September 20, 2006

People's Mutual Holdings and People's Bank Announce Plan To Reorganize to Stock Holding Company

BRIDGEPORT, CONN. - People's Mutual Holdings, a federally-chartered mutual holding company (MHC), and its subsidiary, People's Bank (Nasdaq: PBCT), an $11 billion federal savings bank (the Bank), today announced their plan to convert from a mutual holding company structure to a fully-public stock savings and loan holding company.

The Boards of MHC and the Bank have adopted a Plan of Conversion and Reorganization (the Plan). Presently, MHC owns approximately 58% of the Bank and members of the public own approximately 42% of the Bank. Pursuant to the Plan, 100% of the Bank's shares will ultimately be owned by a new public holding company, referred to here as "People's Holdings".

To accomplish this, present shareholders of the Bank, other than MHC, will receive new shares of common stock of People's Holdings pursuant to an 'exchange ratio' designed to preserve their approximate current aggregate percentage interest in the Bank. This exchange ratio will be determined based upon an appraisal of the new entity, which will be performed by an independent appraiser at a later date.

In addition, the shares of the Bank held by MHC will be retired and People's Holdings will offer and sell shares of common stock in People's Holdings in an amount representing the approximate percentage ownership interest in the Bank currently held by the MHC, also to be based on the appraisal of People's Holdings. The shares will be offered and sold in a subscription offering first to eligible depositors as of June 30, 2005. Other depositors also will be given the opportunity to purchase stock in the subscription offering, subject to the priorities set forth in the Plan. If necessary, shares will be offered to the general public.

The Plan provides for the establishment of the People's Community Foundation, an endowment for the Bank's continued commitment to its communities that will be funded with stock or cash proceeds from the conversion transaction, subject to the approval of depositors and shareholders. Additionally, People's Bank and MHC also intend to establish an Employee Stock Ownership Plan in connection with the offering.

The transactions contemplated by the Plan are subject to approval by the bank's shareholders (other than MHC), depositors and the Office of Thrift Supervision (OTS). Special meetings of People's shareholders and its depositors will be held to approve the Plan;it is likely that those meetings will be held in the first quarter of 2007. A prospectus, proxy statement and other offering materials containing detailed information relating to the Plan, details of the offering, and business and financial information about the Bank and People's Holdings will be sent to shareholders and depositors of the Bank prior to the special meetings.

A copy of the Plan will be available in each People's Bank branch and at its headquarters for review by depositors and shareholders. The Plan is subject to amendments following regulatory review.

The Plan will have no effect on People's customers or their accounts, as there are no changes to the Bank's products, services, rates or fees contemplated in the Plan.

People's Bank is a diversified financial services company providing consumer and commercial banking services, in addition to insurance, trust and financial advisory services. The Bank is a leader in supermarket banking, with 73 of its 156 branches located in Super Stop & Shop stores. It plans to open at least 15 branches in Westchester County, New York by the end of 2009. Through its subsidiaries, People's provides brokerage and financial advisory services, asset management, equipment financing and insurance services.

Certain statements contained in this release are forward-looking in nature. These include all statements about People's plans, objectives, expectations and other statements that are not historical facts, and usually use words such as "expect," "anticipate," "believe" and similar expressions. Such statements represent management's current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People's actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People's include, but are not limited to: (1) changes in general economic conditions, including interest rates;(2) potential improvements or deterioration in credit quality;(3) competition among providers of financial services;(4) residential mortgage and secondary market activity;(5) changes in accounting and regulatory guidance applicable to banks;and (6) price levels and conditions in the public securities markets generally. People's does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

THIS RELEASE IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OR LAWS OF ANY SUCH STATE OR JURISDICTION. THE OFFER WILL BE MADE ONLY BY THE PROSPECTUS. THE SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS, MAY LOSE VALUE AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.