Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.


 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 19, 2019 (July 18, 2019)

 

 

People’s United Financial, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-33326   20-8447891

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

850 Main Street, Bridgeport, CT   06604
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (203)
338-7171

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligations of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of each exchange

on which registered

Common Stock, $0.01 par value per share   PBCT   NASDAQ Global Select Market
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, $0.01 par value per
share
  PBCTP   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the
Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an
emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On July 18, 2019, People’s United Financial, Inc. (the “Company”) issued a press release announcing its results of operations for the
three- and six-month periods ended June 30, 2019. A copy of that press release is being furnished herewith as Exhibit 99.1.

The information contained in and accompanying this Form 8-K with respect to Item 2.02 (including Exhibit 99.1 hereto)
is being furnished to, and not filed with, the Securities and Exchange Commission in accordance with General Instruction B.2 to Form 8-K.

 

Item 7.01.

Regulation FD Disclosure.

The Company hereby furnishes the Investor Presentation attached hereto as Exhibit 99.2.

The information contained in and accompanying this Form 8-K with respect to Item 7.01 (including Exhibit 99.2 hereto)
is being furnished to, and not filed with, the Securities and Exchange Commission in accordance with General Instruction B.2 to Form 8-K.

 

Item 9.01.

Financial Statements and Exhibits

 

(d)

The following Exhibits are submitted herewith.

 

Exhibit
No.
  

Description

99.1    Earnings Press Release dated July 18, 2019
99.2    Investor Presentation dated July 18, 2019



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

 

     

People’s United Financial, Inc.

      (Registrant)
Date: July 19, 2019                  By:  

/s/ Andrew S. Hersom

      (Signature)
    Name:   Andrew S. Hersom
    Title:   Senior Vice President, Investor Relations

Exhibit 99.1

 

LOGO

People’s United Financial Reports Second Quarter Net Income of
$133.2 Million, or $0.33 per Common Share

Operating Earnings of $0.34 per Common Share

Board of Directors Approves Share Repurchase Program

 

  •  

Announced the acquisition of United Financial Bancorp on July
15th.

 

  •  

Return on average assets of 1.04 percent and return on average tangible common equity of 14.1 percent.

 

  •  

Efficiency ratio of 55.8 percent, an improvement of 150 basis points linked-quarter and 260 basis points
year-over-year, reflecting continued focus on enhancing operating leverage.

 

  •  

Non-interest income of $106.3 million, an increase of
12 percent both linked-quarter and year-over-year.

 

  •  

Period-end loans and deposits increased nine percent and seven percent,
respectively, from March 31st, driven by the BSB Bancorp acquisition and organic growth.

BRIDGEPORT, CT., July 18, 2019 – People’s United Financial, Inc. (NASDAQ: PBCT) today reported results for the second
quarter 2019. These results along with comparison periods are summarized below:

 

($ in millions, except per common share data)       
     Three Months Ended  
     Jun. 30, 2019     Mar. 31, 2019     Jun. 30, 2018  

Net income

   $ 133.2     $ 114.6     $ 110.2  

Net income available to common shareholders

     129.7       111.1       106.7  

Per common share

     0.33       0.30       0.31  

Operating earnings1

     134.8       123.0       109.0  

Per common share

     0.34       0.33       0.32  
  

 

 

   

 

 

   

 

 

 

Net interest income

   $ 348.1     $ 332.8     $ 301.2  

Net interest margin

     3.12     3.20     3.10

Non-interest income

     106.3       94.6       94.9  
  

 

 

   

 

 

   

 

 

 

Non-interest expense

   $ 278.4     $ 277.2     $ 248.6  

Operating non-interest expense1

     271.9       262.2       245.7  

Efficiency ratio

     55.8     57.3     58.4
  

 

 

   

 

 

   

 

 

 

Average balances

      

Loans

   $ 38,229     $ 35,046     $ 32,116  

Deposits

     39,211       36,450       32,535  

Period-end balances

      

Loans

     38,557       35,515       32,512  

Deposits

     39,467       36,901       32,468  
  

 

 

   

 

 

   

 

 

 

 

1 

See Non-GAAP Financial Measures and Reconciliation to GAAP beginning on
page 16.

“We are pleased with the Company’s performance in the second quarter,” said Jack Barnes, Chairman and Chief
Executive Officer. “Operating earnings of $135 million increased 24 percent from a year ago and operating return on average common tangible equity of 14.6 percent improved 40 basis points. These strong results reflect the success
of our strategy of balancing organic growth with thoughtful M&A. The integration of BSB Bancorp continues


to progress very well and we were excited to announce earlier this week the financially attractive acquisition of United Financial Bancorp, which strengthens our well-established presence in
central Connecticut and western Massachusetts. We are also pleased to announce the Company’s Board of Directors approved the repurchase of up to 20 million common shares, which further demonstrates our commitment to returning capital to
shareholders.”

“Higher revenues and our continued emphasis on controlling costs generated a second quarter efficiency ratio of
55.8 percent, an improvement of 260 basis points from the prior year quarter,” stated David Rosato, Senior Executive Vice President and Chief Financial Offer. “Total revenues of $454 million grew 15 percent year-over-year
due to increases in both net interest income and non-interest income. Net interest margin of 3.12 percent improved two basis points from a year ago, but declined eight basis points linked-quarter. While
new business yields remained greater than the total loan portfolio yield, the margin contracted due to higher deposit costs and the addition of BSB Bancorp. Organic loan and deposit period-end balances grew
one percent and two percent respectively, from March 31st. Loan growth was driven by strong results in mortgage warehouse lending, healthcare and equipment finance, partially offset by continued
headwinds in commercial real estate and planned reductions in residential mortgage balances. Deposits benefited from higher than expected municipal balances and a large short-term deposit from a commercial customer.”

 

     As of and for the Three Months Ended  
     Jun. 30, 2019     Mar. 31, 2019     Jun. 30, 2018  

Asset Quality

      

Net loan charge-offs to average total loans

     0.05     0.06     0.06

Originated non-performing loans as a percentage of
originated loans

     0.52     0.49     0.56
  

 

 

   

 

 

   

 

 

 

Returns

      

Return on average assets1

     1.04     0.96     1.00

Return on average tangible common
equity1

     14.1     13.0     13.9
  

 

 

   

 

 

   

 

 

 

Capital Ratios

      
People’s United Financial, Inc.                   

Tangible common equity / tangible assets

     7.7     7.7     7.3

Tier 1 leverage

     8.7     8.8     8.6

Common equity tier 1

     10.0     10.2     10.0

Tier 1 risk-based

     10.7     10.8     10.8

Total risk-based

     12.0     12.4     12.5
People’s United Bank, N.A.                   

Tier 1 leverage

     8.9     9.0     9.1

Common equity tier 1

     10.9     11.2     11.4

Tier 1 risk-based

     10.9     11.2     11.4

Total risk-based

     12.4     12.9     13.4
  

 

 

   

 

 

   

 

 

 

 

1 

See Non-GAAP Financial Measures and Reconciliation to GAAP beginning on
page 16

The Company’s Board of Directors approved the repurchase of up to 20 million shares of common stock. The share
repurchases will be made at the discretion of the Company following the close of the United Financial Bancorp acquisition. The Board of Directors also declared a $0.1775 per common share quarterly dividend payable August 15, 2019 to
shareholders of record on August 1, 2019. Based on the closing stock price on July 17, 2019, the dividend yield on People’s United Financial common stock is 4.4 percent.

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 $51 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.

