PEOPLES SAVINGS FINANCIAL CORP /CT/, DEF 14A, 1996-03-20

PEOPLES SAVINGS FINANCIAL CORP /CT/
DEF 14A, 1996-03-20
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

PEOPLE'S SAVINGS FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

JOHN G. MEDVEC
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

<PAGE>

PEOPLE'S SAVINGS FINANCIAL CORP.
123 BROAD STREET
NEW BRITAIN, CONNECTICUT 06053

March 22, 1996

Dear Stockholders:

You are cordially invited to attend the People's Savings Financial Corp.
Annual Meeting of Stockholders to be held on Tuesday, April 23, 1996 at 10:00
a.m. at the Ramada Inn, 65 Columbus Boulevard, New Britain, Connecticut.

The proposals to be considered at the meeting are (1) the election of two
directors, each for a term of three years, and (2) the ratification of the
appointment of Coopers & Lybrand as independent auditors for the fiscal year
ending December 31, 1996. All of the nominees for election as directors are
members of the present Board of Directors. Their names and information about
them and the other members of the Board of Directors will be found in the
Proxy Statement which, along with the formal Notice of Annual Meeting, is
attached.

We hope that you will attend the Annual Meeting. Regardless of whether you
plan to attend, please complete, date, sign and return the enclosed proxy card
in the accompanying envelope.

YOUR SHARES CANNOT BE VOTED AT THE MEETING UNLESS YOU ARE PRESENT OR
REPRESENTED BY PROXY.

If you have any questions, please do not hesitate to contact our Secretary,
Teresa Sasinski, at (203)224-7771.

The Company's 1995 Annual Report is included in this package, and we urge
you to read it carefully.

Thank you for your cooperation and continuing support.

Sincerely,

Joseph A. Welna, M.D.
Chairman of the Board

Richard S. Mansfield
President and Chief Executive
Officer
<PAGE>

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO THE STOCKHOLDERS OF PEOPLE'S SAVINGS FINANCIAL CORP.

Notice is hereby given that the Annual Meeting of Stockholders of People's
Savings Financial Corp. (the "Company") will be held on Tuesday, April 23,
1996 at 10:00 a.m. at the Ramada Inn, 65 Columbus Boulevard, New Britain,
Connecticut, for the purpose of considering and voting upon the following
matters:

1. Election of two directors who, with the nine directors whose terms of
office do not expire at this meeting, will constitute the full Board of
Directors of the Company.

2. Ratification of the appointment of Coopers & Lybrand as independent
auditors for the fiscal year ending December 31, 1996.

3. Such other business as may properly come before the meeting or any
adjournment thereof.

Only stockholders of record at the close of business on March 8, 1996 are
entitled to notice of, and to vote at, the meeting.

By order of the Board of Directors

Teresa Sasinski, Secretary

March 22, 1996

WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU WERE A
STOCKHOLDER OF RECORD ON MARCH 8, 1996 AND ATTEND THE MEETING, YOU MAY THEN
REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>

PEOPLE'S SAVINGS FINANCIAL CORP.
123 BROAD STREET
NEW BRITAIN, CONNECTICUT 06053
(203)224-7771

----------------

PROXY STATEMENT
1996 ANNUAL MEETING OF STOCKHOLDERS: APRIL 23, 1996
APPROXIMATE DATE OF MAILING TO STOCKHOLDERS: MARCH 22, 1996

INTRODUCTION

This Proxy Statement is being furnished to the stockholders of People's
Savings Financial Corp., a Connecticut corporation (the "Company"), in
connection with the solicitation by the Board of Directors of the Company of
proxies for use at the Annual Meeting of Stockholders of the Company to be
held on Tuesday, April 23, 1996, at 10:00 a.m. at the Ramada Inn, 65 Columbus
Boulevard, New Britain, Connecticut (the "Annual Meeting"), and at any
adjournment thereof. The purpose of the Annual Meeting is to consider and vote
upon (1) the election of two directors who, with the nine directors whose
terms of office do not expire at this meeting, will constitute the full Board
of Directors of the Company, and (2) the ratification of the appointment of
Coopers & Lybrand as independent auditors for the fiscal year ending December
31, 1996.

The principal executive offices of the Company and its subsidiary, The
People's Savings Bank of New Britain (the "Bank"), are located at 123 Broad
Street, New Britain, Connecticut 06053, and the telephone number of the
Company and the Bank is (203) 224-7771.

RECORD DATE; VOTING RIGHTS

The Board of Directors of the Company has fixed the close of business on
March 8, 1996 as the record date (the "Record Date") for determining holders
of outstanding shares of the Common Stock of the Company ("Company Common
Stock") entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof. Only holders of Company Common Stock of record on the
books of the Company at the close of business on the Record Date will be
entitled to vote at the Annual Meeting and any adjournment thereof. As of
February 29, 1996, there were 1,924,363 shares of Company Common Stock issued
and outstanding, each of which is entitled to one vote on each matter
submitted to a vote at the Annual Meeting. Pursuant to the Bylaws of the
Company, a majority of the issued and outstanding shares of Company Common
Stock present in person or by proxy will constitute a quorum for the
transaction of business at the Annual Meeting.

The affirmative vote of a majority of the voting power of shares represented
and entitled to vote at the Annual Meeting is required to approve the election
of directors and to ratify the appointment of the auditors. In certain
circumstances, a shareholder will be considered to be present at the Annual
Meeting for quorum purposes, but will not be deemed to have voted in the
election of directors or in connection with other matters presented for
approval at the Annual Meeting. Such circumstances will exist where a
shareholder is present but specifically abstains from voting, or where shares
are represented at a meeting by a proxy conferring authority to vote on
certain matters but not on the election of directors or on other matters to be
voted on at the Annual Meeting. Under Connecticut law, such abstentions and
non-votes have the effect of a vote against the election of management's
nominees and against approval of the other matters presented for approval by
the stockholders.

