People’s United Financial Reports First Quarter Net Income of $144.5 Million, or $0.33 per Common Share

BRIDGEPORT, Conn., April 22, 2021 /PRNewswire/ — People’s United Financial, Inc. (NASDAQ: PBCT) today reported results for the first quarter of…

BRIDGEPORT, Conn., April 22, 2021 /PRNewswire/ — People’s United Financial, Inc. (NASDAQ: PBCT) today reported results for the first quarter of 2021. These results along with comparison periods are summarized below:









($ in millions, except per common share data)










 Three Months Ended




Mar. 31, 2021


Dec. 31, 2020


Mar. 31, 2020









Net income (loss)


$           144.5


$         (145.3)


$           130.4

Net income (loss) available








to common shareholders


141.0


(148.8)


126.9


Per common share


0.33


(0.35)


0.30









Operating earnings1


156.5


147.7


141.1


Per common share


0.37


0.35


0.33

















Net interest income


$           385.9


$           382.8


$           396.0


Net interest margin


2.74%


2.84%


3.12%









Non-interest income


94.6


178.2


123.8

Operating non-interest income1


94.6


102.3


123.8

















Non-interest expense


$           311.9


$           646.4


$           320.1

Operating non-interest expense1


292.3


288.5


302.2









Efficiency ratio


56.6%


55.5%


54.0%

















Average balances







Loans


$         42,854


$         44,061


$         43,460

Deposits


52,876


50,674


44,163









Period-end balances







Loans


42,770


43,869


44,284

Deposits


53,475


52,138


44,741









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

«Our first quarter results marked a solid start to the year and further highlighted the strengths of the franchise,» said Jack Barnes, Chairman and Chief Executive Officer. «In February, we announced the merger with M&T, a like-minded partner that has a similar culture, approach to service, complementary offerings, and minimal geographic overlap. This transaction will bring together two high-performing and well-respected institutions to create a leading U.S. super regional bank. The combined company will provide customers greater access to branches, expert bankers, innovative solutions, and enhanced digital capabilities. We are excited about the opportunities ahead and building upon the legacy forged by People’s United over 178 years. Importantly, as we work towards the close of the merger, our focus remains steadfast on delivering value to customers, supporting communities, and caring for colleagues.»

«We are pleased with the Company’s financial performance in the first quarter,» stated David Rosato, Senior Executive Vice President and Chief Financial Officer. «Operating income of $156.5 million, increased six percent linked-quarter and generated an operating return of average tangible common equity of 13.8 percent. These results included modestly higher net interest income, continued well-controlled expenses, and a negative provision for credit losses primarily driven by an improved economic outlook. Net interest margin of 2.74 percent was 10 basis points lower than the fourth quarter due to lower yields in the securities portfolio, two fewer calendars days and increased excess liquidity. These headwinds were partially offset by a further reduction in deposits costs for the seventh consecutive quarter, and stable loan yields. The loan-to-deposit ratio concluded the quarter at 80 percent as loans decreased $1.1 billion or three percent from December 31, while deposits grew $1.3 billion or three percent. The decline in period-end loans was largely driven by $586 million in lower retail balances, and a $431 million reduction in mortgage warehouse from a record level at year-end. Conversely, the loan portfolio benefited from a net increase in PPP balances of $288 million and continued solid results in LEAF. Deposit growth reflected federal stimulus payments, PPP funds and strong inflows in our municipal business.»




















 As of and for the Three Months Ended




Mar. 31, 2021


Dec. 31, 2020


Mar. 31, 2020









Asset Quality















Net loan charge-offs 


0.12%


0.12%


0.10%


to average total loans




Non-performing loans


0.83%


0.75%


0.54%


as a percentage of total loans




















Returns















Return on average assets1


0.90%


(0.93%)


0.89%

Return on average tangible common equity1


12.5%


(13.4%)


11.8%

















Capital Ratios















People’s United Financial, Inc.







Tangible common equity / tangible assets


7.4%


7.5%


7.4%

Tier 1 leverage


8.3%


8.3%


8.4%

Common equity tier 1 


10.9%


10.5%


9.5%

Tier 1 risk-based


11.4%


11.0%


10.0%

Total risk-based 


12.8%


12.4%


11.3%









People’s United Bank, N.A.







Tier 1 leverage


8.7%


8.7%


8.9%

Common equity tier 1 


12.1%


11.5%


10.7%

Tier 1 risk-based


12.1%


11.5%


10.7%

Total risk-based 


13.3%


12.8%


12.0%









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

The Company’s Board of Directors voted to increase the common stock dividend to an annual rate of $0.73 per share. Based on the closing stock price on April 21, 2021, the dividend yield on People’s United Financial common stock is 4.1 percent. The quarterly dividend of $0.1825 per share is payable May 15, 2021 to shareholders of record on May 3, 2021.

