Market Overview

People's United Financial Reports First Quarter Net Income of $114.6 Million, or $0.30 per Common Share

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BRIDGEPORT, Conn., April 18, 2019 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ:PBCT) today reported results for the first quarter 2019. These results along with comparison periods are summarized below:


($ in millions, except per common share data)









 Three Months Ended





Mar. 31, 2019


Dec. 31, 2018


Mar. 31, 2018











Net income


$         114.6


$         132.9


$         107.9


Net income available


111.1


129.4


104.4



to common shareholders






Per common share


0.30


0.35


0.30











Operating earnings1


123.0


134.2


104.4



Per common share


0.33


0.36


0.30




















Net interest income


$         332.8


$         332.6


$         295.8



Net interest margin


3.20%


3.17%


3.05%











Non-interest income1


94.6


88.7


90.4




















Non-interest expense


$         277.2


$         262.7


$         243.5


Operating non-interest expense1

262.2


254.7


243.5











Efficiency ratio


57.3%


55.1%


59.4%




















Average balances








Loans


$       35,046


$       35,016


$       32,096


Deposits


36,450


35,959


32,824











Period-end balances








Loans


35,515


35,241


32,104


Deposits


36,901


36,159


32,894











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




"We are pleased with our first quarter performance and continued success enhancing profitability," said Jack Barnes, Chairman and Chief Executive Officer. "Operating earnings of $123 million grew 18 percent from a year ago and operating return on average tangible common equity of 14.4 percent improved 60 basis points. Total revenues increased 11 percent year-over-year due to both higher net interest income and non-interest income. The quarter benefited from the First Connecticut acquisition and further net interest margin expansion primarily resulting from higher yields on new business. With the acquisition of BSB Bancorp complete, we are excited to leverage our expanded customer and employee base to build upon our strong organic growth in Massachusetts, particularly in the Greater Boston area. Integration has gone very well, core systems conversion will take place in the third quarter, and we remain confident in achieving the transaction's attractive financial returns. In addition, we are proud to announce an increase to our common dividend for the 26th consecutive year, which demonstrates our commitment to deliver shareholder value through a consistent return of capital."

"In what is typically a seasonally slower quarter for loan growth, total period-end loans increased one percent from year-end," said David Rosato, Senior Executive Vice President and Chief Financial Officer. "Solid results across C&I businesses and equipment finance more than offset lower commercial real estate balances, reflecting the importance of our portfolio's diversification. We are encouraged with our ongoing success gathering deposits as period-end balances were up two percent during the quarter, lowering the loan-to-deposit ratio to 96 percent. Asset quality was once again exceptional in each of our portfolios as net charge-offs of six basis points improved linked-quarter from an already low level. While the credit environment has continued to be benign for an extended period, we remain committed to our conservative and well-defined approach to underwriting that has served us well for many years."






















 As of and for the Three Months Ended





Mar. 31, 2019


Dec. 31, 2018


Mar. 31, 2018











Asset Quality

















Net loan charge-offs 


0.06%


0.09%


0.06%


       to average total loans





Originated non-performing loans


0.49%


0.55%


0.52%


as a percentage of originated loans























Returns

















Return on average assets1


0.96%


1.11%


0.98%


Return on average tangible common equity1

13.0%


14.9%


13.8%




















Capital Ratios

















People's United Financial, Inc.








Tangible common equity / tangible assets

7.7%


7.6%


7.3%


Tier 1 leverage


8.8%


8.7%


8.5%


Common equity tier 1 


10.2%


10.3%


10.1%


Tier 1 risk-based


10.8%


10.9%


10.8%


Total risk-based 


12.4%


12.5%


12.6%











People's United Bank, N.A.








Tier 1 leverage



9.0%


9.0%


8.6%


Common equity tier 1 



11.2%


11.4%


11.0%


Tier 1 risk-based



11.2%


11.4%


11.0%


Total risk-based 



12.9%


13.2%


12.9%











1See Non-GAAP Financial Measures and Reconciliation to GAAP


The Company's Board of Directors voted to increase the common stock dividend to an annual rate of $0.71 per share.  Based on the closing stock price on April 17, 2019, the dividend yield on People's United Financial common stock is 4.1 percent. The quarterly dividend of $0.1775 per share is payable May 15, 2019 to shareholders of record on May 1, 2019.

People's United Bank, N.A. is a subsidiary of People's United Financial, Inc., a diversified, community-focused financial services company headquartered in the Northeast with more than $48 billion in assets. Founded in 1842, People's United Bank offers commercial and retail banking through a network of over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management and insurance solutions. The company also provides specialized commercial services to customers nationwide.