The Company has been advised that all of the executive officers and
directors of the Company and their affiliates intend to vote their shares of
Company Common Stock in favor of the election of the two directors and the
ratification of the appointment of independent auditors.
<PAGE>

SOLICITATION, REVOCATION AND USE OF PROXIES

Shares of Company Common Stock represented by properly executed proxies
will, unless such proxies have previously been revoked, be voted at the Annual
Meeting in accordance with the instructions indicated in the proxies. If no
instructions are indicated, shares will be voted FOR the proposals to elect
the nominees for director and ratify the appointment of independent auditors
and, in the discretion of the proxy holders, as to any other matter which may
properly come before the Annual Meeting or any adjournment thereof.

Any stockholder of the Company who has given a proxy has the power to revoke
such proxy at any time before it is voted by filing with the Secretary of the
Company an instrument revoking it or a duly executed proxy bearing a later
date. A stockholder of record on the Record Date may also revoke a proxy by
appearing at the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not in and of itself constitute the revocation of a proxy.

The Company will bear the costs of soliciting proxies from its stockholders.
In addition to the use of the mails, proxies may be solicited by the
directors, officers and employees of the Company, without additional
remuneration, by personal interview, telephone or telegram. Arrangements will
also be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial
owners of Company Common Stock held of record by such persons, and the Company
may reimburse such custodians, nominees and fiduciaries for reasonable out-of-
pocket expenses incurred in connection therewith.

PRINCIPAL STOCKHOLDERS

The following table shows, as of the most recent practicable date (February
29, 1996), any person known to the Company (including any "group" as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), to be the beneficial owner of more than 5% of the
Company Common Stock. This information is furnished in accordance with
Securities and Exchange Commission ("SEC") rules with respect to any persons
known by the Company to be beneficial owners of more than 5% of the Company
Common Stock.

In preparing the following table, the Company has relied on information
furnished by First Manhattan Co. and First Union Corporation on Schedules 13D
and 13G filed with the SEC and mailed to the Company. Unless otherwise
indicated, each person has sole voting and sole dispositive power with respect
to the shares shown.

<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(A)
------------------- -------------------- -----------
<S> <C> <C>
First Manhattan Co. ..................... 103,500(b) 5.38%
437 Madison Avenue
New York, New York 10022
First Union Corporation ................. 113,200(c) 5.88%
One First Union Center
Charlotte, North Carolina 28288
</TABLE>
- --------
(a) The percentages shown are calculated on the basis of the number of
outstanding shares of the Company Common Stock on February 29, 1996.
(b) First Manhattan Co. is a registered investment advisor and the general
partner of First Save Associates, L.P. ("First Save") and Second First
Save Associates, L.P. ("Second First"). According to their report on
Schedule 13D filed with the SEC on February 7, 1996, First Save and Second
First have sole voting and dispositive power with respect to 51,900 and
51,600 shares, respectively.
(c) First Union Corporation is a parent holding company as defined in SEC Rule
13d-1(b)(ii)(G). According to its report on Schedule 13G filed with the
SEC on February 12, 1996, First Union Corporation exercises shared voting
power with respect to 10,000 shares.

2
<PAGE>

ELECTION OF A CLASS OF DIRECTORS

(PROPOSAL 1)

The Certificate of Incorporation and the Bylaws of the Company provide for
the election of directors by the stockholders and for the division of the
Board of Directors into three classes as nearly equal in number as possible.
The terms of office of the members of one class expire and a successor class
is elected at each annual meeting of the stockholders. Vacancies in
directorships may be filled, until the expiration of the term of the vacated
directorship, by the vote of a majority of the directors then in office.

INFORMATION ON NOMINEES AND DIRECTORS

There are now eleven directors of the Company. The terms of two directors
expire at this Annual Meeting, each of whom has been nominated for re-election
at the Annual Meeting for a three-year term, expiring at the annual meeting in
1999. In the event that any nominee for director is unable or declines to
serve, which the Board of Directors has no reason to expect, the proxy holders
will vote for a substitute nominee designated by the present Board of
Directors. The terms of the remaining two classes of directors expire at the
annual meetings in 1997 and 1998, respectively, or when their successors are
elected and qualify.

Nominations of persons for election to the Board of Directors may be made at
a meeting of stockholders by or at the direction of the Board of Directors or
by any stockholder of the Company entitled to vote for the election of
directors at the meeting who complies with certain prior notice procedures set
forth in the Company's Bylaws. Such nominations, other than those made by or
at the direction of the Board of Directors, must be made in writing to the
Secretary of the Company and must be delivered or mailed to the principal
executive offices of the Company not less than 60 days nor more than 90 days
prior to the meeting; provided, however, that in the event that less than 50
days notice of the date of the meeting is given to stockholders, notice by the
stockholder to be timely must be so mailed or delivered not later than the
close of business on the seventh day following the day on which such notice of
the date of the meeting was mailed. A stockholder's notice must set forth (a)
as to each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of such person, (ii) the principal occupation of such person, (iii)
the number of shares of the Company Common Stock which will be voted for such
person and (iv) any other information relating to such person that is required
to be disclosed in solicitation of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the Exchange
Act (including, without limitation, such person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected), and (b) as to the stockholder giving the notice, (i) the name and
address, as they appear on the Company's books, of such stockholder, and (ii)
the number of shares of the Company Common Stock which are beneficially owned
by such stockholder.

Except as indicated in the notes following the tables below, the nominees
and the directors continuing in office have sole voting and investment power
with respect to the shares listed as being beneficially owned by them.

The following tables set forth information, as of the most recent
practicable date (February 29, 1996), regarding the nominees for re-election
as directors at the Annual Meeting and the directors of the Company continuing
in office, including (a) the name of each nominee and director continuing in
office, (b) his principal occupation for the previous five years, (c) his
current service on the committees of the Board of Directors, (d) his age and
period of service as a director of the Bank and the Company, (e) the number of
shares and percentage of the Company Common Stock beneficially owned, either
directly or indirectly, and (f) the expiration date of his current term as
director. Each nominee and director continuing in office is also a director of
the Bank and has served as a director of the Company since its incorporation
in February 1989.