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 over $64 billion in assets. Founded in 1842, People’s United Bank offers commercial and retail banking through a network of more than 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management solutions. The company also provides specialized commercial services to customers nationwide.

1Q 2021 Financial Highlights

Summary

  • Net income totaled $144.5 million, or $0.33 per common share.
    • Net income available to common shareholders totaled $141.0 million.
    • Operating earnings totaled $156.5 million, or $0.37 per common share (See Non-GAAP Financial Measures and Reconciliation to GAAP).
  • Net interest income totaled $385.9 million in 1Q21 compared to $382.8 million in 4Q20.
    • Includes $29.6 million associated with PPP loans in 1Q21 ($24.6 million in net fees and $5.0 million in net interest income).
  • Net interest margin decreased ten basis points from 4Q20 to 2.74% reflecting:
    • Lower rates on deposits (increase of five basis points).
    • Higher yields on the loan portfolio (increase of three basis points).
    • Lower yields on the securities portfolio (decrease of 11 basis points).
    • Two less calendar days in 1Q21 (decrease of four basis points).
    • Excess liquidity resulting from deposits at the Federal Reserve Bank (decrease of three basis points).
    • PPP loans had a ten basis point favorable impact on the net interest margin in 1Q21.
  • Provision for credit losses on loans totaled $(13.6) million.
    • Allowance for credit losses on loans decreased $26.0 million.
    • Net loan charge-offs totaled $12.4 million.
    • Net loan charge-off ratio of 0.12%.
  • Non-interest income totaled $94.6 million in 1Q21 compared to $178.2 million in 4Q20.
    • Operating non-interest income totaled $94.6 million in 1Q21 and $102.3 million in 4Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).
    • Investment management fees increased $1.0 million.
    • Customer interest rate swap income decreased $2.1 million.
    • Commercial banking lending fees decreased $1.9 million.
    • Operating lease income decreased $1.6 million.
    • Included in non-interest income in 4Q20 is a $75.9 million net gain on the sale of People’s United Insurance Agency, Inc. (See Non-GAAP Financial Measures and Reconciliation to GAAP).
    • At March 31, 2021, assets under discretionary management totaled $9.8 billion.
  • Non-interest expense totaled $311.9 million in 1Q21 compared to $646.4 million in 4Q20.
    • Operating non-interest expense totaled $292.3 million in 1Q21 and $288.5 million in 4Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).
    • Compensation and benefits expense increased $6.2 million, primarily reflecting seasonally higher payroll and benefit-related costs in 1Q21.
    •  Occupancy and equipment expense, excluding $0.3 million of non-operating expenses in 4Q20, decreased $1.5 million.
    • Professional and outside services expense, excluding $9.4 million and $0.8 million of non-operating expenses in 1Q21 and 4Q20, respectively, increased $0.1 million.
    • Regulatory assessment expense increased $1.2 million.
    •  Other non-interest expense includes non-operating expenses totaling $10.1 million in 1Q21 and $3.8 million in 4Q20.
    • The efficiency ratio was 56.6% for 1Q21 compared to 55.5% for 4Q20 and 54.0% for 1Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).
  • The effective income tax rate was 20.7% for 1Q21 compared to 37.0% for the full-year of 2020.
    • The full-year 2020 effective income tax rate reflects the impact of a non-deductible goodwill impairment charge for which no tax benefit was realized. Excluding non-deductible goodwill impairment, the effective income tax rate was 18.4% for the full-year of 2020.

Commercial Banking

  • Commercial loans totaled $32.7 billion at March 31, 2021, a $514 million decrease from December 31, 2020.
    • PPP loans increased $288 million ($965 million in initial funding less $677 million in loan forgiveness).
    • The mortgage warehouse portfolio decreased $431 million.
    • The New York multifamily portfolio decreased $39 million.
    • The equipment financing portfolio decreased $3 million.
  • Average commercial loans totaled $32.5 billion in 1Q21, a $575 million decrease from 4Q20.
    • PPP loans decreased $5 million.
    • The average mortgage warehouse portfolio decreased $59 million.
    • The average New York multifamily portfolio decreased $53 million.
    • The average equipment financing portfolio increased $20 million.
  • Commercial deposits totaled $23.3 billion at March 31, 2021 compared to $22.9 billion at December 31, 2020.
  • The ratio of non-accrual commercial loans to total commercial loans was 0.85% at March 31, 2021 compared to 0.74% at December 31, 2020.
  • Non-performing commercial assets totaled $286.1 million at March 31, 2021 compared to $255.2 million at December 31, 2020.
  • For the commercial loan portfolio, the allowance for credit losses as a percentage of commercial loans was 0.77% at March 31, 2021 compared to 0.91% at December 31, 2020.
  • The commercial allowance for credit losses represented 90% of non-accrual commercial loans at March 31, 2021 compared to 123% at December 31, 2020.