 

Page 2


2Q 2019 Financial Highlights

Summary

 

  •  

Net income totaled $133.2 million, or $0.33 per common share.

 

  •  

Net income available to common shareholders totaled $129.7 million.

 

  •  

Operating earnings totaled $134.8 million, or $0.34 per common share (see page 16).

 

  •  

Net interest income totaled $348.1 million in 2Q19 compared to $332.8 million in 1Q19.

 

  •  

Net interest margin decreased eight basis points from 1Q19 to 3.12% reflecting:

 

  •  

Higher yields on the loan portfolio (increase of six basis points).

 

  •  

One additional calendar day in 2Q19 (increase of two basis points).

 

  •  

Higher rates on deposits and borrowings (decrease of 15 basis points).

 

  •  

Lower yields on the securities portfolio (decrease of one basis point).

 

  •  

Provision for loan losses totaled $7.6 million.

 

  •  

Net loan charge-offs totaled $4.5 million.

 

  •  

Net loan charge-off ratio of 0.05% in 2Q19.

 

  •  

Non-interest income totaled $106.3 million in 2Q19 compared to
$94.6 million in 1Q19.

 

  •  

Customer interest rate swap income increased $4.6 million.

 

  •  

Commercial banking lending fees increased $2.4 million.

 

  •  

Bank service charges increased $1.2 million.

 

  •  

Insurance revenue decreased $1.8 million.

 

  •  

At June 30, 2019, assets under discretionary management totaled $9.3 billion.

 

  •  

Non-interest expense totaled $278.4 million in 2Q19 compared to
$277.2 million in 1Q19.

 

  •  

Operating non-interest expense totaled $271.9 million in 2Q19 (see
page 16).

 

  •  

Compensation and benefits expense, excluding $1.5 million of merger-related expenses in both 2Q19 and 1Q 19,
increased $5.9 million, primarily reflecting additional personnel costs resulting from the BSB Bancorp acquisition, partially offset by lower payroll and benefit-related costs in 2Q19.

 

  •  

Professional and outside services expense, excluding $4.7 million and $1.2 million of merger-related
expenses in 2Q19 and 1Q19, respectively, increased $1.4 million.

 

  •  

Intangible amortization expense increased $1.3 million.

 

  •  

Other non-interest expense includes merger-related expenses of
$0.2 million and $11.9 million in 2Q19 and 1Q19, respectively.

 

  •  

The efficiency ratio was 55.8% for 2Q19 compared to 57.3% for 1Q19 and 58.4% for 2Q18 (see page 16).

 

  •  

The effective income tax rate was 20.9% for 2Q19 and 20.8% for the first six months of 2019, compared to 18.8%
for the full-year of 2018.

 

  •  

The rate in 2018 reflects a $9.2 million benefit recognized in connection with tax reform.

 

Page 3


Commercial Banking

 

  •  

Commercial loans totaled $27.0 billion at June 30, 2019, an increase of $1.6 billion from
March 31, 2019.

 

  •  

Organic growth of $620 million.

 

  •  

The mortgage warehouse portfolio increased $340 million.

 

  •  

The equipment financing portfolio increased $145 million.

 

  •  

The New York multifamily portfolio decreased $59 million.

 

  •  

Average commercial loans totaled $26.5 billion in 2Q19, an increase of $1.6 billion from 1Q19.

 

  •  

The average mortgage warehouse portfolio increased $320 million.

 

  •  

The average equipment financing portfolio increased $153 million.

 

  •  

The average New York multifamily portfolio decreased $44 million.

 

  •  

Commercial deposits totaled $15.1 billion at June 30, 2019 compared to $13.5 billion at
March 31, 2019.

 

  •  

Increase reflects, in part, a $500 million short-term deposit.

 

  •  

The ratio of originated non-performing commercial loans to originated
commercial loans was 0.48% at June 30, 2019 compared to 0.45% at March 31, 2019.

 

  •  

Non-performing commercial assets, excluding acquired non-performing loans, totaled $117.6 million at June 30, 2019 compared to $111.1 million at March 31, 2019.

 

  •  

For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.91% at
both June 30, 2019 and March 31, 2019.

 

  •  

The originated commercial allowance for loan losses represented 190% of originated
non-performing commercial loans at June 30, 2019 compared to 202% at March 31, 2019.

Retail Banking

 

  •  

Residential mortgage loans totaled $9.5 billion at June 30, 2019, an increase of $1.4 billion from
March 31, 2019.

 

  •  

Average residential mortgage loans totaled $9.7 billion in 2Q19, an increase of $1.5 billion from 1Q19.

 

  •  

Home equity loans totaled $2.0 billion at June 30, 2019, an increase of $114 million from
March 31, 2019.

 

  •  

Average home equity loans totaled $2.0 billion in 2Q19, an increase of $105 million from 1Q19.

 

  •  

Retail deposits totaled $24.4 billion at June 30, 2019 compared to $23.4 billion at March 31,
2019.

 

  •  

The ratio of originated non-performing residential mortgage loans to
originated residential mortgage loans was 0.57% at June 30, 2019 compared to 0.52% at March 31, 2019.

 

  •  

The ratio of originated non-performing home equity loans to originated
home equity loans was 0.86% at June 30, 2019 compared to 0.81% at March 31, 2019.

 

Page 4


Conference Call

On July 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.

INVESTOR CONTACT:

Andrew S. Hersom

Investor Relations

203.338.4581

Andrew.Hersom@peoples.com

MEDIA CONTACT:

Steven Bodakowski

Corporate Communications

203.338.4202

Steven.Bodakowski@peoples.com

 

Page 5


People’s United Financial, Inc.

FINANCIAL HIGHLIGHTS

 

 

People’s United Financial completed its
acquisition of BSB Bancorp, Inc. effective April 1, 2019. Accordingly, BSB Bancorp’s results of operations are included beginning with the effective date, and prior period results have not been restated to include BSB Bancorp.

 

 

 

     Three Months Ended  

(dollars in millions, except per common share data)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
 

Earnings Data:

          

Net interest income (fully taxable equivalent)

   $ 355.4     $ 340.0     $ 339.5     $ 313.0     $ 307.8  

Net interest income

     348.1       332.8       332.6       306.4       301.2  

Provision for loan losses

     7.6       5.6       9.9       8.2       6.5  

Non-interest income (1)

     106.3       94.6       88.7       92.3       94.9  

Non-interest expense (1)

     278.4       277.2       262.7       241.3       248.6  

Income before income tax expense

     168.4       144.6       148.7       149.2       141.0  

Net income

     133.2       114.6       132.9       117.0       110.2  

Net income available to common shareholders (1)

     129.7       111.1       129.4       113.5       106.7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selected Statistical Data:

          

Net interest margin (2)

     3.12     3.20     3.17     3.15     3.10

Return on average assets (1), (2)

     1.04       0.96       1.11       1.06       1.00  

Return on average common equity (2)

     7.7       7.0       8.3       8.0       7.6  

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

     14.1       13.0       14.9       14.5       13.9  

Efficiency ratio (1)

     55.8       57.3       55.1       56.7       58.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Share Data:

          

Earnings per common share:

          

Basic

   $ 0.33     $ 0.30     $ 0.35     $ 0.33     $ 0.31  

Diluted (1)

     0.33       0.30       0.35       0.33       0.31  

Dividends paid per common share

     0.1775       0.1750       0.1750       0.1750       0.1750  

Common dividend payout ratio (1)

     53.8     58.6     50.3     52.9     56.2

Book value per common share (end of period)

   $ 17.34     $ 17.13     $ 16.95     $ 16.69     $ 16.56  

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

     9.51       9.35       9.23       9.19       9.02  

Stock price:

          

High

     17.66       18.03       17.46       19.00       19.37  

Low

     15.24       14.25       13.66       16.95       18.00  

Close (end of period)

     16.78       16.44       14.43       17.12       18.09  

Common shares (end of period) (in millions)

     392.24       372.18       371.02       342.36       341.59  

Weighted average diluted common shares (in millions)

     394.57       374.09       372.83       345.04       344.47  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

See Non-GAAP Financial Measures and Reconciliation to GAAP beginning on
page 16.