3
<PAGE>

NOMINEES FOR ELECTION AT THIS MEETING FOR A THREE YEAR TERM

DIRECTORS CONTINUING IN OFFICE

<CAPTION>
AMOUNT AND
NATURE OF
POSITIONS HELD WITH BENEFICIAL PERCENT
THE COMPANY AND THE HAS SERVED TERM WILL OWNERSHIP OF OF COMPANY
BANK AND PRINCIPAL AS A EXPIRE AT COMPANY COMMON STOCK
OCCUPATION DURING DIRECTOR THE ANNUAL COMMON BENEFICIALLY
NAME THE PAST FIVE YEARS AGE SINCE MEETING IN STOCK OWNED
---- --------------------- --- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Walter D. Blogoslawski.. Investment Committee 62 1977 1997 13,000(a) 0.67%
(Chairman); Owner of
Investment Research
and
PHB Realty,
Vero Beach, Florida
Stanley P. Filewicz, Pension and Audit 62 1982 1997 10,400(b)(c)(d) 0.54%
M.D. .................. Committees;
Orthopedic
Surgeon; President
of
New Britain
Orthopedic Surgical
Group, Inc.
Roland L. LeClerc....... Audit and Marketing 68 1983 1997 8,542(e)(d) 0.44%
(Chairman)
Committees;
Retired Partner of
insurance and real
estate firm of
LeClerc &
Fortier, New
Britain, CT
Chester S. Sledzik, Es- Executive, Loan and 68 1975 1997 9,077(d)(f)(g) 0.47%
quire.................. Investment
Committees;
General Counsel to
the
Bank; Partner in law
firm of Sledzik &
McGuire, New
Britain, CT
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
POSITIONS HELD WITH BENEFICIAL PERCENT
THE COMPANY AND THE HAS SERVED TERM WILL OWNERSHIP OF OF COMPANY
BANK AND PRINCIPAL AS A EXPIRE AT COMPANY COMMON STOCK
OCCUPATION DURING DIRECTOR THE ANNUAL COMMON BENEFICIALLY
NAME THE PAST FIVE YEARS AGE SINCE MEETING IN STOCK OWNED
---- --------------------- --- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Gryboski, Planning (Chairman), 56 1976 1998 25,546(h)(i) 1.33%
M.D.................... Executive, Loan,
Investment, Trust
and
Nominating
Committees;
Senior Attending
Otolaryngologist and
Head and Neck
Surgeon at New
Britain
General Hospital;
Assistant Clinical
Professor of
Otolaryngology and
Head and Neck
Surgery at the
University of
Connecticut Medical
School
Walter J. Liss.......... Audit (Chairman), 67 1970 1998 16,869(j)(k)(l) .87%
Executive, Planning,
Nominating and
Personnel
Committees;
Secretary of
Board of Directors;
President of Liss
Insurance Agency,
Inc.,
New Britain, CT
Richard S. Mansfield.... Member of all 55 1985 1998 32,366(m) 1.66%
Committees (except
the
Audit and Personnel
Committees);
President and Chief
Executive Officer of
the
Company and the
Bank; formerly
Executive Vice
President
and Vice President
for
Mortgage Lending at
the
Bank
Robert A. Story......... Executive, Loan 54 1983 1998 12,026(k)(n) 0.62%
(Chairman),
Investment,
Nominating
(Chairman), Trust
and Personnel
Committees;
President of Story
Brothers Auto
Rental, Inc. and
Story Brothers,
Inc., New Britain,
CT; automobile
repair business
</TABLE>

5
<PAGE>

- --------
(a) Includes options to purchase 1,000 shares granted to outside directors
upon re-election as a director in 1988 and 1994, and options to purchase 2,000
shares granted to outside directors at the 1995 annual meeting of
shareholders.
(b) Includes options to purchase 3,000 shares of the Company Common Stock
based on options granted to outside directors on the conversion of the Bank to
a capital stock savings bank and assumed by the Company at the time it
acquired all of the Bank's outstanding shares of Common Stock.
(c) Includes 100 shares owned by Dr. Filewicz's spouse, and 300 shares owned
by his minor children, over which he shares voting and investment power.
(d) Includes options to purchase 1,000 shares granted upon re-election as a
director in 1988, 1991 and 1994, and options to purchase 2,000 shares granted
at the 1995 annual meeting of shareholders.
(e) Includes options to purchase 2,000 shares of the Company's Common Stock
remaining from options granted to outside directors of the Bank on conversion
of the Bank to a capital stock savings bank and assumed by the Company at the
time it acquired all of the Bank's outstanding shares of Common Stock.
(f) Includes 1,077 shares owned jointly by Attorney Sledzik and his spouse
in which Attorney Sledzik shares voting and investment power.
(g) Includes options to purchase 1,500 shares of the Company's Common Stock
remaining from options granted to outside directors of the Bank on conversion
of the Bank to a capital stock savings bank and assumed by the Company at the
time it acquired all of the Bank's outstanding shares of Common Stock.
(h) Includes 4,500 shares owned as custodian for Dr. Gryboski's minor
children; and 12,700 shares owned by his IRA.
(i) Includes options to purchase 2,000 shares granted to outside directors
at the 1995 annual meeting of shareholders.
(j) Includes 2,423 shares owned by Mr. Liss' spouse; 1,787 shares held in
his spouse's Individual Retirement Account ("IRA"); 2,000 shares owned by a
corporate investment plan; and 1,346 shares owned by a scholarship fund for
which he is an officer.
(k) Includes options to purchase 1,000 shares granted upon re-election as a
director in 1989 and 1992, and options to purchase 2,000 shares granted at the
1995 annual meeting of shareholders.
(l) Includes options to purchase 1,000 shares remaining from options granted
to outside directors of the Bank on conversion of the Bank to a capital stock
savings bank and assumed by the Company at the time it acquired all of the
Bank's outstanding shares of Common Stock upon conversion.
(m) Includes options to purchase 31,000 shares, and 1,366 shares owned
jointly with Mr. Mansfield's spouse.