Retail Banking

  • Residential mortgage loans totaled $8.1 billion at March 31, 2021, a $452 million decrease from December 31, 2020.
    • Average residential mortgage loans totaled $8.3 billion in 1Q21, a $493 million decrease from 4Q20.
  • Home equity loans totaled $1.9 billion at March 31, 2021, a $123 million decrease from December 31, 2020.
    • Average home equity loans totaled $1.9 billion in 1Q21, a $128 million decrease from 4Q20.
  • Retail deposits totaled $30.2 billion at March 31, 2021 compared to $29.2 billion at December 31, 2020.
  • The ratio of non-accrual residential mortgage loans to residential mortgage loans was 0.71% at March 31, 2021 compared to 0.73% at December 31, 2020.
  • The ratio of non-accrual home equity loans to home equity loans was 1.00% at March 31, 2021 compared to 1.03% at December 31, 2020.
  • For the retail loan portfolio, the allowance for credit losses as a percentage of retail loans was 1.48% at March 31, 2021 compared to 1.14% at December 31, 2020.
  • The retail allowance for credit losses represented 195% of non-accrual retail loans at March 31, 2021 compared to 146% at December 31, 2020.

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 pending merger with M&T Bank Corporation; (10) changes in regulation resulting from or relating to financial reform legislation; and (11) the COVID-19 pandemic and its effect on the economic and business environment in which we operate.  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

























As of and for the Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions, except per common share data)


2021


2020


2020


2020


2020


Earnings Data:












  Net interest income (fully taxable equivalent)

$

393.5

$

390.2

$

398.7

$

413.0

$

403.7


  Net interest income 


385.9


382.8


391.4


405.6


396.0


  Provision for credit losses


(13.6)


14.7


26.8


80.8


33.5


  Non-interest income (1)


94.6


178.2


101.1


89.6


123.8


  Non-interest expense (1)


311.9


646.4


293.6


304.0


320.1


  Income (loss) before income tax expense


182.2


(100.1)


172.1


110.4


166.2


  Net income (loss)


144.5


(145.3)


144.6


89.9


130.4


  Net income (loss) available to common shareholders (1)


141.0


(148.8)


141.1


86.4


126.9














Selected Statistical Data:












  Net interest margin (2)


2.74

%

2.84

%

2.97

%

3.05

%

3.12

%

  Return on average assets (1), (2)


0.90


(0.93)


0.94


0.58


0.89


  Return on average common equity (2)


7.7


(7.8)


7.5


4.6


6.7


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


12.5


(13.4)


13.1


8.1


11.8


  Efficiency ratio (1)


56.6


55.5


53.8


53.5


54.0














Common Share Data:












  Earnings per common share: 












    Basic

$

0.34

$

(0.36)

$

0.34

$

0.21

$

0.30


    Diluted (1)


0.33


(0.35)


0.34


0.21


0.30


  Dividends paid per common share


0.1800


0.1800


0.1800


0.1800


0.1775


  Common dividend payout ratio (1)


53.7

%

(50.8)

%

53.6

%

87.4

%

60.9

%

  Book value per common share

$

17.42

$

17.56

$

18.11

$

17.95

$

17.87


  Tangible book value per common share (1)


10.70


10.77


10.37


10.18


10.07


  Stock price:












    High


19.40


13.58


12.36


13.99


17.00


    Low


12.66


9.98


9.74


9.37


10.40


    Close


17.90


12.93


10.31


11.57


11.05


  Common shares outstanding (in millions) (1)


427.22


424.68


424.67


424.59


424.47


  Weighted average diluted common shares (in millions)


422.58


420.39


420.29


420.15


429.77














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










(2) Annualized.












 

 

People’s United Financial, Inc.












FINANCIAL HIGHLIGHTS – Continued

























As of and for the Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions)


2021


2020


2020


2020


2020


Financial Condition Data:












    Total assets

$

64,173

$

63,092

$

60,871

$

61,510

$

60,433


    Loans 


42,770


43,870


45,231


45,452


44,284


    Securities


10,445


9,191


8,270


8,233


8,552


    Short-term investments


4,992


3,766


439


987


744


    Allowance for credit losses on loans


399


425


424


414


342


    Goodwill and other acquisition-related intangible assets


2,835


2,846


3,244


3,254


3,264


    Deposits


53,475


52,138


49,637


49,934


44,741


    Borrowings


1,156


1,148


1,237


1,782


5,911


    Notes and debentures


1,003


1,010


1,012


1,015


1,013


    Stockholders’ equity


7,592


7,603


7,831


7,763


7,726


    Total risk-weighted assets (1):












       People’s United Financial, Inc.


44,302


45,075


45,756


45,657


46,408


       People’s United Bank, N.A.


