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16.01.2020 22:01:00
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People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share
BRIDGEPORT, Conn., Jan. 16, 2020 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the fourth quarter and full year 2019. These results along with comparison periods are summarized below:
($ in millions, except per common share data) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | ||||||||
Net income | $ 137.5 | $ 135.1 | $ 132.9 | $ 520.4 | $ 468.1 | |||||||
Net income available | 134.0 | 131.6 | 129.4 | 506.3 | 454.0 | |||||||
to common shareholders | ||||||||||||
Per common share | 0.31 | 0.33 | 0.35 | 1.27 | 1.29 | |||||||
Operating earnings1 | 158.8 | 135.5 | 134.2 | 552.1 | 461.4 | |||||||
Per common share | 0.37 | 0.34 | 0.36 | 1.39 | 1.31 | |||||||
Net interest income | $ 382.7 | $ 348.7 | $ 332.6 | $ 1,412.3 | $ 1,236.0 | |||||||
Net interest margin | 3.14% | 3.12% | 3.17% | 3.14% | 3.12% | |||||||
Non-interest income | 124.2 | 106.0 | 88.7 | 431.1 | 366.4 | |||||||
Operating non-interest income1 | 116.6 | 106.0 | 98.7 | 423.5 | 376.4 | |||||||
Non-interest expense | $ 325.7 | $ 281.4 | $ 262.7 | $ 1,162.7 | $ 996.1 | |||||||
Operating non-interest expense1 | 286.6 | 276.4 | 254.7 | 1,097.1 | 984.7 | |||||||
Efficiency ratio | 53.7% | 56.8% | 55.1% | 55.8% | 57.4% | |||||||
Average balances | ||||||||||||
Loans | $ 42,006 | $ 38,317 | $ 35,016 | $ 38,419 | $ 32,854 | |||||||
Deposits | 42,195 | 38,657 | 35,959 | 39,143 | 33,601 | |||||||
Period-end balances | ||||||||||||
Loans | 43,596 | 38,781 | 35,241 | |||||||||
Deposits | 43,590 | 38,574 | 36,159 | |||||||||
1See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||||||||||
"We are very pleased with the Company's financial and operating performance in 2019," said Jack Barnes, Chairman and Chief Executive Officer. "It was another noteworthy year for People's United as we acquired two banks and a specialty finance company, enhanced our suite of banking technology and further strengthened core capabilities. As a result, we continued to build the earnings power of the Company as evidenced by a 20 percent increase in full year operating earnings from a year ago and an operating return on average tangible common equity of 14.7 percent. In addition, operating earnings per common share of $1.39 increased for the tenth consecutive year. While we have almost tripled total assets to nearly $60 billion over the last ten years, we have remained true to our roots of delivering superior service at a local level, maintaining exceptional asset quality and supporting our communities. As we start a new decade already filled with economic and competitive uncertainties, we are confident our long-term approach to managing the business will enable us to generate value for customers and shareholders regardless of the operating environment. "
"We concluded 2019 with a strong financial performance as demonstrated by another record quarter of earnings," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Operating earnings of $158.8 million increased 17 percent linked-quarter and reflected the acquisition of United, improved net interest margin and positive operating leverage. The fourth quarter margin of 3.14 percent benefited from continued remixing of the loan portfolio, disciplined management of deposit costs and the net effect of purchase accounting adjustments related to the United transaction. Excluding these purchase accounting adjustments, the margin was 3.09 percent. On an organic basis, period-end loan balances were essentially flat compared to September 30th, while period-end deposits declined one percent. Commercial loan growth of $314 million was driven by solid results in commercial real estate, equipment finance and our specialized industry verticals within C&I. These increases were offset by a $343 million decline in retail loans mostly due to our planned reduction of residential mortgages as we continue to remix the balance sheet with a focus on higher yielding portfolios. The decline in period-end deposits of $287 million was primarily attributable to lower brokered deposit balances."
As of and for the Three Months Ended | |||||||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |||||
Asset Quality | |||||||
Net loan charge-offs | 0.06% | 0.06% | 0.09% | ||||
to average total loans | |||||||
Originated non-performing loans | 0.48% | 0.48% | 0.55% | ||||
as a percentage of originated loans | |||||||
Returns | |||||||
Return on average assets1 | 0.98% | 1.05% | 1.11% | ||||
Return on average tangible common equity1 | 12.8% | 14.0% | 14.9% | ||||
Capital Ratios | |||||||
People's United Financial, Inc. | |||||||
Tangible common equity / tangible assets | 8.0% | 7.8% | 7.6% | ||||
Tier 1 leverage | 9.2% | 8.7% | 8.7% | ||||
Common equity tier 1 | 10.2% | 10.1% | 10.3% | ||||
Tier 1 risk-based | 10.7% | 10.7% | 10.9% | ||||
Total risk-based | 12.0% | 12.0% | 12.5% | ||||
People's United Bank, N.A. | |||||||
Tier 1 leverage | 9.3% | 8.8% | 9.0% | ||||
Common equity tier 1 | 10.8% | 10.8% | 11.4% | ||||
Tier 1 risk-based | 10.8% | 10.8% | 11.4% | ||||
Total risk-based | 12.1% | 12.2% | 13.2% | ||||
1See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||||
The Board of Directors declared a $0.1775 per common share quarterly dividend payable February 15, 2020 to shareholders of record on February 1, 2020. Based on the closing stock price on January 15, 2020, 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 approximately $59 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.
4Q 2019 Financial Highlights
Summary
- Net income totaled $137.5 million, or $0.31 per common share.
- Net income available to common shareholders totaled $134.0 million.
- Operating earnings totaled $158.8 million, or $0.37 per common share (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- Net interest income totaled $382.7 million in 4Q19 compared to $348.7 million in 3Q19.
- Net interest margin increased two basis points from 3Q19 to 3.14% reflecting:
- Lower rates on deposits (increase of four basis points).
- Lower rates on borrowings (increase of two basis points).
- Lower yields on the loan portfolio (decrease of four basis points).
- Provision for loan losses totaled $7.3 million.
- Net loan charge-offs totaled $6.7 million.
- Net loan charge-off ratio of 0.06% in 4Q19.
- Non-interest income totaled $124.2 million in 4Q19 compared to $106.0 million in 3Q19.
- Customer interest rate swap income increased $3.3 million.
- Bank service charges increased $1.9 million.
- Commercial banking lending fees increased $1.1 million.
- Insurance revenue decreased $2.8 million.
- Included in other non-interest income is a $7.6 million net gain on the sale of branches (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- At December 31, 2019, assets under discretionary management totaled $9.2 billion.
- Non-interest expense totaled $325.7 million in 4Q19 compared to $281.4 million in 3Q19.
- Operating non-interest expense totaled $286.6 million in 4Q19 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- Compensation and benefits expense, excluding $7.5 million and $0.8 million of merger-related expenses in 4Q19 and 3Q19, respectively, increased $6.6 million, primarily reflecting additional employees resulting from the United Financial acquisition.
- Professional and outside services expense, excluding $5.6 million and $3.7 million of merger-related expenses in 4Q19 and 3Q19, respectively, increased $4.0 million.
- Regulatory assessment expense increased $2.0 million.
- Included in other non-interest expense in 4Q19 is a $16.5 million charge relating to the write-off of an intangible asset and $8.9 million of merger-related expenses (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- The efficiency ratio was 53.7% for 4Q19 compared to 56.8% for 3Q19 and 55.1% for 4Q18 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- The effective income tax rate was 21.0% for 4Q19 and 20.2% for the full-year 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.
Commercial Banking
- Commercial loans totaled $30.7 billion at December 31, 2019, an increase of $3.2 billion from September 30, 2019.
- Organic growth of $314 million.