6
<PAGE>

(n) Includes 105 shares owned by Mr. Story's spouse as custodian for his
minor child; 100 shares owned as custodian for his minor child; and 129 shares
held in his spouse's IRA.

(o) Includes 10,000 shares owned by New Britain Obstetrics/Gynecology Group
Pension Plan. Dr. Welna has a 25% interest in the pension plan but disclaims
beneficial ownership of the shares owned by the pension plan. Also includes
options to purchase 1,000 shares and 2,000 shares granted to outside directors
in 1992 and 1995, respectively.

OWNERSHIP OF SHARES BY DIRECTORS AND OFFICERS

As of February 29, 1996, John G. Medvec, Executive Vice President and
Treasurer, beneficially owned 25,272 shares (including 24,000 shares under
stock options that are exercisable within 60 days), representing 1.30% of the
Company's outstanding stock. Including such shares, all of the current
directors and executive officers of the Company as a group (12 persons) own
beneficially as of February 29, 1996 an aggregate of 200,493 shares of Company
Common Stock, representing 9.88% of the total number of such shares
outstanding. Of that aggregate, current non-employee directors own 142,855
shares of Company Common Stock, or 7.24% of the total shares outstanding, and
executive officers own 57,638 such shares, or 2.91%.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company held seven meetings and the Board of
Directors of the Bank had thirteen meetings during fiscal year 1995. The
committees of the Board of Directors of the Company were established on July
1, 1989. The committees of the Board of Directors of the Company did not (with
the exception of the Nominating Committee) meet separately from the committees
of the Board of Directors of the Bank. The committees of the Board of
Directors of the Bank are the Audit Committee, the Executive Committee, the
Loan Committee, the Investment Committee, the Pension Committee, the Personnel
Committee, the Marketing Committee, the Trust Committee and the Planning
Committee. The following information relates to the committees of the Board of
Directors of the Bank and the Nominating Committee of the Company.

The Audit Committee met eleven times during fiscal year 1995. The members of
the Audit Committee are Walter J. Liss (Chairman), Stanley P. Filewicz and
Roland L. LeClerc. The Audit Committee reviews the examination reports of the
state and federal regulatory agencies, the quarterly reports of the internal
auditor and the annual reports of the independent auditors, and reviews the
adequacy of accounting, financial and operating controls.

The Executive Committee met two times during fiscal year 1995. The members
of the Executive Committee are Joseph A. Welna (Chairman), Robert A. Gryboski,
Walter J. Liss, A. Richard Puskarz, Robert A. Story and Chester S. Sledzik.
The Executive Committee has general supervision of the affairs of the Bank in
the absence of the full Board of Directors, and meets when and if necessary
between full Board meetings.

The Company's Nominating Committee met one time in 1995. The current members
of the Nominating Committee are Robert A. Story (Chairman), Robert A. Gryboski
and Walter J. Liss. The Nominating Committee nominates candidates for election
to the Board of Directors or for appointment by the Board from time to time
for the purpose of filling any vacancy among the directors. Nominations of
persons for election to the Board of Directors may also be made by
stockholders, as described above under "Election of a Class of Directors
(Proposal 1)".

The Loan Committee met eleven times during fiscal year 1995. Members of the
Loan Committee are Robert A. Story (Chairman), Robert A. Gryboski and Chester
S. Sledzik. Robert Mendillo, officer of the Bank, also attends meetings of the
Loan Committee. The Loan Committee reviews and approves all loans in excess of
$203,750.

7
<PAGE>

The Investment Committee met eleven times during fiscal year 1995. Members
of the Investment Committee are Walter D. Blogoslawski (Chairman), Robert A.
Story, Robert A. Gryboski and Chester S. Sledzik. The Investment Committee
reviews all fixed income investments and all equity investments to ensure that
they have been made within the policy guidelines established by the Board.

The Pension Committee met two times during fiscal year 1995. The members of
the Pension Committee are Robert A. Story and Stanley P. Filewicz (Chairman).
The Committee is responsible for supervising and controlling the operation of
the pension plan.

The Personnel Committee met twelve times during fiscal year 1995. The
members of the Personnel Committee are A. Richard Puskarz (Chairman), Walter
J. Liss and Robert A. Story. The Personnel Committee oversees and makes
recommendations to the Board regarding compensation and benefits for officers
and employees of the Bank. The Personnel Committee is also responsible for
administering the 1995 Stock Option and Incentive Plan and the 1995 Stock
Option Plan for Outside Directors.

The Marketing Committee met four times during 1995. The members of the
Marketing Committee are Roland L. LeClerc (Chairman), and Henry Poplaski. The
Marketing Committee reviews marketing, public relations and advertising for
the Bank.

The Planning Committee met ten times during fiscal year 1995. The members of
the Planning Committee are Robert A. Gryboski (Chairman), Walter J. Liss and
A. Richard Puskarz. The Planning Committee conceives and recommends short and
long range plans and objectives to strengthen the Bank's and the Company's
continued growth and sound financial condition.

The Trust Committee met eleven times during fiscal year 1995. Members of the
Trust Committee are Joseph A. Welna (Chairman), Robert A. Gryboski and Robert
A. Story. The Trust Committee is responsible for supervising the operations of
the Bank's trust department.

Richard S. Mansfield and Joseph A. Welna are members of each of the
committees of the Board of Directors, except that Mr. Mansfield is not a
member of the Audit Committee or the Personnel Committee. John G. Medvec, who
is not a director but is Executive Vice President and Treasurer of the Bank,
also attends meetings of the Board of Directors and committees of the Board of
Directors. Other senior officers regularly attend committee meetings relevant
to their responsibilities.

During 1995, every director attended at least 75 percent of the combined
total of the meetings of the Board of Directors and of committee(s) of which
he was a member.

COMPENSATION OF DIRECTORS

Each director who is not an employee of the Company or the Bank is currently
paid an annual retainer fee of $14,600. The Chairman of the Board is paid an
annual fee of $23,200. Directors of the Company do not receive additional
compensation for any Company or Bank Board of Directors or committee meeting
they attend. At the present time, each director of the Company is also a
director of the Bank. Individual directors are also compensated for additional
services they may provide in the following capacities: committee chairman
($1,475); executive committee member ($3,050); and Secretary of the Board
($3,100).

