Company Announcements

People's United Financial Reports Fourth Quarter Net Income of $207.7 Million, or $0.49 per Common Share

BRIDGEPORT, Conn., Jan. 21, 2021 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the fourth quarter and full year 2020. These results along with comparison periods are summarized below:

($ in millions, except per common share data)




 Three Months Ended



Twelve Months Ended





Dec. 31, 2020


Sep. 30, 2020


Dec. 31, 2019



Dec. 31, 2020


Dec. 31, 2019
















Net income


$         207.7


$         144.6


$         137.5



$         572.6


$         520.4


Net income available


204.2


141.1


134.0



558.5


506.3



to common shareholders









Per common share


0.49


0.34


0.31



1.32


1.27
















Operating earnings1


147.7


144.7


158.8



534.6


552.1



Per common share


0.35


0.34


0.37



1.27


1.39






























Net interest income


$         382.8


$         391.4


$         382.7



$      1,575.8


$      1,412.3



Net interest margin


2.84%


2.97%


3.14%



2.99%


3.14%
















Non-interest income


178.2


101.1


124.2



492.7


431.1


Operating non-interest income1


102.3


101.1


116.6



416.8


423.5






























Non-interest expense


$         293.4


$         293.6


$         325.7



$      1,211.1


$      1,162.7


Operating non-interest expense1

288.5


289.0


286.6



1,165.2


1,097.1
















Efficiency ratio


55.5%


53.8%


53.7%



54.2%


55.8%






























Average balances













Loans


$       44,061


$       44,853


$       42,006



$       44,382


$       38,419


Deposits


50,674


49,542


42,195



48,217


39,143
















Period-end balances













Loans


43,869


45,231


43,596







Deposits


52,138


49,637


43,590





















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

"We are pleased with our performance in 2020, especially in light of the uncertain economic environment caused by the pandemic," said Jack Barnes, Chairman and Chief Executive Officer. "Full year financial and operating results were strong and reflect the resilience of People's United, its employees and customers. Pre-provision net revenue of $827 million, on an operating basis, increased 12 percent from the prior year, reflecting the success of recent acquisitions and solid execution across core operations. Higher revenues and continued emphasis on controlling costs lowered the efficiency ratio 160 basis points to 54.2 percent, marking the seventh consecutive year of improvement. Asset quality remained excellent, indicative of the Company's conservative approach to underwriting, diversified loan portfolio, and deep customer relationships. We are particularly pleased by the continued reduction in loan deferrals, which ended the year at $271 million or 0.6 percent of total loans, down from $1.6 billion or 3.5 percent of total loans at the close of the third quarter."

Barnes continued, "As consumer preferences evolve to more digitally-driven experiences, we have continually enhanced our technology capabilities to deliver value, provide convenience and create efficiencies. As a result, customers are increasingly utilizing our online and mobile platforms for their banking needs. Given these accelerating digital banking trends and shifts in retail shopping behavior, we announced today the decision not to renew our existing in-store branch contracts with Stop & Shop in Connecticut and New York upon expiration in 2022. This decision enables us to further optimize our branch network, while providing the same level of personalized service across each of our channels."

"We concluded the year with a solid financial performance in the fourth quarter," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Operating earnings of $147.7 million increased two percent linked-quarter and benefited from a lower provision, higher fee income and well-controlled expenses. Net interest margin of 2.84 percent was 13 basis points lower than the third quarter, primarily due to increased excess liquidity and lower yields in both the loan and securities portfolios. These headwinds were partially offset by our continued discipline managing deposit pricing as costs declined for the sixth consecutive quarter. The loan-to-deposit ratio at quarter-end was 84 percent as loans decreased nearly $1.4 billion or three percent from September 30, while deposits grew $2.5 billion or five percent. The decline in period-end loans was primarily driven by $715 million in lower retail balances, $289 million in forgiven PPP loans, and a combined $107 million reduction in our runoff portfolios. Conversely, we continued to achieve strong growth in our mortgage warehouse and LEAF businesses. Period-end deposit growth reflected a $1.8 billion increase in non-interest bearing balances, partially offset by the roll-off of higher cost time deposits."





 As of and for the Three Months Ended




Dec. 31, 2020


Sep. 30, 2020


Dec. 31, 2019









Asset Quality















Net loan charge-offs 


0.12%


0.15%


0.06%

     to average total loans




Non-performing loans


0.75%


0.68%


0.51%

     as a percentage of total loans1




















Returns















Return on average assets2


1.33%


0.94%


0.98%

Return on average tangible common equity2


18.4%


13.1%


12.8%

















Capital Ratios















People's United Financial, Inc.







Tangible common equity / tangible assets


7.5%


7.5%


8.0%

Tier 1 leverage


8.4%


8.2%


9.1%

Common equity tier 1 


10.5%


9.9%


10.2%

Tier 1 risk-based


11.0%


10.5%


10.7%

Total risk-based 


12.4%


11.8%


12.0%









People's United Bank, N.A.







Tier 1 leverage



8.7%


8.7%


9.3%

Common equity tier 1 



11.5%


11.0%


10.9%

Tier 1 risk-based



11.5%


11.0%


10.9%

Total risk-based 



12.8%


12.3%


12.1%









1Ratios for periods prior to January 1, 2020 have been restated to reflect the total loan portfolio (originated & acquired)

2See Non-GAAP Financial Measures and Reconciliation to GAAP





The Board of Directors declared a $0.18 per common share quarterly dividend payable February 15, 2021 to shareholders of record on February 1, 2021. Based on the closing stock price on January 20, 2021, the dividend yield on People's United Financial common stock is 5.0 percent.

