May 27, 2005

People's Bank Reports Resolution Of Contract Issues;Expects To Record Second-Quarter Gain

BRIDGEPORT, CONN. - People's Bank (NASDAQ: PBCT) announced today that it has entered into an agreement resolving issues regarding its financial obligations under a contract for the servicing of its credit card portfolio, which was sold in March 2004. People's had previously established an accrued liability to account for contract termination and other exit costs relating to the sale of its credit card business. In light of the resolution of issues relating to the servicing contract, People's has reversed the remaining balance of this liability and expects to recognize additional pre-tax income of approximately $9.7 million in the second quarter of 2005 as a result of this action.

Founded in 1842, People's Bank (peoples.com) is one of Connecticut's largest banks with assets of $11 billion, more than 240 ATMs and 154 branches, 67 of which offer convenient seven-day banking in Super Stop & Shop locations across the state. A diversified financial services company, People's Bank provides consumer, commercial, insurance, retail investment and trust services to personal and business banking customers. People's Bank is the official banking partner of the University of Connecticut Division of Athletics. For more information about People's, its products and services, please call 800-772-1090, visit peoples.com or any of People's branches.