Market Overview

People's United Financial Reports Second Quarter Net Income of $110.2 Million, or $0.31 per Common Share

Share:

People's United Financial Reports Second Quarter Net Income of $110.2 Million, or $0.31 per Common Share

Operating Earnings of $0.32 per Common Share

- Announced the acquisition of First Connecticut Bancorp and acquired Vend Lease Company in the quarter.

- Return on average assets of 1.00 percent and return on average tangible common equity of 13.9 percent.

- Efficiency ratio of 58.4 percent, an improvement of 100 basis points linked quarter reflecting continued revenue growth and well-controlled expenses.

- Net interest margin of 3.10 percent, expanded five basis points linked quarter and benefited from an increase in loan yields that continue to outpace the rise in deposit costs.

- Board of Directors declared a common stock dividend for the 100th consecutive quarter.

PR Newswire

BRIDGEPORT, Conn., July 19, 2018 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ:PBCT) today reported results for the second quarter 2018. Results for the second quarter and comparison periods are summarized below:










($ in millions, except per common share data)









 As of and for the Three Months Ended





Jun. 30, 2018


Mar. 31, 2018


Jun. 30, 2017











Net income


$          110.2


$          107.9


$             69.3


Net income available


106.7


104.4


65.8



to common shareholders






Per common share


0.31


0.30


0.19











Operating earnings1


109.0


104.4


82.6



Per common share


0.32


0.30


0.24




















Net interest income


$          301.2


$          295.8


$          274.9



Net interest margin


3.10%


3.05%


2.96%











Non-interest income


94.9


90.4


91.6




















Non-interest expense


$          248.6


$          243.5


$          257.3


Operating non-interest expense1

245.7


243.5


232.5











Efficiency ratio1


58.4%


59.4%


58.4%




















Average balances








Loans


$        32,116


$        32,096


$        31,400


Deposits


32,536


32,824


32,024











End of period balances








Loans


32,512


32,104


31,611


Deposits


32,468


32,894


31,815











1See Non-GAAP Financial Measures and Reconciliation to GAAP.


"Our commitment to enhancing profitability was further demonstrated by reporting another quarter of record net income," said Jack Barnes, Chairman and Chief Executive Officer. "These results reflect the continued benefits of investments in revenue producing initiatives, sustained excellent asset quality and recent successful acquisitions. Consistent with our strategy of balancing organic growth with thoughtful M&A, we announced today the all-cash acquisition of Vend Lease, a Baltimore-based equipment finance company established in 1979 that operates primarily in the hospitality industry.  Vend Lease shares our client-centric approach, has a highly specialized skill set and is a recognized brand in the markets it serves.  The company will become a division of LEAF Commercial Capital, enabling it to leverage LEAF's leading automation capabilities to further accelerate growth. We are excited about the transaction as it deepens our network of specialty finance experts and bolsters our nationwide businesses."

"Higher revenues and well-controlled expenses generated a second quarter efficiency ratio of 58.4 percent, an improvement of 100 basis points linked quarter," said David Rosato, Senior Executive Vice President and Chief Financial Officer. "Revenues of $396 million grew three percent due to increases in both net interest income and non-interest income.  Net interest margin of 3.10 percent expanded five basis points and benefited from new business yields exceeding the total portfolio yield for the sixth consecutive quarter and the upward repricing of floating rate loans. Operating expenses of $246 million, which includes $4 million in costs related to ten branch closures, were up only one percent. Loan growth from the end of the first quarter was driven by solid results in middle market C&I, equipment financing and mortgage warehouse lending. These increases were partially offset by the ongoing run-off of the transactional portion of the New York multi-family portfolio. Deposit balances were lower as a result of seasonal declines in our municipal and retail businesses. However, we expect deposits to rebound in the third and fourth quarters in line with historical seasonal trends."
























 As of and for the Three Months Ended






Jun. 30, 2018


Mar. 31, 2018


Jun. 30, 2017













Asset Quality



















Net loan charge-offs 


0.06%


0.06%


0.09%



     to average total loans






Originated non-performing loans


0.56%


0.52%


0.60%



     as a percentage of originated loans


























Returns



















Return on average assets1


1.00%


0.98%


0.65%



Return on average tangible common equity1

13.9%


13.8%


8.7%























Capital Ratios



















People's United Financial, Inc.









Tangible common equity / tangible assets

7.3%


7.3%


7.5%



Tier 1 leverage


8.6%


8.5%


8.6%



Common equity tier 1 


10.0%


10.1%


10.1%



Tier 1 risk-based


10.8%


10.8%


10.9%



Total risk-based 


12.5%


12.6%


12.6%













People's United Bank, N.A.









Tier 1 leverage



9.1%


8.6%


9.0%



Common equity tier 1 



11.4%


11.0%


11.3%



Tier 1 risk-based



11.4%


11.0%


11.3%



Total risk-based 



13.4%


12.9%


13.3%













1See Non-GAAP Financial Measures and Reconciliation to GAAP.





The Company's Board of Directors declared a $0.1750 per common share quarterly dividend payable August 15, 2018 to shareholders of record on August 1, 2018. Based on the closing stock price on July 18, 2018, the dividend yield on People's United Financial common stock is 3.8 percent.

People's United Financial, Inc., a diversified financial services company with approximately $45 billion in total assets, provides commercial and retail banking, as well as wealth management services through a network of approximately 400 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.