DIRECTORS' DEFERRED FEES PLANS

The Bank has in effect programs which permit directors to defer certain
amounts to which such director would be entitled for services rendered as a
director. Such amounts are to be credited to deferred compensation accounts,
generally up to the full amount of the directors fees to which they are
entitled. The funds in such deferred compensation accounts are, in each case,
invested in a life

8
<PAGE>

insurance policy owned by the Bank. Following the retirement or death of the
participating director, the Bank will make monthly payments for ten years to
him or his beneficiary of an amount computed actuarially. If the director
becomes disabled prior to retirement, he will be entitled to the same benefits
as upon retirement, depending on the number of years of participation in the
program. If the director terminates his services with the Bank, or the Bank
terminates the services of the director for cause, or if the director
withdraws from the program, the program provides that the Bank will pay him
the amount of the deferred fees plus interest at 12%. Total payments in 1995
of $43,647 were made by the Bank pursuant to these programs to former
directors and to certain current directors who have attained age 65 (or 70, in
the case of one of the Bank's programs) to Matthew R. Duksa ($6,960), Edward
Januszewski ($6,352), Roland L. LeClerc ($8,728), Eugene M. Rosol ($7,495),
Chester S. Sledzik ($8,728) and Walter Liss ($5,384). By properly deferring
fees under this program, a director avoids federal income tax in the year in
which the fees are earned and incurs such tax when the deferred payments are
made. The Bank is not entitled to a deduction for the life insurance premiums
which are paid, but may deduct the amount of deferred compensation paid when
paid. Although the Bank currently funds the benefits payable under this
program through the purchase of life insurance owned by the Bank on each
participating director, any deficiency would be provided from the general
assets of the Bank.

1995 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

The Company also adopted, and the stockholders have approved, the 1995 Stock
Option Plan for Outside Directors (the "Outside Directors' Plan"). The purpose
of the Outside Directors' Plan is to promote the long-term success of the
Company by providing financial incentives to directors who are in a position
to make significant contributions to such success and to ally more closely
their financial interests with that of the Company and its stockholders.

The Outside Directors' Plan provides for annual option grants of 2,000
options to all non-employee directors on the Company's Board of Directors on
the date of the Company's annual meeting of stockholders (the "Grant Date")
beginning with the annual meeting in 1995. The aggregate number of shares
subject to options under the Outside Directors' Plan is 120,000, subject to
adjustment for stock splits or other changes in corporate structure or
capitalization affecting the Company's Common Stock. Shares delivered upon the
exercise of options pursuant to the Outside Directors' Plan may be either
authorized but unissued shares of Common Stock or shares of Common Stock held
in treasury. Shares subject to options which expire or terminate before
exercise become available for issuance under the Outside Directors' Plan. If
the number of shares of Common Stock subject to options on any Grant Date
under the Outside Directors' Plan exceeds the number of shares which are
available for issuance on such grant date, each director's options shall be
reduced on a pro rata basis in order to comply with the maximum number of
shares issuable under the Outside Directors' Plan. Options are exercisable
upon grant except for options granted to a director who first becomes a
director on a Grant Date; such options are exercisable 60 days after that
Grant Date.

The Outside Directors' Plan is administered by a Committee of three or more
non-employee directors of the Company. Only non-employee directors are
eligible to participate in the Outside Directors' Plan. All options are
exercisable at the Fair Market Value of the Company's Common Stock on the date
preceding the date of grant (the "Option Price"). "Fair Market Value" is
defined as the average of bid and asked prices for the Common Stock on the
date as of which the determination is made, as made available for publication
by the National Association of Securities Dealers Automated Quotation System,
National Market. In the event of any stock split, stock dividend, merger,
consolidation, reorganization, recapitalization or other change in corporate
structure or capitalization affecting the Company's Common Stock, the number
of shares subject to the Outside Directors' Plan, the number of shares then
subject to options and the price per share payable upon the exercise of
options may be appropriately adjusted by the Committee. In the event a new
non-employee director is appointed by the Board to fill a vacant directorship,
the new director will not be eligible for an automatic option grant until the
next annual meeting of stockholders.

9
<PAGE>

Unless earlier terminated, the term of the Plan is for 5 years (through the
1999 annual meeting of stockholders) and each option shall be exercisable for
10 years from the date of grant. Upon termination of service as a director,
options will terminate on the earlier of three months after termination of
service as a director or the expiration of the term of the option, except in
the event of the grantee's death, disability or retirement. In the event of
termination of service as a director for such reasons, options will terminate
at the expiration of the option term.

COMPENSATION OF EXECUTIVE OFFICERS

Each of the executive officers of the Company is also currently an officer
of the Bank. The Company has no existing plan or arrangement to pay any
remuneration to such officers in addition to the compensation that they will
receive from the Bank in their respective capacities as officers of the Bank.
The following table sets forth a summary for the last three (3) fiscal years
of the cash and non-cash compensation paid or awarded by the Bank to the Chief
Executive Officer and the only other executive officer whose total annual
salary and bonus exceeded $100,000 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------ ------------
(A) (B) (C) (D) (E)
ALL OTHER
SALARY COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) OPTIONS (#) ($)(1)
--------------------------- ---- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Richard S. Mansfield........... 1995 157,857 0 10,203(2)
President and Chief 1994 144,076 0 11,872(2)
Executive Officer 1993 137,530 0 4,494
John G. Medvec................. 1995 118,489 0 3,553
Executive Vice President 1994 113,007 0 3,453
and Treasurer 1993 107,495 0 3,975
</TABLE>
- --------
(1) Amounts of All Other Compensation are amounts contributed or accrued in
the relevant year by the Company for the Named Executive Officers under the
Company's Savings and Investment Plan. The executives may receive other
perquisites customary to their positions the aggregate amount of which do not
amount to, on an annual basis, 10% of the salary shown above for each.
(2) Includes $5,703 and $8,146 paid to Mr. Mansfield for vacation time not
used in 1995 and 1994, respectively.

