APRIL 2, 2002

Building A Business From Scratch, People's Sees Success In Municipal Finance

Bank Grabs Significant Share of Bond, Note Markets

BRIDGEPORT, CONN.
Since launching its Municipal Banking and Finance department in 1996, People's Bank has become a significant player among banks providing Connecticut's local governments with a full menu of products and services.

In fact, in 2001, People's was Connecticut's leading financial adviser in sales of bonds and notes. People's advisees sold notes and bonds totaling $343.9 million, or 21 percent of the Connecticut market, ahead of all other competitors. Cities, towns, school districts and other local government bodies borrow money to finance a wide array of projects that enhance their communities, from schools to sidewalks to sewers.

And since it began offering these services in 1996, People's has established banking relationships with more than 50 cities, towns and districts, despite the fact that government clients don't change banks that often. For example, when the Town of Waterford switched to People's, it had been doing business with its previous bank for 50 years.

A key to People's success in municipal finance has been its branch network. With 150 branches across Connecticut, and more opening this year, there are People's bankers in most of the state's cities and towns. Together with People's municipal finance professionals, branch staff members work hard to develop relationships with city or town officials and fill the local government's needs.

"Typically, municipalities want relationship officers who understand their needs," says Valerie J. Arch, vice president and manager, Commercial Services, at People's. "Our municipal banking officers and our branch staff go to great lengths to get to know the communities they serve."

In 1996, Arch was recruited to People's specifically to start a municipal finance business. "My goal has always been to provide the level of service that cities and towns were accustomed to getting, but that the big banks were no longer providing," Arch said.

People's now offers a wide range of services, including

• advising on the sales of bonds and note
• cash management
• money desk services, including certificates of deposit and money market accounts
• trust management services
• imaging and lockbox services for receipt of taxes and other payments.

People's has been an innovator in municipal finance. In 1999, People's became the first Connecticut bank to use the Internet to auction municipal bonds and notes, and is one of a select few using that technology today. Using the Web-based technology can mean more bidders and lower rates, saving money for the governmental agency. People's also was the first Connecticut bank to use the Internet and e-mail to distribute official statements, documents issued before these auctions.

People's municipal finance professionals have saved their customers money in other ways as well, conducting trend analyses that led rating agencies to increase the bond ratings of municipalities such as Bristol, Newtown and Groton. A higher bond rating means a lower interest rate - and a lower cost - for borrowing.

"We do everything we can to save our taxpayers hard-earned dollars, so we appreciate having a partner like People's that is innovative, professional and responsive," Diane Waldron, finance director, Town of Cheshire, said. Waldron says People's worked with the town to save approximately $775,000 in a $30 million advanced bond refunding. After the sale, People's continued to bring opportunities to the town to capitalize on market conditions, and was successful in helping Cheshire save an additional $189,000 by restructuring the investments in its bond escrow account. "People's continually looks for ways to meet our needs, and they frequently exceed our expectations," Waldron said.

In 2001, People's acted as financial adviser on 30 percent of all short-term note sales in Connecticut, a figure unsurpassed by any other bank. In terms of the dollar amount of short-term notes sold in that period, People's was the state leader, acting as financial adviser for 30 percent of sales.

During the process of helping a municipality borrow money, People's professionals get to know their customers. Those relationships often lead to the city or town bringing more of its business to People's.

Through People's cash management and money desk services, municipalities can invest tax receipts, grant monies and other revenues in a variety of overnight instruments and short-term certificates of deposit. Lockbox services streamline the processing of payments and receipts by eliminating the need for handling of cash and checks in Town Hall.

"People's is committed to its communities, and part of that commitment is having the expertise and the experience to help local governments get the most out of their tax dollars," said Brian F. Dreyer, executive vice president, Commercial Banking, at People's.

People's (peoples.com) is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest state-chartered bank in Connecticut with managed assets of $14 billion, 148 branches and 220 ATMs. People's is a leader in consumer and commercial banking, residential lending, insurance sales, supermarket banking and is the nation's 15th-largest issuer of MasterCard and Visa credit cards. People's subsidiaries offer brokerage services, asset management, equipment financing and leasing, and insurance services.

CONTACT:
Deborah P. MacDonnell, manager, External Communications, 203-338-3255 or dpmacdo@peoples.com