- The equipment financing portfolio increased $175 million.
- The mortgage warehouse portfolio decreased $180 million.
- The New York multifamily portfolio decreased $55 million.
- Average commercial loans totaled $29.4 billion in 4Q19, an increase of $2.5 billion from 3Q19.
- The average equipment financing portfolio increased $144 million.
- The average mortgage warehouse portfolio increased $138 million.
- The average New York multifamily portfolio decreased $73 million.
- Commercial deposits totaled $16.6 billion at December 31, 2019 compared to $14.9 billion at September 30, 2019.
- The ratio of originated non-performing commercial loans to originated commercial loans was 0.44% at both December 31, 2019 and September 30, 2019.
- Non-performing commercial assets, excluding acquired non-performing loans, totaled $119.2 million at December 31, 2019 compared to $118.3 million at September 30, 2019.
- For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.89% at both December 31, 2019 and September 30, 2019.
- The originated commercial allowance for loan losses represented 201% of originated non-performing commercial loans at December 31, 2019 compared to 205% at September 30, 2019.
Retail Banking
- Residential mortgage loans totaled $10.3 billion at December 31, 2019, an increase of $1.0 billion from September 30, 2019.
- Average residential mortgage loans totaled $10.0 billion in 4Q19, an increase of $626 million from 3Q19.
- Home equity loans totaled $2.4 billion at December 31, 2019, an increase of $450 million from September 30, 2019.
- Average home equity loans totaled $2.3 billion in 4Q19, an increase of $279 million from 3Q19.
- Retail deposits totaled $27.0 billion at December 31, 2019 compared to $23.7 billion at September 30, 2019.
- The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.55% at both December 31, 2019 and September 30, 2019.
- The ratio of originated non-performing home equity loans to originated home equity loans was 0.78% at December 31, 2019 compared to 0.85% at September 30, 2019.
- For the originated retail loan portfolio, the allowance for loan losses as a percentage of loans was 0.35% at both December 31, 2019 and September 30, 2019.
- The originated retail allowance for loan losses represented 59% of originated non-performing retail loans at December 31, 2019 compared to 57% at September 30, 2019.
Conference Call
On January 16, 2020, 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 | |||||||||||
People's United Financial completed its acquisition of United Financial Bancorp, Inc. effective November 1, 2019. Accordingly, | |||||||||||
United Financial's results of operations are included beginning with the effective date, and prior period results have not been | |||||||||||
restated to include United Financial. | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions, except per common share data) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
Earnings Data: | |||||||||||
Net interest income (fully taxable equivalent) | $ | 390.3 | $ | 356.0 | $ | 355.4 | $ | 340.0 | $ | 339.5 | |
Net interest income | 382.7 | 348.7 | 348.1 | 332.8 | 332.6 | ||||||
Provision for loan losses | 7.3 | 7.8 | 7.6 | 5.6 | 9.9 | ||||||
Non-interest income (1) | 124.2 | 106.0 | 106.3 | 94.6 | 88.7 | ||||||
Non-interest expense (1) | 325.7 | 281.4 | 278.4 | 277.2 | 262.7 | ||||||
Income before income tax expense | 173.9 | 165.5 | 168.4 | 144.6 | 148.7 | ||||||
Net income | 137.5 | 135.1 | 133.2 | 114.6 | 132.9 | ||||||
Net income available to common shareholders (1) | 134.0 | 131.6 | 129.7 | 111.1 | 129.4 | ||||||
Selected Statistical Data: | |||||||||||
Net interest margin (2) | 3.14 | % | 3.12 | % | 3.12 | % | 3.20 | % | 3.17 | % | |
Return on average assets (1), (2) | 0.98 | 1.05 | 1.04 | 0.96 | 1.11 | ||||||
Return on average common equity (2) | 7.2 | 7.7 | 7.7 | 7.0 | 8.3 | ||||||
Return on average tangible common equity (1), (2) | 12.8 | 14.0 | 14.1 | 13.0 | 14.9 | ||||||
Efficiency ratio (1) | 53.7 | 56.8 | 55.8 | 57.3 | 55.1 | ||||||
Common Share Data: | |||||||||||
Earnings per common share: | |||||||||||
Basic | $ | 0.31 | $ | 0.34 | $ | 0.33 | $ | 0.30 | $ | 0.35 | |
Diluted (1) | 0.31 | 0.33 | 0.33 | 0.30 | 0.35 | ||||||
Dividends paid per common share | 0.1775 | 0.1775 | 0.1775 | 0.1750 | 0.1750 | ||||||
Common dividend payout ratio (1) | 52.2 | % | 53.1 | % | 53.8 | % | 58.6 | % | 50.3 | % | |
Book value per common share (end of period) | $ | 17.60 | $ | 17.54 | $ | 17.34 | $ | 17.13 | $ | 16.95 | |
Tangible book value per common share (end of period) (1) | 10.12 | 9.74 | 9.51 | 9.35 | 9.23 | ||||||
Stock price: | |||||||||||
High | 17.22 | 17.10 | 17.66 | 18.03 | 17.46 | ||||||
Low | 14.73 | 13.81 | 15.24 | 14.25 | 13.66 | ||||||
Close (end of period) | 16.90 | 15.64 | 16.78 | 16.44 | 14.43 | ||||||
Common shares (end of period) (in millions) | 437.74 | 392.57 | 392.24 | 372.18 | 371.02 | ||||||
Weighted average diluted common shares (in millions) | 424.98 | 394.45 | 394.57 | 374.09 | 372.83 | ||||||
(1) See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||||||||
(2) Annualized. | |||||||||||
People's United Financial, Inc. | ||||||
FINANCIAL HIGHLIGHTS | ||||||
People's United Financial completed its acquisition of United Financial Bancorp, Inc. effective November 1, 2019. | ||||||
Accordingly, United Financial's results of operations are included beginning with the effective date, and | ||||||
prior period results have not been restated to include United Financial. | ||||||
Twelve Months Ended | ||||||
December 31, | ||||||
(dollars in millions, except per common share data) | 2019 | 2018 | ||||
Earnings Data: | ||||||
Net interest income (fully taxable equivalent) | $ | 1,441.7 | $ | 1,262.4 | ||
Net interest income | 1,412.3 | 1,236.0 | ||||
Provision for loan losses | 28.3 | 30.0 | ||||
Non-interest income (1) | 431.1 | 366.4 | ||||
Non-interest expense (1) | 1,162.7 | 996.1 | ||||
Income before income tax expense | 652.4 | 576.3 | ||||
Net income | 520.4 | 468.1 | ||||
Net income available to common shareholders (1) | 506.3 | 454.0 | ||||
Selected Statistical Data: | ||||||
Net interest margin | 3.14 | % | 3.12 | % | ||