OPTIONS/SAR GRANTS

The following table provides detailed information concerning stock options
granted to the Named Executive Officers pursuant to the 1995 Stock Option and
Incentive Plan for employees during 1995. In addition, in accordance with SEC
rules, this table shows potential realizable gains that would exist for these
options for the Named Executives. These potential gains are based on assumed
annualized rates of stock price appreciation of 5% and 10% from the date the
options were granted over the full 10 year option term.

10
<PAGE>

OPTION/SAR GRANTS IN 1995

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PRICE APPRECIATION
OVER OPTION TERM
------------------------------
(A) (B) (C) (D) (D)(1) (E) (F) (G) (H)
% OF
TOTAL MARKET
OPTIONS/SARS EXERCISE PRICE
GRANTED TO OR AT
EMPLOYEES BASE GRANT
OPTIONS IN FISCAL PRICE DATE EXPIRATION
NAME GRANTED (#) YEAR ($/SH) ($/SH) DATE 5% ($) 10% ($) 0% ($)
---- ----------- ------------ -------- ------ ---------- ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard S. Mansfield.... 25,000(1) 28% $17.56 $17.56 1/25/05 $276,000(2) $699,750(2) -0-
John G. Medvec.......... 20,000(3) 23% $17.56 $17.56 1/25/05 $220,100(2) $559,800(2) -0-
</TABLE>
- --------
(1) These options were granted to Mr. Mansfield on January 25, 1995 at
$17.56 per share, the fair market value of the Company's stock on that date.
(2) The resulting stock price for the grant expiring on January 25, 2005
would be $28.60 at 5% and $45.55 at 10% compounded annually for 10 years.
(3) These options were granted to Mr. Medvec on January 25, 1995 at $17.56
per share, the fair market value of the Company's stock on that date.

The following table sets forth information concerning option exercises in
fiscal 1995 and the fiscal year-end value of unexercised options to purchase
the Company's Common Stock granted to the Named Executive Officers under the
1995 Stock Option and Incentive Plan for employees and a prior plan for
employees.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1995 DECEMBER 31, 1995
ACQUIRED ON VALUE (#) EXERCISABLE/ ($) EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
---- ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Richard S. Mansfield.... 0 0 34,000/N/A 129,925/N/A
John G. Medvec.......... 0 0 25,000/N/A 84,365/N/A
</TABLE>
- --------
(1) Based on the difference between the option exercise price and the
average of the high and low price of the Company Common Stock on December 31,
1995 ($19.25).

The table that follows shows the estimated annual benefits payable upon
retirement to Bank employees, including officers, in the earnings and years of
service classifications indicated, under the Bank's noncontributory defined
benefit plan. The plan covers officers and employees of the Bank who have
attained the age of 20 1/2 years, who in one year work at least 1,000 hours
and have completed six months of service with the Bank. The retirement
benefits reflect a reduction to recognize in part the Bank's cost of Social
Security benefits related to service for the Bank. The plan also provides for
the payment of benefits to an employee's surviving spouse or other
beneficiary, and for optional early retirement benefits provided a participant
has attained age 55 and completed at least 10 years of credited service with
the Bank.

11
<PAGE>

ESTIMATED ANNUAL RETIREMENT BENEFITS

<TABLE>
<CAPTION>
HIGHEST FIVE
YEAR 15 20 25 30 35
AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 4,950 $ 6,600 $ 8,250 $ 9,900 $ 11,550
$ 25,000 6,188 8,250 10,313 12,375 14,438
$ 50,000 14,561 19,415 24,269 29,123 33,976
$ 75,000 23,186 30,915 38,644 46,373 54,101
$100,000 31,811 42,415 53,019 63,623 74,226
$125,000 40,436 53,915 67,394 80,873 94,351
$150,000 49,061 65,415 81,769 98,123 114,476
$175,000* 49,061 65,415 81,769 98,123 114,476
</TABLE>
- --------
* Applicable pension law currently restricts the amount of annual
compensation on which these benefits can be based to $150,000.

The compensation covered by the plan whose benefits are summarized in the
table above equals salary and bonus. The covered compensation for each of the
Named Executive Officers is the highest five-year average of the amounts shown
in the "Salary" column of the Summary Compensation Table.

The Named Executive Officers have been credited with the following years of
service: Mr. Mansfield, 15 years; and Mr. Medvec, 20 years.

EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS

Mr. Mansfield and Mr. Medvec each entered into employment agreements with
the Bank in 1986. These agreements have three year terms which are
automatically extended on each January 1 for an additional year (unless either
party gives written notice of his or its intention not to extend the
agreement). The agreements provide for payment of an annual base salary and
annual salary increases at not less than the percentage increase in the cost
of living, as measured by the Consumer Price Index--All Urban Consumers of the
U.S. Bureau of Labor Statistics. Mr. Mansfield and Mr. Medvec are also
eligible to participate in all pension and other benefits paid by the Bank to
its officers. Under these agreements, Mr. Mansfield and Mr. Medvec currently
are paid annual salaries for the period September 15, 1995 through September
15, 1996 of $155,692 and $121,703, respectively. If the employment of Mr.
Mansfield or Mr. Medvec is terminated without "cause" (as defined in the
agreements), they will be entitled to severance pay equal to their salary and
bonus compensation for an additional twelve-month period plus other benefits
they would have been entitled to had they remained employed for such period.
These agreements provide that upon a change in control of the Bank (as defined
in the agreements), such officers will, under certain circumstances, receive
compensation during the term of employment (three years from the time of the
change in control, with automatic one year renewals each year) no less than
their respective levels of compensation at the time of the change in control
of the Bank, increased at least annually by no less than the percentage
increase in the Consumer Price Index--All Urban Consumers of the U.S. Bureau
of Labor Statistics. In the event the officer's employment is terminated
following a change in control (except for a termination for "cause"), the
officer will be entitled to receive severance payments in an amount equal to
the salary and bonus compensation for the remaining term of employment
following the change in control plus other benefits the officer would have
been entitled to had he or she remained employed for such period. These
agreements also contain confidentiality provisions effective following
termination of employment with the Bank, and noncompetition provisions
prohibiting the officers from obtaining employment in a similar business in
the Bank's market area for a period of one year following termination of
employment with the Bank.