2Q 2018 Financial Highlights

Summary

  • Net income totaled $110.2 million, or $0.31 per common share.
    • Net income available to common shareholders totaled $106.7 million.
    • Operating earnings totaled $109.0 million, or $0.32 per common share (see Non-GAAP Financial Measures and Reconciliation to GAAP).
  • Net interest income totaled $301.2 million in 2Q18 compared to $295.8 million in 1Q18.
  • Net interest margin increased five basis points from 1Q18 to 3.10% reflecting:
    • Higher yields on the loan portfolio (increase of 13 basis points).
    • Higher yields on the securities portfolio (increase of one basis point).
    • Higher rates on deposits and borrowings (decrease of 11 basis points).
    • One additional calendar day in 2Q18 (increase of two basis points).
  • Provision for loan losses totaled $6.5 million.
    • Net loan charge-offs totaled $5.0 million.
    • Net loan charge-off ratio of 0.06% in 2Q18.
  • Non-interest income totaled $94.9 million in 2Q18 compared to $90.4 million in 1Q18.
    • Customer interest rate swap income increased $2.5 million.
    • Bank service charges increased $0.5 million.
    • Other non-interest income in 2Q18 includes $2.0 million in gains related to certain legacy investments.
    • Insurance revenue decreased $1.5 million, reflecting the seasonality of commercial insurance renewals.
    • Commercial banking lending fees decreased $1.0 million.
    • At June 30, 2018, assets under administration, which are not reported as assets of People's United Financial, totaled $23.6 billion, of which $9.0 billion are under discretionary management, compared to $23.6 billion and $9.0 billion, respectively, at March 31, 2018.
  • Non-interest expense totaled $248.6 million in 2Q18 compared to $243.5 million in 1Q18.
    • Operating non-interest expense totaled $245.7 million in 2Q18 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
    • Compensation and benefits expense decreased $5.7 million, primarily reflecting lower payroll and benefit-related costs in 2Q18.
    • Professional and outside services expense, excluding $2.1 million of merger-related expenses in 2Q18, decreased $0.1 million.
    • Regulatory assessment expense decreased $0.7 million.
    • Other non-interest expense in 2Q18 includes a $4.1 million charge relating to the closing of 10 branches and $0.8 million of merger-related expenses.
    • The efficiency ratio was 58.4% for 2Q18 compared to 59.4% for 1Q18 and 58.4% for 2Q17 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
  • The effective income tax rate was 21.8% for 2Q18 and 21.6% for the first six months of 2018, compared to 27.8% for the full-year of 2017.
    • The lower rates in 2018 primarily reflect the benefit from a reduction in the U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018.

Commercial Banking

  • Commercial loans totaled $23.7 billion at June 30, 2018, an increase of $416 million from March 31, 2018.
    • The mortgage warehouse portfolio increased $95 million from March 31, 2018.
    • The New York multi-family portfolio decreased $79 million from March 31, 2018.
    • Equipment financing includes $68 million in loans and leases acquired in connection with the Vend Lease acquisition.
  • Average commercial loans totaled $23.3 billion in 2Q18, an increase of $61 million from 1Q18.
    • The average mortgage warehouse portfolio increased $150 million from 1Q18.
    • The average New York multi-family portfolio decreased $154 million from 1Q18.
  • Commercial deposits totaled $11.4 billion at June 30, 2018 compared to $12.0 billion at March 31, 2018.
  • The ratio of originated non-performing commercial loans to originated commercial loans was 0.55% at June 30, 2018 compared to 0.49% at March 31, 2018.
  • Non-performing commercial assets, excluding acquired non-performing loans, totaled $132.6 million at June 30, 2018 compared to $115.7 million at March 31, 2018.
  • For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.93% at June 30, 2018 compared to 0.94% at March 31, 2018.
  • The originated commercial allowance for loan losses represented 169% of originated non-performing commercial loans at June 30, 2018 compared to 194% at March 31, 2018.

Retail Banking

  • Residential mortgage loans totaled $6.9 billion at June 30, 2018, an increase of $32 million from March 31, 2018.
    • Average residential mortgage loans totaled $6.8 billion in 2Q18, an increase of $17 million from 1Q18.
  • Home equity loans totaled $1.9 billion at March 31, 2018, a decrease of $41 million from March 31, 2018.
    • Average home equity loans totaled $1.9 billion in 2Q18, a decrease of $56 million from 1Q18.
  • Retail deposits totaled $21.1 billion at June 30, 2018 compared to $20.9 billion at March 31, 2018.
  • The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.50% at June 30, 2018 compared to 0.54% at March 31, 2018.
  • The ratio of originated non-performing home equity loans to originated home equity loans was 0.81% at June 30, 2018 compared to 0.85% at March 31, 2018.

Conference Call
On July 19, 2018, 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.

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," "should" 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, international, 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) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; (9) the successful integration of acquisitions; and (10) 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.

###

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

 

People's United Financial, Inc.













FINANCIAL HIGHLIGHTS




























Three Months Ended





June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,



(dollars in millions, except per common share data)


2018


2018


2017


2017


2017



Earnings Data:













  Net interest income (fully taxable equivalent)

$

307.8

$

302.1

$

304.1

$

295.8

$

285.2



  Net interest income 


301.2


295.8


292.3


284.6


274.9



  Provision for loan losses


6.5


5.4


7.5


7.0


7.1



  Non-interest income (1)


94.9


90.4


87.3


89.3


91.6



  Non-interest expense (1)


248.6


243.5


239.7


237.1


257.3



  Income before income tax expense


141.0


137.3


132.4


129.8


102.1



  Net income


110.2


107.9


106.2


90.8


69.3



  Net income available to common shareholders (1)


106.7


104.4


102.7


87.3


65.8
















Selected Statistical Data:













  Net interest margin (2)


3.10

%

3.05

%

3.07

%

3.04

%

2.96

%


  Return on average assets (1), (2)


1.00


0.98


0.96


0.84


0.65



  Return on average common equity (2)


7.6


7.5


7.4


6.4


4.8



  Return on average tangible common equity (1), (2)


13.9


13.8


13.8


11.8


8.7



  Efficiency ratio (1)


58.4


59.4


56.1


57.3


58.4
















Common Share Data:













  Earnings per common share: 













    Basic

$

0.31

$

0.31

$

0.30

$

0.26

$

0.20



    Diluted (1)


0.31


0.30


0.30


0.26


0.19



  Dividends paid per common share


0.1750


0.1725


0.1725


0.1725


0.1725



  Common dividend payout ratio (1)


56.2

%

56.3

%

57.1

%

66.8

%

88.6

%


  Book value per common share (end of period)

$

16.56

$

16.43

$

16.40

$

16.29

$

16.18



  Tangible book value per common share (end of period) (1)

9.02


8.93


8.87


8.68


8.99



  Stock price:













    High


19.37


20.26


19.50


18.26


18.21



    Low


18.00


18.18


17.58


15.97


16.44



    Close (end of period)


18.09


18.66


18.70


18.14


17.66



  Common shares (end of period) (in millions)


341.59


341.01


339.98


337.84


337.51



  Weighted average diluted common shares (in millions)

344.47


344.00


341.11


338.82


338.51
















(1) See Non-GAAP Financial Measures and Reconciliation to GAAP.