Return on average assets (1) | 1.01 | 1.04 | ||||
Return on average common equity | 7.4 | 7.8 | ||||
Return on average tangible common equity (1) | 13.4 | 14.3 | ||||
Efficiency ratio (1) | 55.8 | 57.4 | ||||
Common Share Data: | ||||||
Earnings per common share: | ||||||
Basic | $ | 1.28 | $ | 1.30 | ||
Diluted (1) | 1.27 | 1.29 | ||||
Dividends paid per common share | 0.7075 | 0.6975 | ||||
Common dividend payout ratio (1) | 54.3 | % | 53.7 | % | ||
Book value per common share (end of period) | $ | 17.60 | $ | 16.95 | ||
Tangible book value per common share (end of period) (1) | 10.12 | 9.23 | ||||
Stock price: | ||||||
High | 18.03 | 20.26 | ||||
Low | 13.81 | 13.66 | ||||
Close (end of period) | 16.90 | 14.43 | ||||
Common shares (end of period) (in millions) | 437.74 | 371.02 | ||||
Weighted average diluted common shares (in millions) | 397.15 | 351.66 | ||||
(1) See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||||
People's United Financial, Inc. | |||||||||||
FINANCIAL HIGHLIGHTS - Continued | |||||||||||
People's United Financial completed its acquisition of United Financial Bancorp, Inc. effective November 1, 2019. Accordingly, | |||||||||||
United Financial's results of operations are included beginning with the effective date, and prior period results have not been | |||||||||||
restated to include United Financial. | |||||||||||
As of and for the Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
Financial Condition Data: | |||||||||||
Total assets | $ | 58,590 | $ | 52,072 | $ | 51,622 | $ | 48,092 | $ | 47,877 | |
Loans | 43,596 | 38,781 | 38,557 | 35,515 | 35,241 | ||||||
Securities | 7,790 | 7,135 | 7,086 | 7,176 | 7,233 | ||||||
Short-term investments | 317 | 158 | 275 | 106 | 266 | ||||||
Allowance for loan losses | 247 | 246 | 244 | 241 | 240 | ||||||
Goodwill and other acquisition-related intangible assets | 3,275 | 3,065 | 3,073 | 2,897 | 2,866 | ||||||
Deposits | 43,590 | 38,574 | 39,467 | 36,901 | 36,159 | ||||||
Borrowings | 5,155 | 4,629 | 3,400 | 2,860 | 3,593 | ||||||
Notes and debentures | 993 | 916 | 912 | 902 | 896 | ||||||
Stockholders' equity | 7,947 | 7,131 | 7,046 | 6,621 | 6,534 | ||||||
Total risk-weighted assets (1): | |||||||||||
People's United Financial, Inc. | 45,243 | 39,779 | 39,026 | 36,466 | 35,910 | ||||||
People's United Bank, N.A. | 45,210 | 39,727 | 38,976 | 36,447 | 35,875 | ||||||
Non-performing assets (2) | 180 | 182 | 179 | 167 | 186 | ||||||
Net loan charge-offs | 6.7 | 5.8 | 4.5 | 5.1 | 7.5 | ||||||
Average Balances: | |||||||||||
Loans | $ | 42,006 | $ | 38,317 | $ | 38,229 | $ | 35,046 | $ | 35,016 | |
Securities (3) | 7,372 | 7,041 | 7,147 | 7,311 | 7,479 | ||||||
Short-term investments | 294 | 219 | 214 | 203 | 292 | ||||||
Total earning assets | 49,673 | 45,577 | 45,591 | 42,560 | 42,786 | ||||||
Total assets | 56,130 | 51,524 | 51,088 | 47,800 | 47,721 | ||||||
Deposits | 42,195 | 38,657 | 39,211 | 36,450 | 35,959 | ||||||
Borrowings | 4,146 | 3,855 | 3,146 | 2,937 | 3,456 | ||||||
Notes and debentures | 974 | 914 | 904 | 896 | 886 | ||||||
Total funding liabilities | 47,314 | 43,427 | 43,261 | 40,284 | 40,302 | ||||||
Stockholders' equity | 7,654 | 7,079 | 6,978 | 6,562 | 6,515 | ||||||
Ratios: | |||||||||||
Net loan charge-offs to average total loans (annualized) | 0.06 | % | 0.06 | % | 0.05 | % | 0.06 | % | 0.09 | % | |
Non-performing assets to originated loans, | |||||||||||
real estate owned and repossessed assets (2) | 0.55 | 0.56 | 0.56 | 0.54 | 0.61 | ||||||
Originated allowance for loan losses to: | |||||||||||
Originated loans (2) | 0.75 | 0.75 | 0.76 | 0.76 | 0.77 | ||||||
Originated non-performing loans (2) | 156.4 | 156.0 | 146.0 | 157.0 | 140.9 | ||||||
Average stockholders' equity to average total assets | 13.6 | 13.7 | 13.7 | 13.7 | 13.7 | ||||||
Stockholders' equity to total assets | 13.6 | 13.7 | 13.6 | 13.8 | 13.6 | ||||||
Tangible common equity to tangible assets (4) | 8.0 | 7.8 | 7.7 | 7.7 | 7.6 | ||||||
Total risk-based capital (1): | |||||||||||
People's United Financial, Inc. | 12.0 | 12.0 | 12.0 | 12.4 | 12.5 | ||||||
People's United Bank, N.A. | 12.1 | 12.2 | 12.4 | 12.9 | 13.2 | ||||||
(1) December 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 | ||||
Dec. 31, | Sept. 30, | June 30, | Dec. 31, | |
(in millions) | 2019 | 2019 | 2019 | 2018 |
Assets | ||||
Cash and due from banks | $ 484.2 | $ 635.2 | $ 505.9 | $ 665.7 |
Short-term investments | 316.8 | 157.8 | 274.8 | 266.3 |
Securities: | ||||
Trading debt securities, at fair value | 7.1 | 9.3 | 9.3 | 8.4 |
Equity securities, at fair value | 8.2 | 7.8 | 8.5 | 8.1 |
Debt securities available-for-sale, at fair value | 3,564.3 | 2,978.7 | 2,971.2 | 3,121.0 |
Debt securities held-to-maturity, at amortized cost | 3,869.2 | 3,805.4 | 3,807.5 | 3,792.3 |
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 341.1 | 334.0 | 289.4 | 303.4 |
Total securities | 7,789.9 | 7,135.2 | 7,085.9 | 7,233.2 |
Loans held-for-sale | 511.3 | 24.8 | 17.4 | 19.5 |
Loans: | ||||
Commercial real estate | 14,762.3 | 12,186.9 | 12,230.7 | 11,649.6 |
Commercial and industrial | 11,041.6 | 10,545.9 | 10,121.8 | 9,088.9 |
Equipment financing | 4,910.4 | 4,735.6 | 4,611.0 | 4,339.2 |
Total Commercial Portfolio | 30,714.3 | 27,468.4 | 26,963.5 | 25,077.7 |
Residential mortgage | 10,318.1 | 9,308.7 | 9,532.6 | 8,154.2 |
Home equity and other consumer | 2,563.7 | 2,004.3 | 2,060.6 | 2,009.5 |
Total Retail Portfolio | 12,881.8 | 11,313.0 | 11,593.2 | 10,163.7 |
Total loans | 43,596.1 | 38,781.4 | 38,556.7 | 35,241.4 |
Less allowance for loan losses | (246.6) | (246.0) | (244.0) | (240.4) |
Total loans, net | 43,349.5 | 38,535.4 | 38,312.7 | 35,001.0 |
Goodwill and other acquisition-related intangible assets | 3,274.6 | 3,064.9 | 3,072.9 | 2,865.7 |
Bank-owned life insurance | 705.0 | 505.6 | 504.4 | 467.0 |
Premises and equipment, net | 305.5 | 258.5 | 261.0 | 267.3 |
Other assets | 1,853.0 | 1,754.4 | 1,587.5 | 1,091.6 |
Total assets | $ 58,589.8 | $ 52,071.8 | $ 51,622.5 | $ 47,877.3 |
Liabilities | ||||
Deposits: | ||||
Non-interest-bearing | $ 9,803.7 | $ 9,129.3 | $ 8,747.2 | $ 8,543.0 |
Savings | 4,987.7 | 4,616.6 | 4,847.4 | 4,116.5 |
