JULY 19, 2007
People's United Financial Reports 2nd Quarter Improvement In Net Income Of 61 Percent Over Prior Year After Adjustment For Funding Its Newly Established Charitable Foundation

Click here to see the second quarter Financial Schedule.

BRIDGEPORT, CONN. - People's United Financial, Inc. (Nasdaq: PBCT) today announced net income of $13.5 million, or $0.05 per share, for the second quarter of 2007. The current quarter's results reflect the previously announced $60 million contribution to the People's United Community Foundation, which had the effect of reducing net income by $39.6 million, or $0.13 per share. Excluding this charge, net income would have been $53.1 million, or $0.18 per share, compared to $32.9 million or $0.11 per share for the second quarter of 2006. Prior period per share information has been adjusted to reflect the exchange of People's Bank common stock for 2.1 shares of People's United Financial common stock upon completing the second-step conversion on April 16, 2007.

For the second quarter of 2007, return on average assets was 0.40 percent and return on average stockholders' equity was 1.4 percent, compared to 1.20 percent and 10.1 percent, respectively, for the year-ago quarter. Return on average assets and return on average stockholders' equity would have been 1.59 percent and 5.34 percent, respectively, for the second quarter of 2007, excluding the previously mentioned $60 million contribution.

The Board of Directors of People's United Financial declared a $0.1333 per share quarterly dividend, payable August 15, 2007 to shareholders of record on August 1, 2007. Based on the closing stock price on July 18, 2007, the dividend yield on People's United Financial common stock is 3.1 percent.

President and Chief Executive Officer, John A. Klein stated, "The successful completion of our second-step conversion in April, which raised $3.44 billion in gross proceeds, followed by our recent announcement of an agreement to acquire the Chittenden Corporation, were truly significant milestones for the company."

Klein added, "In addition, the announcement of our rebranding to People's United Bank will facilitate our plans for continued growth in new and existing markets, while at the same time emphasizing our commitment to our customers and communities. Our funding of the People's United Community Foundation also exemplifies this commitment."

Klein concluded, "And, of course, in mid-June we opened our first Westchester County, New York branch in an attractive Scarsdale location. Overall, it has been a busy quarter in which we nonetheless continued to deliver strong financial results."

"Key drivers of the company's performance this quarter were a significant increase in the net interest margin and ongoing strong asset quality," said Philip R. Sherringham, Executive Vice President and Chief Financial Officer. "The year-over-year 41 basis point improvement in the net interest margin reflects the benefits from the investment of the net proceeds from our second-step conversion and the balance sheet restructuring activities completed during 2006."

Sherringham continued, "Average earning assets increased $2.4 billion on a year-over-year basis, reflecting increases of $3.2 billion in average short-term investments as a result of the second-step conversion and $272 million, or 3 percent, in average loans, while average securities declined $1.0 billion, or 93 percent. While average commercial banking loans increased 9 percent on a year-over-year basis, average residential mortgage loans actually declined 2 percent as a result of our decision to sell all newly-originated residential mortgage loans in the current environment."

Sherringham added, "Although non-interest expenses increased $7.6 million, or 9 percent, from the first quarter of 2007, the large increase in net interest income due to the investment of the proceeds from the second-step conversion led to a significant improvement in the efficiency ratio to 53 percent this quarter."

Commenting on asset quality, Sherringham stated, "Second quarter net loan charge-offs included a $3.6 million charge-off relating to one commercial banking loan that has been classified as non-performing since December 2006, comprising substantially all of total net loan charge-offs of $3.7 million for the second quarter of 2007, compared to $0.2 million in the year-ago quarter. Net loan charge-offs as a percent of average loans on an annualized basis were 0.16 percent in the second quarter of 2007, compared to 0.01 percent in the second quarter of last year."

At June 30, 2007, non-performing assets totaled $18.4 million, a $1.0 million, or 5 percent, decrease from March 31, 2007. Non-performing assets equaled 0.20 percent of total loans, REO and repossessed assets, compared to 0.21 percent at March 31, 2007. The allowance for loan losses as a percentage of non-performing loans was 405 percent at June 30, 2007, compared to 389 percent at March 31, 2007. The allowance for loan losses as a percentage of total loans remained at 0.80 percent at both June 30, 2007 and March 31, 2007.

Selected Financial Terms

In addition to evaluating People's United 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 United 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 United 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 United 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 United 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 United Financial's ongoing operating efficiency, as the excluded items are generally related to external market conditions and non-routine transactions.

Conference Call

On July 20, 2007, at 11 a.m., Eastern Time, People's United 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 United Bank's Web site. The call will be archived on the Web site and available for approximately 90 days.

2Q Financial Highlights (2Q 2007 compared with 2Q 2006 unless otherwise indicated)

Summary

• Net income totaled $13.5 million, or $0.05 per share.
• Excluding the $60 million contribution expense, earnings would have been $53.1 million, or $0.18 per share.
• Net interest income increased $35.9 million, or 37%.
• Reflects the investment of $3.3 billion in net proceeds from the second-step conversion.
• Net interest margin increased 41 basis points from 2Q06 and increased 29 basis points from 1Q07 to 4.23%.
• Provision for loan losses increased $1.6 million.
• Net loan charge-offs in 2Q07 totaled $3.7 million (which includes a $3.6 million charge-off related to one commercial banking loan) compared to $0.2 million in 2Q06.
The allowance for loan losses was reduced by $1.9 million in 2Q07.
• Non-interest income, excluding security losses, increased $2.3 million, or 5%.
• Total fee-based revenues increased $1.0 million, or 3%.
• Bank-owned life insurance income increased $0.5 million.
• Non-interest expense, excluding the contribution expense, increased $9.1 million, or 11%.
• Compensation and benefits increased $4.6 million (2Q07 included $2.3 million of amortization expense related to the newly-implemented employee stock ownership plan as well as higher compensation expense).
• Other non-interest expense increased $3.1 million, with the largest component being expenses tied to the rebranding of the bank.

Commercial Banking

• Average commercial banking loans grew $360 million, or 9%.
• Average commercial non-interest-bearing deposits totaled $889 million.
• Non-performing commercial banking assets decreased $0.3 million, or 3%, from March 31, 2007.
• The ratio of non-performing commercial banking loans to total commercial banking loans was 0.29% at June 30, 2007, compared to 0.30% at March 31, 2007 and 0.55% at June 30, 2006.
• Net loan charge-offs totaled $4.1 million, or 0.38% annualized, of average commercial banking loans.

Consumer Financial Services

• Average residential mortgage loans decreased $87 million, or 2%.
• Average consumer non-interest-bearing deposits totaled $1.2 billion.

Treasury

• Average securities declined $1.0 billion, or 93%.
• Average securities made up 1% of average earning assets compared to 10% in 2Q06.
• Average short-term investments increased $3.2 billion, reflecting the investment of the net proceeds from the second-step conversion.

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 United Bank, is a leader in supermarket banking, with 75 of its 160 branches located in Super Stop & Shop stores. Through its subsidiaries, People's United Financial 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 United 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 United 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 United Financial include, but are not limited to: (1) changes in general, national or regional economic conditions;(2) changes in interest rates;(3) changes in loan default and charge-off rates;(4) changes in deposit levels;(5) changes in levels of income and expense in non-interest income and expense related activities;(6) residential mortgage and secondary market activity;(7) changes in accounting and regulatory guidance applicable to banks;(8) price levels and conditions in the public securities markets generally;and (9) competition and its effect on pricing, spending, third-party relationships and revenues. People's United 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.