44,256


45,016


45,685


45,615


46,397


    Non-accrual loans


353


329


306


296


240


    Net loan charge-offs


12.4


13.4


17.3


8.5


10.6














Average Balances:












    Loans

$

42,854

$

44,061

$

44,853

$

45,153

$

43,460


    Securities (2)


9,561


8,390


7,922


8,240


8,022


    Short-term investments


5,000


2,582


842


774


290


    Total earning assets


57,415


55,034


53,617


54,168


51,772


    Total assets


64,057


62,396


61,293


61,841


58,604


    Deposits


52,876


50,674


49,542


48,447


44,163


    Borrowings


1,143


1,233


1,283


2,911


4,353


    Notes and debentures


1,008


1,011


1,014


1,014


1,000


    Total funding liabilities


55,027


52,918


51,839


52,372


49,515


    Stockholders’ equity


7,606


7,884


7,801


7,757


7,804














Ratios:












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


0.12

%

0.12

%

0.15

%

0.08

%

0.10

%

    Non-performing assets to total loans, real estate owned












      and repossessed assets


0.85


0.78


0.71


0.69


0.59


    Allowance for credit losses on loans to:












      Total loans


0.93


0.97


0.94


0.91


0.77


      Non-accrual loans


113.0


129.1


138.4


139.8


142.2


    Average stockholders’ equity to average total assets


11.9


12.6


12.7


12.5


13.3


    Stockholders’ equity to total assets


11.8


12.1


12.9


12.6


12.8


    Tangible common equity to tangible assets (3)


7.4


7.5


7.5


7.3


7.4


    Total risk-based capital (1):












       People’s United Financial, Inc.


12.8


12.4


11.8


11.8


11.3


       People’s United Bank, N.A.


13.3


12.8


12.3


12.3


12.0














(1) March 31, 2021 amounts and ratios are preliminary.












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










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










 

 

People’s United Financial, Inc.




CONSOLIDATED STATEMENTS OF CONDITION 









March 31, 

Dec. 31,

March 31, 

(in millions)

2021

2020

2020

Assets




Cash and due from banks

$        464.2

$        477.3

$        507.6

Short-term investments

4,992.1

3,766.0

744.3

Securities:




  Debt securities available-for-sale, at fair value 

6,160.6

4,925.5

4,276.6

  Debt securities held-to-maturity, at amortized cost

4,016.8

3,993.8

3,861.5

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

266.2

266.6

407.2

  Equity securities, at fair value

1.5

5.3

6.2

    Total securities

10,445.1

9,191.2

8,551.5

Loans held-for-sale

10.1

26.5

19.2

Loans: 




  Commercial and industrial (1)

14,288.2

14,982.3

12,045.7

  Commercial real estate (1)

13,520.1

13,336.9

14,651.6

  Equipment financing

4,927.2

4,930.0

5,012.7

    Total Commercial Portfolio

32,735.5

33,249.2

31,710.0

  Residential mortgage

8,067.2

8,518.9

10,081.9

  Home equity and other consumer

1,967.0

2,101.4

2,492.1

    Total Retail Portfolio

10,034.2

10,620.3

12,574.0

    Total loans

42,769.7

43,869.5

44,284.0

  Less allowance for credit losses on loans

(399.1)

(425.1)

(341.7)

    Total loans, net

42,370.6

43,444.4

43,942.3

Goodwill and other acquisition-related intangible assets

2,834.6

2,845.9

3,264.0

Bank-owned life insurance

713.1

711.6

707.6

Premises and equipment, net

269.5

276.7

300.8

Other assets

2,073.2

2,352.2

2,396.0

    Total assets

$  64,172.5

$  63,091.8

$  60,433.3





Liabilities




Deposits: 




  Non-interest-bearing

$  16,266.5

$  15,881.7

$  10,526.0

  Savings

6,517.7

6,029.7

5,136.0

  Interest-bearing checking and money market

25,782.8

24,567.5

20,238.9

  Time

4,908.3

5,658.8

8,840.2

    Total deposits

53,475.3

52,137.7

44,741.1

Borrowings:




  Federal Home Loan Bank advances

569.7

569.7

4,489.7

  Customer repurchase agreements

436.2

452.9

301.1

  Federal funds purchased

150.0

125.0

1,120.0

    Total borrowings

1,155.9

1,147.6

5,910.8

Notes and debentures

1,003.3

1,009.6

1,012.6

Other liabilities

945.8

1,194.1

1,043.3

    Total liabilities

56,580.3

55,489.0

52,707.8





Stockholders’ Equity




Preferred stock

244.1

244.1

244.1

Common stock

5.4

5.3

5.3

Additional paid-in capital 

7,693.9

7,663.6

7,644.4

Retained earnings

1,426.9

1,363.6

1,514.5

Unallocated common stock of ESOP, at cost

(113.8)

(115.6)

(121.1)

Accumulated other comprehensive loss

(195.3)

(89.2)

(92.7)

Treasury stock, at cost

(1,469.0)

(1,469.0)

(1,469.0)

    Total stockholders’ equity

7,592.2

7,602.8

7,725.5

    Total liabilities and stockholders’ equity

$  64,172.5

$  63,091.8

$  60,433.3





(1) In the first quarter of 2021, the Company completed a portfolio review to ensure consistent classification of certain

     commercial loans across the Company’s franchise and conformity to industry practice for such loans. As a result,

     approximately $350 million of loans secured by non-owner-occupied commercial properties were prospectively

     reclassified, in March 2021, from commercial and industrial loans to commercial real estate loans. Prior period

     balances were not restated to conform to the current presentation. 