1Q 2019 Financial Highlights

Summary

  • Net income totaled $114.6 million, or $0.30 per common share.
    • Net income available to common shareholders totaled $111.1 million.
    • Operating earnings totaled $123.0 million, or $0.33 per common share (see Non-GAAP Financial Measures and Reconciliation to GAAP).
  • Net interest income totaled $332.8 million in 1Q19 compared to $332.6 million in 4Q18.
  • Net interest margin increased three basis points from 4Q18 to 3.20% reflecting:
    • Higher yields on the loan portfolio (increase of 15 basis points).
    • Higher yields on the securities portfolio (increase of one basis point).
    • Higher rates on deposits and borrowings (net decrease of nine basis points).
    • Two fewer calendar days in 1Q19 (decrease of four basis points).
  • Provision for loan losses totaled $5.6 million.
    • Net loan charge-offs totaled $5.1 million.
    • Net loan charge-off ratio of 0.06% in 1Q19.
  • Non-interest income totaled $94.6 million in 1Q19 compared to $88.7 million in 4Q18.
    • Insurance revenue increased $3.8 million.
    • Customer interest rate swap income decreased $4.0 million.
    • Commercial banking lending fees decreased $1.8 million.
    • Bank service charges decreased $1.7 million.
    • Net security losses of $10.0 million in 4Q18 incurred in response to a tax reform-related benefit recognized in the period (see Non-GAAP Financial Measures and Reconciliation to GAAP).
    • At March 31, 2019, assets under administration totaled $25.5 billion, of which $9.3 billion are under discretionary management, compared to $23.3 billion and $8.6 billion, respectively, at December 31, 2018.
  • Non-interest expense totaled $277.2 million in 1Q19 compared to $262.7 million in 4Q18.
    • Operating non-interest expense totaled $262.2 million in 1Q19 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
    • Compensation and benefits expense, excluding $1.5 million and $3.5 million of merger-related expenses in 1Q19 and 4Q18, respectively, increased $5.9 million, primarily reflecting seasonally higher payroll and benefit-related costs in 1Q19.
    • Professional and outside services expense, excluding $1.2 million and $3.7 million of merger-related expenses in 1Q19 and 4Q18, respectively, increased $1.1 million.
    • Other non-interest expense includes merger-related expenses of $11.9 million and $0.2 million in 1Q19 and 4Q18, respectively.
    • The efficiency ratio was 57.3% for 1Q19 compared to 55.1% for 4Q18 and 59.4% for 1Q18 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
  • The effective income tax rate was 20.8% for 1Q19 and 18.8% for the full-year of 2018.
    • The rate in 2018 reflects a $9.2 million benefit recognized in connection with tax reform.

Commercial Banking

  • Commercial loans totaled $25.4 billion at March 31, 2019, an increase of $334 million from December 31, 2018.
    • The equipment financing portfolio increased $127 million.
    • The mortgage warehouse portfolio increased $93 million.
    • The New York multifamily portfolio decreased $27 million.
  • Average commercial loans totaled $24.9 billion in 1Q19, an increase of $108 million from 4Q18.
    • The average equipment financing portfolio increased $115 million.
    • The average mortgage warehouse portfolio decreased $91 million.
    • The average New York multifamily portfolio decreased $48 million.
  • Commercial deposits totaled $13.5 billion at March 31, 2019 compared to $13.1 billion at December 31, 2018.
  • The ratio of originated non-performing commercial loans to originated commercial loans was 0.45% at March 31, 2019 compared to 0.52% at December 31, 2018.
  • Non-performing commercial assets, excluding acquired non-performing loans, totaled $111.1 million at March 31, 2019 compared to $126.1 million at December 31, 2018.
  • For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.91% at March 31, 2019 compared to 0.93% at December 31, 2018.
  • The originated commercial allowance for loan losses represented 202% of originated non-performing commercial loans at March 31, 2019 compared to 181% at December 31, 2018.

Retail Banking

  • Residential mortgage loans totaled $8.2 billion at March 31, 2019, an increase of $9 million from December 31, 2018.
    • Average residential mortgage loans totaled $8.2 billion in 1Q19, a decrease of $12 million from 4Q18.
  • Home equity loans totaled $1.9 billion at March 31, 2019, a decrease of $67 million from December 31, 2018.
    • Average home equity loans totaled $1.9 billion in 1Q19, a decrease of $66 million from 4Q18.
  • Retail deposits totaled $23.4 billion at March 31, 2019 compared to $23.1 billion at December 31, 2018.
  • The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.52% at March 31, 2019 compared to 0.57% at December 31, 2018.
  • The ratio of originated non-performing home equity loans to originated home equity loans was 0.81% at March 31, 2019 compared to 0.85% at December 31, 2018.