 

6


People’s United Financial, Inc.

FINANCIAL HIGHLIGHTS

 

 

People’s United Financial completed its
acquisition of BSB Bancorp, Inc. effective April 1, 2019. Accordingly, BSB Bancorp’s results of operations are included beginning with the effective date, and prior period results have not been restated to include BSB Bancorp.

 

 

 

     Six Months Ended
June 30,
 

(dollars in millions, except per common share data)

   2019     2018  

Earnings Data:

    

Net interest income (fully taxable equivalent)

   $ 695.4     $ 609.9  

Net interest income

     680.9       597.0  

Provision for loan losses

     13.2       11.9  

Non-interest income

     200.9       185.3  

Non-interest expense (1)

     555.6       492.1  

Income before income tax expense

     313.0       278.3  

Net income

     247.8       218.1  

Net income available to common shareholders (1)

     240.8       211.1  
  

 

 

   

 

 

 

Selected Statistical Data:

    

Net interest margin (2)

     3.15     3.07

Return on average assets (1), (2)

     1.00       0.99  

Return on average common equity (2)

     7.4       7.5  

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

     13.5       13.9  

Efficiency ratio (1)

     56.6       58.9  
  

 

 

   

 

 

 

Common Share Data:

    

Earnings per common share:

    

Basic

   $ 0.63     $ 0.62  

Diluted (1)

     0.63       0.61  

Dividends paid per common share

     0.3525       0.3475  

Common dividend payout ratio (1)

     56.0     56.2

Book value per common share (end of period)

   $ 17.34     $ 16.56  

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

     9.51       9.02  

Stock price:

    

High

     18.03       20.26  

Low

     14.25       18.00  

Close (end of period)

     16.78       18.09  

Common shares (end of period) (in millions)

     392.24       341.59  

Weighted average diluted common shares (in millions)

     384.39       344.23  
  

 

 

   

 

 

 

 

(1)

See Non-GAAP Financial Measures and Reconciliation to GAAP beginning on
page 16.

 

7


People’s United Financial, Inc.

FINANCIAL HIGHLIGHTS – Continued

 

 

 

People’s United Financial completed its acquisition of BSB Bancorp, Inc. effective April 1, 2019.
Accordingly, BSB Bancorp’s results of operations are included beginning with the effective date, and prior period results have not been restated to include BSB Bancorp.

 

 

 

     As of and for the Three Months Ended  
     June 30,     March 31,     Dec. 31,     Sept. 30,     June 30,  

(dollars in millions)

   2019     2019     2018     2018     2018  

Financial Condition Data:

          

Total assets

   $ 51,622     $ 48,092     $ 47,877     $ 44,133     $ 44,575  

Loans

     38,557       35,515       35,241       32,199       32,512  

Securities

     7,086       7,176       7,233       7,385       7,324  

Short-term investments

     275       106       266       128       253  

Allowance for loan losses

     244       241       240       238       237  

Goodwill and other acquisition-related intangible assets

     3,073       2,897       2,866       2,569       2,574  

Deposits

     39,467       36,901       36,159       33,210       32,468  

Borrowings

     3,400       2,860       3,593       3,392       4,639  

Notes and debentures

     911       902       896       886       889  

Stockholders’ equity

     7,046       6,621       6,534       5,959       5,900  

Total risk-weighted assets (1):

          

People’s United Financial, Inc.

     39,128       36,466       35,910       33,181       33,369  

People’s United Bank, N.A.

     39,078       36,447       35,875       33,132       33,317  

Non-performing assets (2)

     179       167       186       173       187  

Net loan charge-offs

     4.5       5.1       7.5       7.0       5.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average Balances:

          

Loans

   $ 38,229     $ 35,046     $ 35,016     $ 32,166     $ 32,116  

Securities (3)

     7,147       7,311       7,479       7,404       7,302  

Short-term investments

     214       203       292       193       267  

Total earning assets

     45,591       42,560       42,786       39,763       39,685  

Total assets

     51,088       47,800       47,721       44,245       44,110  

Deposits

     39,211       36,450       35,959       33,058       32,535  

Borrowings

     3,146       2,937       3,456       3,539       4,031  

Notes and debentures

     904       896       886       888       890  

Total funding liabilities

     43,261       40,284       40,302       37,485       37,456  

Stockholders’ equity

     6,978       6,562       6,515       5,937       5,870  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios:

          

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

     0.05     0.06     0.09     0.09     0.06

Non-performing assets to originated loans, real estate
owned and repossessed assets (2)

     0.56       0.54       0.61       0.57       0.62  

Originated allowance for loan losses to:

          

Originated loans (2)

     0.76       0.76       0.77       0.78       0.77  

Originated non-performing loans (2)

     146.0       157.0       140.9       147.9       138.4  

Average stockholders’ equity to average total assets

     13.7       13.7       13.7       13.4       13.3  

Stockholders’ equity to total assets

     13.6       13.8       13.6       13.5       13.2  

Tangible common equity to tangible assets (4)

     7.7       7.7       7.6       7.6       7.3  

Total risk-based capital (1):

          

People’s United Financial, Inc.

     12.0       12.4       12.5       12.8       12.5  

People’s United Bank, N.A.

     12.4       12.9       13.2       13.6       13.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

June 30, 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 beginning on
page 16.

 

8


People’s United Financial, Inc.    

CONSOLIDATED STATEMENTS OF CONDITION    

 

 

 

(in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    June 30,
2018
 

Assets

        

Cash and due from banks

   $ 505.9     $ 508.5     $ 665.7     $ 462.7  

Short-term investments

     274.8       106.0       266.3       253.1  

Securities:

        

Trading debt securities, at fair value

     9.3       8.3       8.4       8.2  

Equity securities, at fair value

     8.5       8.2       8.1       9.9  

Debt securities
available-for-sale, at fair value

     2,971.2       3,060.0       3,121.0       3,245.1  

Debt securities
held-to-maturity, at amortized cost

     3,807.5       3,823.4       3,792.3       3,718.7  

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

     289.4       275.6       303.4       342.2  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total securities

     7,085.9       7,175.5       7,233.2       7,324.1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loans
held-for-sale

     17.4       7.8       19.5       17.1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loans:

        

Commercial real estate

     12,230.7       11,591.2       11,649.6       10,761.1  

Commercial and industrial

     10,121.8       9,354.7       9,088.9       8,823.3  

Equipment financing

     4,611.0       4,466.1       4,339.2       4,103.9  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Commercial Portfolio

     26,963.5       25,412.0       25,077.7       23,688.3  
  

 

 

   

 

 

   

 

 

   

 

 

 

Residential mortgage

     9,532.6       8,163.1       8,154.2       6,866.2  

Home equity and other consumer

     2,060.6       1,940.1       2,009.5       1,957.5  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Retail Portfolio