(2) Annualized.













 

 

People's United Financial, Inc.






FINANCIAL HIGHLIGHTS














Six Months Ended




June 30,


(dollars in millions, except per common share data)


2018


2017


Earnings Data:






  Net interest income (fully taxable equivalent)

$

609.9

$

543.3


  Net interest income 


597.0


523.5


  Provision for loan losses


11.9


11.5


  Non-interest income


185.3


176.3


  Non-interest expense (1)


492.1


483.4


  Income before income tax expense


278.3


204.9


  Net income


218.1


140.1


  Net income available to common shareholders (1)


211.1


133.1








Selected Statistical Data:






  Net interest margin (2)


3.07

%

2.90

%

  Return on average assets (1), (2)


0.99


0.68


  Return on average common equity (2)


7.5


5.1


  Return on average tangible common equity (1), (2)


13.9


9.1


  Efficiency ratio (1)


58.9


58.9








Common Share Data:






  Earnings per common share:






    Basic

$

0.62

$

0.42


    Diluted (1)


0.61


0.41


  Dividends paid per common share


0.3475


0.3425


  Common dividend payout ratio (1)


56.2

%

83.4

%

  Book value per common share (end of period)

$

16.56

$

16.18


  Tangible book value per common share (end of period) (1)


9.02


8.99


  Stock price:






    High


20.26


19.85


    Low


18.00


16.44


    Close (end of period)


18.09


17.66


  Common shares (end of period) (in millions)


341.59


337.51


  Weighted average diluted common shares (in millions)


344.23


324.89








(1) See Non-GAAP Financial Measures and Reconciliation to GAAP.






(2) Annualized.






 

 

People's United Financial, Inc.












FINANCIAL HIGHLIGHTS - Continued


























As of and for the Three Months Ended




June 30,


March 31, 


Dec. 31,


Sept. 30,


June 30,


(dollars in millions)


2018


2018


2017


2017


2017


Financial Condition Data:












    Total assets

$

44,575

$

44,101

$

44,453

$

43,998

$

43,023


    Loans 


32,512


32,104


32,575


32,384


31,611


    Securities


7,324


7,173


7,043


6,914


6,880


    Short-term investments


253


470


378


303


216


    Allowance for loan losses


237


235


234


233


232


    Goodwill and other acquisition-related intangible assets

2,574


2,555


2,560


2,568


2,426


    Deposits


32,468


32,894


33,056


32,547


31,815


    Borrowings


4,639


3,877


4,104


4,144


4,084


    Notes and debentures


889


892


902


906


907


    Stockholders' equity


5,900


5,846


5,820


5,746


5,704


    Total risk-weighted assets (1):












       People's United Financial, Inc.


33,371


32,833


33,256


33,029


32,095


       People's United Bank, N.A.


33,323


32,784


33,202


32,981


32,050


    Non-performing assets (2)


187


174


168


191


198


    Net loan charge-offs


5.0


4.5


6.5


5.2


6.8














Average Balances:












    Loans

$

32,116

$

32,096

$

32,271

$

31,994

$

31,400


    Securities (3)


7,302


7,186


7,023


6,559


6,728


    Short-term investments


267


366


361


347


355


    Total earning assets


39,685


39,648


39,654


38,900


38,483


    Total assets


44,110


44,011


44,039


43,256


42,666


    Deposits


32,536


32,824


32,879


32,065


32,024


    Borrowings


4,031


3,752


3,836


4,010


3,498


    Notes and debentures


890


895


904


909


907


    Total funding liabilities


37,456


37,471


37,619


36,984


36,429


    Stockholders' equity


5,870


5,821


5,774


5,722


5,696














Ratios:












    Net loan charge-offs to average total loans (annualized)

0.06

%

0.06

%

0.08

%

0.06

%

0.09

%

    Non-performing assets to originated loans,












      real estate owned and repossessed assets (2)


0.62


0.58


0.56


0.64


0.67


    Originated allowance for loan losses to:












      Originated loans (2)


0.77


0.78


0.77


0.77


0.77


      Originated non-performing loans (2)


138.4


149.3


155.2


131.6


128.1


    Average stockholders' equity to average total assets


13.3


13.2


13.1


13.2


13.4


    Stockholders' equity to total assets


13.2


13.3


13.1


13.1


13.3


    Tangible common equity to tangible assets (4)


7.3


7.3


7.2


7.1


7.5


    Total risk-based capital (1):












       People's United Financial, Inc.


12.5


12.6


12.2


12.0


12.6


       People's United Bank, N.A.


13.4


12.9


12.6


12.6


13.3














(1) June 30, 2018 amounts and ratios are preliminary.












(2) Excludes acquired loans.












(3) Average balances for securities are based on amortized cost.










(4) See Non-GAAP Financial Measures and Reconciliation to GAAP.










 

 

People's United Financial, Inc.





CONSOLIDATED STATEMENTS OF CONDITION











June 30,

March 31,

Dec. 31,

June 30,

(in millions)

2018

2018

2017

2017

Assets





Cash and due from banks

$        462.7

$        402.2

$        505.1

$        455.9

Short-term investments

253.1

470.3

377.5

216.3

Securities:





  Trading debt securities, at fair value

8.2

8.2

8.2

7.8

  Equity securities, at fair value

9.9

9.5

8.7

9.0

  Debt securities available-for-sale, at fair value 

3,245.1

3,153.8

3,125.3

3,673.3

  Debt securities held-to-maturity, at amortized cost

3,718.7

3,696.3

3,588.1

2,875.6

  Federal Home Loan Bank and Federal Reserve Bank stock, at cost

342.2

305.2

312.3

314.3

    Total securities

7,324.1

7,173.0

7,042.6

6,880.0

Loans held-for-sale

17.1

10.4

16.6

26.5

Loans: 