 

 

People’s United Financial, Inc.










CONSOLIDATED STATEMENTS OF INCOME 





















Three Months Ended


March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(in millions, except per common share data)

2021


2020


2020


2020


2020

Interest and dividend income:










  Commercial and industrial

$  116.1


$   111.3


$  110.7


$  112.4


$  106.4

  Commercial real estate

98.8


106.1


110.5


122.4


149.6

  Equipment financing

62.8


62.1


65.4


67.6


68.2

  Residential mortgage

69.9


74.9


82.1


84.8


90.4

  Home equity and other consumer

16.5


18.7


19.9


20.1


28.0

    Total interest on loans

364.1


373.1


388.6


407.3


442.6

  Securities

51.4


47.2


47.5


49.8


51.2

  Short-term investments

1.2


0.8


0.4


0.2


2.0

  Loans held-for-sale

0.3


0.4


0.3


0.3


3.3

    Total interest and dividend income

417.0


421.5


436.8


457.6


499.1

Interest expense:










  Deposits 

22.7


30.1


36.5


41.7


78.9

  Borrowings 

1.2


1.3


1.5


2.0


15.4

  Notes and debentures

7.2


7.3


7.4


8.3


8.8

    Total interest expense

31.1


38.7


45.4


52.0


103.1

    Net interest income

385.9


382.8


391.4


405.6


396.0

Provision for credit losses on loans 

(13.6)


14.7


27.1


80.8


33.5

Provision for credit losses on securities 



(0.3)



    Net interest income after provision for credit losses

399.5


368.1


364.6


324.8


362.5

Non-interest income:










  Bank service charges

23.5


24.7


24.5


20.3


28.0

  Investment management fees

19.9


18.9


18.8


17.4


18.1

  Commercial banking lending fees

13.6


15.5


12.7


10.6


12.1

  Operating lease income

11.3


12.9


12.4


11.8


12.6

  Cash management fees

9.2


9.1


8.8


8.1


7.4

  Customer interest rate swap income, net

0.1


2.2


1.2


2.7


8.8

  Gain on sale of business, net of expenses (1)


75.9




  Other non-interest income

17.0


19.0


22.7


18.7


36.8

    Total non-interest income

94.6


178.2


101.1


89.6


123.8

Non-interest expense:










  Compensation and benefits 

172.8


166.6


166.5


167.8


173.9

  Occupancy and equipment 

49.1


50.9


49.1


48.0


51.0

  Professional and outside services

33.6


24.9


24.1


25.7


38.5

  Amortization of other acquisition-related intangible assets

11.0


9.7


10.2


10.2


10.7

  Regulatory assessments

8.1


6.9


8.4


8.7


8.7

  Operating lease expense

7.8


8.5


9.3


8.8


9.8

  Goodwill impairment


353.0




  Other non-interest expense 

29.5


25.9


26.0


34.8


27.5

    Total non-interest expense (1)

311.9


646.4


293.6


304.0


320.1

    Income (loss) before income tax expense

182.2


(100.1)


172.1


110.4


166.2

Income tax expense

37.7


45.2


27.5


20.5


35.8

    Net income (loss)

144.5


(145.3)


144.6


89.9


130.4

Preferred stock dividend

3.5


3.5


3.5


3.5


3.5

    Net income (loss) available to common shareholders

$  141.0


$ (148.8)


$  141.1


$    86.4


$  126.9











Earnings per common share:










  Basic

$    0.34


$    (0.36)


$    0.34


$    0.21


$    0.30

  Diluted

0.33


(0.35)


0.34


0.21


0.30











(1) The gain on sale of business, net of expenses, is considered non-operating income. Total non-interest expense includes 

    $19.6 million,$357.9 million, $4.6 million, $18.5 million and $17.9 million of non-operating expenses for the three months ended

     March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.  See Non-GAAP

     Financial Measures and Reconciliation to GAAP.










 

 

People’s United Financial, Inc.












