People's United Bank

October 20, 2011

People's United Financial Reports Third Quarter Operating Earnings Of $0.19 Per Share And Net Income Of $0.15 Per Share; Authorizes Additional Share Repurchase

Click here to see the third quarter Financial Schedule.

BRIDGEPORT, CT. – People's United Financial, Inc. (NASDAQ: PBCT) today announced net income of $52.9 million, or $0.15 per share, for the third quarter of 2011, compared to $24.1 million, or $0.07 per share, for the third quarter of 2010, and $51.2 million, or $0.15 per share, for the second quarter of 2011. Operating earnings were $67.3 million for the third quarter of 2011, compared to $27.7 million for the third quarter of 2010 and $57.3 million for this year's second quarter. Included in this quarter's results are $14.4 million (after-tax) of merger-related expenses and one-time charges, including $6.2 million related to the prepayment of assumed FHLB advances). As previously reported, People's United Financial completed its acquisition of Danvers Bancorp, Inc. on June 30, 2011, effective July 1, 2011. Accordingly, Danvers' results of operations are included as of the effective date, and prior period results have not been restated to include Danvers.

During the third quarter of 2011 the Company completed the stock repurchase authorization announced in January 2011 by purchasing 15.8 million shares of common stock at an average price of $11.81 per share. Today, People's United Financial's Board of Directors approved an additional share repurchase authorization. Under the authorization, up to 5 percent of the Company's common stock outstanding, or 18 million shares, can be repurchased, either directly or through agents, in the open market at prices and terms satisfactory to management.

The Company's Board of Directors also declared a $0.1575 per share quarterly dividend, payable November 15, 2011 to shareholders of record on November 1, 2011. Based on the closing stock price on October 19, 2011, the dividend yield on People's United Financial common stock is 5.2 percent.

"Our performance this quarter continues to reflect improvements in our operating metrics, including another solid quarter of organic loan and deposit growth throughout our franchise, and encouraging trends in asset quality," stated Jack Barnes, President and Chief Executive Officer. "In fact, on an annualized basis and excluding the effect of the Danvers acquisition, loans and deposits increased 15 percent and 6 percent, respectively, from June 30, 2011; our net interest margin remains above 4 percent; and our efficiency ratio improved to 63.1 percent from 71.2 percent in the year-ago quarter."

Barnes added, "We have made significant progress over the past year converting acquired companies onto a single core operating system. In addition, we simplified the operations within our wealth management businesses, specifically our brokerage and insurance subsidiaries, which underwent their own respective system conversions. Just this past weekend we successfully completed the Danvers core system conversion, which will improve our operating results in future periods."

Barnes concluded, "We remain focused on delivering shareholder value by leveraging opportunities within our existing markets. Our emphasis on building lasting relationships throughout our franchise and continuing to cross-sell our products across all lines of business are key contributors to our organic growth and strong operating performance. Further, we continue to strengthen our position in the important Boston and New York MSAs."

"On an operating basis, earnings were $67 million, or 19 cents per share, this quarter," said Kirk W. Walters, Senior Executive Vice President and Chief Financial Officer. "The Company's performance this quarter reflects an improvement in net interest income, continued positive results in our fee businesses and tighter expense control."

Walters continued, "The net interest margin increased 37 basis points in the third quarter of 2011 compared to last year's third quarter and remained relatively flat compared to the second quarter of 2011, declining a modest two basis points. Non-interest income this quarter continues to reflect improvement in most of our fee-based businesses, as well as the addition of Danvers. The entire increase in the level of operating non-interest expense this quarter reflects the Danvers acquisition, partially offset by benefits from cost-savings initiatives announced last quarter."

Walters concluded, "While the overall level of non-performing loans is reflective of a period of prolonged economic weakness, we are pleased with the credit trends noted over the past few quarters. In fact, our year-to-date net loan charge-off ratio of 28 basis points is roughly one-quarter of our peers', which is a reflection of the Company's historically strong underwriting standards, the strength of the footprint in which we operate and the vigor of our customers who have successfully managed through the economic crises."

At September 30, 2011, People's United Financial's tier 1 common and total risk-based capital ratios were 15.0 percent and 16.6 percent, respectively, and the tangible equity ratio stood at 12.5 percent. People's United Bank's tier 1 and total risk-based capital ratios were 14.1 percent and 14.9 percent, respectively, at September 30, 2011.

Loans acquired in connection with acquisitions have been recorded at fair value, including a reduction for estimated credit losses, and without carryover of the respective portfolio's historical allowance for loan losses. As such, selected asset quality metrics have been highlighted to distinguish between the 'originated' portfolio and the 'acquired' portfolio.

At September 30, 2011, the allowance for loan losses as a percentage of originated loans, which represents all loans other than those acquired, was 1.09 percent and as a percentage of originated non-performing loans was 69 percent, compared to 1.15 percent and 68 percent, respectively, at June 30, 2011. For the originated commercial banking portfolio, the allowance for loan losses ratio was 1.48 percent at September 30, 2011 and represented 92 percent of non-performing commercial banking loans at that date.

For the originated loan portfolio, non-performing loans equaled 1.60 percent of originated loans at September 30, 2011, compared to 1.69 percent at June 30, 2011 and 1.77 percent at September 30, 2010. Non-performing assets (excluding acquired non-performing loans) equaled 1.88 percent of originated loans, REO and repossessed assets at September 30, 2011 compared to 2.05 percent at June 30, 2011 and 2.19 percent at September 30, 2010.

Non-performing loans in the acquired portfolio, which represent the contractual balances of loans acquired that meet our definition of non-performing but for which the risk of loss has already been considered by virtue of our estimate of acquisition-date fair value and/or the existence of an FDIC loss-share agreement, totaled $241.6 million at September 30, 2011 compared to $250.4 million at June 30, 2011 and $359.8 million at December 31, 2010. During the third quarter, loans with a contractual balance of approximately $41 million (carrying amount of approximately $32 million) were sold at a net loss of approximately $5 million.

Third quarter net loan charge-offs totaled $13.4 million compared to $15.5 million in the second quarter of 2011. Net loan charge-offs as a percent of average loans on an annualized basis were 0.27 percent in the third quarter of 2011 compared to 0.35 percent in this year's second quarter. The provision for loan losses in the third quarter of 2011 reflects a $5.7 million increase in the allowance for loan losses related to the growth in the commercial and residential mortgage loan portfolios, partially offset by charge-offs of $4.7 million against previously established specific reserves.

Operating return on average assets was 0.98 percent for the third quarter of 2011, compared to 0.92 percent for the second quarter of 2011 and 0.50 percent for the third quarter of 2010. Operating return on average tangible stockholders' equity was 8.0 percent for the third quarter of 2011, compared to 7.1 percent for the second quarter of 2011 and 3.1 percent for the third quarter of 2010.

People's United Financial, a diversified financial services company with $27 billion in assets, provides commercial and retail banking, as well as wealth management services through a network of 372 branches in Connecticut, Massachusetts, Vermont, New York, New Hampshire and Maine. Through its subsidiaries, People's United Financial provides equipment financing, brokerage and insurance services.

Conference Call

On October 20, 2011, at 5 p.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 Us" 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.

3Q 2011 Financial Highlights

Summary

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; (9) competition and its effect on pricing, spending, third-party relationships and revenues; (10) the successful integration of acquired companies; and (11) changes in regulation resulting from or relating to financial reform legislation. 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.

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Access Information About People's United Financial at www.peoples.com.