  Commercial real estate

10,761.1

10,810.4

11,068.7

11,164.2

  Commercial and industrial

8,823.3

8,574.1

8,731.1

8,709.7

  Equipment financing

4,103.9

3,887.9

3,905.4

2,918.3

    Total Commercial Portfolio

23,688.3

23,272.4

23,705.2

22,792.2

  Residential mortgage

6,866.2

6,834.2

6,805.7

6,687.7

  Home equity and other consumer

1,957.5

1,997.8

2,064.4

2,131.3

    Total Retail Portfolio

8,823.7

8,832.0

8,870.1

8,819.0

    Total loans

32,512.0

32,104.4

32,575.3

31,611.2

  Less allowance for loan losses

(236.8)

(235.3)

(234.4)

(231.6)

    Total loans, net

32,275.2

31,869.1

32,340.9

31,379.6

Goodwill and other acquisition-related intangible assets

2,573.8

2,554.9

2,560.0

2,426.3

Bank-owned life insurance

407.2

406.0

405.0

404.7

Premises and equipment, net

246.3

250.0

253.0

270.2

Other assets

1,015.0

964.6

952.7

963.7

    Total assets

$  44,574.5

$  44,100.5

$  44,453.4

$  43,023.2






Liabilities





Deposits: 





  Non-interest-bearing

$    8,002.4

$    7,938.6

$    8,002.4

$    7,566.4

  Savings

4,184.9

4,442.1

4,410.5

4,668.6

  Interest-bearing checking and money market

14,659.4

15,257.6

15,189.1

14,887.0

  Time

5,621.5

5,255.5

5,454.3

4,692.7

    Total deposits

32,468.2

32,893.8

33,056.3

31,814.7

Borrowings:





  Federal Home Loan Bank advances

3,510.1

2,610.7

2,774.4

3,130.8

  Federal funds purchased

855.0

805.0

820.0

629.0

  Customer repurchase agreements

254.9

265.8

301.6

324.0

  Other borrowings

19.1

195.4

207.8

0.6

    Total borrowings

4,639.1

3,876.9

4,103.8

4,084.4

Notes and debentures

888.7

891.9

901.6

906.5

Other liabilities

678.3

592.4

571.8

514.1

    Total liabilities

38,674.3

38,255.0

38,633.5

37,319.7






Stockholders' Equity





Preferred stock

244.1

244.1

244.1

244.1

Common stock

4.4

4.4

4.4

4.3

Additional paid-in capital 

6,040.3

6,029.0

6,012.3

5,965.0

Retained earnings

1,167.9

1,121.4

1,040.2

967.8

Unallocated common stock of Employee Stock Ownership Plan, at cost

(133.7)

(135.5)

(137.3)

(141.0)

Accumulated other comprehensive loss

(260.7)

(255.8)

(181.7)

(174.6)

Treasury stock, at cost

(1,162.1)

(1,162.1)

(1,162.1)

(1,162.1)

    Total stockholders' equity

5,900.2

5,845.5

5,819.9

5,703.5

    Total liabilities and stockholders' equity

$  44,574.5

$  44,100.5

$  44,453.4

$  43,023.2

 

 

People's United Financial, Inc.










CONSOLIDATED STATEMENTS OF INCOME





















Three Months Ended


June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,

(in millions, except per common share data)

2018


2018


2017


2017


2017

Interest and dividend income:










  Commercial real estate

$   111.5


$   107.0


$   106.2


$   105.6


$   105.3

  Commercial and industrial

90.1


82.3


80.1


80.0


74.1

  Equipment financing

50.5


48.9


47.4


41.5


31.5

  Residential mortgage

55.3


54.7


53.4


52.5


52.3

  Home equity and other consumer

21.4


20.8


20.7


21.0


19.9

    Total interest on loans

328.8


313.7


307.8


300.6


283.1

  Securities

45.1


44.0


41.6


37.2


37.9

  Short-term investments

1.3


1.2


1.0


1.1


0.9

  Loans held-for-sale

0.2


0.2


0.2


0.3


0.1

    Total interest and dividend income

375.4


359.1


350.6


339.2


322.0

Interest expense:










  Deposits 

47.3


41.3


38.3


34.4


30.9

  Borrowings 

18.5


14.2


12.4


12.7


8.9

  Notes and debentures

8.4


7.8


7.6


7.5


7.3

    Total interest expense

74.2


63.3


58.3


54.6


47.1

    Net interest income

301.2


295.8


292.3


284.6


274.9

Provision for loan losses 

6.5


5.4


7.5


7.0


7.1

    Net interest income after provision for loan losses

294.7


290.4


284.8


277.6


267.8

Non-interest income:










  Bank service charges

24.3


23.8


24.7


25.3


25.0

  Investment management fees

17.2


17.7


17.3


16.9


16.3

  Operating lease income

11.2


10.7


11.7


10.9


11.0

  Commercial banking lending fees

9.4


10.4


8.8


7.0


11.5

  Insurance revenue

8.3


9.8


6.9


9.7


7.5

  Cash management fees

7.0


6.6


6.5


6.8


6.5

  Brokerage commissions

3.2


3.1


2.9


2.8


3.4

  Customer interest rate swap income, net

4.0


1.5


5.2


1.9


2.4

  Net security gains (losses) (1)

-


0.1


(9.8)


-


0.1

  Other non-interest income

10.3


6.7


13.1


8.0


7.9

    Total non-interest income

94.9


90.4


87.3


89.3


91.6

Non-interest expense:










  Compensation and benefits (2)

135.0


140.7


132.7


129.9


132.1

  Occupancy and equipment 

40.8


41.2


41.0


40.2


39.8

  Professional and outside services

20.6


18.6


18.7


19.2


28.1

  Regulatory assessments

9.9


10.6


11.9


10.3


9.9

  Operating lease expense

8.7


9.0


8.9


8.8


8.7

  Amortization of other acquisition-related intangible assets

4.9


5.1


7.9


7.9


7.9

  Other non-interest expense (2)

28.7


18.3


18.6


20.8


30.8

    Total non-interest expense (1)

248.6


243.5


239.7


237.1


257.3

    Income before income tax expense

141.0


137.3


132.4


129.8


102.1

Income tax expense (1)

30.8


29.4


26.2


39.0


32.8

    Net income

110.2


107.9


106.2


90.8


69.3

Preferred stock dividend

3.5


3.5


3.5


3.5


3.5

    Net income available to common shareholders

$   106.7


$   104.4


$   102.7


$     87.3


$     65.8

Earnings per common share:










  Basic

$     0.31


$     0.31


$     0.30


$     0.26


$     0.20

  Diluted

0.31


0.30


0.30


0.26


0.19











(1) Includes $10.0 million of security losses incurred as a tax planning strategy in response to tax reform enacted on December 22, 2017,

     which are considered non-operating, for the three months ended December 31, 2017. Total non-interest expense includes 

     $2.9 million, $1.6 million, $3.0 million and $24.8 million of non-operating expenses for the three months ended June 30, 2018, 

     December 31, 2017, September 30, 2017 and June 30, 2017, respectively. Income tax expense includes a $6.5 million benefit realized 

     in connection with tax reform, which is considered non-operating, for the three months ended December 31, 2017.