The Company is currently in the process of performing its annual goodwill impairment assessment. Additional time is necessary to complete the analysis given the complexities brought about by the macroeconomic effects of the Covid-19 pandemic, particularly the current and projected low interest rate environment and a decline in bank stock valuations last fall, including on the date of the Company's annual assessment (October 1st). Any potential goodwill impairment charge could be material to reported earnings, but would represent a non-cash charge and have no effect on the Company's cash balances, liquidity or tangible equity. In addition, because goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company's well-capitalized regulatory capital ratios would not be affected by this potential non-cash expense. The analysis will be completed prior to filing the Annual Report on Form 10-K with the Securities and Exchange Commission.

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 $63 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.

4Q 2020 Financial Highlights

Summary

  • Net income totaled $207.7 million, or $0.49 per common share.
    • Net income available to common shareholders totaled $204.2 million.
  • Operating earnings totaled $147.7 million, or $0.35 per common share (See Non-GAAP Financial Measures and Reconciliation to GAAP).
  • Net interest income totaled $382.8 million in 4Q20 compared to $391.4 million in 3Q20.
  • Net interest margin decreased 13 basis points from 3Q20 to 2.84% reflecting:
    • Excess liquidity resulting from deposits at the Federal Reserve Bank (decrease of nine basis points).
    • Lower yields on the loan and securities portfolios (decrease of nine basis points).
    • Lower rates on deposits (increase of five basis points).
  • Provision for credit losses on loans totaled $14.7 million.
    • Allowance for credit losses on loans increased $1.3 million.
    • Net loan charge-offs totaled $13.4 million.
    • Net loan charge-off ratio of 0.12% in 4Q20.
  • Non-interest income totaled $178.2 million in 4Q20 compared to $101.1 million in 3Q20.
    • Commercial banking lending fees increased $2.8 million.
    • Customer interest rate swap income increased $1.0 million.
    • Insurance revenue decreased $5.6 million.
    • Included in non-interest income in 4Q20 is a $75.9 million net gain on the sale of People's United Insurance Agency (See Non-GAAP Financial Measures and Reconciliation to GAAP).
    • At December 31, 2020, assets under discretionary management totaled $9.5 billion.
  • Non-interest expense totaled $293.4 million in 4Q20 compared to $293.6 million in 3Q20.
    • Operating non-interest expense totaled $288.5 million in 4Q20 and $289.0 million in 3Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).
    • Compensation and benefits expense, excluding $0.3 million of merger-related expenses in 3Q20, increased $0.4 million.
    • Occupancy and equipment expense, excluding $0.3 million and $0.9 million of merger-related expenses in 4Q20 and 3Q20, respectively, increased $2.4 million.
    • Professional and outside services expense, excluding $0.8 million and $1.4 million of merger-related expenses in 4Q20 and 3Q20, respectively, increased $1.4 million.
    • Regulatory assessment expense decreased $1.5 million.
    • Other non-interest expense includes merger-related expenses of $3.8 million in 4Q20 and $2.0 million in 3Q20.
    • The efficiency ratio was 55.5% for 4Q20 compared to 53.8% for 3Q20 and 53.7% for 4Q19 (See Non-GAAP Financial Measures and Reconciliation to GAAP).
  • The effective income tax rate was 17.9% for 4Q20 and 18.4% for the full-year of 2020, compared to 20.2% for the full-year of 2019.
    • The 4Q20 and full-year 2020 effective tax rates reflect a $7.1 million benefit related to the revaluation of certain state deferred tax assets.

Commercial Banking

  • Commercial loans totaled $33.2 billion at December 31, 2020, a $647 million decrease from September 30, 2020.
    • Paycheck Protection Plan loans totaled $2.3 billion at December 31, 2020, a $289 million decrease from September 30, 2020.
    • The mortgage warehouse portfolio increased $161 million.
    • The New York multifamily portfolio decreased $47 million.
    • The equipment financing portfolio decreased $42 million.
  • Average commercial loans totaled $33.1 billion in 4Q20, an $86 million decrease from 3Q20.
    • Paycheck Protection Plan loans averaged $2.5 billion in 4Q20, a $69 million decrease from 3Q20.
    • The average mortgage warehouse portfolio increased $455 million.
    • The average New York multifamily portfolio decreased $53 million.
    • The average equipment financing portfolio decreased $9 million.
  • Commercial deposits totaled $22.9 billion at December 31, 2020 compared to $21.6 billion at September 30, 2020.
  • The ratio of non-accrual commercial loans to total commercial loans was 0.74% at December 31, 2020 compared to 0.65% at September 30, 2020.
  • Non-performing commercial assets totaled $255.2 million at December 31, 2020 compared to $234.1 million at September 30, 2020.
  • For the commercial loan portfolio, the allowance for credit losses as a percentage of commercial loans was 0.91% at December 31, 2020 compared to 0.86% at September 30, 2020.
  • The commercial allowance for credit losses represented 123% of non-accrual commercial loans at December 31, 2020 compared to 132% at September 30, 2020.

Retail Banking

  • Residential mortgage loans totaled $8.5 billion at December 31, 2020, a $577 million decrease from September 30, 2020.
    • Average residential mortgage loans totaled $8.8 billion in 4Q20, a $587 million decrease from 3Q20.
  • Home equity loans totaled $2.0 billion at December 31, 2020, a $128 million decrease from September 30, 2020.
    • Average home equity loans totaled $2.1 billion in 4Q20, a $110 million decrease from 3Q20.
  • Retail deposits totaled $29.2 billion at December 31, 2020 compared to $28.0 billion at September 30, 2020.
  • The ratio of non-accrual residential mortgage loans to residential mortgage loans was 0.73% at December 31, 2020 compared to 0.69% at September 30, 2020.
  • The ratio of non-accrual home equity loans to home equity loans was 1.03% at December 31, 2020 compared to 1.04% at September 30, 2020.
  • For the retail loan portfolio, the allowance for credit losses as a percentage of retail loans was 1.14% at December 31, 2020 compared to 1.17% at September 30, 2020.
  • The retail allowance for credit losses represented 146% of non-accrual retail loans at December 31, 2020 compared to 155% at September 30, 2020.