Interest-bearing checking and money market | 19,592.6 | 16,727.2 | 17,424.8 | 16,583.3 |
Time | 9,205.5 | 8,100.4 | 8,447.9 | 6,916.2 |
Total deposits | 43,589.5 | 38,573.5 | 39,467.3 | 36,159.0 |
Borrowings: | ||||
Federal Home Loan Bank advances | 3,125.4 | 2,948.5 | 2,054.4 | 2,404.5 |
Federal funds purchased | 1,620.0 | 1,365.0 | 1,110.0 | 845.0 |
Customer repurchase agreements | 409.1 | 315.6 | 235.2 | 332.9 |
Other borrowings | - | - | - | 11.0 |
Total borrowings | 5,154.5 | 4,629.1 | 3,399.6 | 3,593.4 |
Notes and debentures | 993.1 | 915.7 | 911.5 | 895.8 |
Other liabilities | 905.5 | 822.8 | 797.9 | 695.2 |
Total liabilities | 50,642.6 | 44,941.1 | 44,576.3 | 41,343.4 |
Stockholders' Equity | ||||
Preferred stock | 244.1 | 244.1 | 244.1 | 244.1 |
Common stock | 5.3 | 4.9 | 4.9 | 4.7 |
Additional paid-in capital | 7,639.4 | 6,901.5 | 6,890.7 | 6,549.3 |
Retained earnings | 1,512.8 | 1,449.3 | 1,388.1 | 1,284.8 |
Unallocated common stock of Employee Stock Ownership Plan, at cost | (122.9) | (124.7) | (126.5) | (130.1) |
Accumulated other comprehensive loss | (166.9) | (182.3) | (193.0) | (256.8) |
Treasury stock, at cost | (1,164.6) | (1,162.1) | (1,162.1) | (1,162.1) |
Total stockholders' equity | 7,947.2 | 7,130.7 | 7,046.2 | 6,533.9 |
Total liabilities and stockholders' equity | $ 58,589.8 | $ 52,071.8 | $ 51,622.5 | $ 47,877.3 |
People's United Financial, Inc. | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
Three Months Ended | ||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||
(in millions, except per common share data) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||
Interest and dividend income: | ||||||||||
Commercial real estate | $ 147.2 | $ 136.6 | $ 139.9 | $ 132.7 | $ 130.2 | |||||
Commercial and industrial | 114.9 | 113.4 | 111.4 | 103.9 | 100.1 | |||||
Equipment financing | 66.7 | 65.3 | 62.8 | 59.0 | 56.7 | |||||
Residential mortgage | 88.2 | 84.7 | 85.5 | 70.7 | 70.2 | |||||
Home equity and other consumer | 30.8 | 24.7 | 25.7 | 24.9 | 24.4 | |||||
Total interest on loans | 447.8 | 424.7 | 425.3 | 391.2 | 381.6 | |||||
Securities | 47.8 | 44.7 | 46.2 | 47.8 | 48.5 | |||||
Short-term investments | 1.0 | 1.3 | 1.2 | 1.3 | 1.4 | |||||
Loans held-for-sale | 0.3 | 0.2 | 0.1 | 0.2 | 0.3 | |||||
Total interest and dividend income | 496.9 | 470.9 | 472.8 | 440.5 | 431.8 | |||||
Interest expense: | ||||||||||
Deposits | 86.9 | 92.2 | 96.6 | 81.2 | 70.6 | |||||
Borrowings | 18.5 | 21.5 | 19.3 | 17.7 | 20.0 | |||||
Notes and debentures | 8.8 | 8.5 | 8.8 | 8.8 | 8.6 | |||||
Total interest expense | 114.2 | 122.2 | 124.7 | 107.7 | 99.2 | |||||
Net interest income | 382.7 | 348.7 | 348.1 | 332.8 | 332.6 | |||||
Provision for loan losses | 7.3 | 7.8 | 7.6 | 5.6 | 9.9 | |||||
Net interest income after provision for loan losses | 375.4 | 340.9 | 340.5 | 327.2 | 322.7 | |||||
Non-interest income: | ||||||||||
Bank service charges | 28.9 | 27.0 | 26.4 | 25.2 | 26.9 | |||||
Investment management fees | 16.7 | 17.3 | 17.1 | 16.5 | 16.4 | |||||
Commercial banking lending fees | 12.9 | 11.8 | 10.2 | 7.8 | 9.6 | |||||
Operating lease income | 12.8 | 13.0 | 12.7 | 12.7 | 12.0 | |||||
Customer interest rate swap income, net | 8.9 | 5.6 | 7.6 | 3.0 | 6.3 | |||||
Insurance revenue | 7.5 | 10.3 | 8.7 | 10.5 | 6.7 | |||||
Cash management fees | 7.1 | 7.3 | 7.2 | 6.8 | 6.6 | |||||
Brokerage commissions | 2.6 | 2.6 | 2.6 | 2.8 | 3.3 | |||||
Net security gains (losses) (1) | 0.1 | - | 0.1 | - | (10.0) | |||||
Other non-interest income (1) | 26.7 | 11.1 | 13.7 | 9.3 | 10.9 | |||||
Total non-interest income | 124.2 | 106.0 | 106.3 | 94.6 | 88.7 | |||||
Non-interest expense: | ||||||||||
Compensation and benefits | 171.4 | 158.1 | 161.3 | 155.4 | 151.5 | |||||
Occupancy and equipment | 52.2 | 45.0 | 44.4 | 44.3 | 44.6 | |||||
Professional and outside services | 29.6 | 23.7 | 24.9 | 20.0 | 21.4 | |||||
Amortization of other acquisition-related intangible assets | 9.8 | 8.0 | 8.0 | 6.7 | 6.9 | |||||
Operating lease expense | 9.6 | 9.9 | 9.9 | 9.4 | 9.8 | |||||
Regulatory assessments | 7.3 | 5.3 | 6.5 | 7.0 | 7.4 | |||||
Other non-interest expense | 45.8 | 31.4 | 23.4 | 34.4 | 21.1 | |||||
Total non-interest expense (1) | 325.7 | 281.4 | 278.4 | 277.2 | 262.7 | |||||
Income before income tax expense | 173.9 | 165.5 | 168.4 | 144.6 | 148.7 | |||||
Income tax expense (1) | 36.4 | 30.4 | 35.2 | 30.0 | 15.8 | |||||
Net income | 137.5 | 135.1 | 133.2 | 114.6 | 132.9 | |||||
Preferred stock dividend | 3.5 | 3.5 | 3.5 | 3.5 | 3.5 | |||||
Net income available to common shareholders | $ 134.0 | $ 131.6 | $ 129.7 | $ 111.1 | $ 129.4 | |||||
Earnings per common share: | ||||||||||
Basic | $ 0.31 | $ 0.34 | $ 0.33 | $ 0.30 | $ 0.35 | |||||
Diluted | 0.31 | 0.33 | 0.33 | 0.30 | 0.35 | |||||
(1) Includes $10.0 million of security losses for the three months ended December 31, 2018, which are considered | ||||||||||
non-operating, incurred in response to a tax reform-related benefit recognized in the period. Other non-interest income | ||||||||||
includes $7.6 million of non-operating income for the three months ended December 31, 2019. Total non-interest expense | ||||||||||
includes $39.1 million, $5.0 million, $6.5 million, $15.0 million and $8.0 million of non-operating expenses for the three | ||||||||||
months ended December, 31 2019, September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018, respectively. | ||||||||||
Income tax expense for the three months ended December 31, 2018 includes a $9.2 million benefit recognized in connection | ||||||||||
with tax reform, which is considered non-operating. See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||||||||
People's United Financial, Inc. | |||||
CONSOLIDATED STATEMENTS OF INCOME | |||||
Twelve Months Ended | |||||
December 31, | |||||
(in millions, except per common share data) | 2019 | 2018 | |||
Interest and dividend income: | |||||
Commercial real estate | $ 556.4 | $ 463.4 | |||
Commercial and industrial | 443.6 | 365.7 | |||
Equipment financing | 253.8 | 212.3 | |||
Residential mortgage | 329.1 | 236.2 | |||
Home equity and other consumer | 106.1 | 88.6 | |||
Total interest on loans | 1,689.0 | 1,366.2 | |||
Securities | 186.5 | 184.2 | |||