     See Non-GAAP Financial Measures and Reconciliation to GAAP.









(2) In accordance with GAAP, effective January 1, 2018, net periodic pension and postretirement benefit costs are reported within other

     non-interest expense rather than compensation and benefits. Prior period amounts have been reclassified to conform to this

     presentation.










 

 

People's United Financial, Inc.




CONSOLIDATED STATEMENTS OF INCOME









Six Months Ended


June 30,

(in millions, except per common share data)

2018


2017

Interest and dividend income:




  Commercial real estate

$     218.5


$     193.9

  Commercial and industrial

172.4


138.7

  Equipment financing

99.4


63.1

  Residential mortgage

110.0


101.6

  Home equity and other consumer

42.2


38.3

    Total interest on loans

642.5


535.6

  Securities

89.1


74.9

  Short-term investments

2.5


1.6

  Loans held for sale

0.4


0.4

    Total interest and dividend income

734.5


612.5

Interest expense:




  Deposits 

88.6


58.0

  Borrowings 

32.7


16.2

  Notes and debentures

16.2


14.8

    Total interest expense

137.5


89.0

    Net interest income

597.0


523.5

Provision for loan losses 

11.9


11.5

    Net interest income after provision for loan losses

585.1


512.0

Non-interest income:




  Bank service charges

48.1


48.5

  Investment management fees

34.9


32.3

  Operating lease income

21.9


21.2

  Commercial banking lending fees

19.8


19.7

  Insurance revenue

18.1


16.6

  Cash management fees

13.6


12.8

  Brokerage commissions

6.3


6.4

  Customer interest rate swap income, net

5.5


5.2

  Net security gains (losses)

0.1


(15.6)

  Other non-interest income

17.0


29.2

    Total non-interest income

185.3


176.3

Non-interest expense:




  Compensation and benefits (1)

275.7


260.0

  Occupancy and equipment 

82.0


78.4

  Professional and outside services

39.2


43.6

  Regulatory assessments

20.5


19.5

  Operating lease expense

17.7


17.5

  Amortization of other acquisition-related intangible assets

10.0


14.2

  Other non-interest expense (1)

47.0


50.2

    Total non-interest expense (2)

492.1


483.4

    Income before income tax expense

278.3


204.9

Income tax expense

60.2


64.8

    Net income

218.1


140.1

Preferred stock dividend

7.0


7.0

    Net income available to common shareholders

$    211.1


$    133.1

Earnings per common share:




   Basic

$      0.62


$      0.42

   Diluted 

0.61


0.41





(1) In accordance with GAAP, effective January 1, 2018, net periodic pension and postretirement benefit

     costs are reported within other non-interest expense rather than compensation and benefits. Prior 

     period amounts have been reclassified to conform to this presentation.



(2) Total non-interest expense includes $2.9 million and $26.0 million of non-operating expenses for the six

     months ended June 30, 2018 and 2017, respectively. See Non-GAAP Financial Measures and Reconciliation

     to GAAP.




 

 

People's United Financial, Inc.












AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)




















June 30, 2018


March 31, 2018


June 30, 2017

Three months ended

Average


Yield/


Average


Yield/


Average


Yield/

(dollars in millions)

Balance

Interest

Rate


Balance

Interest

Rate


Balance

Interest

Rate

Assets:












Short-term investments

$        266.7

$      1.3

2.02%


$        366.4

$      1.2

1.35%


$        354.8

$      0.9

0.97%

Securities (2)

7,302.1

49.2

2.69


7,186.1

48.0

2.67


6,727.5

44.6

2.65

Loans:












  Commercial real estate

10,802.9

111.5

4.13


10,934.2

107.0

3.91


11,371.4

105.3

3.70

  Commercial and industrial

8,558.3

92.6

4.32


8,418.6

84.6

4.02


8,276.1

77.7

3.75

  Equipment financing

3,923.6

50.5

5.14


3,870.6

48.9

5.06


2,924.8

31.5

4.31

  Residential mortgage

6,853.6

55.5

3.24


6,837.1

54.9

3.21


6,693.3

52.4

3.14

  Home equity and other consumer

1,977.6

21.4

4.33


2,035.0

20.8

4.09


2,134.8

19.9

3.73

    Total loans

32,116.0

331.5

4.13


32,095.5

316.2

3.94


31,400.4

286.8

3.65

    Total earning assets

39,684.8

$ 382.0

3.85%


39,648.0

$ 365.4

3.69%


38,482.7

$ 332.3

3.45%

Other assets

4,425.0




4,363.3




4,183.1



    Total assets

$  44,109.8




$  44,011.3




$  42,665.8















Liabilities and stockholders' equity:












Deposits:












  Non-interest-bearing

$    7,872.7

$         -

-   %


$    7,796.7

$         -

-   %


$    7,399.5

$         -

-   %

  Savings, interest-bearing checking












    and money market

19,220.6

28.2

0.59


19,642.6

24.9

0.51


19,895.8

19.6

0.39

  Time

5,442.3

19.1

1.40


5,384.5

16.4

1.22


4,728.7

11.3

0.96

    Total deposits

32,535.6

47.3

0.58


32,823.8

41.3

0.50


32,024.0

30.9

0.39

Borrowings:












  Federal Home Loan Bank advances

3,009.3

14.8

1.97


2,677.1

10.9

1.63


2,546.6

7.1

1.11

  Federal funds purchased

634.5

3.0

1.86


608.3

2.3

1.53


625.2

1.6

1.04

  Customer repurchase agreements

228.7

0.1

0.31


262.6

0.1

0.18


313.9

0.1

0.19

  Other borrowings

158.5

0.6

1.45


203.7

0.9

1.65


11.8

0.1

1.94

    Total borrowings

4,031.0

18.5

1.84


3,751.7

14.2

1.51


3,497.5

8.9

1.02

Notes and debentures

889.6

8.4

3.79


895.2

7.8

3.48


907.2

7.3

3.24

    Total funding liabilities

37,456.2

$   74.2

0.79%


37,470.7

$   63.3

0.68%


36,428.7

$   47.1

0.52%

Other liabilities

784.0




720.1




541.0



    Total liabilities

38,240.2




38,190.8




36,969.7



Stockholders' equity

5,869.6




5,820.5




5,696.1



    Total liabilities and












      stockholders' equity

$  44,109.8




$  44,011.3




$  42,665.8















Net interest income/spread (3)


$ 307.8

3.06%



$ 302.1

3.01%



$ 285.2

2.93%







Net interest margin



3.10%




3.05%




2.96%













(1) Average yields earned and rates paid are annualized.










(2) Average balances and yields for securities are based on amortized cost.







(3) The fully taxable equivalent adjustment was $6.6 million, $6.3 million and $10.3 million for the three months ended June 30, 2018,

      March 31, 2018 and June 30, 2017, respectively.










 

 

People's United Financial, Inc.








AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)












June 30, 2018


June 30, 2017

Six months ended

Average


Yield/


Average


Yield/

(dollars in millions)

Balance

Interest

Rate


Balance

Interest

Rate

Assets:








Short-term investments

$        316.3

$      2.5

1.63%


$        362.6

$      1.6

0.89%

Securities (2)

7,244.4

97.2

2.68


6,779.2

87.8

2.59

Loans:








  Commercial real estate

10,868.2

218.5

4.02


10,783.8

193.9

3.60

  Commercial and industrial

8,488.8

177.2

4.18


7,996.0

145.6

3.64

  Equipment financing

3,897.3

99.4

5.10


2,948.5

63.1

4.28

  Residential mortgage

6,845.4

110.4

3.22


6,534.9

102.0

3.12

  Home equity and other consumer

2,006.2

42.2

4.20


2,120.2

38.3

3.62

    Total loans

32,105.9

647.7

4.03


30,383.4

542.9

3.57

    Total earning assets

39,666.6

$ 747.4

3.77%


37,525.2

$ 632.3

3.37%

Other assets

4,394.2




3,972.8



    Total assets

$  44,060.8




$  41,498.0











Liabilities and stockholders' equity:








Deposits:








  Non-interest-bearing

$    7,834.9

$         -

-   %


$    6,919.9

$         -

-   %

  Savings, interest-bearing checking








    and money market

19,430.4

53.1

0.55


19,404.6

36.0

0.37

  Time

5,413.6

35.5

1.31


4,654.9

22.0

0.95

    Total deposits

32,678.9

88.6

0.54


30,979.4

58.0

0.37

Borrowings:








  Federal Home Loan Bank advances

2,844.1

25.7

1.81


2,628.7

12.9

0.98

  Federal funds purchased

621.5

5.3

1.70


616.4

2.8

0.91

  Customer repurchase agreements

245.5

0.3

0.24


311.7

0.2

0.19

  Other borrowings

181.0

1.4

1.57


45.7

0.3

0.79

    Total borrowings

3,892.1

32.7

1.68


3,602.5

16.2

0.90

Notes and debentures

892.5

16.2

3.63


936.3

14.8

3.17

    Total funding liabilities

37,463.5

$ 137.5

0.73%


35,518.2

$   89.0

0.50%

Other liabilities

752.1




547.4



    Total liabilities

38,215.6




36,065.6



Stockholders' equity

5,845.2




5,432.4



    Total liabilities and








      stockholders' equity

$  44,060.8




$  41,498.0











Net interest income/spread (3)


$ 609.9

3.04%



$ 543.3

2.87%









Net interest margin



3.07%




2.90%









(1) Average yields earned and rates paid are annualized.






(2) Average balances and yields for securities are based on amortized cost.



(3) The fully taxable equivalent adjustment was $12.9 million and $19.8 million for the six months ended

      June 30, 2018 and 2017, respectively.







 

 

People's United Financial, Inc.
























Loans acquired in a business combination are initially recorded at fair value with no carryover of an acquired entity's previous

established allowance for loan losses. Accordingly, selected asset quality metrics have been highlighted to distinguish between

the 'originated' portfolio and the 'acquired' portfolio.























NON-PERFORMING ASSETS


























June 30, 


March 31,


Dec. 31,


Sept. 30,


June 30,


(dollars in millions)


2018


2018


2017


2017


2017


Originated non-performing loans:












Commercial:












  Commercial real estate

$

20.3

$

21.0

$

23.7

$

36.7

$

42.9


  Commercial and industrial


50.1


34.6


32.6


34.9


40.2


  Equipment financing


49.2


47.7


44.3


54.1


48.2


    Total


119.6


103.3


100.6


125.7


131.3


Retail:












  Residential mortgage


33.5


35.4


32.7


33.8


30.8


  Home equity


15.1


16.1


15.4


14.8


15.8


  Other consumer


-


-


-


-


-


    Total


48.6


51.5


48.1


48.6


46.6


    Total originated non-performing loans (1)


168.2


154.8


148.7


174.3


177.9


REO:












  Commercial


9.3


10.6


9.3


6.3


4.3


  Residential


5.8


6.8


7.6


4.7


6.7


    Total REO


15.1


17.4


16.9


11.0


11.0


Repossessed assets


3.7


1.8


2.5


5.4


9.2


    Total non-performing assets

$

187.0

$

174.0

$

168.1

$

190.7

$

198.1














Acquired non-performing loans (contractual amount)

$

26.7

$

30.1

$

29.7

$

26.6

$

26.4














Originated non-performing loans as a percentage












  of originated loans


0.56

%

0.52

%

0.49

%

0.59

%

0.60

%

Non-performing assets as a percentage of:












  Originated loans, REO and repossessed assets


0.62


0.58


0.56


0.64


0.67


  Tangible stockholders' equity and originated












     allowance for loan losses


5.25


4.94


4.81


5.60


5.65














(1) Reported net of government guarantees totaling $2.6 million at June 30, 2018, $3.0 million at March 31, 2018, 


     $3.1 million at December 31, 2017, $4.0 million at September 30, 2017 and $4.2 million at June 30, 2017.