Conference Call

On April 18, 2019, 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



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions, except per common share data)


2019


2018


2018


2018


2018


Earnings Data:












  Net interest income (fully taxable equivalent)

$

340.0

$

339.5

$

313.0

$

307.8

$

302.1


  Net interest income 


332.8


332.6


306.4


301.2


295.8


  Provision for loan losses


5.6


9.9


8.2


6.5


5.4


  Non-interest income (1)


94.6


88.7


92.3


94.9


90.4


  Non-interest expense (1)


277.2


262.7


241.3


248.6


243.5


  Income before income tax expense


144.6


148.7


149.2


141.0


137.3


  Net income


114.6


132.9


117.0


110.2


107.9


  Net income available to common shareholders (1)


111.1


129.4


113.5


106.7


104.4














Selected Statistical Data:












  Net interest margin (2)


3.20

%

3.17

%

3.15

%

3.10

%

3.05

%

  Return on average assets (1), (2)


0.96


1.11


1.06


1.00


0.98


  Return on average common equity (2)


7.0


8.3


8.0


7.6


7.5


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


13.0


14.9


14.5


13.9


13.8


  Efficiency ratio (1)


57.3


55.1


56.7


58.4


59.4














Common Share Data:












  Earnings per common share: 












    Basic

$

0.30

$

0.35

$

0.33

$

0.31

$

0.31


    Diluted (1)


0.30


0.35


0.33


0.31


0.30


  Dividends paid per common share


0.1750


0.1750


0.1750


0.1750


0.1725


  Common dividend payout ratio (1)


58.6

%

50.3

%

52.9

%

56.2

%

56.3

%

  Book value per common share (end of period)

$

17.13

$

16.95

$

16.69

$

16.56

$

16.43


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


9.35


9.23


9.19


9.02


8.93


  Stock price:












    High


18.03


17.46


19.00


19.37


20.26


    Low


14.25


13.66


16.95


18.00


18.18


    Close (end of period)


16.44


14.43


17.12


18.09


18.66


  Common shares (end of period) (in millions)


372.18


371.02


342.36


341.59


341.01


  Weighted average diluted common shares (in millions)

374.09


372.83


345.04


344.47


344.00














(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



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31, 


(dollars in millions)


2019


2018


2018


2018


2018


Financial Condition Data:












    Total assets

$

48,092

$

47,877

$

44,133

$

44,575

$

44,101


    Loans 


35,515


35,241


32,199


32,512


32,104


    Securities


7,175


7,233


7,385


7,324


7,173


    Short-term investments


106


266


128


253


470


    Allowance for loan losses


241


240


238


237


235


    Goodwill and other acquisition-related intangible assets

2,896


2,866


2,569


2,574


2,555


    Deposits


36,901


36,159


33,210


32,468


32,894


    Borrowings


2,860


3,593


3,392


4,639


3,877


    Notes and debentures


902


896


886


889


892


    Stockholders' equity


6,621


6,534


5,959


5,900


5,845


    Total risk-weighted assets (1):












       People's United Financial, Inc.


36,479


35,910


33,181


33,369


32,833


       People's United Bank, N.A.


36,461


35,875


33,132


33,317


32,784


    Non-performing assets (2)


167


186


173


187


174


    Net loan charge-offs


5.1


7.5


7.0


5.0


4.5














Average Balances:












    Loans

$

35,046

$

35,016

$

32,166

$

32,116

$

32,096


    Securities (3)


7,311


7,479


7,404


7,302


7,186


    Short-term investments


203


292


193


267


366


    Total earning assets


42,560


42,786


39,763


39,685


39,648


    Total assets


47,800


47,721


44,245


44,110


44,011


    Deposits


36,450


35,959


33,058


32,535


32,824


    Borrowings


2,937


3,456


3,539


4,031


3,752


    Notes and debentures


896


886


888


890


895


    Total funding liabilities


40,284


40,302


37,485


37,456


37,471


    Stockholders' equity


6,562


6,515


5,937


5,870


5,820














Ratios:












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

0.06

%

0.09

%

0.09

%

0.06

%

0.06

%

    Non-performing assets to originated loans,












      real estate owned and repossessed assets (2)


0.54


0.61


0.57


0.62


0.58


    Originated allowance for loan losses to:












      Originated loans (2)


0.76


0.77


0.78


0.77


0.78


      Originated non-performing loans (2)


157.0


140.9


147.9


138.4


149.3


    Average stockholders' equity to average total assets


13.7


13.7


13.4


13.3


13.2


    Stockholders' equity to total assets


13.8


13.6


13.5


13.2


13.3


    Tangible common equity to tangible assets (4)


7.7


7.6


7.6


7.3


7.3


    Total risk-based capital (1):












       People's United Financial, Inc.