Short-term investments | 4.8 | 5.0 | |||
Loans held for sale | 0.8 | 0.9 | |||
Total interest and dividend income | 1,881.1 | 1,556.3 | |||
Interest expense: | |||||
Deposits | 356.9 | 216.1 | |||
Borrowings | 77.0 | 70.9 | |||
Notes and debentures | 34.9 | 33.3 | |||
Total interest expense | 468.8 | 320.3 | |||
Net interest income | 1,412.3 | 1,236.0 | |||
Provision for loan losses | 28.3 | 30.0 | |||
Net interest income after provision for loan losses | 1,384.0 | 1,206.0 | |||
Non-interest income: | |||||
Bank service charges | 107.5 | 99.9 | |||
Investment management fees | 67.6 | 68.7 | |||
Operating lease income | 51.2 | 44.9 | |||
Commercial banking lending fees | 42.7 | 37.3 | |||
Insurance revenue | 37.0 | 34.6 | |||
Cash management fees | 28.4 | 27.1 | |||
Customer interest rate swap income, net | 25.1 | 14.6 | |||
Brokerage commissions | 10.6 | 12.8 | |||
Net security gains (losses) (1) | 0.2 | (9.8) | |||
Other non-interest income (1) | 60.8 | 36.3 | |||
Total non-interest income | 431.1 | 366.4 | |||
Non-interest expense: | |||||
Compensation and benefits | 646.2 | 562.9 | |||
Occupancy and equipment | 185.9 | 168.2 | |||
Professional and outside services | 98.2 | 77.6 | |||
Operating lease expense | 38.8 | 36.4 | |||
Amortization of other acquisition-related intangible assets | 32.5 | 21.8 | |||
Regulatory assessments | 26.1 | 37.9 | |||
Other non-interest expense | 135.0 | 91.3 | |||
Total non-interest expense (1) | 1,162.7 | 996.1 | |||
Income before income tax expense | 652.4 | 576.3 | |||
Income tax expense (1) | 132.0 | 108.2 | |||
Net income | 520.4 | 468.1 | |||
Preferred stock dividend | 14.1 | 14.1 | |||
Net income available to common shareholders | $ 506.3 | $ 454.0 | |||
Earnings per common share: | |||||
Basic | $ 1.28 | $ 1.30 | |||
Diluted | 1.27 | 1.29 | |||
(1) Includes $10.0 million of security losses for the twelve months ended December 31, 2018, which are considered | |||||
non-operating, incurred in response to a tax reform-related benefit recognized in the period. Other non-interest | |||||
income includes $7.6 million of non-operating income for the twelve months ended December 31, 2019. Total | |||||
non-interest expense includes $65.6 million and $11.4 million of non-operating expenses for the twelve months | |||||
ended December 31, 2019 and 2018, respectively. Income tax expense for the twelve months ended | |||||
December 31, 2018 includes a $9.2 million benefit recognized in connection with tax reform, which is considered | |||||
non-operating. See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||
People's United Financial, Inc. | |||||||||||
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) | |||||||||||
December 31, 2019 | September 30, 2019 | December 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 | $ 294.4 | $ 1.0 | 1.39% | $ 218.7 | $ 1.3 | 2.33% | $ 291.6 | $ 1.4 | 2.02% | ||
Securities (2) | 7,372.2 | 52.6 | 2.85 | 7,041.3 | 49.4 | 2.80 | 7,478.7 | 52.9 | 2.83 | ||
Loans: | |||||||||||
Commercial real estate | 13,793.2 | 147.2 | 4.27 | 12,194.8 | 136.6 | 4.48 | 11,688.1 | 130.2 | 4.45 | ||
Commercial and industrial | 10,805.1 | 117.7 | 4.36 | 10,059.2 | 116.0 | 4.61 | 8,880.3 | 102.6 | 4.62 | ||
Equipment financing | 4,785.0 | 66.7 | 5.58 | 4,640.6 | 65.3 | 5.63 | 4,243.2 | 56.7 | 5.34 | ||
Residential mortgage | 10,019.0 | 88.5 | 3.53 | 9,392.7 | 84.9 | 3.62 | 8,165.4 | 70.5 | 3.46 | ||
Home equity and other consumer | 2,603.8 | 30.8 | 4.72 | 2,029.2 | 24.7 | 4.88 | 2,038.5 | 24.4 | 4.80 | ||
Total loans | 42,006.1 | 450.9 | 4.29 | 38,316.5 | 427.5 | 4.46 | 35,015.5 | 384.4 | 4.39 | ||
Total earning assets | 49,672.7 | $ 504.5 | 4.06% | 45,576.5 | $ 478.2 | 4.20% | 42,785.8 | $ 438.7 | 4.10% | ||
Other assets | 6,457.2 | 5,947.8 | 4,935.3 | ||||||||
Total assets | $ 56,129.9 | $ 51,524.3 | $ 47,721.1 | ||||||||
Liabilities and stockholders' equity: | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ 9,593.6 | $ - | - % | $ 8,777.3 | $ - | - % | $ 8,576.4 | $ - | - % | ||
Savings, interest-bearing checking | |||||||||||
and money market | 23,674.3 | 49.7 | 0.84 | 21,758.5 | 53.4 | 0.98 | 20,621.7 | 41.7 | 0.81 | ||
Time | 8,926.8 | 37.2 | 1.67 | 8,121.6 | 38.8 | 1.91 | 6,761.1 | 28.9 | 1.71 | ||
Total deposits | 42,194.7 | 86.9 | 0.82 | 38,657.4 | 92.2 | 0.95 | 35,959.2 | 70.6 | 0.79 | ||
Borrowings: | |||||||||||
Federal Home Loan Bank advances | 2,287.7 | 11.4 | 1.99 | 2,363.0 | 14.1 | 2.39 | 2,371.9 | 14.9 | 2.51 | ||
Federal funds purchased | 1,489.3 | 6.4 | 1.73 | 1,202.3 | 6.8 | 2.26 | 761.4 | 4.5 | 2.38 | ||
Customer repurchase agreements | 369.2 | 0.7 | 0.73 | 290.1 | 0.6 | 0.86 | 285.1 | 0.4 | 0.56 | ||
Other borrowings | - | - | - | - | - | - | 37.5 | 0.2 | 2.26 | ||
Total borrowings | 4,146.2 | 18.5 | 1.78 | 3,855.4 | 21.5 | 2.23 | 3,455.9 | 20.0 | 2.32 | ||
Notes and debentures | 973.5 | 8.8 | 3.61 | 913.8 | 8.5 | 3.73 | 886.4 | 8.6 | 3.90 | ||
Total funding liabilities | 47,314.4 | $ 114.2 | 0.96% | 43,426.6 | $ 122.2 | 1.13% | 40,301.5 | $ 99.2 | 0.99% | ||
Other liabilities | 1,161.3 | 1,019.1 | 904.2 | ||||||||
Total liabilities | 48,475.7 | 44,445.7 | 41,205.7 | ||||||||
Stockholders' equity | 7,654.2 | 7,078.6 | 6,515.4 | ||||||||
Total liabilities and | |||||||||||
stockholders' equity | $ 56,129.9 | $ 51,524.3 | $ 47,721.1 | ||||||||
Net interest income/spread (3) | $ 390.3 | 3.10% | $ 356.0 | 3.07% | $ 339.5 | 3.11% | |||||
Net interest margin | 3.14% | 3.12% | 3.17% | ||||||||
(1) Average yields earned and rates paid are annualized. | |||||||||||
(1) Average balances and yields for securities are based on amortized cost. | |||||||||||
(2) The fully taxable equivalent adjustment was $7.6 million, $7.3 million and $6.9 million for the three months ended | |||||||||||
December 31, 2019, September 30, 2019 and December 31, 2018, respectively. | |||||||||||
People's United Financial, Inc. | ||||||||
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Twelve months ended | Average | Yield/ | Average | Yield/ | ||||
(dollars in millions) | Balance | Interest | Rate | Balance | Interest | Rate | ||
Assets: | ||||||||
Short-term investments | $ 232.7 | $ 4.8 | 2.06% | $ 278.9 | $ 5.0 | 1.81% | ||
