APRIL 19, 2007

People's Financial, Inc. Reports People's Bank Earnings Of $34 Million Or $0.24 Per Share;Raises Dividend 12 Percent

BRIDGEPORT, CONN. –People's Financial, Inc. (NASDAQ: PBCTD) today announced that its principal subsidiary, People's Bank, reported net income of $33.6 million, or $0.24 per share, for the first quarter of 2007, compared to $34.8 million, or $0.24 per share, for the first quarter of 2006. Income from continuing operations was $33.1 million for the first quarter of 2007, compared to $33.9 million for the year-ago quarter. Per share amounts are based on the number of outstanding shares of People's Bank common stock prior to completing the second-step conversion on April 16, 2007. The results of the second-step conversion did not impact People's Bank's reported quarterly results.

For the first quarter of 2007, return on average assets was 1.27 percent and return on average stockholders' equity was 10.0 percent, compared to 1.28 percent and 10.8 percent, respectively, for the year-ago quarter.

As previously announced on April 16, 2007, People's Financial successfully completed its second-step conversion, which included the sale of 172.2 million shares in a subscription and syndicated offering, the issuance of 126.6 million shares in exchange for previously outstanding shares of People's Bank common stock, and the issuance of 2.0 million shares to The People's Community Foundation. The Board of Directors of People's Financial declared a $0.13 per share quarterly dividend on all 300.8 million outstanding shares of People's Financial common stock, payable May 15, 2007 to shareholders of record on May 1, 2007. The dividend represents a 12 percent increase over the dividend paid to the former holders of People's Bank common stock prior to the conversion, after adjusting for the exchange ratio. Based on the closing stock price on April 18, 2007, the dividend yield on People's Financial common stock is 2.5 percent.

President and Chief Executive Officer, John A. Klein stated, "We are very pleased to reward our shareholders with a 15th consecutive annual dividend increase, reflecting management's positive outlook for People's Financial's future."

Klein continued, "The successful completion of our second-step conversion earlier this week, which raised $3.44 billion, allows us to continue to invest in our valuable banking franchise in Connecticut and beyond, and has enabled us to make a $60 million donation to fund The People's Community Foundation. Our additional size and scale will help improve our overall profitability and preserve our long-term competitiveness. In particular, our ability to make acquisitions is now considerably enhanced."

Klein concluded, "The bank delivered another quarter of solid earnings through continued growth in our core lending businesses, including a year-over-year double-digit increase in commercial banking loans."

"Key drivers of the bank's performance this quarter were a relatively stable net interest margin and ongoing strong asset quality," said Philip R. Sherringham, Executive Vice President and Chief Financial Officer. "While the net interest margin declined 2 percent from the fourth quarter of 2006, it improved 17 basis points year-over-year, reflecting the benefits from the balance sheet restructuring activities completed during 2006."

Sherringham added, "Average loans increased $750 million, or 9 percent, on a year-over-year basis, while average securities declined $1.3 billion, or 94 percent."

Sherringham concluded, "Bankwide asset quality remains very strong. First quarter net loan charge-offs totaled $0.4 million, or 0.01 percent of average loans on an annualized basis, compared to $1.0 million, or 0.05 percent (after excluding a $2.3 million commercial banking loan recovery), in the first quarter of last year."

Compared to the first quarter of 2006, the $3.1 million increase in the provision for loan losses reflects a $0.4 million increase in the allowance for loan losses and net loan charge-offs of $0.4 million in the current quarter, compared to a $1.0 million decrease in the allowance for loan losses and net loan recoveries of $1.3 million in the year-ago quarter.

At March 31, 2007, non-performing assets totaled $19.4 million, a $3.3 million, or 15 percent, decrease from December 31, 2006. Non-performing assets equaled 0.21 percent of total loans, REO and repossessed assets, compared to 0.24 percent at December 31, 2006. The allowance for loan losses as a percentage of non-performing loans was 389 percent at March 31, 2007, compared to 328 percent at December 31, 2006. The allowance for loan losses as a percentage of total loans was 0.80 percent at March 31, 2007, compared to 0.79 percent at December 31, 2006.

Selected Financial Terms
In addition to evaluating People's Financial's results of operations in accordance with generally accepted accounting principles ("GAAP"), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as core deposits, purchased funds and the efficiency ratio. Management believes these non-GAAP financial measures provide information useful to investors in understanding People's Financial's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts.