     11,593.2       10,103.2       10,163.7       8,823.7  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     38,556.7       35,515.2       35,241.4       32,512.0  

Less allowance for loan losses

     (244.0     (240.9     (240.4     (236.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loans, net

     38,312.7       35,274.3       35,001.0       32,275.2  
  

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill and other acquisition-related intangible assets

     3,072.9       2,896.5       2,865.7       2,573.8  

Bank-owned life insurance

     504.4       467.8       467.0       407.2  

Premises and equipment, net

     261.0       255.8       267.3       246.3  

Other assets

     1,587.5       1,399.7       1,091.6       1,015.0  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 51,622.5     $ 48,091.9     $ 47,877.3     $ 44,574.5  
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

        

Deposits:

        

Non-interest-bearing

   $ 8,747.2     $ 8,315.6     $ 8,543.0     $ 8,002.4  

Savings

     4,847.4       4,159.1       4,116.5       4,184.9  

Interest-bearing checking and money market

     17,424.8       17,130.0       16,583.3       14,659.4  

Time

     8,447.9       7,296.2       6,916.2       5,621.5  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     39,467.3       36,900.9       36,159.0       32,468.2  
  

 

 

   

 

 

   

 

 

   

 

 

 

Borrowings:

        

Federal Home Loan Bank advances

     2,054.4       1,573.2       2,404.5       3,510.1  

Federal funds purchased

     1,110.0       1,020.0       845.0       855.0  

Customer repurchase agreements

     235.2       264.8       332.9       254.9  

Other borrowings

     —         1.6       11.0       19.1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total borrowings

     3,399.6       2,859.6       3,593.4       4,639.1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Notes and debentures

     911.5       901.6       895.8       888.7  

Other liabilities

     797.9       808.6       695.2       678.3  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     44,576.3       41,470.7       41,343.4       38,674.3  
  

 

 

   

 

 

   

 

 

   

 

 

 

Stockholders’ Equity

        

Preferred stock

     244.1       244.1       244.1       244.1  

Common stock

     4.9       4.7       4.7       4.4  

Additional paid-in capital

     6,890.7       6,558.8       6,549.3       6,040.3  

Retained earnings

     1,388.1       1,328.6       1,284.8       1,167.9  

Unallocated common stock of Employee Stock Ownership Plan, at cost

     (126.5     (128.3     (130.1     (133.7

Accumulated other comprehensive loss

     (193.0     (224.6     (256.8     (260.7

Treasury stock, at cost

     (1,162.1     (1,162.1     (1,162.1     (1,162.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     7,046.2       6,621.2       6,533.9       5,900.2  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 51,622.5     $ 48,091.9     $ 47,877.3     $ 44,574.5  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

9


People’s United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

     Three Months Ended  

(in millions, except per common share data)

   June 30,
2019
     March 31,
2019
     Dec. 31,
2018
    Sept. 30,
2018
     June 30,
2018
 

Interest and dividend income:

             

Commercial real estate

   $ 139.9      $ 132.7      $ 130.2     $ 114.7      $ 111.5  

Commercial and industrial

     111.4        103.9        100.1       93.2        90.1  

Equipment financing

     62.8        59.0        56.7       56.2        50.5  

Residential mortgage

     85.5        70.7        70.2       56.0        55.3  

Home equity and other consumer

     25.7        24.9        24.4       22.0        21.4  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest on loans

     425.3        391.2        381.6       342.1        328.8  

Securities

     46.2        47.8        48.5       46.6        45.1  

Short-term investments

     1.2        1.3        1.4       1.1        1.3  

Loans
held-for-sale

     0.1        0.2        0.3       0.2        0.2  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and dividend income

     472.8        440.5        431.8       390.0        375.4  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Interest expense:

             

Deposits

     96.6        81.2        70.6       56.9        47.3  

Borrowings

     19.3        17.7        20.0       18.2        18.5  

Notes and debentures

     8.8        8.8        8.6       8.5        8.4  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest expense

     124.7        107.7        99.2       83.6        74.2  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income

     348.1        332.8        332.6       306.4        301.2  

Provision for loan losses

     7.6        5.6        9.9       8.2        6.5  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income after provision for loan losses

     340.5        327.2        322.7       298.2        294.7  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Non-interest income:

             

Bank service charges

     26.4        25.2        26.9       24.9        24.3  

Investment management fees

     17.1        16.5        16.4       17.4        17.2  

Operating lease income

     12.7        12.7        12.0       11.0        11.2  

Commercial banking lending fees

     10.2        7.8        9.6       7.9        9.4  

Insurance revenue

     8.7        10.5        6.7       9.8        8.3  

Customer interest rate swap income, net

     7.6        3.0        6.3       2.8        4.0  

Cash management fees

     7.2        6.8        6.6       7.0        7.0  

Brokerage commissions

     2.6        2.8        3.3       3.2        3.2  

Net security gains (losses) (1)

     0.1        —          (10.0     0.1        —    

Other non-interest income

     13.7        9.3        10.9       8.2        10.3  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total non-interest income

     106.3        94.6        88.7       92.3        94.9  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Non-interest expense:

             

Compensation and benefits

     161.3        155.4        151.5       135.7        135.0  

Occupancy and equipment

     44.4        44.3        44.6       41.6        40.8  

Professional and outside services

     24.9        20.0        21.4       17.0        20.6  

Operating lease expense

     9.9        9.4        9.8       8.9        8.7  

Amortization of other acquisition-related intangible assets

     8.0        6.7        6.9       4.9        4.9  

Regulatory assessments

     6.5        7.0        7.4       10.0        9.9  

Other non-interest expense

     23.4        34.4        21.1       23.2        28.7  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total non-interest expense (1)

     278.4        277.2        262.7       241.3        248.6  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income before income tax expense

     168.4        144.6        148.7       149.2        141.0  

Income tax expense (1)

     35.2        30.0        15.8       32.2        30.8  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net income

     133.2        114.6        132.9       117.0        110.2  

Preferred stock dividend

     3.5        3.5        3.5       3.5        3.5  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net income available to common shareholders

   $ 129.7      $ 111.1      $ 129.4     $ 113.5      $ 106.7  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Earnings per common share:

             

Basic

   $ 0.33      $ 0.30      $ 0.35     $ 0.33      $ 0.31  

Diluted

     0.33        0.30        0.35       0.33        0.31  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(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
$6.5 million, $15.0 million, $8.0 million, $0.5 million and $2.9 million of non-operating expenses for the three months ended June 30 ,2019, 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 beginning on on page 16.