Conference Call

On January 21, 2021, 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; (10) changes in regulation resulting from or relating to financial reform legislation; (11) the outcome of the ongoing goodwill impairment analysis; and (12) 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



Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,

(dollars in millions, except per common share data)


2020


2020


2020


2020


2019

Earnings Data:











  Net interest income (fully taxable equivalent)

$

390.2

$

398.7

$

413.0

$

403.7

$

390.3

  Net interest income 


382.8


391.4


405.6


396.0


382.7

  Provision for credit losses (1)


14.7


26.8


80.8


33.5


7.3

  Non-interest income (2)


178.2


101.1


89.6


123.8


124.2

  Non-interest expense (2)


293.4


293.6


304.0


320.1


325.7

  Income before income tax expense


252.9


172.1


110.4


166.2


173.9

  Net income


207.7


144.6


89.9


130.4


137.5

  Net income available to common shareholders (2)


204.2


141.1


86.4


126.9


134.0












Selected Statistical Data:











  Net interest margin (3)


2.84

%

2.97

%

3.05

%

3.12

%

3.14

  Return on average assets (2), (3)


1.33


0.94


0.58


0.89


0.98

  Return on average common equity (3)


10.7


7.5


4.6


6.7


7.2

  Return on average tangible common equity (2), (3)


18.4


13.1


8.1


11.8


12.8

  Efficiency ratio (2)


55.5


53.8


53.5


54.0


53.7












Common Share Data:











  Earnings per common share: 











    Basic

$

0.49

$

0.34

$

0.21

$

0.30

$

0.31

    Diluted (2)


0.49


0.34


0.21


0.30


0.31

  Dividends paid per common share


0.1800


0.1800


0.1800


0.1775


0.1775

  Common dividend payout ratio (2)


37.1

%

53.6

%

87.4

%

60.9

%

52.2

  Book value per common share

$

18.40

$

18.11

$

17.95

$

17.87

$

17.60

  Tangible book value per common share (2)


10.77


10.37


10.18


10.07


10.12

  Stock price:











    High


13.58


12.36


13.99


17.00


17.22

    Low


9.98


9.74


9.37


10.40


14.73

    Close


12.93


10.31


11.57


11.05


16.90

  Common shares outstanding (in millions) (2)


424.68


424.67


424.59


424.47


443.66

  Weighted average diluted common shares (in millions)

420.39


420.29


420.15


429.77


424.98












(1) Provision for credit losses in 2020 reflects the application of the CECL standard and the impact of COVID-19.

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








(3) Annualized.











 

People's United Financial, Inc.


FINANCIAL HIGHLIGHTS




As of and for the


Twelve Months Ended


      December 31,


(dollars in millions, except per common share data)


2020


2019



Earnings Data:







  Net interest income (fully taxable equivalent)

$

1,605.6

$

1,441.7



  Net interest income 


1,575.8


1,412.3



  Provision for credit losses (1)


155.8


28.3



  Non-interest income (2)


492.7


431.1



  Non-interest expense (2)


1,211.1


1,162.5



  Income before income tax expense


701.6


652.4



  Net income


572.6


520.4



  Net income available to common shareholders (2)


558.5


506.3










Selected Statistical Data:







  Net interest margin 


2.99

%

3.14

%


  Return on average assets (2)


0.94


1.01



  Return on average common equity 


7.4


7.4



  Return on average tangible common equity (2)


12.9


13.4



  Efficiency ratio (2)


54.2


55.8










Common Share Data:







  Earnings per common share: 







    Basic

$

1.33

$

1.28



    Diluted (2)


1.32


1.27



  Dividends paid per common share


0.7175


0.7075



  Common dividend payout ratio (2)


54.5

%

54.3

%


  Book value per common share

$

18.40

$

17.60



  Tangible book value per common share (2)


10.77


10.12



  Stock price:







    High


17.00


18.03



    Low


9.37


13.81



    Close


12.93


16.90



  Common shares outstanding (in millions) (2)


424.68


443.66



  Weighted average diluted common shares (in millions)


422.55


397.15










(1) Provision for credit losses in 2020 reflects the application of the CECL standard and the impact of COVID-19.

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







 

People's United Financial, Inc.











FINANCIAL HIGHLIGHTS - Continued



















As of and for the Three Months Ended



Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


(dollars in millions)


2020


2020


2020


2020


2019


Financial Condition Data:












    Total assets

$

63,445

$

60,871

$

61,510

$

60,433

$

58,590


    Loans 


43,444


45,231


45,452


44,284


43,596


    Securities


9,191


8,270


8,233


8,552


7,790


    Short-term investments


3,766


439


987


744


317


    Allowance for credit losses on loans (1)


425


424


414


342


247


    Goodwill and other acquisition-related intangible assets

3,199


3,244


3,254


3,264


3,275


    Deposits


52,138


49,637


49,934


44,741


43,590


    Borrowings


1,148


1,237


1,782


5,911


5,155


    Notes and debentures


1,010


1,012


1,015


1,013


993


    Stockholders' equity


7,956


7,831


7,763


7,726


7,947


    Total risk-weighted assets (2):












       People's United Financial, Inc.


45,056


45,756


45,657


46,408


45,208


       People's United Bank, N.A.