Securities (1) | 7,217.5 | 205.2 | 2.84 | 7,343.7 | 200.9 | 2.74 | ||
Loans: | ||||||||
Commercial real estate | 12,480.1 | 556.4 | 4.46 | 11,017.7 | 463.4 | 4.21 | ||
Commercial and industrial | 9,874.7 | 454.3 | 4.60 | 8,611.7 | 375.4 | 4.36 | ||
Equipment financing | 4,574.9 | 253.8 | 5.55 | 4,040.8 | 212.3 | 5.25 | ||
Residential mortgage | 9,314.8 | 329.9 | 3.54 | 7,188.6 | 237.1 | 3.30 | ||
Home equity and other consumer | 2,174.0 | 106.1 | 4.88 | 1,995.6 | 88.6 | 4.44 | ||
Total loans | 38,418.5 | 1,700.5 | 4.43 | 32,854.4 | 1,376.8 | 4.19 | ||
Total earning assets | 45,868.7 | $ 1,910.5 | 4.17% | 40,477.0 | $ 1,582.7 | 3.91% | ||
Other assets | 5,789.3 | 4,552.7 | ||||||
Total assets | $ 51,658.0 | $ 45,029.7 | ||||||
Liabilities and stockholders' equity: | ||||||||
Deposits: | ||||||||
Non-interest-bearing | $ 8,822.9 | $ - | - % | $ 8,069.8 | $ - | - % | ||
Savings, interest-bearing checking | ||||||||
and money market | 22,204.1 | 209.3 | 0.94 | 19,630.1 | 127.4 | 0.65 | ||
Time | 8,115.7 | 147.6 | 1.82 | 5,901.4 | 88.7 | 1.50 | ||
Total deposits | 39,142.7 | 356.9 | 0.91 | 33,601.3 | 216.1 | 0.64 | ||
Borrowings: | ||||||||
Federal Home Loan Bank advances | 2,098.0 | 50.1 | 2.39 | 2,653.6 | 54.5 | 2.05 | ||
Federal funds purchased | 1,127.5 | 24.6 | 2.18 | 682.2 | 13.6 | 2.00 | ||
Customer repurchase agreements | 296.6 | 2.2 | 0.75 | 252.7 | 1.0 | 0.40 | ||
Other borrowings | 3.3 | 0.1 | 1.87 | 104.5 | 1.8 | 1.66 | ||
Total borrowings | 3,525.4 | 77.0 | 2.18 | 3,693.0 | 70.9 | 1.92 | ||
Notes and debentures | 922.1 | 34.9 | 3.78 | 889.8 | 33.3 | 3.75 | ||
Total funding liabilities | 43,590.2 | $ 468.8 | 1.08% | 38,184.1 | $ 320.3 | 0.84% | ||
Other liabilities | 996.5 | 808.4 | ||||||
Total liabilities | 44,586.7 | 38,992.5 | ||||||
Stockholders' equity | 7,071.3 | 6,037.2 | ||||||
Total liabilities and | ||||||||
stockholders' equity | $ 51,658.0 | $ 45,029.7 | ||||||
Net interest income/spread (2) | $ 1,441.7 | 3.09% | $ 1,262.4 | 3.07% | ||||
Net interest margin | 3.14% | 3.12% | ||||||
(2) Average balances and yields for securities are based on amortized cost. | ||||||||
(3) The fully taxable equivalent adjustment was $29.4 million and $26.4 million for the twelve months ended | ||||||||
December 31, 2019 and 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 | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
Originated non-performing loans: | |||||||||||
Commercial: | |||||||||||
Commercial real estate | $ | 29.8 | $ | 25.1 | $ | 23.2 | $ | 33.6 | $ | 33.5 | |
Commercial and industrial | 32.1 | 37.7 | 45.4 | 30.3 | 38.0 | ||||||
Equipment financing | 46.2 | 41.5 | 42.7 | 37.5 | 42.0 | ||||||
Total | 108.1 | 104.3 | 111.3 | 101.4 | 113.5 | ||||||
Retail: | |||||||||||
Residential mortgage | 36.3 | 36.6 | 38.4 | 35.4 | 38.9 | ||||||
Home equity | 12.6 | 14.3 | 14.7 | 14.1 | 15.3 | ||||||
Other consumer | - | 0.1 | - | - | - | ||||||
Total | 48.9 | 51.0 | 53.1 | 49.5 | 54.2 | ||||||
Total originated non-performing loans (1) | 157.0 | 155.3 | 164.4 | 150.9 | 167.7 | ||||||
REO: | |||||||||||
Residential | 11.9 | 12.3 | 8.1 | 6.9 | 5.5 | ||||||
Commercial | 7.3 | 7.7 | 0.6 | 4.1 | 8.7 | ||||||
Total REO | 19.2 | 20.0 | 8.7 | 11.0 | 14.2 | ||||||
Repossessed assets | 4.2 | 6.3 | 5.7 | 5.6 | 3.9 | ||||||
Total non-performing assets | $ | 180.4 | $ | 181.6 | $ | 178.8 | $ | 167.5 | $ | 185.8 | |
Acquired non-performing loans (contractual amount) | $ | 67.1 | $ | 21.1 | $ | 34.1 | $ | 42.6 | $ | 50.1 | |
Originated non-performing loans as a percentage | |||||||||||
of originated loans | 0.48 | % | 0.48 | % | 0.52 | % | 0.49 | % | 0.55 | % | |
Non-performing assets as a percentage of: | |||||||||||
Originated loans, REO and repossessed assets | 0.55 | 0.56 | 0.56 | 0.54 | 0.61 | ||||||
Tangible stockholders' equity and originated | |||||||||||
allowance for loan losses | 3.67 | 4.21 | 4.24 | 4.23 | 4.76 | ||||||
(1) Reported net of government guarantees totaling $1.3 million at December 31, 2019, $1.4 million at September 30, 2019, | |||||||||||
$1.6 million at June 30, 2019, $1.4 million at March 31, 2019 and $1.9 million at December 31, 2018. | |||||||||||
People's United Financial, Inc. | |||||||||||
PROVISION AND ALLOWANCE FOR LOAN LOSSES | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
Allowance for loan losses on originated loans: | |||||||||||
Balance at beginning of period | $ | 242.3 | $ | 240.1 | $ | 236.9 | $ | 236.3 | $ | 233.9 | |
Charge-offs | (7.2) | (6.8) | (4.4) | (5.6) | (7.3) | ||||||
Recoveries | 1.6 | 2.1 | 2.2 | 2.2 | 1.3 | ||||||
Net loan charge-offs | (5.6) | (4.7) | (2.2) | (3.4) | (6.0) | ||||||
Provision for loan losses | 8.8 | 6.9 | 5.4 | 4.0 | 8.4 | ||||||
Balance at end of period | 245.5 | 242.3 | 240.1 | 236.9 | 236.3 | ||||||
Allowance for loan losses on acquired loans: | |||||||||||
Balance at beginning of period | 3.7 | 3.9 | 4.0 | 4.1 | 4.1 | ||||||
Charge-offs | (1.3) | (1.4) | (2.9) | (1.9) | (1.8) | ||||||
Recoveries | 0.2 | 0.3 | 0.6 | 0.2 | 0.3 | ||||||
Net loan charge-offs | (1.1) | (1.1) | (2.3) | (1.7) | (1.5) | ||||||
Provision for loan losses | (1.5) | 0.9 | 2.2 | 1.6 | 1.5 | ||||||
Balance at end of period | 1.1 | 3.7 | 3.9 | 4.0 | 4.1 | ||||||
Total allowance for loan losses | $ | 246.6 | $ | 246.0 | $ | 244.0 | $ | 240.9 | $ | 240.4 | |
Originated commercial allowance for loan losses | |||||||||||
as a percentage of originated commercial loans | 0.89 | % | 0.89 | % | 0.91 | % | 0.91 | % | 0.93 | % | |
Originated retail allowance for loan losses | |||||||||||
as a percentage of originated retail loans | 0.35 | 0.35 | 0.34 | 0.37 | 0.36 | ||||||
Total originated allowance for loan losses | |||||||||||
as a percentage of: | |||||||||||
Originated loans | 0.75 | 0.75 | 0.76 | 0.76 | 0.77 | ||||||
Originated non-performing loans | 156.4 | 156.0 | 146.0 | 157.0 | 140.9 | ||||||
NET LOAN CHARGE-OFFS (RECOVERIES) | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
Commercial: | |||||||||||
Commercial real estate | $ | (0.1) | $ | (0.2) | $ | 0.1 | $ | 1.1 | $ | 1.4 | |
Commercial and industrial | 2.3 | 1.6 | 0.2 | 1.7 | 1.4 | ||||||
Equipment financing | 4.2 | 4.2 | 3.9 | 2.2 | 4.4 | ||||||
Total | 6.4 | 5.6 | 4.2 | 5.0 | 7.2 | ||||||
