Operator: Good day, ladies and gentlemen, and welcome to the People's United Financial Inc. First Quarter Earnings Conference Call. My name is Crystal, and I will be your operator 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 and IR: Good morning, and thank you for joining us for today's call. Jack Barnes, President and Chief Executive Officer; Kirk Walters, 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 www.peoples.com under Investor Relations.
With that, I will turn the call over to Jack.
John P. Barnes - President and CEO: Thank you, Peter. Good afternoon, everyone, and thank you for joining us today. We are very pleased to be able to share a solid progress toward improved operating performance in the quarter, which comes from everybody's hard work on executing to our plan.
Before we go through the slides, I'd like to remind you that our objectives have been and continue to be straightforward and two-fold; one, to optimize the existing business, and two, sufficiently deploy excess capital; very happy to be able to provide the number of details regarding our continued progress against those objectives.
Here on slide two, we provide an overview of our first quarter results. Net income for the quarter was $51.7 million or $0.15 per share, with operating net income of $53.8 million, which when rounded, is still $0.15 per share.
Net interest margin expanded by 29 basis points in the first quarter to 4.16% from 3.87% in the fourth quarter. Total loan growth was $195 million or 4.5% linked quarter annualized. Deposits grew at a 3.9% annualized rate.
Notably, this growth occurred while deposit rates fell from 64 basis points to 59 basis points in the quarter. Our non-interest income increased by $6.5 million, supported by a $5.5 million gain on non-performing loan sales from the Smithtown portfolio, and a full quarter of contributions from Smithtown and RiverBank.
With expenses flat and revenue up, our efficiency ratio declined to 66.2%. This represents initial steps toward our ultimate goal. We would expect that as we deploy capitals and right size our expense basis, our efficiency ratio will move in line with peer averages.
Asset quality improved with our non-performing assets decreasing in the first quarter to 1.96% from 2.09% in the fourth quarter. Net charge-offs also declined to 22 basis points from 28 basis points in the prior year quarter. Our Danvers transaction is on track with their shareholder vote set for May 13.
On Slide 3, we review recent initiatives. As you know, we named Kirk Walters, as CFO, and he is now a member of the Board of both the bank and the holding company. Kirk brings extraordinary competencies and experience, built over more than 30 years; 22 of those years in the Northeast markets. In particular, his experiences at Chittenden and Santander, give him an outstanding perspective on the competitive landscape in which we operate.