12
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following non-employee directors served on the Personnel Committee of
the Board of Directors during the last fiscal year: Messrs. A. Richard Puskarz
(Chairman), Walter J. Liss and Robert A. Story. Mr. Puskarz is the President
and Chief Executive Officer of Art Press, Inc., which provides certain
printing services to the Company and the Bank. In 1995, the Company paid Art
Press, Inc. approximately $65,650 for such work.

PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Notwithstanding anything to the contrary contained in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act, that might incorporate by reference future filings in whole or in part,
including this Proxy Statement, the following report and the Performance Graph
immediately following the report shall not be incorporated by reference into
any such filings.

Executive Compensation for the officers (including the Named Executive
Officers) of the Company is managed by the Personnel Committee of the Board of
Directors (the "Committee"). The Committee consists of three non-employee
members of the Board of Directors appointed by the Chairman of the Board: A.
Richard Puskarz (Chairman), Walter J. Liss and Robert A. Story. The Committee
is charged with determining the compensation level of Mr. Mansfield, President
and Chief Executive Officer of the Company, and approving management salary
recommendations for the other Company officers. The Committee is also
responsible for developing and implementing any annual and long-term incentive
programs for the Company's executives and other employees. All determinations
made by the Committee with respect to the cash component of compensation are
subject to approval by the full Board of Directors.

The Committee has implemented an Executive Compensation program which
reflects its conservative and straightforward approach to compensating
officers. Executive compensation is designed to attract and retain qualified
executives with a market competitive salary and to focus the executives on the
long-term growth of the Company and the creation of stockholder value through
long-term incentive awards. Compensation for officers consist of one or more
of the following components: salary, perquisites, employer contributions under
the Company's Savings and Investment Plan and equity-based long-term
incentives in the form of stock options. The Personnel Committee sets salary
levels for the twelve-month period beginning in September of each year.

Salaries paid to officers in 1995 were based primarily on the market levels
of compensation paid to senior banking executives of similar-sized Connecticut
banks as reported in a survey published by the Connecticut Bankers Association
(the "CBA Survey"). The CBA Survey included a comparison of compensation
levels paid to executive officers by 18 Connecticut banks with assets ranging
from $200 million to $399 million. The Personnel Committee based 1995 salary
increases on average percentage increases paid by other Connecticut and
regional banks as reflected in the CBA Survey. The salary increase in 1995 for
all executive officers of the Bank, including the Chief Executive Officer, was
5%. The banks included in the CBA Survey provided salary increases of 4% to 5%
in 1995. The median percentage increase in compensation reflected in the CBA
Survey was 4.5% for Bank officers.

Although not computed on the basis of specific financial goals or
quantitative performance criteria, other factors considered by the Personnel
Committee in determining base salary levels in 1995 included:

. the respective level of experience and contributions to the Company's
growth of executive officers;

.the past and projected performance of the Company; and

.the Company's performance compared with that of its peer group of
Connecticut banks of similar asset size.

13
<PAGE>

Stock option grants are made periodically by the Committee to officers and
other key employees and are based on individual officer and employee
contributions to the success of the Company, the performance of the Company in
general and the Company's performance in comparison with the performance of
the Company's peer group. The size of stock option grants is based on market
practice generally and on the respective accomplishments of the selected
executives. Options were granted to officers in 1995 based on the Bank's
expansion activities, growth, and performance since 1991, when options were
last granted to officers.

For the September 1994 to September 1995 period, Mr. Mansfield received a
salary of $148,278, a 5% increase over the salary of $141,296 for the
corresponding 1994 period. The salary level is based on a comparison of
compensation paid to chief executive officers of Connecticut banks with a
similar asset size as reflected in the CBA Survey and on the overall financial
performance of the Company. Data contained in the CBA Survey indicate that Mr.
Mansfield's salary and salary increase are well within the competitive market
range.

THE PERSONNEL COMMITTEE
A. Richard Puskarz (Chairman)
Walter J. Liss
Robert A. Story

PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company Common Stock with the
cumulative total return of the NASDAQ Stock Market (U.S.) Index and the Keefe,
Bruyette & Woods, Inc. New England Banks Index for the period of five fiscal
years commencing December 31, 1990 and ended December 31, 1995.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *

PERFORMANCE GRAPH APPEARS HERE

<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) KEEFE NASDAQ PSB of NB
- ------------------- ----- ------ ---------
<S> <C> <C> <C>
Measurement Pt- 12/31/1990 $100 $100 $100
FYE 12/31/1991 $175.57 $160.60 $149.50
FYE 12/31/1992 $308.34 $186.90 $252.30
FYE 12/31/1993 $411.65 $214.50 $283.60
FYE 12/31/1994 $414.42 $209.70 $284.70
FYE 12/31/1995 $646.81 $296.30 $323.80
</TABLE>

14
<PAGE>

TRANSACTIONS WITH MANAGEMENT AND OTHERS

Certain of the directors and executive officers of the Company are and have
been customers of the Company and the Bank and have had banking transactions
with the Bank. As of December 31, 1995, the Bank had outstanding a maximum
aggregate amount of $2,358,389 in loans to directors and executive officers of
the Company and the Bank and immediate family members of such directors and
executive officers. As a matter of policy, these loans were made on
substantially the same terms (including interest rates and collateral) as
those prevailing at the time for comparable transactions with other customers
of the Bank, were made in the ordinary course of business, and did not involve
more than the normal risk of collectibility or present other unfavorable
features. No director or executive officer (together with his immediate family
members) had indebtedness to the Bank exceeding $672,010.

The Bank had no loans outstanding on December 31, 1995 to any person known
by the Company to be a beneficial owner of more than five percent of Company
Common Stock.