Core deposits is a measure of stable funding sources and is defined as total deposits, other than brokered certificates of deposit (acquired in the wholesale market), municipal deposits (which are seasonally variable by nature) and escrow deposits from People's Financial's subscription offering. Purchased funds include borrowings, brokered certificates of deposit and municipal deposits.

The efficiency ratio, which represents an approximate measure of the cost required by People's Financial to generate a dollar of revenue, is the ratio of total non-interest expense (excluding goodwill impairment charges, amortization of acquisition-related intangibles, losses on real estate assets and nonrecurring expenses) to net interest income plus total non-interest income (excluding gains and losses on sales of assets, other than residential mortgage loans, and nonrecurring income). People's Financial generally considers an income or expense to be nonrecurring if it is not similar to an income or expense of a type incurred within the last two years and is not similar to an income or expense of a type reasonably expected to be incurred within the following two years. Management considers the efficiency ratio to be more representative of People's Financial's ongoing operating efficiency, as the excluded items are generally related to external market conditions and non-routine transactions.

Conference Call
On April 20, 2007, at 11 a.m., Eastern Time, People's Financial will host a conference call to discuss this earnings announcement. The call may be heard through www.peoples.com by selecting "Investor Relations"in the "About People's"section on the home page, and then selecting "Conference Calls"in the "News and Events"section. Additional materials relating to the call may also be accessed at People's Bank's Web site. The call will be archived on the Web site and available for approximately 90 days.

The financial information appearing on the following pages pertains to People's Bank and its consolidated subsidiaries for periods prior to completing People's United Financial's second-step conversion on April 16, 2007. Consequently, per share amounts are based on the number of outstanding shares of People's Bank common stock for the relevant periods, and the financial information does not reflect the results of the second-step conversion or stock offering.

1Q Financial Highlights(1Q 2007 compared with 1Q 2006 unless otherwise indicated)
Summary

• Net income totaled $33.6 million, or $0.24 per share.
• Net interest income increased $1.3 million, or 1%.
• Net interest margin increased 17 basis points from 1Q06 and declined 7 basis points from 4Q06 to 3.94%.
• Provision for loan losses increased $3.1 million.
• Net loan charge-offs in 1Q07 totaled $0.4 million compared to net loan recoveries in 1Q06 of $1.3 million, a difference of $1.7 million.
• The allowance for loan losses was increased $0.4 million in 1Q07 and was reduced $1.0 million in 1Q06.
• Non-interest income increased $1.2 million, or 3%.
• Bank-owned life insurance income increased $0.5 million.
• Non-interest expense increased $0.5 million, or 1%.
• Total deposits at March 31, 2007 included $643 million in escrow funds related to People's Financial's recently completed subscription offering.

Commercial Banking

• Average commercial banking loans grew $406 million, or 11%.
• Average commercial non-interest-bearing deposits totaled $881 million.
• Non-performing commercial banking assets decreased $1.4 million, or 10%, from December 31, 2006.
• The ratio of non-performing commercial banking loans to total commercial banking loans was 0.21% at March 31, 2007, compared to 0.34% at December 31, 2006 and 0.44% at March 31, 2006.
• Net loan charge-offs totaled $0.1 million, or 0.01% annualized, of average commercial banking loans, compared to $0.4 million, or 0.04% annualized, in 1Q06 (excluding the $2.3 million recovery).

Consumer Financial Services

• Average residential mortgage loans increased $299 million, or 8%.
• People's purchased $170 million of residential mortgage loans towards the end of 1Q06.
• Average home equity loan portfolios increased $57 million, or 5%.
• Average consumer non-interest-bearing deposits totaled $1.2 billion.

Treasury

• Average securities declined $1.3 billion, or 94%.
• Average securities made up 1% of average earning assets compared to 13% in 1Q06.

People's United Financial is a diversified financial services company providing consumer and commercial banking services, in addition to insurance, trust and financial advisory services. Its principal subsidiary, People's Bank, is a leader in supermarket banking, with 75 of its 159 branches located in Super Stop &Shop stores. Through its subsidiaries, People's Financial provides brokerage and financial advisory services, asset management, equipment financing and insurance services.

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Certain statements contained in this release are forward-looking in nature. These include all statements about People's Financial'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 Financial'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 Financial 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 Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.