 

 

People's United Financial, Inc.
























PROVISION AND ALLOWANCE FOR LOAN LOSSES
























Three Months Ended




June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


(dollars in millions)


2018


2018


2017


2017


2017


Allowance for loan losses on originated loans:











  Balance at beginning of period

$

231.3

$

230.8

$

229.2

$

227.9

$

225.0


  Charge-offs


(4.7)


(4.4)


(6.4)


(5.8)


(6.7)


  Recoveries


1.9


1.4


1.2


1.5


1.8


    Net loan charge-offs


(2.8)


(3.0)


(5.2)


(4.3)


(4.9)


  Provision for loan losses


4.3


3.5


6.8


5.6


7.8


    Balance at end of period


232.8


231.3


230.8


229.2


227.9














Allowance for loan losses on acquired loans:












  Balance at beginning of period


4.0


3.6


4.2


3.7


6.3


  Charge-offs


(2.5)


(1.8)


(1.5)


(1.0)


(1.9)


  Recoveries


0.3


0.3


0.2


0.1


-


    Net loan charge-offs


(2.2)


(1.5)


(1.3)


(0.9)


(1.9)


  Provision for loan losses


2.2


1.9


0.7


1.4


(0.7)


    Balance at end of period


4.0


4.0


3.6


4.2


3.7


    Total allowance for loan losses

$

236.8

$

235.3

$

234.4

$

233.4

$

231.6














Originated commercial allowance for loan losses











  as a percentage of originated commercial loans

0.93

%

0.94

%

0.93

%

0.94

%

0.94

%

Originated retail allowance for loan losses












  as a percentage of originated retail loans


0.36


0.36


0.35


0.35


0.35


Total originated allowance for loan losses












  as a percentage of:












    Originated loans


0.77


0.78


0.77


0.77


0.77


    Originated non-performing loans


138.4


149.3


155.2


131.6


128.1














NET LOAN CHARGE-OFFS (RECOVERIES)

























Three Months Ended



June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


(dollars in millions)


2018


2018


2017


2017


2017


Commercial:












  Commercial real estate

$

0.7

$

0.5

$

1.5

$

1.5

$

1.2


  Commercial and industrial


1.7


1.7


2.1


2.0


1.8


  Equipment financing


2.6


1.6


2.0


0.5


2.7


    Total


5.0


3.8


5.6


4.0


5.7


Retail:












  Residential mortgage


(0.1)


0.2


0.2


0.1


0.1


  Home equity


-


0.4


0.5


0.9


0.7


  Other consumer


0.1


0.1


0.2


0.2


0.3


    Total


-


0.7


0.9


1.2


1.1


    Total net loan charge-offs

$

5.0

$

4.5

$

6.5

$

5.2

$

6.8














Net loan charge-offs to












  average total loans (annualized)


0.06

%

0.06

%

0.08

%

0.06

%

0.09

%

 

 

People's United Financial, Inc.










NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP
































    In addition to evaluating People's United Financial Inc. ("People's United") results of operations in accordance with

U.S. generally accepted accounting principles ("GAAP"), management routinely supplements its evaluation with an analysis

of certain non-GAAP financial measures, such as the efficiency and tangible common equity ratios, tangible book value per

common share and operating earnings metrics. Management believes these non-GAAP financial measures provide


information useful to investors in understanding People's United's underlying operating performance and trends, and

facilitates comparisons with the performance of other financial institutions. Further, the efficiency ratio and operating

earnings metrics are used by management in its assessment of financial performance, including non-interest expense

control, while the tangible common equity ratio and tangible book value per common share are used to analyze the 


relative strength of People's United's capital position. 





















    The efficiency ratio, which represents an approximate measure of the cost required by People's United to generate a

dollar of revenue, is the ratio of (i) total non-interest expense (excluding operating lease expense, goodwill impairment 

charges, amortization of other acquisition-related intangible assets, losses on real estate assets and non-recurring


expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent ("FTE") basis plus total non-interest

income (including the FTE adjustment on bank-owned life insurance ("BOLI") income, the netting of operating lease 

expense and excluding gains and losses on sales of assets other than residential mortgage loans and acquired loans, and

non-recurring income) (the denominator). People's United generally considers an item of income or expense to be


non-recurring if it is not similar to an item of income or expense of a type incurred within the last two years and is not

similar to an item of income or expense of a type reasonably expected to be incurred within the following two years.














     Operating earnings exclude from net income available to common shareholders those items that management considers

to be of such a non-recurring or infrequent nature that, by excluding such items (net of income taxes), People's United's

results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating

earnings, which include, but are not limited to: (i) non-recurring gains/losses; (ii) merger-related expenses, including

acquisition integration and other costs; (iii) writedowns of banking house assets and related lease termination costs; 

(iv) severance-related costs; and (v) charges related to executive-level management separation costs, are generally also

excluded when calculating the efficiency ratio. Operating earnings per common share ("EPS") is derived by determining the

per common share impact of the respective adjustments to arrive at operating earnings and adding (subtracting) such

amounts to (from) diluted EPS, as reported. Operating return on average assets is calculated by dividing operating earnings

(annualized) by average total assets. Operating return on average tangible common equity is calculated by dividing


operating earnings (annualized) by average tangible common equity. The operating common dividend payout ratio is

calculated by dividing common dividends paid by operating earnings for the respective period.

















    The tangible common equity ratio is the ratio of (i) tangible common equity (total stockholders' equity less preferred

stock, goodwill and other acquisition-related intangible assets) (the numerator) to (ii) tangible assets (total assets less

goodwill and other acquisition-related intangible assets) (the denominator). Tangible book value per common share is

calculated by dividing tangible common equity by common shares (total common shares issued, less common shares

classified as treasury shares and unallocated Employee Stock Ownership Plan ("ESOP") common shares).
