44,996


45,685


45,615


46,397


45,174


    Non-accrual loans


329


306


296


240


224


    Net loan charge-offs


13.4


17.3


8.5


10.6


6.7














Average Balances:












    Loans

$

44,061

$

44,853

$

45,153

$

43,460

$

42,006


    Securities (3)


8,390


7,922


8,240


8,022


7,372


    Short-term investments


2,582


842


774


289


294


    Total earning assets


55,034


53,617


54,168


51,772


49,673


    Total assets


62,396


61,293


61,841


58,604


56,130


    Deposits


50,674


49,542


48,447


44,163


42,195


    Borrowings


1,233


1,283


2,911


4,353


4,146


    Notes and debentures


1,011


1,014


1,014


1,000


974


    Total funding liabilities


52,918


51,839


52,372


49,515


47,314


    Stockholders' equity


7,884


7,801


7,757


7,804


7,654














Ratios:












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

0.12

%

0.15

%

0.08

%

0.10

%

0.06

%

    Non-performing assets to total loans, real estate owned











      and repossessed assets


0.78


0.71


0.69


0.59


0.57


    Allowance for credit losses on loans to (1):












      Total loans


0.97


0.94


0.91


0.77


0.57


      Non-accrual loans


129.1


138.4


139.8


142.2


110.0


    Average stockholders' equity to average total assets


12.6


12.7


12.5


13.3


13.6


    Stockholders' equity to total assets


12.5


12.9


12.6


12.8


13.6


    Tangible common equity to tangible assets (4)


7.5


7.5


7.3


7.4


8.0


    Total risk-based capital (2):












       People's United Financial, Inc.


12.4


11.8


11.8


11.3


12.0


       People's United Bank, N.A.


12.8


12.3


12.3


12.0


12.1














(1) Allowance for credit losses on loans and asset quality ratios for 2020 reflect the initial adoption and application of the 

     CECL standard.












(2) December 31, 2020 amounts and ratios are preliminary.











(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 (1)







Dec. 31,

Sept. 30

June 30

Dec. 31,

(in millions)

2020

2020

2020

2019

Assets





Cash and due from banks

$        477.3

$        616.8

$        491.9

$        484.2

Short-term investments

3,766.0

438.6

987.4

316.8

Securities:





  Trading debt securities, at fair value

-

-

-

7.1

  Equity securities, at fair value

5.3

5.6

5.8

8.2

  Debt securities available-for-sale, at fair value 

4,925.5

4,080.7

4,080.3

3,564.3

  Debt securities held-to-maturity, at amortized cost

3,993.8

3,916.5

3,848.6

3,869.2

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

266.6

267.1

298.3

341.1

    Total securities

9,191.2

8,269.9

8,233.0

7,789.9

Loans held-for-sale

26.5

21.4

12.2

511.3

Loans: 





  Commercial and industrial (2)

14,982.3

15,295.0

14,593.9

11,041.6

  Commercial real estate (2)

13,336.9

13,713.3

13,999.5

14,762.3

  Equipment financing

4,930.0

4,887.6

4,880.1

4,910.4

    Total Commercial Portfolio

33,249.2

33,895.9

33,473.5

30,714.3

  Residential mortgage

8,518.9

9,095.6

9,623.7

10,318.1

  Home equity and other consumer

2,101.4

2,239.1

2,354.3

2,563.7

    Total Retail Portfolio

10,620.3

11,334.7

11,978.0

12,881.8

    Total loans

43,869.5

45,230.6

45,451.5

43,596.1

  Less allowance for credit losses on loans

(425.1)

(423.8)

(414.0)

(246.6)

    Total loans, net

43,444.4

44,806.8

45,037.5

43,349.5

Goodwill and other acquisition-related intangible assets

3,198.9

3,243.5

3,253.7

3,274.6

Bank-owned life insurance

711.6

710.5

708.1

705.0

Premises and equipment, net

276.7

281.3

285.7

305.5

Other assets

2,352.2

2,482.4

2,500.2

1,853.0

    Total assets

$  63,444.8

$  60,871.2

$  61,509.7

$  58,589.8






Liabilities





Deposits: 





  Non-interest-bearing

$  15,881.7

$  14,101.9

$  13,656.9

$    9,803.7

  Savings

6,029.7

5,846.3

5,759.4

4,987.7

  Interest-bearing checking and money market

24,567.5

23,361.8

22,943.6

19,592.6

  Time

5,658.8

6,326.5

7,574.4

9,205.5

    Total deposits

52,137.7

49,636.5

49,934.3

43,589.5

Borrowings:





  Federal Home Loan Bank advances

569.7

579.8

1,289.7

3,125.4

  Customer repurchase agreements

452.9

432.5

342.1

409.1

  Federal funds purchased

125.0

225.0

150.0

1,620.0

    Total borrowings

1,147.6

1,237.3

1,781.8

5,154.5

Notes and debentures

1,009.6

1,012.0

1,014.5

993.1

Other liabilities

1,194.1

1,153.9

1,016.1

905.5

    Total liabilities

55,489.0

53,039.7

53,746.7

50,642.6






Stockholders' Equity





Preferred stock

244.1

244.1

244.1

244.1

Common stock

5.3

5.3

5.3

5.3

Additional paid-in capital 

7,663.6

7,657.3

7,651.2

7,639.4

Retained earnings

1,716.6

1,589.1

1,524.6

1,512.8

Accumulated other comprehensive loss

(89.2)

(77.9)

(73.9)

(166.9)

Unallocated common stock of Employee Stock Ownership Plan, at cost

(115.6)

(117.4)

(119.3)

(122.9)

Treasury stock, at cost

(1,469.0)

(1,469.0)

(1,469.0)

(1,164.6)

    Total stockholders' equity

7,955.8

7,831.5

7,763.0

7,947.2

    Total liabilities and stockholders' equity

$  63,444.8

$  60,871.2

$  61,509.7

$  58,589.8






(1) The Consolidated Statement of Condition for December 31, 2020 is preliminary and does not reflect any estimated goodwill impairment that the Company is in the process of evaluating.