12.4


12.5


12.8


12.5


12.6


       People's United Bank, N.A.


12.9


13.2


13.6


13.4


12.9














(1) March 31, 2019 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









March 31,

Dec. 31,

March 31,

(in millions)

2019

2018

2018

Assets




Cash and due from banks

$        508.5

$        665.7

$        402.2

Short-term investments

106.0

266.3

470.3

Securities:




  Trading debt securities, at fair value

8.3

8.4

8.2

  Equity securities, at fair value

8.2

8.1

9.5

  Debt securities available-for-sale, at fair value 

3,060.0

3,121.0

3,153.8

  Debt securities held-to-maturity, at amortized cost

3,823.4

3,792.3

3,696.3

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

275.6

303.4

305.2

    Total securities

7,175.5

7,233.2

7,173.0

Loans held-for-sale

7.8

19.5

10.4

Loans: 




  Commercial real estate

11,591.2

11,649.6

10,810.4

  Commercial and industrial

9,354.7

9,088.9

8,574.1

  Equipment financing

4,466.1

4,339.2

3,887.9

    Total Commercial Portfolio

25,412.0

25,077.7

23,272.4

  Residential mortgage

8,163.1

8,154.2

6,834.2

  Home equity and other consumer

1,940.1

2,009.5

1,997.8

    Total Retail Portfolio

10,103.2

10,163.7

8,832.0

    Total loans

35,515.2

35,241.4

32,104.4

  Less allowance for loan losses

(240.9)

(240.4)

(235.3)

    Total loans, net

35,274.3

35,001.0

31,869.1

Goodwill and other acquisition-related intangible assets

2,896.5

2,865.7

2,554.9

Bank-owned life insurance

467.8

467.0

406.0

Premises and equipment, net

255.8

267.3

250.0

Other assets

1,399.7

1,091.6

964.6

    Total assets

$  48,091.9

$  47,877.3

$  44,100.5





Liabilities




Deposits: 




  Non-interest-bearing

$    8,315.6

$    8,543.0

$    7,938.6

  Savings

4,159.1

4,116.5

4,442.1

  Interest-bearing checking and money market

17,130.0

16,583.3

15,257.6

  Time

7,296.2

6,916.2

5,255.5

    Total deposits

36,900.9

36,159.0

32,893.8

Borrowings:




  Federal Home Loan Bank advances

1,573.2

2,404.5

2,610.7

  Federal funds purchased

1,020.0

845.0

805.0

  Customer repurchase agreements

264.8

332.9

265.8

  Other borrowings

1.6

11.0

195.4

    Total borrowings

2,859.6

3,593.4

3,876.9

Notes and debentures

901.6

895.8

891.9

Other liabilities

808.6

695.2

592.4

    Total liabilities

41,470.7

41,343.4

38,255.0





Stockholders' Equity




Preferred stock

244.1

244.1

244.1

Common stock

4.7

4.7

4.4

Additional paid-in capital 

6,558.8

6,549.3

6,029.0

Retained earnings

1,328.6

1,284.8

1,121.4

Unallocated common stock of Employee Stock Ownership Plan, at cost

(128.3)

(130.1)

(135.5)

Accumulated other comprehensive loss

(224.6)

(256.8)

(255.8)

Treasury stock, at cost

(1,162.1)

(1,162.1)

(1,162.1)

    Total stockholders' equity

6,621.2

6,533.9

5,845.5

    Total liabilities and stockholders' equity

$  48,091.9

$  47,877.3

$  44,100.5

 

People's United Financial, Inc.