The Company and the Bank expect to have in the future banking transactions
in the ordinary course of business with directors and executive officers of
the Company and the Bank and their immediate family members, on substantially
the same terms, including interest rates and collateral on loans, as those
prevailing at the same time for comparable transactions with persons not
affiliated with the Company or the Bank.

Several of the Company's directors are affiliated with entities engaged in
various levels of business activity with the Company and the Bank. Mr. Puskarz
is the President and Chief Executive Officer of Art Press, Inc., which
provides certain printing services to the Company and the Bank. In 1995, the
Company paid Art Press, Inc. approximately $65,650 for such work. LeClerc
Fortier Insurance, of which Mr. LeClerc is a retired partner, provides
insurance coverage for the Company and the Bank. In 1995, LeClerc Fortier
Insurance, as agent, collected premiums from the Company and the Bank
totalling approximately $181,283. Attorney Sledzik has been elected by the
Board as Bank attorney and was paid a retainer of $16,535 in 1995 for his work
in such position. In addition, Attorney Sledzik is a member of the law firm of
Sledzik & McGuire, which often acts as counsel to the Bank on loan closings,
the fees for which are paid by the borrower. Such firm also provides certain
additional legal services for the Bank for which, in 1995, it was paid
approximately $3,116.

The Company believes that all transactions of the Company and the Bank with
officers, directors, employees, principal stockholders or affiliates,
including those outlined above, have been or will be on terms no less
favorable to the Company than could have been or could be obtained from third
persons.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent (10%) of the
Company Common Stock, to file with the SEC initial reports of ownership and
reports of changes in ownership of Company Common Stock and other equity
securities of the Company. Officers, directors and ten percent (10%)
shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
ten percent (10%) beneficial owners were complied with.

THE NOMINEES FOR DIRECTOR MUST BE ELECTED BY A MAJORITY OF THE VOTING POWER
OF THE SHARES REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES FOR DIRECTOR.

15
<PAGE>

RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND
AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1996

(PROPOSAL 2)

The Board of Directors of the Company has renewed the Company's arrangements
with Coopers & Lybrand, Independent Certified Public Accountants, to be its
independent auditors for the fiscal year ending December 31, 1996, subject to
ratification by the Company's stockholders. Representatives of Coopers &
Lybrand are expected to be present at the Annual Meeting. They will be
afforded an opportunity to make a statement if they desire to do so and to
respond to appropriate stockholders' questions.

THE APPOINTMENT OF THE AUDITORS MUST BE RATIFIED BY A MAJORITY OF THE VOTING
POWER OF THE SHARES REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND AS
INDEPENDENT AUDITORS.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other matters which may come before the Annual Meeting. If
any matter other than those referred to in this Proxy Statement should
properly come before the Annual Meeting, it is the intention of each person
named in the enclosed form of proxy to vote each proxy with respect to such
matters in accordance with his or her best judgment.

STOCKHOLDER PROPOSALS

Any stockholder who intends to present a proposal at the Company's April 22,
1997 Annual Meeting of Stockholders is advised that, in order for such
proposal to be included in the Board of Directors' proxy material for such
meeting, the proposal must be received by the Company at its principal
executive office no later than November 22, 1996, directed to the Secretary of
the Company. Any such stockholder proposal must meet the requirements
specified in SEC Rule 14a-8 under the Exchange Act.

If the date of the next Annual Meeting of Stockholders is subsequently
advanced or delayed by more than thirty (30) calendar days from the date
announced above, the Company will, in a timely manner, inform its stockholders
of such change and the date by which proposals of stockholders must be
received.

BY ORDER OF THE BOARD OF DIRECTORS

Teresa Sasinski, Secretary

New Britain, Connecticut
March 22, 1996

16
<PAGE>

PROXY PEOPLE'S SAVINGS FINANCIAL CORP. PROXY
123 BROAD STREET
NEW BRITAIN, CONNECTICUT 06053

1996 ANNUAL MEETING OF SHAREHOLDERS - APRIL 23, 1996

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PEOPLE'S SAVINGS
FINANCIAL CORP.

The undersigned shareholder of People's Savings Financial Corp. hereby
appoints Richard S. Mansfield and Joseph A. Welna, M.D. and each of them the
proxies of the undersigned with full power of substitution to vote all the
shares of People's Savings Financial Corp. held of record by the undersigned on
March 8, 1996, at the Annual Meeting of Shareholders of the Corporation to be
held at the Ramada Inn, in New Britain, Connecticut, at 10:00 a.m. on Tuesday,
April 23, 1996 and at any adjournment(s) thereof, with all the power which the
undersigned would have if personally present, hereby revoking any proxy
heretofore given. A majority of said proxies or their substitutes who attend the
meeting (or if only one shall be present, then that one) may exercise all of the
powers hereby granted.

This proxy when properly signed will be voted in the manner directed herein by
the undersigned shareholder. If no specification is made, this proxy will be
voted "FOR" all nominees for Director and "FOR" proposal 2. If any other
business is properly presented at this Annual Meeting, or any adjournment(s)
thereof, this proxy will be voted in accordance with the determination of a
majority of the Board of Directors.

The undersigned hereby acknowledges receipt of the proxy statement for the
Meeting and instructs the proxies to vote as follows:

1. ELECTION OF DIRECTORS:

Henry Poplaski and A. Richard Puskarz

FOR all nominees listed above WITHHOLD AUTHORITY to vote for
(Except as marked to the contrary below) all nominees listed above

[ ] [ ]

(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)

[ ]

For all nominees except:
---------------------------------------------------

THIS PROXY IS CONTINUED ON THE REVERSE SIDE

<PAGE>

2. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1996.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. WITH DISCRETIONARY AUTHORITY TO VOTE UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

Please sign exactly as your name appears on this proxy card.
When signing as a fiduciary or representative - attorney,
executor, administrator, trustee or guardian - please give your
full title as such. Proxies signed by a corporation must be
signed in the full corporate name by the President or otherwise
duly authorized officer. Proxies signed by a partnership must be
signed in the partnership name by a duly authorized person.

Date:
--------------------------------------

-------------------------------------------
Signature

-------------------------------------------
Signature if held jointly

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.