    In light of diversity in presentation among financial institutions, the methodologies used by People's United for


determining the non-GAAP financial measures discussed above may differ from those used by other financial



institutions.












 

 

People's United Financial, Inc.















NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued






















OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO











Three Months Ended


Six Months Ended



June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


June 30,


June 30,

(dollars in millions)


2018


2018


2017


2017


2017


2018


2017

Total non-interest expense 


$   248.6


$   243.5


$   239.7


$   237.1


$   257.3


$   492.1


$   483.4

Adjustments to arrive at operating















  non-interest expense:















  Merger-related expenses


(2.9)


-


(1.6)


(3.0)


(24.8)


(2.9)


(26.0)

    Total


(2.9)


-


(1.6)


(3.0)


(24.8)


(2.9)


(26.0)

    Operating non-interest expense


245.7


243.5


238.1


234.1


232.5


489.2


457.4
















Operating lease expense


(8.7)


(9.0)


(8.9)


(8.8)


(8.7)


(17.7)


(17.5)

Amortization of other acquisition-related














    intangible assets


(4.9)


(5.1)


(7.9)


(7.9)


(7.9)


(10.0)


(14.2)

Other (1)


(1.7)


(1.3)


(1.4)


(1.5)


(0.4)


(3.0)


(2.2)

    Total non-interest expense for















      efficiency ratio


$   230.4


$   228.1


$   219.9


$   215.9


$   215.5


$   458.5


$   423.5
















Net interest income (FTE basis)


$   307.8


$   302.1


$   304.1


$   295.8


$   285.2


$   609.9


$   543.3

Total non-interest income


94.9


90.4


87.3


89.3


91.6


185.3


176.3

    Total revenues


402.7


392.5


391.4


385.1


376.8


795.2


719.6

Adjustments:















  Operating lease expense


(8.7)


(9.0)


(8.9)


(8.8)


(8.7)


(17.7)


(17.5)

  BOLI FTE adjustment


0.4


0.4


0.8


1.2


1.0


0.8


1.4

  Net security (gains) losses


-


(0.1)


9.8


-


(0.1)


(0.1)


15.6

  Other (2)


-


-


(1.3)


(0.2)


-


-


0.2

    Total revenues for efficiency ratio


$   394.4


$   383.8


$   391.8


$   377.3


$   369.0


$   778.2


$   719.3

    Efficiency ratio


58.4%


59.4%


56.1%


57.3%


58.4%


58.9%


58.9%
















(1)  Items classified as "other" and deducted from non-interest expense for purposes of calculating the efficiency ratio include

       certain franchise taxes and real estate owned expenses.











(2)  Items classified as "other" and (deducted from) added to total revenues for purposes of calculating the  efficiency ratio

       include, as applicable, asset write-offs and gains associated with the sale of branch locations.





 

 

People's United Financial, Inc.















NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued






















OPERATING EARNINGS

















Three Months Ended


Six Months Ended



June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


June 30,


June 30,

(dollars in millions, except per common share data)

2018


2018


2017


2017


2017


2018


2017

Net income available to common shareholders

$   106.7


$   104.4


$   102.7


$      87.3


$        65.8


$   211.1


$   133.1

Adjustments to arrive at operating earnings:















  Merger-related expenses


2.9


-


1.6


3.0


24.8


2.9


26.0

  Security losses associated with tax reform (1)

-


-


10.0


-


-


-


-

    Total pre-tax adjustments


2.9


-


11.6


3.0


24.8


2.9


26.0

  Tax effect (2)


(0.6)


-


(9.8)


(1.0)


(8.0)


(0.6)


(8.4)

    Total adjustments, net of tax


2.3


-


1.8


2.0


16.8


2.3


17.6

    Operating earnings


$   109.0


$   104.4


$   104.5


$      89.3


$        82.6


$   213.4


$   150.7
















Diluted EPS, as reported


$      0.31


$      0.30


$      0.30


$      0.26


$        0.19


$      0.61


$      0.41

Adjustments to arrive at operating EPS:















  Merger-related expenses


0.01


-


0.01


-


0.05


0.01


0.05

  Security losses associated with tax reform


-


-


0.02


-


-





  Tax benefit associated with tax reform


-


-


(0.02)


-


-


-


-

    Total adjustments per common share 


0.01


-


0.01


-


0.05


0.01


0.05

    Operating EPS


$      0.32


$      0.30


$      0.31


$      0.26


$        0.24


$      0.62


$      0.46
















Average total assets


$ 44,110


$ 44,011


$ 44,039


$ 43,256


$   42,666


$ 44,061


$ 41,498
















Operating return on















  average assets (annualized)


0.99%


0.95%


0.95%


0.83%


0.77%


0.97%


0.73%
















(1) Security losses incurred as a tax planning strategy in response to tax reform enacted on December 22, 2017 



     are considered non-operating.















(2) Includes a $6.5 million benefit realized in connection with tax reform enacted on December 22, 2017.




















OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY












Three Months Ended


Six Months Ended



June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


June 30,


June 30,

(dollars in millions)


2018


2018


2017


2017


2017


2018


2017

Operating earnings


$   109.0


$   104.4


$   104.5


$      89.3


$        82.6


$   213.4


$   150.7
















Average stockholders' equity


$   5,870


$   5,820


$   5,774


$   5,722


$     5,696


$   5,845


$   5,432

Less: Average preferred stock


244


244


244


244


244


244


244

Average common equity


5,626


5,576


5,530


5,478


5,452


5,601


5,188

Less: Average goodwill and average other















         acquisition-related intangible assets


2,554


2,558


2,564


2,524


2,415


2,556


2,275

Average tangible common equity


$   3,072


$   3,018


$   2,966


$   2,954


$     3,037


$   3,045


$   2,913
















Operating return on average tangible















  common equity (annualized)


14.2%


13.8%


14.1%


12.1%


10.9%


14.0%


10.3%

 

 

People's United Financial, Inc.















NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued






















OPERATING COMMON DIVIDEND PAYOUT RATIO















Three Months Ended


Six Months Ended



June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


June 30,


June 30,

(dollars in millions)


2018


2018


2017


2017


2017


2018


2017

Common dividends paid


$      59.9


$      58.8


$      58.6