CONSOLIDATED STATEMENTS OF INCOME





















Three Months Ended


March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(in millions, except per common share data)

2019


2018


2018


2018


2018

Interest and dividend income:










  Commercial real estate

$  132.7


$  130.2


$  114.7


$  111.5


$     107.0

  Commercial and industrial

103.9


100.1


93.2


90.1


82.3

  Equipment financing

59.0


56.7


56.2


50.5


48.9

  Residential mortgage

70.7


70.2


56.0


55.3


54.7

  Home equity and other consumer

24.9


24.4


22.0


21.4


20.8

    Total interest on loans

391.2


381.6


342.1


328.8


313.7

  Securities

47.8


48.5


46.6


45.1


44.0

  Short-term investments

1.3


1.4


1.1


1.3


1.2

  Loans held-for-sale

0.2


0.3


0.2


0.2


0.2

    Total interest and dividend income

440.5


431.8


390.0


375.4


359.1

Interest expense:










  Deposits 

81.2


70.6


56.9


47.3


41.3

  Borrowings 

17.7


20.0


18.2


18.5


14.2

  Notes and debentures

8.8


8.6


8.5


8.4


7.8

    Total interest expense

107.7


99.2


83.6


74.2


63.3

    Net interest income

332.8


332.6


306.4


301.2


295.8

Provision for loan losses 

5.6


9.9


8.2


6.5


5.4

    Net interest income after provision for loan losses

327.2


322.7


298.2


294.7


290.4

Non-interest income:










  Bank service charges

25.2


26.9


24.9


24.3


23.8

  Investment management fees

16.5


16.4


17.4


17.2


17.7

  Operating lease income

12.7


12.0


11.0


11.2


10.7

  Insurance revenue

10.5


6.7


9.8


8.3


9.8

  Commercial banking lending fees

7.8


9.6


7.9


9.4


10.4

  Cash management fees

6.8


6.6


7.0


7.0


6.6

  Brokerage commissions

2.8


3.3


3.2


3.2


3.1

  Customer interest rate swap income, net

2.3


6.3


2.8


4.0


1.5

  Net security (losses) gains (1)

-


(10.0)


0.1


-


0.1

  Other non-interest income

10.0


10.9


8.2


10.3


6.7

    Total non-interest income

94.6


88.7


92.3


94.9


90.4

Non-interest expense:










  Compensation and benefits 

155.4


151.5


135.7


135.0


140.7

  Occupancy and equipment 

44.3


44.6


41.6


40.8


41.2

  Professional and outside services

20.0


21.4


17.0


20.6


18.6

  Operating lease expense

9.4


9.8


8.9


8.7


9.0

  Regulatory assessments

7.0


7.4


10.0


9.9


10.6

  Amortization of other acquisition-related intangible assets

6.7


6.9


4.9


4.9


5.1

  Other non-interest expense 

34.4


21.1


23.2


28.7


18.3

    Total non-interest expense (1)

277.2


262.7


241.3


248.6


243.5

    Income before income tax expense

144.6


148.7


149.2


141.0


137.3

Income tax expense (1)

30.0


15.8


32.2


30.8


29.4

    Net income

114.6


132.9


117.0


110.2


107.9

Preferred stock dividend

3.5


3.5


3.5


3.5


3.5

    Net income available to common shareholders

$   111.1


$   129.4


$   113.5


$   106.7


$     104.4











Earnings per common share:










  Basic

$     0.30


$     0.35


$     0.33


$     0.31


$      0.31

  Diluted

0.30


0.35


0.33


0.31


0.30











(1) Includes $10.0 million of security losses for the three months ended December 31, 2018, which are considered non-operating,

     incurred as a tax planning strategy in response to tax reform-related benefits recognized in the period. Total non-interest 

     expense includes $15.0 million, $8.0 million, $0.5 million and $2.9 million of non-operating expenses for the three months ended

     March 31, 2019,  December 31, 2018, September 30, 2018 and June 30, 2018, respectively.  Income tax expense includes a 

     $9.2 million benefit recognized in connection with tax reform, which is considered non-operating, for the three months ended

     December 31, 2018.  See Non-GAAP Financial Measures and Reconciliation to GAAP.

 

People's United Financial, Inc.












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




















March 31, 2019


December 31, 2018


March 31, 2018

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

$        202.8

$      1.3

2.60%


$        291.6

$      1.4

2.02%


$        366.4

$      1.2

1.35%

Securities (2)

7,310.6

52.4

2.87


7,478.7

52.9

2.83


7,186.1

48.0

2.67

Loans:












  Commercial real estate

11,588.3

132.7

4.58


11,688.1

130.2

4.45


10,934.2

107.0

3.91

  Commercial and industrial

8,974.0

106.5

4.74


8,880.3

102.6

4.62


8,418.6

84.6

4.02

  Equipment financing

4,357.7

59.0

5.42


4,243.2

56.7

5.34


3,870.6

48.9

5.06

  Residential mortgage

8,153.6

70.9

3.48


8,165.4

70.5

3.46


6,837.1

54.9

3.21

  Home equity and other consumer

1,972.9

24.9

5.05


2,038.5

24.4

4.80


2,035.0

20.8

4.09

    Total loans

35,046.5

394.0

4.50


35,015.5

384.4

4.39


32,095.5

316.2

3.94

    Total earning assets

42,559.9

$ 447.7

4.21%


42,785.8

$ 438.7

4.10%


39,648.0

$ 365.4

3.69%

Other assets

5,240.3




4,935.3




4,363.3



    Total assets

$  47,800.2




$  47,721.1




$  44,011.3















Liabilities and stockholders' equity:












Deposits:












  Non-interest-bearing

$    8,301.3

$         -

-   %


$    8,576.4

$         -

-   %


$    7,796.7

$         -

-   %

  Savings, interest-bearing checking












    and money market

21,018.0

48.8

0.93


20,621.7

41.7

0.81


19,642.6

24.9

0.51

  Time

7,130.8

32.4

1.82


6,761.1

28.9

1.71


5,384.5

16.4

1.22

    Total deposits

36,450.1

81.2

0.89


35,959.2

70.6

0.79


32,823.8

41.3

0.50

Borrowings:












  Federal Home Loan Bank advances

1,890.1

12.4

2.64


2,371.9

14.9

2.51


2,677.1

10.9

1.63

  Federal funds purchased

751.9

4.7

2.52


761.4

4.5

2.38


608.3

2.3

1.53

  Customer repurchase agreements

286.2

0.5

0.65


285.1

0.4

0.56


262.6

0.1

0.18

  Other borrowings

9.0

0.1

2.43


37.5

0.2

2.26


203.7

0.9

1.65

    Total borrowings

2,937.2

17.7

2.41


3,455.9

20.0

2.32


3,751.7

14.2

1.51

Notes and debentures

896.3

8.8

3.93


886.4

8.6

3.90


895.2

7.8

3.48

    Total funding liabilities

40,283.6

$ 107.7

1.07%


40,301.5

$   99.2

0.99%


37,470.7

$   63.3

0.68%

Other liabilities

954.3




904.2




720.1



    Total liabilities

41,237.9




41,205.7




38,190.8



Stockholders' equity

6,562.3




6,515.4




5,820.5



    Total liabilities and












      stockholders' equity

$  47,800.2




$  47,721.1




$  44,011.3















Net interest income/spread (3)


$ 340.0

3.14%



$ 339.5

3.11%



$ 302.1

3.01%













Net interest margin



3.20%




3.17%




3.05%













(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 $7.2 million, $6.9 million and $6.3 million for the three months ended 

      March 31, 2019, December 31, 2018 and March 31, 2018, 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


























March 31,


Dec. 31,


Sept. 30,


June 30, 


March 31,


(dollars in millions)


2019


2018


2018


2018


2018


Originated non-performing loans:












Commercial:












  Commercial real estate

$

33.6

$

33.5

$

17.2

$

20.3

$

21.0


  Commercial and industrial


30.3


38.0


44.9


50.1


34.6


  Equipment financing


37.5


42.0


49.3


49.2


47.7


    Total


101.4


113.5


111.4


119.6


103.3


Retail:












  Residential mortgage


35.4


38.9


32.0


33.5


35.4


  Home equity


14.1


15.3


14.6


15.1


16.1


  Other consumer


-


-


0.1


-


-


    Total


49.5


54.2


46.7


48.6


51.5


    Total originated non-performing loans (1)


150.9


167.7


158.1


168.2


154.8


REO:












  Commercial


4.1


8.7


8.7


9.3


10.6


  Residential


6.9


5.5


4.4


5.8


6.8


    Total REO


11.0


14.2


13.1


15.1


17.4


Repossessed assets


5.6


3.9


2.0


3.7


1.8


    Total non-performing assets

$

167.5

$

185.8

$

173.2

$

187.0

$

174.0














Acquired non-performing loans (contractual amount)

$

42.6

$

50.1

$

32.3

$

26.7

$

30.1














Originated non-performing loans as a percentage












  of originated loans


0.49

%

0.55

%

0.53

%

0.56

%

0.52

%

Non-performing assets as a percentage of:












  Originated loans, REO and repossessed assets


0.54


0.61


0.57


0.62


0.58


  Tangible stockholders' equity and originated












     allowance for loan losses


4.23


4.76


4.78


5.25


4.94














(1)  Reported net of government guarantees totaling $1.4 million at March 31, 2019, $1.9 million at December 31, 2018, 

      $2.5 million at September 30, 2018, $2.6 million at June 30, 2018 and $3.0 million at March 31, 2018.