 

10


People’s United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

     Six Months Ended
June 30,
 

(in millions, except per common share data)

   2019      2018  

Interest and dividend income:

     

Commercial real estate

   $ 272.6      $ 218.5  

Commercial and industrial

     215.3        172.4  

Equipment financing

     121.8        99.4  

Residential mortgage

     156.2        110.0  

Home equity and other consumer

     50.6        42.2  
  

 

 

    

 

 

 

Total interest on loans

     816.5        642.5  

Securities

     94.0        89.1  

Short-term investments

     2.5        2.5  

Loans held for sale

     0.3        0.4  
  

 

 

    

 

 

 

Total interest and dividend income

     913.3        734.5  
  

 

 

    

 

 

 

Interest expense:

     

Deposits

     177.8        88.6  

Borrowings

     37.0        32.7  

Notes and debentures

     17.6        16.2  
  

 

 

    

 

 

 

Total interest expense

     232.4        137.5  
  

 

 

    

 

 

 

Net interest income

     680.9        597.0  

Provision for loan losses

     13.2        11.9  
  

 

 

    

 

 

 

Net interest income after provision for loan losses

     667.7        585.1  
  

 

 

    

 

 

 

Non-interest income:

     

Bank service charges

     51.6        48.1  

Investment management fees

     33.6        34.9  

Operating lease income

     25.4        21.9  

Insurance revenue

     19.2        18.1  

Commercial banking lending fees

     18.0        19.8  

Cash management fees

     14.0        13.6  

Customer interest rate swap income, net

     10.6        5.5  

Brokerage commissions

     5.4        6.3  

Other non-interest income

     23.1        17.1  
  

 

 

    

 

 

 

Total non-interest income

     200.9        185.3  
  

 

 

    

 

 

 

Non-interest expense:

     

Compensation and benefits

     316.7        275.7  

Occupancy and equipment

     88.7        82.0  

Professional and outside services

     44.9        39.2  

Operating lease expense

     19.3        17.7  

Amortization of other acquisition-related intangible assets

     14.7        10.0  

Regulatory assessments

     13.5        20.5  

Other non-interest expense

     57.8        47.0  
  

 

 

    

 

 

 

Total non-interest expense (1)

     555.6        492.1  
  

 

 

    

 

 

 

Income before income tax expense

     313.0        278.3  

Income tax expense

     65.2        60.2  
  

 

 

    

 

 

 

Net income

     247.8        218.1  

Preferred stock dividend

     7.0        7.0  
  

 

 

    

 

 

 

Net income available to common shareholders

   $ 240.8      $ 211.1  
  

 

 

    

 

 

 

Earnings per common share:

     

Basic

   $ 0.63      $ 0.62  

Diluted

     0.63        0.61  
  

 

 

    

 

 

 

 

(1)

Total non-interest expense includes $21.5 million and
$2.9 million of non-operating expenses for the six months ended June 30, 2019 and 2018, respectively. See Non-GAAP Financial Measures and Reconciliation to
GAAP beginning on page 16.

 

11


People’s United Financial, Inc.    

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

 

 

 

     June 30, 2019     March 31, 2019     June 30, 2018  

Three months ended

(dollars in millions)

   Average
Balance
     Interest      Yield/
Rate
    Average
Balance
     Interest      Yield/
Rate
    Average
Balance
     Interest      Yield/
Rate
 

Assets:

                        

Short-term investments

   $ 214.1      $ 1.2        2.21   $ 202.8      $ 1.3        2.60   $ 266.7      $ 1.3        2.02

Securities (2)

     7,147.1        50.8        2.85       7,310.6        52.4        2.87       7,302.1        49.2        2.69  

Loans:

                        

Commercial real estate

     12,323.2        139.9        4.54       11,588.3        132.7        4.58       10,802.9        111.5        4.13  

Commercial and industrial

     9,638.2        114.1        4.74       8,974.0        106.5        4.74       8,558.3        92.6        4.32  

Equipment financing

     4,510.8        62.8        5.56       4,357.7        59.0        5.42       3,923.6        50.5        5.14  

Residential mortgage

     9,672.6        85.6        3.54       8,153.6        70.9        3.48       6,853.6        55.5        3.24  

Home equity and other consumer

     2,084.6        25.7        4.94       1,972.9        24.9        5.05       1,977.6        21.4        4.33  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total loans

     38,229.4        428.1        4.48       35,046.5        394.0        4.50       32,116.0        331.5        4.13  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total earning assets

     45,590.6      $ 480.1        4.21     42,559.9      $ 447.7        4.21     39,684.8      $ 382.0        3.85
     

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

 

Other assets

     5,496.9             5,240.3             4,425.0        
  

 

 

         

 

 

         

 

 

       

Total assets

   $ 51,087.5           $ 47,800.2           $ 44,109.8        
  

 

 

         

 

 

         

 

 

       

Liabilities and stockholders’ equity:

                        

Deposits:

                        

Non-interest-bearing

   $ 8,605.6      $ —          —     $ 8,301.3      $ —          —     $ 7,872.7      $ —          —  

Savings, interest-bearing checking and money market

     22,341.3        57.4        1.03       21,018.0        48.8        0.93       19,220.6        28.2        0.59  

Time

     8,263.8        39.2        1.90       7,130.8        32.4        1.82       5,442.3        19.1        1.40  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total deposits

     39,210.7        96.6        0.99       36,450.1        81.2        0.89       32,535.6        47.3        0.58  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Borrowings:

                        

Federal Home Loan Bank advances

     1,844.0        12.2        2.64       1,890.1        12.4        2.64       3,009.3        14.8        1.97  

Federal funds purchased

     1,057.8        6.7        2.53       751.9        4.7        2.52       634.5        3.0        1.86  

Customer repurchase agreements

     240.0        0.4        0.77       286.2        0.5        0.65       228.7        0.1        0.31  

Other borrowings

     4.3        —          0.64       9.0        0.1        2.43       158.5        0.6        1.45  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total borrowings

     3,146.1        19.3        2.46       2,937.2        17.7        2.41       4,031.0        18.5        1.84  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Notes and debentures

     903.8        8.8        3.89       896.3        8.8        3.93       889.6        8.4        3.79  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total funding liabilities

     43,260.6      $ 124.7        1.15     40,283.6      $ 107.7        1.07     37,456.2      $ 74.2        0.79
     

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

 

Other liabilities

     848.8             954.3             784.0        
  

 

 

         

 

 

         

 

 

       

Total liabilities

     44,109.4             41,237.9             38,240.2        

Stockholders’ equity

     6,978.1             6,562.3             5,869.6        
  

 

 

         

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 51,087.5           $ 47,800.2           $ 44,109.8        
  

 

 

         

 

 

         

 

 

       

Net interest income/spread (3)

      $ 355.4        3.06      $ 340.0        3.14      $ 307.8        3.06
     

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

 

Net interest margin

           3.12           3.20           3.10
        

 

 

         

 

 

         

 

 

 

 

(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 $7.3 million, $7.2 million and $6.6 million for the
three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

 

12


People’s United Financial, Inc.

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

 

 

 

     June 30, 2019     June 30, 2018  

Six months ended

(dollars in millions)

   Average
Balance
     Interest      Yield/
Rate
    Average
Balance
     Interest      Yield/
Rate
 

Assets:

                

Short-term investments

   $ 208.5      $ 2.5        2.40   $ 316.3      $ 2.5        1.63

Securities (2)

     7,228.4        103.2        2.86       7,244.4        97.2        2.68  

Loans:

                

Commercial real estate

     11,957.8        272.6        4.56       10,868.2        218.5        4.02  

Commercial and industrial

     9,307.9        220.6        4.74       8,488.8        177.2        4.18  

Equipment financing

     4,434.7        121.8        5.49       3,897.3        99.4        5.10  

Residential mortgage

     8,917.3        156.5        3.51       6,845.4        110.4        3.22  

Home equity and other consumer

     2,029.0        50.6        4.99       2,006.2        42.2        4.20  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total loans

     36,646.7        822.1        4.49       32,105.9        647.7        4.03  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total earning assets

     44,083.6      $ 927.8        4.21     39,666.6      $ 747.4        3.77
     

 

 

    

 

 

      

 

 

    

 

 

 

Other assets

     5,369.3             4,394.2        
  

 

 

         

 

 

       

Total assets

   $ 49,452.9           $ 44,060.8        
  

 

 

         

 

 

       

Liabilities and stockholders’ equity:

                

Deposits:

                

Non-interest-bearing

   $ 8,454.3      $ —          —     $ 7,834.9      $ —          —  

Savings, interest-bearing checking and money market

     21,683.3        106.2        0.98       19,430.4        53.1        0.55  

Time

     7,700.5        71.6        1.86       5,413.6        35.5        1.31  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total deposits

     37,838.1        177.8        0.94       32,678.9        88.6        0.54  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Borrowings:

                

Federal Home Loan Bank advances

     1,866.9        24.6        2.64       2,844.1        25.7        1.81  

Federal funds purchased

     905.7        11.4        2.52       621.5        5.3        1.70  

Customer repurchase agreements

     263.0        0.9        0.71       245.5        0.3        0.24  

Other borrowings

     6.6        0.1        1.85       181.0        1.4        1.57  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total borrowings

     3,042.2        37.0        2.43       3,892.1        32.7        1.68  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Notes and debentures

     900.1        17.6        3.91       892.5        16.2        3.63  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total funding liabilities

     41,780.4      $ 232.4        1.11     37,463.5      $ 137.5        0.73
     

 

 

    

 

 

      

 

 

    

 

 

 

Other liabilities

     901.1             752.1        
  

 

 

         

 

 

       

Total liabilities

     42,681.5             38,215.6        

Stockholders’ equity

     6,771.4             5,845.2        
  

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 49,452.9           $ 44,060.8        
  

 

 

         

 

 

       

Net interest income/spread (3)

      $ 695.4        3.10      $ 609.9        3.04
     

 

 

    

 

 

      

 

 

    

 

 

 

Net interest margin

           3.15           3.07
        

 

 

         

 

 

 

 

(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 $14.5 million and $12.9 million for the six months ended
June 30, 2019 and 2018, respectively.    

 

13


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    

 

 

 

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
 

Originated non-performing loans:

          

Commercial:

          

Commercial real estate

   $ 23.2     $ 33.6     $ 33.5     $ 17.2     $ 20.3  

Commercial and industrial

     45.4       30.3       38.0       44.9       50.1  

Equipment financing

     42.7       37.5       42.0       49.3       49.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     111.3       101.4       113.5       111.4       119.6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Retail:

          

Residential mortgage

     38.4       35.4       38.9       32.0       33.5  

Home equity

     14.7       14.1       15.3       14.6       15.1  

Other consumer

     —         —         —         0.1       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     53.1       49.5       54.2       46.7       48.6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total originated non-performing loans (1)

     164.4       150.9       167.7       158.1       168.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

REO:

          

Residential

     8.1       6.9       5.5       4.4       5.8  

Commercial

     0.6       4.1       8.7       8.7       9.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total REO

     8.7       11.0       14.2       13.1       15.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Repossessed assets

     5.7       5.6       3.9       2.0       3.7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 178.8     $ 167.5     $ 185.8     $ 173.2     $ 187.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Acquired non-performing loans (contractual
amount)

   $ 34.1     $ 42.6     $ 50.1     $ 32.3     $ 26.7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Originated non-performing loans as a percentage of
originated loans

     0.52     0.49     0.55     0.53     0.56

Non-performing assets as a percentage of:

          

Originated loans, REO and repossessed assets

     0.56       0.54       0.61       0.57       0.62  

Tangible stockholders’ equity and originated allowance for loan losses

     4.24       4.23       4.76       4.78       5.25  

 

(1)

Reported net of government guarantees totaling $1.6 million at June 30, 2019, $1.4 million at
March 31, 2019, $1.9 million at December 31, 2018, $2.5 million at September 30, 2018 and $2.6 million at June 30, 2018.    

 

14


People’s United Financial, Inc.    

PROVISION AND ALLOWANCE FOR LOAN LOSSES    

 

 

 

     Three Months Ended  

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
 

Allowance for loan losses on originated loans:

          

Balance at beginning of period

   $ 236.9     $ 236.3     $ 233.9     $ 232.8     $ 231.3  

Charge-offs

     (4.4     (5.6     (7.3     (6.4     (4.7

Recoveries

     2.2       2.2       1.3       1.0       1.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loan charge-offs

     (2.2     (3.4     (6.0     (5.4     (2.8

Provision for loan losses

     5.4       4.0       8.4       6.5       4.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

     240.1       236.9       236.3       233.9       232.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses on acquired loans:

          

Balance at beginning of period

     4.0       4.1       4.1       4.0       4.0  

Charge-offs

     (2.9     (1.9     (1.8     (2.0     (2.5

Recoveries

     0.6       0.2       0.3       0.4       0.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loan charge-offs

     (2.3     (1.7     (1.5     (1.6     (2.2

Provision for loan losses

     2.2       1.6       1.5       1.7       2.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

     3.9       4.0       4.1       4.1       4.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total allowance for loan losses

   $ 244.0     $ 240.9     $ 240.4     $ 238.0     $ 236.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Originated commercial allowance for loan losses as a percentage of originated commercial
loans

     0.91     0.91     0.93     0.94     0.93

Originated retail allowance for loan losses as a percentage of originated retail loans

     0.34       0.37       0.36       0.36       0.36  

Total originated allowance for loan losses as a percentage of:

          

Originated loans

     0.76       0.76       0.77       0.78       0.77  

Originated non-performing loans

     146.0       157.0       140.9       147.9       138.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET LOAN CHARGE-OFFS (RECOVERIES)

 

 

 

     Three Months Ended  

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
 

Commercial:

          

Commercial real estate

   $ 0.1     $ 1.1     $ 1.4     $ 1.7     $ 0.7  

Commercial and industrial

     0.2       1.7       1.4       2.2       1.7  

Equipment financing

     3.9       2.2       4.4       2.9       2.6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     4.2       5.0       7.2       6.8       5.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Retail:

          

Residential mortgage

     0.1       0.1       —         0.1       (0.1

Home equity

     —         (0.2     0.1       (0.1     —    

Other consumer

     0.2       0.2       0.2       0.2       0.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     0.3       0.1       0.3       0.2       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net loan charge-offs

   $ 4.5     $ 5.1     $ 7.5     $ 7.0     $ 5.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     0.05     0.06     0.09     0.09     0.06
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

15


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.

 

16


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  

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
    June 30,
2019
    June 30,
2018
 

Total non-interest expense

   $ 278.4     $ 277.2     $ 262.7     $ 241.3     $ 248.6     $ 555.6     $ 492.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments to arrive at operating non-interest
expense:

              

Merger-related expenses

     (6.5     (15.0     (8.0     (0.5     (2.9     (21.5     (2.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (6.5     (15.0     (8.0     (0.5     (2.9     (21.5     (2.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating non-interest expense

     271.9       262.2       254.7       240.8       245.7       534.1       489.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating lease expense

     (9.9     (9.4     (9.8     (8.9     (8.7     (19.3     (17.7

Amortization of other acquisition-related intangible assets

     (8.0     (6.7     (6.9     (4.9     (4.9     (14.7     (10.0

Other (1)

     (1.4     (1.8     (1.6     (1.8     (1.7     (3.2     (3.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest expense for efficiency ratio

   $ 252.6     $ 244.3     $ 236.4     $ 225.2     $ 230.4     $ 496.9     $ 458.5  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (FTE basis)

   $ 355.4     $ 340.0     $ 339.5     $ 313.0     $ 307.8     $ 695.4     $ 609.9  

Total non-interest income

     106.3       94.6       88.7       92.3       94.9       200.9       185.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     461.7       434.6       428.2       405.3       402.7       896.3       795.2  

Adjustments:

              

Operating lease expense

     (9.9     (9.4     (9.8     (8.9     (8.7     (19.3     (17.7

BOLI FTE adjustment

     0.7       0.6       0.5       0.6       0.4       1.3       0.8  

Net security (gains) losses

     (0.1     —         10.0       (0.1     —         (0.1     (0.1

Other (2)

     —         0.3       —         —         —         0.3       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues for efficiency ratio

   $ 452.4     $ 426.1     $ 428.9     $ 396.9     $ 394.4     $ 878.5     $ 778.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency ratio

     55.8     57.3     55.1     56.7     58.4     56.6     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.

