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People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share

People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share

People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share

Operating Earnings of $0.37 per Common Share

- Completed the acquisition of United Financial on November 1st.

- Return on average assets of 0.98 percent, or 1.13 percent on an operating basis, and return on average tangible common equity of 12.8 percent, or 15.2 percent on an operating basis.

- Net interest margin of 3.14 percent, expanded two basis points linked-quarter and benefited from a 13 basis point reduction in deposit costs.

- Efficiency ratio of 53.7 percent, improved 310 basis points linked-quarter, reflecting well-controlled expenses and higher revenues, particularly continued strong non-interest income results.

- Period-end loans increased 12 percent linked-quarter driven by the United Financial acquisition and solid commercial organic growth, partially offset by a planned reduction of residential mortgage balances.

PR Newswire

BRIDGEPORT, Conn., Jan. 16, 2020

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.