(2) In connection with the United Bank core system conversion in April 2020, approximately $400 million of loans secured by owner-occupied commercial properties were prospectively reclassified, at that time, from commercial real estate loans to commercial and industrial loans. Prior period loan balances were not restated to conform to the current presentation.

 

People's United Financial, Inc.







CONSOLIDATED STATEMENTS OF INCOME (1)













Three Months Ended


Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


(in millions, except per common share data)

2020


2020


2020


2020


2019


Interest and dividend income:











  Commercial real estate (2)

$  106.1


$  110.5


$  122.4


$  149.6


$  147.2


  Commercial and industrial (2)

111.3


110.7


112.4


106.4


114.9


  Equipment financing

62.1


65.4


67.6


68.2


66.7


  Residential mortgage

74.9


82.1


84.8


90.4


88.2


  Home equity and other consumer

18.7


19.9


20.1


28.0


30.8


    Total interest on loans

373.1


388.6


407.3


442.6


447.8


  Securities

47.2


47.5


49.8


51.2


47.8


  Short-term investments

0.8


0.4


0.2


2.0


1.0


  Loans held-for-sale

0.4


0.3


0.3


3.3


0.3


    Total interest and dividend income

421.5


436.8


457.6


499.1


496.9


Interest expense:











  Deposits 

30.1


36.5


41.7


78.9


86.9


  Borrowings 

1.3


1.5


2.0


15.4


18.5


  Notes and debentures

7.3


7.4


8.3


8.8


8.8


    Total interest expense

38.7


45.4


52.0


103.1


114.2


    Net interest income

382.8


391.4


405.6


396.0


382.7


Provision for credit losses on loans (3)

14.7


27.1


80.8


33.5


7.3


Provision for credit losses on securities (3)

-


(0.3)


-


-


-


    Net interest income after provision for credit losses

368.1


364.6


324.8


362.5


375.4


Non-interest income:











  Bank service charges

24.7


24.5


20.3


28.0


28.9


  Investment management fees

18.9


18.8


17.4


18.1


19.3


  Commercial banking lending fees

15.5


12.7


10.6


12.1


12.9


  Operating lease income

12.9


12.4


11.8


12.6


12.7


  Insurance revenue

4.1


9.7


9.0


10.9


7.5


  Cash management fees

9.1


8.8


8.1


7.4


7.1


  Customer interest rate swap income, net

2.2


1.2


2.7


8.8


8.5


  Gain on sale of business, net of expenses  (4)

75.9


-


-


-


-


  Other non-interest income (4)

14.9


13.0


9.7


25.9


27.3


    Total non-interest income

178.2


101.1


89.6


123.8


124.2


Non-interest expense:











  Compensation and benefits 

166.6


166.5


167.8


173.9


171.4


  Occupancy and equipment 

50.9


49.1


48.0


51.0


52.2


  Professional and outside services

24.9


24.1


25.7


38.5


29.6


  Amortization of other acquisition-related intangible assets

9.7


10.2


10.2


10.7


9.8


  Operating lease expense

8.5


9.3


8.8


9.8


9.6


  Regulatory assessments

6.9


8.4


8.7


8.7


7.3


  Other non-interest expense 

25.9


26.0


34.8


27.5


45.8


    Total non-interest expense (4)

293.4


293.6


304.0


320.1


325.7


    Income before income tax expense

252.9


172.1


110.4


166.2


173.9


Income tax expense

45.2


27.5


20.5


35.8


36.4


    Net income

207.7


144.6


89.9


130.4


137.5


Preferred stock dividend

3.5


3.5


3.5


3.5


3.5


    Net income available to common shareholders

$  204.2


$  141.1


$     86.4


$  126.9


$  134.0













Earnings per common share:











  Basic

$     0.49


$     0.34


$     0.21


$     0.30


$     0.31


  Diluted

0.49


0.34


0.21


0.30


0.31













(1) The Consolidated Statement of Income for the three months ended December 31, 2020 is preliminary and does not reflect any estimated goodwill impairment that the Company is in the process of evaluating.

(2) In connection with the United Bank core system conversion in April 2020, approximately $400 million of loans secured by owner-occupied commercial properties were prospectively reclassified, at that time, from commercial real estate loans to commercial and industrial loans. Prior period interest income amounts were not restated to conform to the current presentation.

(3) Provision for credit losses in 2020 reflects the application of the CECL standard and the impact of COVID-19. 


(4) The gain on sale of business, net of expenses, is considered non-operating income. 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  $4.9 million, $4.6 million, $18.5 million, $17.9 million and $39.1 million of non-operating expenses for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.  See Non-GAAP Financial Measures and Reconciliation to GAAP.

 

People's United Financial, Inc.




