank Officers
Joseph V. Ciaburri, Chairman & Chief Executive Officer
Michael M. Ciaburri, President & Chief Operating Officer
Elmer F. Laydon,Vice Chairman
Neal Chorney, Vice President, Branch Officer
Christine Curtis, Assistant Branch Manager, Branch Officer
Michael J. Marchese, Vice President, Commercial Banking Officer
Kathleen M. Mirto, Assistant Vice President, Branch Officer
Joseph R Nuzzo, Vice President, Commercial Banking Officer
Jorge L. Perez, Vice President, Commercial Banking Officer
James A. Peters, Vice President, Operations Officer
Rosemarie A. Romano, Associate Vice President, Executive Assistant to the Chairman
S. John Severson, Vice President, Marketing Officer
Anthony M. Avellani, Controller

Market Makers: Fahnestock & Co. and A.G. Edwards, Stock Symbol -- SCNO


Request for Annual Report to: Rosemarie A. Romano, Corporate Secretary, Southern Connecticut Bancorp, Inc., 215 Church Street, New Haven, Connecticut 06510.