 

People's United Financial, Inc.
























PROVISION AND ALLOWANCE FOR LOAN LOSSES























Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions)


2019


2018


2018


2018


2018


Allowance for loan losses on originated loans:











  Balance at beginning of period

$

236.3

$

233.9

$

232.8

$

231.3

$

230.8


  Charge-offs


(5.6)


(7.3)


(6.4)


(4.7)


(4.4)


  Recoveries


2.2


1.3


1.0


1.9


1.4


    Net loan charge-offs


(3.4)


(6.0)


(5.4)


(2.8)


(3.0)


  Provision for loan losses


4.0


8.4


6.5


4.3


3.5


    Balance at end of period


236.9


236.3


233.9


232.8


231.3














Allowance for loan losses on acquired loans:












  Balance at beginning of period


4.1


4.1


4.0


4.0


3.6


  Charge-offs


(1.9)


(1.8)


(2.0)


(2.5)


(1.8)


  Recoveries


0.2


0.3


0.4


0.3


0.3


    Net loan charge-offs


(1.7)


(1.5)


(1.6)


(2.2)


(1.5)


  Provision for loan losses


1.6


1.5


1.7


2.2


1.9


    Balance at end of period


4.0


4.1


4.1


4.0


4.0


    Total allowance for loan losses

$

240.9

$

240.4

$

238.0

$

236.8

$

235.3














Originated commercial allowance for loan losses











  as a percentage of originated commercial loans

0.91

%

0.93

%

0.94

%

0.93

%

0.94

%

Originated retail allowance for loan losses












  as a percentage of originated retail loans


0.37


0.36


0.36


0.36


0.36


Total originated allowance for loan losses












  as a percentage of:












    Originated loans


0.76


0.77


0.78


0.77


0.78


    Originated non-performing loans


157.0


140.9


147.9


138.4


149.3














NET LOAN CHARGE-OFFS (RECOVERIES)

























Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions)


2019


2018


2018


2018


2018


Commercial:












  Commercial real estate

$

1.1

$

1.4

$

1.7

$

0.7

$

0.5


  Commercial and industrial


1.7


1.4


2.2


1.7


1.7


  Equipment financing


2.2


4.4


2.9


2.6


1.6


    Total


5.0


7.2


6.8


5.0


3.8


Retail:












  Residential mortgage


0.1


-


0.1


(0.1)


0.2


  Home equity


(0.2)


0.1


(0.1)


-


0.4


  Other consumer


0.2


0.2


0.2


0.1


0.1


    Total


0.1


0.3


0.2


-


0.7


    Total net loan charge-offs

$

5.1

$

7.5

$

7.0

$

5.0

$

4.5














Net loan charge-offs to












  average total loans (annualized)


0.06

%

0.09

%

0.09

%

0.06

%

0.06

%

 

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



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2019


2018


2018


2018


2018

Total non-interest expense 


$   277.2


$   262.7


$   241.3


$   248.6


$     243.5

Adjustments to arrive at operating











  non-interest expense:











  Merger-related expenses


(15.0)


(8.0)


(0.5)


(2.9)


-

    Total


(15.0)


(8.0)


(0.5)


(2.9)


-

    Operating non-interest expense


262.2


254.7


240.8


245.7


243.5












Operating lease expense


(9.4)


(9.8)


(8.9)


(8.7)


(9.0)

Amortization of other acquisition-related










    intangible assets


(6.7)


(6.9)


(4.9)


(4.9)


(5.1)

Other (1)


(1.8)


(1.6)


(1.8)


(1.7)


(1.3)

    Total non-interest expense for











      efficiency ratio


$   244.3


$   236.4


$   225.2


$   230.4


$     228.1












Net interest income (FTE basis)


$   340.0


$   339.5


$   313.0


$   307.8


$     302.1

Total non-interest income


94.6


88.7


92.3


94.9


90.4

    Total revenues


434.6


428.2


405.3


402.7


392.5

Adjustments:











  Operating lease expense


(9.4)


(9.8)


(8.9)


(8.7)


(9.0)

  BOLI FTE adjustment


0.6


0.5


0.6


0.4


0.4

  Net security losses (gains)


-


10.0


(0.1)


-


(0.1)

  Other (2)


0.3


-


-


-


-

    Total revenues for efficiency ratio


$   426.1


$   428.9


$   396.9


$   394.4


$     383.8

    Efficiency ratio


57.3%


55.1%


56.7%


58.4%


59.4%












(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 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



