People's United Financial Inc PBCT
Q4 2010 Earnings Call Transcript

Transcript Call Date 01/21/2011

Operator: Good day, ladies and gentlemen, and welcome to the People's United Financial Inc. Fourth Quarter Earnings Conference Call. My name is Towanda, and I will be your coordinator for today.

At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question-and answer-session. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to Mr. Peter Goulding, Vice President of Investor Relations for People's United Financial Inc. Please proceed, Sir.

Peter Goulding - Strategic Planning & IR: Good morning, and thank you for joining us for today's call. Jack Barnes, President and Chief Executive Officer; Paul Burner, our Chief Financial Officer; and other members of our management team are gathered for the call.

Before we get started, please remember to refer to our forward-looking statements on slide 1 of our presentation, which is posted on our website under Investor Relations.

With that, I will turn the call over to Jack.

John P. Barnes - President and CEO: Thank you, Peter. Good morning, everyone. Thank you for joining us today. Before we go through the slides that we’ve provided, I'd like to remind you that our objectives have been and continue to be straightforward and two-fold to optimize the existing business and to efficiently deploy the excess capital.

I'm glad to be able to provide a number of details today regarding our progress against those two objectives. Regarding our agenda today, first, we'll discuss our fourth quarter 2010 results and the primary revenue initiatives we have underway. Second, we'll have an update on the integration of our four acquisitions closed in 2010 and our de novo branches in downtown Boston, finally I look forward to speaking with you about our Danvers Bancorp acquisition and then we'll take questions.

Regarding growth, we're well positioned versus the industry in that we have a number of products and services that we can deliver to new markets that represent real organic growth opportunities for us. Now we have to continue just to execute on that plan. In addition to those growth opportunities, we also remain significantly overcapitalized and intend to continue to look for well priced acquisitions to better leverage our brands. Finally, we constantly evaluate the returns available to us via share repurchases.

On slide three, we provide an overview of our fourth quarter results. Operating net income for the quarter was $36.7 million or $0.10 per share excluding $4.7 million or a $0.01 per share for one-time cost primarily related to mergers. Our net interest margin expanded by 12 basis points in the fourth quarter to 3.85% from 3.73% in the third quarter.

Importantly, asset quality improved with net charge-offs declining 228 basis points from 57 basis points in the prior year quarter. Our NPAs decreased in the fourth quarter to 2.07% from 2.18% in the third quarter. Our net loans grew by $221 million compared to the previous quarter.

On slide four, we review key recent initiatives. Our acquisitions of the Bank of Smithtown and RiverBank both closed November 30, and we're off to a great start. As expected, we opened both our Boston branches at the Prudential Center and at Milk Street by the middle of last month and these branches are doing very, very well.

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