 

17


People’s United Financial, Inc.    

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – Continued

 

OPERATING EARNINGS

 

 

 

     Three Months Ended     Six Months Ended  

(dollars in millions, except per common share data)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
    June 30,
2019
    June 30,
2018
 

Net income available to common shareholders

   $ 129.7     $ 111.1     $ 129.4     $ 113.5     $ 106.7     $ 240.8     $ 211.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments to arrive at operating earnings:

              

Merger-related expenses

     6.5       15.0       8.0       0.5       2.9       21.5       2.9  

Security losses associated with tax reform (1)

     —         —         10.0       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total pre-tax adjustments

     6.5       15.0       18.0       0.5       2.9       21.5       2.9  

Tax effect (2)

     (1.4     (3.1     (13.2     (0.2     (0.6     (4.5     (0.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments, net of tax

     5.1       11.9       4.8       0.3       2.3       17.0       2.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating earnings

   $ 134.8     $ 123.0     $ 134.2     $ 113.8     $ 109.0     $ 257.8     $ 213.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted EPS, as reported

   $ 0.33     $ 0.30     $ 0.35     $ 0.33     $ 0.31     $ 0.63     $ 0.61  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments to arrive at operating EPS:

              

Merger-related expenses

     0.01       0.03       0.01       —         0.01       0.04       0.01  

Security losses associated with tax reform

     —         —         0.02       —         —         —         —    

Tax benefit associated with tax reform

     —         —         (0.02     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments per common share

     0.01       0.03       0.01       —         0.01       0.04       0.01  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating EPS

   $ 0.34     $ 0.33     $ 0.36     $ 0.33     $ 0.32     $ 0.67     $ 0.62  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average total assets

   $ 51,088     $ 47,800     $ 47,721     $ 44,245     $ 44,110     $ 49,453     $ 44,061  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating return on average assets (annualized)

     1.06     1.03     1.12     1.03     0.99     1.04     0.97
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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     Six Months Ended  

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
    June 30,
2019
    June 30,
2018
 

Operating earnings

   $ 134.8     $ 123.0     $ 134.2     $ 113.8     $ 109.0     $ 257.8     $ 213.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average stockholders’ equity

   $ 6,978     $ 6,562     $ 6,515     $ 5,937     $ 5,870     $ 6,771     $ 5,845  

Less: Average preferred stock

     244       244       244       244       244       244       244  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average common equity

     6,734       6,318       6,271       5,693       5,626       6,527       5,601  

Less: Average goodwill and average other acquisition-related intangible assets

     3,043       2,900       2,807       2,572       2,554       2,972       2,556  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible common equity

   $ 3,691     $ 3,418     $ 3,464     $ 3,121     $ 3,072     $ 3,556     $ 3,045  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating return on average tangible common equity (annualized)

     14.6     14.4     15.5     14.6     14.2     14.5     14.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

18


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  

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
    June 30,
2019
    June 30,
2018
 

Common dividends paid

   $ 69.8     $ 65.2     $ 65.1     $ 60.0     $ 59.9     $ 135.0     $ 118.7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating earnings

   $ 134.8     $ 123.0     $ 134.2     $ 113.8     $ 109.0     $ 257.8     $ 213.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating common dividend payout ratio

     51.8     53.0     48.5     52.7     55.0     52.4     55.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TANGIBLE COMMON EQUITY RATIO

 

 

 

(dollars in millions)

   June 30,
2019
    March 31,
2019
    Dec. 31,
2018
    Sept. 30,
2018
    June 30,
2018
 

Total stockholders’ equity

   $ 7,046     $ 6,621     $ 6,534     $ 5,959     $ 5,900  

Less: Preferred stock

     244       244       244       244       244  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common equity

     6,802       6,377       6,290       5,715       5,656  

Less: Goodwill and other acquisition-related intangible assets

     3,073       2,896       2,866       2,569       2,574  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity

   $ 3,730     $ 3,481     $ 3,424     $ 3,146     $ 3,082  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 51,622     $ 48,092     $ 47,877     $ 44,133     $ 44,575  

Less: Goodwill and other acquisition-related intangible assets

     3,073       2,896       2,866       2,569       2,574  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 48,549     $ 45,196     $ 45,011     $ 41,564     $ 42,001  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity ratio

     7.7     7.7     7.6     7.6     7.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TANGIBLE BOOK VALUE PER COMMON SHARE

 

 

 

(in millions, except per common share data)

   June 30,
2019
     March 31,
2019
     Dec. 31,
2018
     Sept. 30,
2018
     June 30,
2018
 

Tangible common equity

   $ 3,730      $ 3,481      $ 3,424      $ 3,146      $ 3,082  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Common shares issued

     487.35        467.38        466.32        437.74        437.06  

Less: Shares classified as treasury shares

     89.01        89.01        89.03        89.02        89.02  

Unallocated ESOP shares

     6.10        6.19        6.27        6.36        6.45  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Common shares

     392.24        372.18        371.02        342.36        341.59  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible book value per common share

   $ 9.51      $ 9.35      $ 9.23      $ 9.19      $ 9.02  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

19

Slide 0

Second Quarter 2019 Results July 18,
2019 Exhibit 99.2


Slide 1

Forward-Looking Statement Certain
statements contained in this presentation are forward-looking in nature. These include all statements about People’s United Financial, Inc. (“People’s United”) 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’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 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 does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


Slide 2

1 Net interest income on a fully
taxable equivalent basis was $355 million, an increase of $15 million or 5%. Second Quarter 2019 Overview Net income of $133.2 million, or $0.33 per Common Share Operating Earnings of $0.34 per Common Share Board of Directors Approves Share
Repurchase Plan Announced the acquisition of United Financial Bancorp on July 15th Net interest income1 of $348 million, an increase of $15 million or 5% Net interest margin of 3.12%, a decrease of 8 basis points New business yields remained higher
than the total portfolio loan yield, but margin contracted due to increased deposits costs and the addition of BSB Bancorp Average loan balances of $38.2 billion, an increase of $3.2 billion or 9% – (Ex. BSB Bancorp, an increase of $490 million or
1%) Period-end loan balances of $38.6 billion, an increase of $3.0 billion or 9% – (Ex. BSB Bancorp, an increase of $383 million or 1%) Runoff of the transactional portion of the New York multifamily portfolio lowered balances by $59 million Average
deposit balances of $39.2 billion, an increase of $2.8 billion or 8% – (Ex. BSB Bancorp, an increase of $713 million or 2%) Period-end deposit balances of $39.5 billion, an increase of $2.6 billion or 7% – (Ex. BSB Bancorp, an increase of $600
million or 2%) Non-interest income of $106 million, an increase of $12 million or 12% Non-interest expense (ex. merger-related expenses of $6.5 million) of $272 million, an increase of $10 million or 4% Efficiency ratio of 55.8%, an improvement of
150 basis points Net loan charge-offs of 0.05%, an improvement of 1 basis point (Comparisons versus first quarter 2019, unless noted otherwise)