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions, except per common share data)

2019


2018


2018


2018


2018

Net income available to common shareholders

$   111.1


$   129.4


$   113.5


$   106.7


$     104.4

Adjustments to arrive at operating earnings:











  Merger-related expenses


15.0


8.0


0.5


2.9


-

  Security losses associated with tax reform (1)

-


10.0


-


-


-

    Total pre-tax adjustments


15.0


18.0


0.5


2.9


-

  Tax effect (2)


(3.1)


(13.2)


(0.2)


(0.6)


-

    Total adjustments, net of tax


11.9


4.8


0.3


2.3


-

    Operating earnings


$   123.0


$   134.2


$   113.8


$   109.0


$     104.4












Diluted EPS, as reported


$      0.30


$      0.35


$      0.33


$      0.31


$        0.30

Adjustments to arrive at operating EPS:











  Merger-related expenses


0.03


0.01


-


0.01


-

  Security losses associated with tax reform


-


0.02


-


-


-

  Tax benefit associated with tax reform


-


(0.02)


-


-


-

    Total adjustments per common share 


0.03


0.01


-


0.01


-

    Operating EPS


$      0.33


$      0.36


$      0.33


$      0.32


$        0.30












Average total assets


$ 47,800


$ 47,721


$ 44,245


$ 44,110


$   44,011












Operating return on











  average assets (annualized)


1.03%


1.12%


1.03%


0.99%


0.95%












(1) Security losses incurred as a tax planning strategy in response to a tax reform-related benefit are considered

     non-operating.

(2) Includes a $9.2 million benefit recognized in connection with tax reform for the three months ended 

     December 31, 2018.












OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY











Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2019


2018


2018


2018


2018

Operating earnings


$   123.0


$   134.2


$   113.8


$   109.0


$     104.4












Average stockholders' equity


$   6,562


$   6,515


$   5,937


$   5,870


$     5,820

Less: Average preferred stock


244


244


244


244


244

Average common equity


6,318


6,271


5,693


5,626


5,576

Less: Average goodwill and average other











          acquisition-related intangible assets


2,900


2,807


2,572


2,554


2,558

Average tangible common equity


$   3,418


$   3,464


$   3,121


$   3,072


$     3,018












Operating return on average tangible











  common equity (annualized)


14.4%


15.5%


14.6%


14.2%


13.8%

 

People's United Financial, Inc.











NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued












OPERATING COMMON DIVIDEND PAYOUT RATIO



Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2019


2018


2018


2018


2018

Common dividends paid


$      65.2


$      65.1


$      60.0


$      59.9


$      58.8

Operating earnings


$   123.0


$   134.2


$   113.8


$   109.0


$   104.4












Operating common dividend payout ratio


53.0%


48.5%


52.7%


55.0%


56.3%












TANGIBLE COMMON EQUITY RATIO













March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2019


2018


2018


2018


2018

Total stockholders' equity


$   6,621


$   6,534


$   5,959


$   5,900


$   5,845

Less: Preferred stock


244


244


244


244


244

Common equity


6,377


6,290


5,715


5,656


5,601

Less: Goodwill and other











         acquisition-related intangible assets


2,896


2,866


2,569


2,574


2,555

Tangible common equity


$   3,481


$   3,424


$   3,146


$   3,082


$   3,046












Total assets


$ 48,092


$ 47,877


$ 44,133


$ 44,575


$ 44,101

Less: Goodwill and other











          acquisition-related intangible assets


2,896


2,866


2,569


2,574


2,555

Tangible assets


$ 45,196


$ 45,011


$ 41,564


$ 42,001


$ 41,546












Tangible common equity ratio


7.7%


7.6%


7.6%


7.3%


7.3%












TANGIBLE BOOK VALUE PER COMMON SHARE



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(in millions, except per common share data)

2019


2018


2018


2018


2018

Tangible common equity


$   3,481


$   3,424


$   3,146


$   3,082


$   3,046












Common shares issued


467.38


466.32


437.74


437.06


436.56

Less: Shares classified as treasury shares


89.01


89.03


89.02


89.02


89.02

          Unallocated ESOP shares


6.19


6.27


6.36


6.45


6.53

Common shares


372.18


371.02


342.36


341.59


341.01












Tangible book value per common share


$      9.35


$      9.23


$      9.19


$      9.02


$      8.93

 

Cision View original content:http://www.prnewswire.com/news-releases/peoples-united-financial-reports-first-quarter-net-income-of-114-6-million-or-0-30-per-common-share-300834686.html

SOURCE People's United Financial, Inc.

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