Retail: | |||||||||||
Residential mortgage | (0.2) | - | 0.1 | 0.1 | - | ||||||
Home equity | 0.3 | - | - | (0.2) | 0.1 | ||||||
Other consumer | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | ||||||
Total | 0.3 | 0.2 | 0.3 | 0.1 | 0.3 | ||||||
Total net loan charge-offs | $ | 6.7 | $ | 5.8 | $ | 4.5 | $ | 5.1 | $ | 7.5 | |
Net loan charge-offs to | |||||||||||
average total loans (annualized) | 0.06 | % | 0.06 | % | 0.05 | % | 0.06 | % | 0.09 | % | |
People's United Financial, Inc. | ||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP | ||||||||||||
In addition to evaluating People's United Financial Inc. ("People's United") results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible common equity ratios, tangible book value per common share and operating earnings metrics. Management believes these non-GAAP financial measures provide information useful to investors in understanding People's United's underlying operating performance and trends, and facilitates comparisons with the performance of other financial institutions. Further, the efficiency ratio and operating earnings metrics are used by management in its assessment of financial performance, including non-interest expense control, while the tangible common equity ratio and tangible book value per common share are used to analyze the relative strength of People's United's capital position. | ||||||||||||
The efficiency ratio, which represents an approximate measure of the cost required by People's United to generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding operating lease expense, goodwill impairment charges, amortization of other acquisition-related intangible assets, losses on real estate assets and non-recurring expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent ("FTE") basis plus total non-interest income (including the FTE adjustment on bank-owned life insurance ("BOLI") income, the netting of operating lease expense and excluding gains and losses on sales of assets other than residential mortgage loans and acquired loans, and non-recurring income) (the denominator). People's United generally considers an item of income or expense to be non-recurring if it is not similar to an item of income or expense of a type incurred within the last two years and is not similar to an item of income or expense of a type reasonably expected to be incurred within the following two years. | ||||||||||||
Operating earnings exclude from net income available to common shareholders those items that management considers to be of such a non-recurring or infrequent nature that, by excluding such items (net of income taxes), People's United's results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating earnings, which include, but are not limited to: (i) non-recurring gains/losses; (ii) merger-related expenses, including acquisition integration and other costs; (iii) writedowns of banking house assets and related lease termination costs; (iv) severance-related costs; and (v) charges related to executive-level management separation costs, are generally also excluded when calculating the efficiency ratio. Operating earnings per common share ("EPS") is derived by determining the per common share impact of the respective adjustments to arrive at operating earnings and adding (subtracting) such amounts to (from) diluted EPS, as reported. Operating return on average assets is calculated by dividing operating earnings (annualized) by average total assets. Operating return on average tangible common equity is calculated by dividing operating earnings (annualized) by average tangible common equity. The operating common dividend payout ratio is calculated by dividing common dividends paid by operating earnings for the respective period. | ||||||||||||
The tangible common equity ratio is the ratio of (i) tangible common equity (total stockholders' equity less preferred stock, goodwill and other acquisition-related intangible assets) (the numerator) to (ii) tangible assets (total assets less goodwill and other acquisition-related intangible assets) (the denominator). Tangible book value per common share is calculated by dividing tangible common equity by common shares (total common shares issued, less common shares classified as treasury shares and unallocated Employee Stock Ownership Plan ("ESOP") common shares). | ||||||||||||
In light of diversity in presentation among financial institutions, the methodologies used by People's United for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions. | ||||||||||||
People's United Financial, Inc. | |||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued | |||||||||||||||
OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||
Total non-interest expense | $ 325.7 | $ 281.4 | $ 278.4 | $ 277.2 | $ 262.7 | $ 1,162.7 | $ 996.1 | ||||||||
Adjustments to arrive at operating | |||||||||||||||
non-interest expense: | |||||||||||||||
Merger-related expenses | (22.6) | (5.0) | (6.5) | (15.0) | (8.0) | (49.1) | (11.4) | ||||||||
Intangible asset write off | (16.5) | - | - | - | - | (16.5) | - | ||||||||
Total | (39.1) | (5.0) | (6.5) | (15.0) | (8.0) | (65.6) | (11.4) | ||||||||
Operating non-interest expense | 286.6 | 276.4 | 271.9 | 262.2 | 254.7 | 1,097.1 | 984.7 | ||||||||
Operating lease expense | (9.6) | (9.9) | (9.9) | (9.4) | (9.8) | (38.8) | (36.4) | ||||||||
Amortization of other acquisition-related | |||||||||||||||
intangible assets | (9.8) | (8.0) | (8.0) | (6.7) | (6.9) | (32.5) | (21.8) | ||||||||
Other (1) | (1.6) | (1.4) | (1.4) | (1.8) | (1.6) | (6.2) | (6.4) | ||||||||
Total non-interest expense for | |||||||||||||||
efficiency ratio | $ 265.6 | $ 257.1 | $ 252.6 | $ 244.3 | $ 236.4 | $ 1,019.6 | $ 920.1 | ||||||||
Net interest income (FTE basis) | $ 390.3 | $ 356.0 | $ 355.4 | $ 340.0 | $ 339.5 | $ 1,441.7 | $ 1,262.4 | ||||||||
Total non-interest income | 124.2 | 106.0 | 106.3 | 94.6 | 88.7 | 431.1 | 366.4 | ||||||||
Total revenues | 514.5 | 462.0 | 461.7 | 434.6 | 428.2 | 1,872.8 | 1,628.8 | ||||||||
Adjustments: | |||||||||||||||
Operating lease expense | (9.6) | (9.9) | (9.9) | (9.4) | (9.8) | (38.8) | (36.4) | ||||||||