Slide 3

Net Interest Income1 ($ in millions)
$332.8 $348.1 1 Net interest income on a fully taxable equivalent basis for 1Q 2019 and 2Q 2019 was $340.0 million and $355.4 million, respectively. +$15.3 or 5% Linked-Quarter Change $30.8 ($14.4) $2.1 ($1.8) ($1.4)


Slide 4

Net Interest Margin 3.20% 3.12% (8) bps
Linked-Quarter Change 6 bps (14 bps) 2 bps (1 bp) (1 bp)


Slide 5

Loans: Average Balances $38,229 ($ in
millions) $35,046 Linked-Quarter Change Linked-quarter change +$3.183 billion or 9% (Ex. BSB Bancorp Acquisition: +$490 million or 1%) $1,519 $735 $664 $153 $112


Slide 6

Deposits: Average Balances ($ in
millions) $39,211 $36,450 Linked-Quarter Change Linked-quarter change +$2.761 billion or 8% (Ex. BSB Bancorp Acquisition: +$713 million or 2%) $1,133 $898 $425 $305


Slide 7

Non-Interest Income ($ in millions)
$94.6 $106.3 +$11.7 or 12% Linked-Quarter Change $4.6 $2.4 $1.2 $0.6 $0.4 $4.3 ($1.8)


Slide 8

Non-Interest Expense ($ in millions)
$278.4 $277.2 Ex. Merger-Related Expenses: +$9.7 or 4% Linked-Quarter Change ($8.5) $5.9 $1.4 $1.3 $0.5 $0.6


Slide 9

Efficiency Ratio Quarterly
Trend


Slide 10

Asset Quality 1Non-performing assets
(excluding acquired non-performing loans) as a percentage of originated loans plus all REO and repossessed assets; acquired non-performing loans excluded as risk of loss has been considered by virtue of (i) our estimate of acquisition-date fair
value, (ii) the existence of an FDIC loss sharing agreement, and/or (iii) allowance for loan losses established subsequent to acquisition Notes: Source: SNL Financial Top 50 Banks represents the largest 50 banks by total assets in each respective
quarter. 2Ex. acquired loan charge-offs, PBCT’s charge-off ratio was 0.02%, 0.04%, 0.07%, 0.07% & 0.03% in 2Q 2019, 1Q 2019, 4Q 2018, 3Q 2018 & 2Q 2018, respectively PBCT Peer Group (Median) Top 50 Banks (Median) PBCT Peer Group
(Median) Top 50 Banks (Median) Non-Performing Assets / Loans & REO (%)1 Net Charge-offs / Average Loans2


Slide 11

Returns Return on Average Assets
Return on Average Tangible Common Equity Returns calculated on an operating basis 14.4% 1.03% 14.6% 1.06%


Slide 12

Capital Ratios Jun. 30, 2018 Sep.
30, 2018 Dec. 31, 2018 Mar. 31, 2019 Jun. 30, 2019 People’s United Financial, Inc. Tang. Com. Equity/Tang. Assets 7.3% 7.6% 7.6% 7.7% 7.7% Tier 1 Leverage 8.6% 8.7% 8.7% 8.8% 8.7% Common Equity Tier 1 10.0% 10.3% 10.3% 10.2% 10.0% Tier 1
Risk-Based 10.8% 11.1% 10.9% 10.8% 10.7% Total Risk-Based 12.5% 12.8% 12.5% 12.4% 12.0% People’s United Bank, N.A. Tier 1 Leverage 9.1% 9.2% 9.0% 9.0% 8.9% Common Equity Tier 1 11.4% 11.6% 11.4% 11.2% 10.9% Tier 1 Risk-Based 11.4% 11.6% 11.4%
11.2% 10.9% Total Risk-Based 13.4% 13.6% 13.2% 12.9% 12.4%


Slide 13

Announced in January April Update
Updated to include acquisition of BSB Bancorp; No change to People’s United stand-alone goals Update Excludes acquisition of United Financial Bancorp Loans1 (average & period-end) Growth range: 3% – 5% Growth range: 10% – 12% No Change
Deposits (average & period-end) Growth range: 3% – 5% Growth range: 10% – 12% No Change Net Interest Income Growth range: 10% – 12% Growth range: 13% – 15% Growth range: 11% – 13% Net Interest Margin 3.15% – 3.25% Assumed no change in the fed
funds rate 3.10% – 3.20% Assumed no change in the fed funds rate 3.05% – 3:15% Assumes two 25bp decreases in the fed funds rate Non-Interest Income (Operating) Growth range: 2% – 4% No Change No Change Non-Interest Expense2 (Operating) $1.040
billion – $1.060 billion $1.060 billion – $1.080 billion No Change Credit Maintain excellent credit quality Provision in the range of $35 million – $45 million No Change No Change Effective Tax Rate 20% – 22% No Change No Change Capital Maintain
strong capital levels Common equity tier 1 capital ratio in the range of 10.0% – 10.5% No Change No Change Full Year 2019 Goals 1 Excludes the transactional portion of the New York multifamily portfolio which is in runoff mode. 2 Assumes an increase
of approximately $12 million in expenses as a result of adopting the new lease accounting standard on January 1, 2019, which limits the type of lease origination costs eligible for deferral in the Company’s equipment financing businesses.


Slide 14

Appendix


Slide 15

Interest Rate Risk Profile 1Yield
curve twist pivot point is 18 month point on yield curve. Short End defined as overnight to 18 months. Long End defined as terms greater than 18 months. Immediate Parallel Shock Est. Change in NII Yield Curve Twist1 Est. Change in NII Jun. 30, 2019
Mar. 31, 2019 Net Interest Income (NII) Sensitivity


Slide 16

Loans By State $24,390 $26,592
$29,745 $32,575 $28,411 ($ in millions, end of period balances) State Breakdown $35,241 $38,557


Slide 17

Deposits By State $22,557 $26,138
$29,861 $33,056 $28,417 ($ in millions, end of period balances) State Breakdown $36,159 $39,467


Slide 18

Asset Quality Originated Portfolio
Coverage Detail as of June 30, 2019 Note – ALLLs: Commercial: $211 million, Retail: $29 million, Total: $240 million. ALLLs / Loans NPLs / Loans ALLLs / NPLs


Slide 19

Peer Group Firm Ticker City State 1
Associated Banc-Corp ASB Green Bay WI 2 BankUnited Inc. BKU Miami Lakes FL 3 Citizens Financial Group, Inc. CFG Providence RI 4 Comerica Inc. CMA Dallas TX 5 First Horizon National Corp. FHN Memphis TN 6 F.N.B. Corp. FNB Pittsburgh PA 7 Huntington
Bancshares, Inc. HBAN Columbus OH 8 KeyCorp KEY Cleveland OH 9 M&T Bank Corp. MTB Buffalo NY 10 New York Community Bancorp NYCB Westbury NY 11 Signature Bank SBNY New York NY 12 Sterling Bancorp STL Montebello NY 13 Valley National Bancorp VLY
Wayne NJ 14 Webster Financial Corp. WBS Waterbury CT 15 Zions Bancorp. ZION Salt Lake City UT


Slide 20

For more information, investors may
contact: Andrew S. Hersom (203) 338-4581 andrew.hersom@peoples.com





Source link