Exhibit 99.1

                     FIRST LITCHFIELD FINANCIAL CORPORATION


News Release
For Immediate Release

          First Litchfield Financial Corporation Sells Preferred Stock
                  Under the Treasury's Capital Purchase Program

Litchfield,   Connecticut,   December  12,  2008--First   Litchfield   Financial
Corporation (Trading Symbol:  FLFL.OB) (the "Company"),  the holding company for
The First National Bank of Litchfield  (the "Bank"),  announced that it has sold
to the U.S. Treasury Department $10,000,000 of Preferred Stock under the Capital
Purchase  Program (the "CPP") of the  Emergency  Economic  Stabilization  Act of
2008.

President  and CEO Joseph J. Greco  stated,  "The  Company and the Bank are both
`well-capitalized' institutions.  Nevertheless, in order to grow our capital for
our  shareholders  and to increase the ability of the Bank to make prudent loans
to its  customers,  we  determined  to seek these funds which are  available  at
attractive  rates.  We will use these funds to serve the communities we serve by
making loans to our customers to purchase homes,  grow their businesses and meet
their needs for credit."

The  Treasury  purchased  Preferred  Stock that  qualifies as Tier 1 capital for
regulatory  purposes and ranks senior to the Common Stock.  The Preferred  Stock
pays a cumulative dividend of 5 percent per annum for the first five years it is
outstanding and thereafter at a rate of 9 percent per annum. The Preferred Stock
is non-voting,  other than voting rights on matters that could adversely  affect
the Preferred  Stock.  The Preferred Stock is callable at one hundred percent of
the issue price plus any accrued and unpaid  dividends after three years.  Prior
to the end of three years,  the  Preferred  Stock may only be redeemed  with the
proceeds from a qualifying equity offering of any Tier 1 perpetual  preferred or
common stock for cash.

As part of the CPP,  the  Company  issued to the  Treasury a 10-year  Warrant to
purchase 199,203 shares of Common Stock at an exercise price of $7.53 per share.
If the Warrant were fully  exercised,  the Company  estimates that the ownership
percentage of the current  shareholders  would be diluted by approximately  7.8%
percent.

The terms and conditions of the transaction  conform to those established by the
Treasury  and  further  details  may be  found  at  the  Treasury's  website  at
http://treas.gov/initiatives/eesa.

At September  30, 2008,  the  Company's  Tier 1 capital  ratio was 6.31% and its
total  risk-based  capital ratio was 10.21%;  using  risk-weighted  assets as of
September 30, 2008, the Company's Tier I capital ratio and its total  risk-based
capital ratio after the issuance of the Preferred  Stock would be  approximately
8.38% and 12.98%, respectively.

Statements  contained in this news release  contain  forward-looking  statements
within the  meaning of the  Private  Securities  Litigation  Reform Act of 1995.
These statements are based on the beliefs and expectations of management as well
as the  assumption  made using  information  currently  available to management.
Because  these  statements  reflect the views of  management  concerning  future
events,   these  statements   involve  risks,   uncertainties  and  assumptions,
including,  among  others:  changes in market  interest  rates and  general  and
regional  economic  conditions;  changes in government  regulations;  changes in
accounting principles; and the quality or composition of the loan and investment
portfolios  and other factors that may be described in the  Company's  quarterly
reports  on Form 10-Q and its annual  report on Form  10-K,  each filed with the
Securities  and Exchange  Commission,  which are available at the Securities and
Exchange  Commission's  internet website (www.sec.gov) and to which reference is
hereby made.  Therefore,  actual future  results may differ  significantly  from
results discussed in the forward-looking statements.

The First  National  Bank of  Litchfield  is a  community  bank  operating  nine
full-service  banking offices in Canton,  Goshen,  Litchfield,  Marble Dale, New
Milford,  Roxbury,  Washington  and two in  Torrington,  Connecticut.  The  Bank
maintains a full service Trust Department that offers asset management,  custody
and  estate  settlement  services  to  individuals,  non-profit  and  commercial
customers.  Additionally, the Bank offers non-deposit retail investment products
such as mutual  funds,  annuities and insurance  through its  relationship  with
Infinex  Investments,  Inc.  The Bank's  subsidiary,  First  Litchfield  Leasing
Corporation,   provides  middle  market  equipment   leasing/financing   to  the
commercial  markets of  Connecticut  and  Massachusetts.  The Company's  website
address is www.fnbl.com.

Contact:
  Joseph J. Greco, President and CEO
  (860) 567-6438

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