Gain on sale of branches, net of expenses | (7.6) | - | - | - | - | (7.6) | - | ||||||||
BOLI FTE adjustment | 0.7 | 0.5 | 0.7 | 0.6 | 0.5 | 2.5 | 9.8 | ||||||||
Net security (gains) losses | (0.1) | - | (0.1) | - | 10.0 | (0.2) | 1.9 | ||||||||
Other (2) | (3.2) | 0.1 | - | 0.3 | - | (2.8) | - | ||||||||
Total revenues for efficiency ratio | $ 494.7 | $ 452.7 | $ 452.4 | $ 426.1 | $ 428.9 | $ 1,825.9 | $ 1,604.1 | ||||||||
Efficiency ratio | 53.7% | 56.8% | 55.8% | 57.3% | 55.1% | 55.8% | 57.4% | ||||||||
(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) added to total revenues for purposes of calculating the efficiency ratio include, | |||||||||||||||
as applicable, asset write-offs and gains/losses 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 | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions, except per common share data) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 (3) | 2018 | |||||||
Net income available to common shareholders | $ 134.0 | $ 131.6 | $ 129.7 | $ 111.1 | $ 129.4 | $ 506.3 | $ 454.0 | |||||||
Adjustments to arrive at operating earnings: | ||||||||||||||
Gain on sale of branches, net of expenses | (7.6) | - | - | - | - | (7.6) | - | |||||||
Merger-related expenses | 22.6 | 5.0 | 6.5 | 15.0 | 8.0 | 49.1 | 11.4 | |||||||
Intangible asset write off | 16.5 | - | - | - | - | 16.5 | - | |||||||
Security losses associated with tax reform (1) | - | - | - | - | 10.0 | - | 10.0 | |||||||
Total pre-tax adjustments | 31.5 | 5.0 | 6.5 | 15.0 | 18.0 | 58.0 | 21.4 | |||||||
Tax effect (2) | (6.7) | (1.1) | (1.4) | (3.1) | (13.2) | (12.2) | (14.0) | |||||||
Total adjustments, net of tax | 24.8 | 3.9 | 5.1 | 11.9 | 4.8 | 45.8 | 7.4 | |||||||
Operating earnings | $ 158.8 | $ 135.5 | $ 134.8 | $ 123.0 | $ 134.2 | $ 552.1 | $ 461.4 | |||||||
Diluted EPS, as reported | $ 0.31 | $ 0.33 | $ 0.33 | $ 0.30 | $ 0.35 | $ 1.27 | $ 1.29 | |||||||
Adjustments to arrive at operating EPS: | ||||||||||||||
Gain on sale of branches, net of expenses | (0.01) | - | - | - | - | (0.01) | - | |||||||
Merger-related expenses | 0.04 | 0.01 | 0.01 | 0.03 | 0.01 | 0.10 | 0.02 | |||||||
Intangible asset write off | 0.03 | - | - | - | - | 0.03 | - | |||||||
Security losses associated with tax reform | - | - | - | - | 0.02 | - | 0.02 | |||||||
Tax benefit associated with tax reform | - | - | - | - | (0.02) | - | (0.02) | |||||||
Total adjustments per common share | 0.06 | 0.01 | 0.01 | 0.03 | 0.01 | 0.12 | 0.02 | |||||||
Operating EPS | $ 0.37 | $ 0.34 | $ 0.34 | $ 0.33 | $ 0.36 | $ 1.39 | $ 1.31 | |||||||
Average total assets | $ 56,130 | $ 51,524 | $ 51,088 | $ 47,800 | $ 47,721 | $ 51,658 | $ 45,030 | |||||||
Operating return on | ||||||||||||||
average assets (annualized) | 1.13% | 1.05% | 1.06% | 1.03% | 1.12% | 1.07% | 1.02% | |||||||
(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 and twelve months ended December 31, 2018. | ||||||||||||||
(3) The sum of the quarterly amounts for certain line items do not equal the full-year amount due to rounding. | ||||||||||||||
OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||
Operating earnings | $ 158.8 | $ 135.5 | $ 134.8 | $ 123.0 | $ 134.2 | $ 552.1 | $ 461.4 | |||||||
Average stockholders' equity | $ 7,654 | $ 7,079 | $ 6,978 | $ 6,562 | $ 6,515 | $ 7,071 | $ 6,037 | |||||||
Less: Average preferred stock | 244 | 244 | 244 | 244 | 244 | 244 | 244 | |||||||
Average common equity | 7,410 | 6,835 | 6,734 | 6,318 | 6,271 | 6,827 | 5,793 | |||||||
Less: Average goodwill and average other | ||||||||||||||
acquisition-related intangible assets | 3,226 | 3,069 | 3,043 | 2,900 | 2,807 | 3,060 | 2,623 | |||||||
Average tangible common equity | $ 4,184 | $ 3,766 | $ 3,691 | $ 3,418 | $ 3,464 | $ 3,767 | $ 3,170 | |||||||
Operating return on average tangible | ||||||||||||||
common equity (annualized) | 15.2% | 14.4% | 14.6% | 14.4% | 15.5% | 14.7% | 14.6% | |||||||
People's United Financial, Inc. | ||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued | ||||||||||||||
OPERATING COMMON DIVIDEND PAYOUT RATIO | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||
Common dividends paid | $ 69.9 | $ 69.9 | $ 69.8 | $ 65.2 | $ 65.1 | $ 274.8 | $ 243.8 | |||||||
Operating earnings | $ 158.8 | $ 135.5 | $ 134.8 | $ 123.0 | $ 134.2 | $ 552.1 | $ 461.4 | |||||||
Operating common dividend payout ratio | 44.0% | 51.6% | 51.8% | 53.0% | 48.5% | 49.8% | 52.8% | |||||||
TANGIBLE COMMON EQUITY RATIO | ||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||
(dollars in millions) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||
Total stockholders' equity | $ 7,947 | $ 7,131 | $ 7,046 | $ 6,621 | $ 6,534 | |||||||||
Less: Preferred stock | 244 | 244 | 244 | 244 | 244 | |||||||||
Common equity | 7,703 | 6,887 | 6,802 | 6,377 | 6,290 | |||||||||
Less: Goodwill and other | ||||||||||||||
acquisition-related intangible assets | 3,275 | 3,065 | 3,073 | 2,896 | 2,866 | |||||||||
Tangible common equity | $ 4,428 | $ 3,822 | $ 3,730 | $ 3,481 | $ 3,424 | |||||||||
Total assets | $58,590 | $52,072 | $ 51,622 | $ 48,092 | $ 47,877 | |||||||||
Less: Goodwill and other | ||||||||||||||
acquisition-related intangible assets | 3,275 | 3,065 | 3,073 | 2,896 | 2,866 | |||||||||
Tangible assets | $55,315 | $49,007 | $ 48,549 | $ 45,196 | $ 45,011 | |||||||||
Tangible common equity ratio | 8.0% | 7.8% | 7.7% | 7.7% | 7.6% | |||||||||
TANGIBLE BOOK VALUE PER COMMON SHARE | ||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||
(in millions, except per common share data) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||
Tangible common equity | $ 4,428 | $ 3,822 | $ 3,730 | $ 3,481 | $ 3,424 | |||||||||
Common shares issued | 532.83 | 487.59 | 487.35 | 467.38 | 466.32 | |||||||||
Less: Shares classified as treasury shares | 89.17 | 89.01 | 89.01 | 89.01 | 89.03 | |||||||||
Unallocated ESOP shares | 5.92 | 6.01 | 6.10 | 6.19 | 6.27 | |||||||||
Common shares | 437.74 | 392.57 | 392.24 | 372.18 | 371.02 | |||||||||
Tangible book value per common share | $ 10.12 | $ 9.74 | $ 9.51 | $ 9.35 | $ 9.23 | |||||||||
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SOURCE People's United Financial, Inc.
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