January 30, 2007

People's Bank Announces Increase In Appraisal of People's Financial, Inc.

BRIDGEPORT, CONN. - People's Bank (the "Bank") (Nasdaq Global Select: PBCT) announced today that its independent appraiser has informed the Bank that it has increased the appraisal of People's Financial, Inc., the proposed holding company of the Bank formed in connection with People's Mutual Holdings' and the Bank's second-step conversion and related stock offering.

Under the updated appraisal, the total valuation of People's Financial would be between $4.791 billion and $6.468 billion, subject to a 15% increase to $7.432 billion as a result of market demand, regulatory considerations or changes in financial markets. This is an increase of approximately 7% from the initial appraisal. As a result, People's Financial is offering to sell between 137,062,500 and 185,437,500 shares of common stock (subject to a 15% increase to 213,253,125 shares) at a purchase price of $20.00 per share.

At the conclusion of the conversion, the shares of the Bank's common stock currently held by public stockholders of the Bank will be exchanged for new shares of common stock of People's Financial based on an exchange ratio estimated to be between 1.6712 and 2.2611 (subject to a 15% increase to 2.6003) shares. The offering range and the corresponding exchange ratios could change as a result of regulatory review or due to updates to the independent appraisal, reflecting, among other things, changes in market conditions before or during the offering.

The updated appraisal, including the corresponding range of shares to be sold in the offering and the range of exchange ratios must be approved by the Office of Thrift Supervision, the Board of Directors of People's Bank and the Board of Trustees of People's Mutual Holdings.

This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." Examples of forward looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of People's Financial and the Bank that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to, general economic and market conditions, legislative and regulatory conditions, changes in interest rates that affect the Bank's interest rate spread, changes in deposit flows, loan demand or real estate values and other economic, governmental, competitive, regulatory and technological factors that may affect the Bank's operations.

A registration statement relating to these securities has been filed with the United States Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release is neither an offer to sell nor a solicitation of an offer to buy common stock. The offer will be made only by means of the written prospectus forming part of the effective registration statement (and, in the case of the subscription offering, an accompanying stock order form). A copy of the prospectus related to the offering, when available, may be obtained by contacting:

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Ryan Beck & Co., Inc.
18 Columbia Turnpike
Florham Park, New Jersey 07932

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.

It's Possible @ People's.