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




















March 31, 2021


December 31, 2020


March 31, 2020

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

$    5,000.0

$     1.2

0.10%


$    2,582.1

$     0.8

0.12%


$        289.8

$     2.0

2.70%

Securities (2)

9,560.6

56.7

2.37


8,390.2

52.3

2.50


8,021.8

56.0

2.80

Loans:












  Commercial real estate 

13,281.3

98.8

2.98


13,574.3

106.1

3.13


14,715.3

149.6

4.07

  Commercial and industrial 

14,319.6

118.4

3.31


14,621.8

113.6

3.11


10,866.6

109.8

4.04

  Equipment financing

4,887.7

62.8

5.13


4,867.5

62.1

5.10


4,915.6

68.2

5.55

  Residential mortgage

8,328.3

70.2

3.37


8,821.0

75.3

3.41


10,236.3

90.5

3.54

  Home equity and other consumer

2,037.1

16.5

3.23


2,176.6

18.7

3.44


2,726.1

30.7

4.51

    Total loans

42,854.0

366.7

3.42


44,061.2

375.8

3.41


43,459.9

448.8

4.13

    Total earning assets

57,414.6

$ 424.6

2.96%


55,033.5

$ 428.9

3.12%


51,771.5

$ 506.8

3.92%

Other assets

6,642.1




7,362.6




6,832.2



    Total assets

$  64,056.7




$  62,396.1




$  58,603.7















Liabilities and stockholders’ equity:












Deposits:












  Non-interest-bearing

$  15,820.0

$         –

–   %


$  14,742.6

$         –

–   %


$  10,077.8

$         –

–   %

  Savings, interest-bearing checking












    and money market

31,820.1

12.8

0.16


29,978.3

14.7

0.20


24,940.7

44.1

0.71

  Time

5,236.4

9.9

0.75


5,953.5

15.4

1.03


9,144.6

34.8

1.52

    Total deposits

52,876.5

22.7

0.17


50,674.4

30.1

0.24


44,163.1

78.9

0.71

Borrowings:












  Federal Home Loan Bank advances

569.7

1.0

0.72


571.8

1.1

0.77


2,430.6

9.8

1.61

  Customer repurchase agreements

422.8

0.2

0.13


447.6

0.2

0.15


328.0

0.5

0.67

  Federal funds purchased

150.6

0.09


213.3

0.09


1,593.9

5.1

1.28

    Total borrowings

1,143.1

1.2

0.42


1,232.7

1.3

0.43


4,352.5

15.4

1.42

Notes and debentures

1,007.8

7.2

2.87


1,010.8

7.3

2.89


999.5

8.8

3.51

    Total funding liabilities

55,027.4

$   31.1

0.23%


52,917.9

$   38.7

0.29%


49,515.1

$ 103.1

0.83%

Other liabilities

1,423.4




1,594.2




1,284.3



    Total liabilities

56,450.8




54,512.1




50,799.4



Stockholders’ equity

7,605.9




7,884.0




7,804.3



    Total liabilities and












      stockholders’ equity

$  64,056.7




$  62,396.1




$  58,603.7















Net interest income/spread (3)


$ 393.5

2.73%



$ 390.2

2.83%



$ 403.7

3.09%













Net interest margin



2.74%




2.84%




3.12%













(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 $7.6 million, $7.4 million and $7.7 million for the three months ended 


      March 31, 2021, December 31, 2020 and March 31, 2020, respectively.







 

 

People’s United Financial, Inc.












NON-PERFORMING ASSETS


























March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions)


2021


2020


2020


2020


2020


Non-accrual loans:












Commercial:












  Commercial real estate

$

90.2

$

60.4

$

85.3

$

73.6

$

53.5


  Commercial and industrial


69.2


76.4


86.7


88.8


55.6


  Equipment financing


118.1


109.3


49.0


48.6


42.5


    Total Commercial


277.5


246.1


221.0


211.0


151.6


Retail:












  Residential mortgage


56.9


62.3


62.9


62.6


66.6


  Home equity


18.7


20.5


22.1


22.5


22.1


  Other consumer


0.2


0.2


0.2


0.1


0.1


    Total Retail


75.8


83.0


85.2


85.2


88.8


    Total non-accrual loans (1)


353.3


329.1


306.2


296.2


240.4


Real estate owned:












  Commercial


3.5


3.6


3.6


7.3


7.3


  Residential


1.5


3.2


1.9


4.9


9.5


    Total real estate owned


5.0


6.8


5.5


12.2


9.5


Repossessed assets


5.4


5.7


9.7


6.2


4.6


    Total non-performing assets

$

363.7

$

341.6

$

321.4

$

314.6

$

254.5














Non-accrual loans as a percentage of total loans


0.83

%

0.75

%

0.68

%

0.65

%

0.54

%

Non-performing assets as a percentage of:












  Total loans, real estate owned and repossessed assets


0.85


0.78


0.71


0.69


0.59


  Tangible stockholders’ equity and allowance












     for credit losses


7.05


6.59


6.41


6.39


5.45














(1) Reported net of government guarantees totaling $2.5 million at March 31, 2021, $2.5 million at December 31, 2020, 


      $2.4 million at September 30, 2020, $2.9 million at June 30, 2020 and $1.2 million at March 31, 2020.




 

 

People’s United Financial, Inc.
























PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS





















Three Months Ended



March 31,


Dec. 31,


Sept 30,


June 30,


March 31,


(dollars in millions)


2021


2020


2020


2020


2020


Allowance for credit losses on loans:












Balance at beginning of period

$

425.1

$

423.8

$

414.0

$

341.7

$

246.6


CECL transition adjustment






72.2


Balance at beginning of period, adjusted


425.1


423.8


414.0


341.7


318.8


  Charge-offs 


(17.8)


(16.7)


(19.3)


(10.3)


(12.6)


  Recoveries 


5.4


3.3


2.0


1.8


2.0


    Net loan charge-offs 


(12.4)


(13.4)


(17.3)


(8.5)


(10.6)


  Provision for credit losses on loans 


(13.6)


14.7


27.1


80.8


33.5


    Balance at end of period 

$

399.1

$

425.1

$

423.8

$

414.0

$

341.7














Allowance for credit losses on loans 












   as a percentage of:












    Total loans


0.93

%

0.97

%

0.94

%

0.91

%

0.77

%

    Non-accrual loans


113.0


129.1


138.4


139.8


142.2






































NET LOAN CHARGE-OFFS (RECOVERIES)

























Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(dollars in millions)


2021


2020


2020


2020


2020


Commercial:












  Commercial real estate

$

5.8

$

0.1

$

4.1

$

1.8

$

3.4


  Commercial and industrial


(0.5)


6.6


6.9



1.0


  Equipment financing


7.2


6.8


6.2


5.2


3.9


    Total


12.5


13.5


17.2


7.0


8.3


Retail:












  Residential mortgage


(0.3)


(0.3)


(0.2)



0.8


  Home equity


(0.2)




0.6


0.1


  Other consumer


0.4


0.2


0.3


0.9


1.4


    Total


(0.1)


(0.1)


0.1


1.5


2.3


    Total net loan charge-offs

$

12.4

$

13.4

$

17.3

$

8.5

$

10.6














Net loan charge-offs to












  average total loans (annualized)


0.12

%

0.12

%

0.15

%

0.08

%

0.10

%

 

 

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.














    Pre-provision net revenue is a useful financial measure as it enables an assessment of the Company’s ability to generate

earnings to cover credit losses through a credit cycle as well as providing an additional basis for comparing the Company’s

results of operation between periods by isolating the impact of the provision for credit losses, which can vary significantly

between periods.





















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

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

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

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

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













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

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


institutions.










 

 

People’s United Financial, Inc.











NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – Continued














OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO









Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2021


2020


2020


2020


2020

Total non-interest expense 


$   311.9


$   646.4


$   293.6


$   304.0


$   320.1

Adjustments to arrive at operating











  non-interest expense:











  Stop & Shop contract termination costs


(12.1)





  Merger-related expenses


(7.5)


(4.9)


(4.6)


(18.5)


(17.9)

  Goodwill impairment



(353.0)




    Total


(19.6)


(357.9)


(4.6)


(18.5)


(17.9)

    Operating non-interest expense


292.3


288.5


289.0


285.5


302.2












Adjustments:











  Amortization of other acquisition-related











     intangible assets


(11.0)


(9.7)


(10.2)


(10.2)


(10.7)

  Operating lease expense


(7.8)


(8.5)


(9.3)


(8.8)


(9.8)

  Other (1)


(1.7)


(1.3)


(5.1)


(1.9)


(1.9)

    Total non-interest expense for











      efficiency ratio


$   271.8


$   269.0


$   264.4


$   264.6


$   279.8












Net interest income (FTE basis)


$   393.5


$   390.2


$   398.7


$   413.0


$   403.7

Total non-interest income


94.6


178.2


101.1


89.6


123.8

    Total revenues


488.1


568.4


499.8


502.6


527.5

Adjustments:











  Operating lease expense


(7.8)


(8.5)


(9.3)


(8.8)


(9.8)

  BOLI FTE adjustment


0.6


0.9


0.8


1.0


0.8

  Gain on sale of business, net of expenses



(75.9)




  Other (2)


(1.1)



(0.1)



(0.3)

    Total revenues for efficiency ratio


$   479.8


$   484.9


$   491.2


$   494.8


$   518.2

    Efficiency ratio


56.6%


55.5%


53.8%


53.5%


54.0%












(1)  Items classified as «other» and deducted from non-interest expense for purposes of calculating the 

       efficiency ratio include certain franchise taxes and real estate owned expenses.



(2)  Items classified as «other» and deducted from total revenues for purposes of calculating the efficiency

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












PRE-PROVISION NET REVENUE













Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(in millions)


2021


2020


2020


2020


2020

Net interest income


$   385.9


$   382.8


$   391.4


$   405.6


$   396.0

Non-interest income


94.6


178.2


101.1


89.6


123.8

Non-interest expense


(311.9)


(646.4)


(293.6)


(304.0)


(320.1)

    Pre-provision net revenue


168.6


(85.4)


198.9


191.2


199.7

Non-operating income



(75.9)




Non-operating expense


19.6


357.9


4.6


18.5


17.9

    Operating pre-provision net revenue


$   188.2


$   196.6


$   203.5


$   209.7


$   217.6

 

 

People’s United Financial, Inc.











NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – Continued
















OPERATING EARNINGS













Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions, except per common share data)


2021


2020


2020


2020


2020

Net income (loss) available to common shareholders


$   141.0


$ (148.8)


$   141.1


$     86.4


$   126.9

Adjustments to arrive at operating earnings:











  Stop & Shop contract termination costs


12.1





  Merger-related expenses


7.5


4.9


4.6


18.5


17.9

  Goodwill impairment (1)



353.0




  Gain on sale of business, net of expenses



(75.9)




    Total pre-tax adjustments


19.6


282.0


4.6


18.5


17.9

  Tax effect (1)


(4.1)


14.5


(1.0)


(3.9)


(3.7)

    Total adjustments, net of tax


15.5


296.5


3.6


14.6


14.2

    Operating earnings


$   156.5


$   147.7


$   144.7


$   101.0


$   141.1












Diluted EPS, as reported


$     0.33


$    (0.35)


$     0.34


$     0.21


$     0.30

Adjustments to arrive at operating EPS:











  Stop & Shop contract termination costs


0.02





  Merger-related expenses


0.02


0.01



0.03


0.03

  Goodwill impairment (1)



0.83




  Gain on sale of business, net of expenses



(0.14)




    Total adjustments per common share 


0.04


0.70



0.03


0.03

    Operating EPS


$     0.37


$     0.35


$     0.34


$     0.24


$     0.33












Average total assets


$ 64,057


$ 62,396


$ 61,293


$ 61,841


$ 58,603












Operating return on











  average assets (annualized)


0.98%


0.95%


0.94%


0.65%


0.96%












(1) The goodwill impairment charge for the three months ended December 31, 2020 is non-tax-deductible.














OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY










Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2021


2020


2020


2020


2020

Operating earnings


$   156.5


$   147.7


$   144.7


$   101.0


$   141.1












Average stockholders’ equity


$   7,606


$   7,884


$   7,801


$   7,757


$   7,804

Less: Average preferred stock


244


244


244


244


244

Average common equity


7,362


7,640


7,557


7,513


7,560

Less: Average goodwill and average other











         acquisition-related intangible assets


2,842


3,213


3,249


3,259


3,269

Average tangible common equity


$   4,520


$   4,427


$   4,308


$   4,254


$   4,291












Operating return on average tangible











  common equity (annualized)


13.8%


13.3%


13.4%


9.5%


13.2%

 

 

People’s United Financial, Inc.











NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – Continued














OPERATING COMMON DIVIDEND PAYOUT RATIO











Three Months Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2021


2020


2020


2020


2020

Common dividends paid


$     75.7


$     75.6


$     75.7


$     75.5


$     77.3

Operating earnings


$   156.5


$   147.7


$   144.7


$   101.0


$   141.1












Operating common dividend payout ratio


48.4%


51.2%


52.3%


74.8%


54.8%























TANGIBLE COMMON EQUITY RATIO













March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(dollars in millions)


2021


2020


2020


2020


2020

Total stockholders’ equity


$   7,592


$   7,603


$   7,831


$   7,763


$   7,726

Less: Preferred stock


244


244


244


244


244

Common equity


7,348


7,359


7,587


7,519


7,482

Less: Goodwill and other











         acquisition-related intangible assets


2,835


2,846


3,244


3,254


3,264

Tangible common equity


$   4,513


$   4,513


$   4,343


$   4,265


$   4,218












Total assets


$ 64,172


$ 63,092


$ 60,871


$ 61,510


$ 60,433

Less: Goodwill and other











         acquisition-related intangible assets


2,835


2,846


3,244


3,254


3,264

Tangible assets


$ 61,337


$ 60,246


$ 57,627


$ 58,256


$ 57,169












Tangible common equity ratio


7.4%


7.5%


7.5%


7.3%


7.4%












TANGIBLE BOOK VALUE PER COMMON SHARE












March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(in millions, except per common share data)


2021


2020


2020


2020


2020

Tangible common equity


$   4,513


$   4,513


$   4,343


$   4,265


$   4,218












Common shares issued


536.20


533.68


533.67


533.59


533.47

Less: Shares classified as treasury shares


108.98


109.00


109.00


109.00


109.00

Common shares outstanding


427.22


424.68


424.67


424.59


424.47

Less: Unallocated ESOP shares


5.49


5.57


5.66


5.75


5.84

Common shares


421.73


419.11


419.01


418.84


418.63












Tangible book value per common share


$   10.70


$   10.77


$   10.18


$   10.07


$   10.07

 

 

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SOURCE People’s United Financial, Inc.