CONSOLIDATED STATEMENTS OF INCOME (1)









Twelve Months Ended


December 31,

(in millions, except per common share data)

2020


2019

Interest and dividend income:




  Commercial real estate

$   488.6


$   556.4

  Commercial and industrial

440.8


443.6

  Equipment financing

263.3


253.8

  Residential mortgage

332.2


329.1

  Home equity and other consumer

86.7


106.1

    Total interest on loans

1,611.6


1,689.0

  Securities

195.7


186.5

  Loans held-for-sale

4.3


0.8

  Short-term investments

3.4


4.8

    Total interest and dividend income

1,815.0


1,881.1

Interest expense:




  Deposits 

187.2


356.9

  Borrowings 

20.2


77.0

  Notes and debentures

31.8


34.9

    Total interest expense

239.2


468.8

    Net interest income

1,575.8


1,412.3

Provision for credit losses on loans (2)

156.1


28.3

Provision for credit losses on securities (2)

(0.3)


-

    Net interest income after provision for credit losses

1,420.0


1,384.0

Non-interest income:




  Bank service charges

97.5


107.5

  Investment management fees

73.2


78.2

  Commercial banking lending fees

50.9


42.7

  Operating lease income

49.7


50.8

  Insurance revenue

33.7


37.0

  Cash management fees

33.4


28.4

  Customer interest rate swap income, net

14.9


24.0

  Gain on sale of business, net of expenses (3)

75.9


-

  Other non-interest income (3)

63.5


62.5

    Total non-interest income

492.7


431.1

Non-interest expense:




  Compensation and benefits

674.8


646.2

  Occupancy and equipment 

199.0


185.9

  Professional and outside services

113.2


98.2

  Amortization of other acquisition-related intangible assets

40.8


32.5

  Operating lease expense

36.4


38.8

  Regulatory assessments

32.7


26.1

  Other non-interest expense

114.2


135.0

    Total non-interest expense (3)

1,211.1


1,162.7

    Income before income tax expense

701.6


652.4

Income tax expense

129.0


132.0

    Net income

572.6


520.4

Preferred stock dividend

14.1


14.1

    Net income available to common shareholders

$   558.5


$   506.3





Earnings per common share:




   Basic

$      1.33


$      1.28

   Diluted 

1.32


1.27





(1) The Consolidated Statement of Income for the twelve months ended December 31, 2020 is preliminary and

      does not reflect any estimated goodwill impairment that the Company is in the process of evaluating.

(2) Provision for credit losses in 2020 reflects the application of the CECL standard and the impact of

     COVID-19.




(3) The gain on sale of business, net of expenses, is considered non-operating income. 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 $45.9 million and $65.6 million of non-operating expenses for the

     twelve months ended December 31, 2020 and 2019, respectively. 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, 2020


September 30, 2020


December 31, 2019

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

$    2,582.1

$      0.8

0.12%


$        841.5

$      0.4

0.19%


$        294.4

$      1.0

1.39%

Securities (2)

8,390.2

52.3

2.50


7,922.4

52.5

2.65


7,372.2

52.6

2.85

Loans:












  Commercial real estate 

13,574.3

106.1

3.13


13,853.1

110.5

3.19


13,793.2

147.2

4.27

  Commercial and industrial 

14,621.8

113.6

3.11


14,419.8

113.0

3.13


10,805.1

117.7

4.36

  Equipment financing

4,867.5

62.1

5.10


4,876.4

65.4

5.37


4,785.0

66.7

5.58

  Residential mortgage

8,821.0

75.3

3.41


9,408.0

82.4

3.51


10,019.0

88.5

3.53

  Home equity and other consumer

2,176.6

18.7

3.44


2,296.0

19.9

3.47


2,603.8

30.8

4.72

    Total loans

44,061.2

375.8

3.41


44,853.3

391.2

3.49


42,006.1

450.9

4.29

    Total earning assets

55,033.5

$ 428.9

3.12%


53,617.2

$ 444.1

3.31%


49,672.7

$ 504.5

4.06%

Other assets

7,362.6




7,676.2




6,457.2



    Total assets

$  62,396.1




$  61,293.4




$  56,129.9















Liabilities and stockholders' equity:












Deposits:












  Non-interest-bearing

$  14,742.6

$         -

-   %


$  13,753.8

$         -

-   %


$    9,593.6

$         -

-   %

  Savings, interest-bearing checking












    and money market

29,978.3

14.7

0.20


28,970.0

16.4

0.23


23,674.3

49.7

0.84

  Time

5,953.5

15.4

1.03


6,817.8

20.1

1.18


8,926.8

37.2

1.67

    Total deposits

50,674.4

30.1

0.24


49,541.6

36.5

0.29


42,194.7

86.9

0.82

Borrowings:












  Federal Home Loan Bank advances

571.8

1.1

0.77


640.5

1.3

0.79


2,287.7

11.4

1.99

  Customer repurchase agreements

447.6

0.2

0.15


382.6

0.2

0.18


1,489.3

6.4

1.73

  Federal funds purchased

213.3

-

0.09


260.1

-

0.08


369.2

0.7

0.73

    Total borrowings

1,232.7

1.3

0.43


1,283.2

1.5

0.46


4,146.2

18.5

1.78

Notes and debentures

1,010.8

7.3

2.89


1,014.0

7.4

2.92


973.5

8.8

3.61

    Total funding liabilities

52,917.9

$   38.7

0.29%


51,838.8

$   45.4

0.35%


47,314.4

$ 114.2

0.96%

Other liabilities

1,594.2




1,653.3




1,161.3



    Total liabilities

54,512.1




53,492.1




48,475.7



Stockholders' equity

7,884.0




7,801.3




7,654.2



    Total liabilities and












       stockholders' equity

$  62,396.1




$  61,293.4




$  56,129.9















Net interest income/spread (3)


$ 390.2

2.83%



$ 398.7

2.96%



$ 390.3

3.10%













Net interest margin



2.84%




2.97%




3.14%













(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 $7.4 million, $7.3 million and $7.6 million for the three months ended 

      December 31, 2020, September 30, 2020 and December 31, 2019, respectively.






 

People's United Financial, Inc.







AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS 













December 31, 2020




December 31, 2019


Twelve months ended

Average


Yield/


Average


Yield/

(dollars in millions)

Balance

Interest

Rate


Balance

Interest

Rate

Assets:








Short-term investments

$    1,125.1

$         3.4

0.31%


$        232.7

$           4.8

2.06%

Securities (1)

8,143.7

215.7

2.65


7,217.5

205.2

2.84

Loans:








  Commercial real estate

14,057.6

488.6

3.48


12,480.1

556.4

4.46

  Commercial and industrial

13,456.8

451.0

3.35


9,874.7

454.3

4.60

  Equipment financing

4,898.2

263.3

5.38


4,574.9

253.8

5.55

  Residential mortgage

9,569.2

333.3

3.48


9,314.8

329.9

3.54

  Home equity and other consumer

2,400.5

89.5

3.73


2,174.0

106.1

4.88

    Total loans

44,382.3

1,625.7

3.66


38,418.5

1,700.5

4.43

    Total earning assets

53,651.1

$ 1,844.8

3.44%


45,868.7

$   1,910.5

4.17%

Other assets

7,387.0




5,789.3



    Total assets

$  61,038.1




$  51,658.0











Liabilities and stockholders' equity:








Deposits:








  Non-interest-bearing

$  12,864.4

$             -

-   %


$    8,822.9

$              -

-   %

  Savings, interest-bearing checking








    and money market

27,831.9

92.2

0.33


22,204.1

209.3

0.94

  Time

7,520.6

95.0

1.26


8,115.7

147.6

1.82

    Total deposits

48,216.9

187.2

0.39


39,142.7

356.9

0.91

Borrowings:








  Federal Home Loan Bank advances

1,371.2

13.7

1.00


2,098.0

50.1

2.39

  Federal funds purchased

688.2

5.4

0.79


1,127.5

24.6

2.18

  Customer repurchase agreements

379.0

1.1

0.29


296.6

2.2

0.75

  Other borrowings

-

-

-


3.3

0.1

1.87

    Total borrowings

2,438.4

20.2

0.83


3,525.4

77.0

2.18

Notes and debentures

1,009.5

31.8

3.15


922.1

34.9

3.78

    Total funding liabilities

51,664.8

$     239.2

0.46%


43,590.2

$      468.8

1.08%

Other liabilities

1,561.5




996.5



    Total liabilities

53,226.3




44,586.7



Stockholders' equity

7,811.8




7,071.3



    Total liabilities and








      stockholders' equity

$  61,038.1




$  51,658.0











Net interest income/spread (2)


$ 1,605.6

2.98%



$   1,441.7

3.09%









Net interest margin



2.99%




3.14%









(1) Average balances and yields for securities are based on amortized cost.



(2) The fully taxable equivalent adjustment was $29.8 million and $29.4 million for the twelve months 

      ended December 31, 2020 and 2019, respectively.






 

People's United Financial, Inc.






















As a result of adopting the CECL standard on January 1, 2020, People's United's prior distinction between the originated loan portfolio and the acquired loan portfolio is no longer necessary. Accordingly, prior period disclosures have been revised to conform to the current period presentation.













NON-PERFORMING ASSETS
























Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


(dollars in millions)


2020


2020


2020


2020


2019


Non-accrual loans:












Commercial:












  Commercial real estate

$

60.4

$

85.3

$

73.6

$

53.5

$

53.8


  Commercial and industrial


76.4


86.7


88.8


55.6


38.5


  Equipment financing


109.3


49.0


48.6


42.5


47.7


    Total Commercial


246.1


221.0


211.0


151.6


140.0


Retail:












  Residential mortgage


62.3


62.9


62.6


66.6


63.3


  Home equity


20.5


22.1


22.5


22.1


20.8


  Other consumer


0.2


0.2


0.1


0.1


-


    Total Retail


83.0


85.2


85.2


88.8


84.1


    Total non-accrual loans (1)


329.1


306.2


296.2


240.4


224.1


Real estate owned:












  Commercial


3.6


3.6


7.3


7.3


7.3


  Residential


3.2


1.9


4.9


9.5


11.9


    Total real estate owned


6.8


5.5


12.2


9.5


11.9


Repossessed assets


5.7


9.7


6.2


4.6


4.2


    Total non-performing assets

$

341.6

$

321.4

$

314.6

$

254.5

$

240.2














Non-accrual loans as a percentage of total loans


0.75

%

0.68

%

0.65

%

0.54

%

0.51

%

Non-performing assets as a percentage of:












  Total loans, real estate owned and repossessed assets

0.78


0.71


0.69


0.59


0.57


  Tangible stockholders' equity and allowance












     for credit losses


6.59


6.41


6.39


5.45


5.03














(1) Reported net of government guarantees totaling $2.5 million at December 31, 2020, $2.4 million at September 30, 2020, $2.9 million at June 30, 2020, $1.2 million at March 31, 2020 and $1.3 million at December 31, 2019.

 

People's United Financial, Inc.










PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS




















Three Months Ended




Dec. 31,


Sept 30,


June 30,


March 31,


Dec. 31,


(dollars in millions)


2020


2020


2020


2020


2019


Allowance for credit losses on loans:












Balance at beginning of period

$

423.8

$

414.0

$

341.7

$

246.6

$

246.0


CECL transition adjustment


-


-


-


72.2


 N/A 


Balance at beginning of period, adjusted


423.8


414.0


341.7


318.8


246.0


  Charge-offs 


(16.7)


(19.3)


(10.3)


(12.6)


(8.5)


  Recoveries 


3.3


2.0


1.8


2.0


1.8


    Net loan charge-offs 


(13.4)


(17.3)


(8.5)


(10.6)


(6.7)


  Provision for credit losses on loans 


14.7


27.1


80.8


33.5


7.3


    Balance at end of period 

$

425.1

$

423.8

$

414.0

$

341.7

$

246.6














Allowance for credit losses on loans 












   as a percentage of:












    Total loans


0.97

%

0.94

%

0.91

%

0.77

%

0.57

%

    Non-accrual loans


129.1


138.4


139.8


142.2


110.0














N/A - not applicable
























NET LOAN CHARGE-OFFS (RECOVERIES)






















Three Months Ended



Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


(dollars in millions)


2020


2020


2020


2020


2019


Commercial:












  Commercial real estate

$

0.1

$

4.1

$

1.8

$

3.4

$

(0.1)


  Commercial and industrial


6.6


6.9


-


1.0


2.3


  Equipment financing


6.8


6.2


5.2


3.9


4.2


    Total


13.5


17.2


7.0


8.3


6.4


Retail:












  Residential mortgage


(0.3)


(0.2)


-


0.8


(0.2)


  Home equity


-


-


0.6


0.1


0.3


  Other consumer


0.2


0.3


0.9


1.4


0.2


    Total


(0.1)


0.1


1.5


2.3


0.3


    Total net loan charge-offs

$

13.4

$

17.3

$

8.5

$

10.6

$

6.7














Net loan charge-offs to












  average total loans (annualized)


0.12

%

0.15

%

0.08

%

0.10

%

0.06

%

 

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


Twelve Months Ended



Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


Dec. 31,


Dec. 31,

(dollars in millions)


2020


2020


2020


2020


2019


2020


2019

Total non-interest expense 


$   293.4


$   293.6


$   304.0


$   320.1


$   325.7


$  1,211.1


$  1,162.7

Adjustments to arrive at operating















  non-interest expense:















  Merger-related expenses


(4.9)


(4.6)


(18.5)


(17.9)


(22.6)


(45.9)


(49.1)

  Intangible asset write-down


-


-


-


-


(16.5)


-


(16.5)

    Total


(4.9)


(4.6)


(18.5)


(17.9)


(39.1)


(45.9)


(65.6)

    Operating non-interest expense


288.5


289.0


285.5


302.2


286.6


1,165.2


1,097.1
















Adjustments:















  Amortization of other acquisition-related













     intangible assets


(9.7)


(10.2)


(10.2)


(10.7)


(9.8)


(40.8)


(32.5)

  Operating lease expense


(8.5)


(9.3)


(8.8)


(9.8)


(9.6)


(36.4)


(38.8)

  Other (1)


(1.3)


(5.1)


(1.9)


(1.9)


(1.6)


(10.2)


(6.2)

    Total non-interest expense for















      efficiency ratio


$   269.0


$   264.4


$   264.6


$   279.8


$   265.6


$  1,077.8


$  1,019.6
















Net interest income (FTE basis)


$   390.2


$   398.7


$   413.0


$   403.7


$   390.3


$  1,605.6


$  1,441.7

Total non-interest income


178.2


101.1


89.6


123.8


124.2


492.7


431.1

    Total revenues


568.4


499.8


502.6


527.5


514.5


2,098.3


1,872.8

Adjustments:















  Gain on sale of business, net of expenses

(75.9)


-


-


-


-


(75.9)


-

  Operating lease expense


(8.5)


(9.3)


(8.8)


(9.8)


(9.6)


(36.4)


(38.8)

  BOLI FTE adjustment


0.9


0.8


1.0


0.8


0.7


3.5


2.5

  Gain on sale of branches, net of expenses

-


-


-


-


(7.6)


-


(7.6)

  Net security gains


-


-


-


-


(0.1)


-


(0.2)

  Other (2)


-


(0.1)


-


(0.3)


(3.2)


(0.4)


(2.8)

    Total revenues for efficiency ratio


$   484.9


$   491.2


$   494.8


$   518.2


$   494.7


$  1,989.1


$  1,825.9

    Efficiency ratio


55.5%


53.8%


53.5%


54.0%


53.7%


54.2%


55.8%
















(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


Twelve Months Ended



Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


Dec. 31,


Dec. 31,

(in millions)


2020


2020


2020


2020


2019


2020


2019

Net interest income


$   382.8


$   391.4


$   405.6


$   396.0


$   382.7


$  1,575.8


$  1,412.3

Non-interest income


178.2


101.1


89.6


123.8


124.2


492.7


431.1

Non-interest expense


(293.4)


(293.6)


(304.0)


(320.1)


(325.7)


(1,211.1)


(1,162.7)

    Pre-provision net revenue


267.6


198.9


191.2


199.7


181.2


857.4


680.7

Non-operating income


(75.9)


-


-


-


(7.6)


(75.9)


(7.6)

Non-operating expense


4.9


4.6


18.5


17.9


39.1


45.9


65.6

   Operating pre-provision net revenue


$   196.6


$   203.5


$   209.7


$   217.6


$   212.7


$     827.4


$     738.7

 

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)

2020


2020


2020


2020


2019


2020 (1)


2019

Net income available to common shareholders

$   204.2


$   141.1


$      86.4


$   126.9


$   134.0


$   558.5


$   506.3

Adjustments to arrive at operating earnings:















  Merger-related expenses


4.9


4.6


18.5


17.9


22.6


45.9


49.1

  Gain on sale of business, net of expenses


(75.9)


-


-


-


-


(75.9)


-

  Intangible asset write-down


-


-


-


-


16.5


-


16.5

  Gain on sale of branches, net of expenses


-


-


-


-


(7.6)


-


(7.6)

    Total pre-tax adjustments


(71.0)


4.6


18.5


17.9


31.5


(30.0)


58.0

  Tax effect 


14.5


(1.0)


(3.9)


(3.7)


(6.7)


6.1


(12.2)

    Total adjustments, net of tax


(56.5)


3.6


14.6


14.2


24.8


(23.9)


45.8

    Operating earnings


$   147.7


$   144.7


$   101.0


$   141.1


$   158.8


$   534.6


$   552.1
















Diluted EPS, as reported


$      0.49


$      0.34


$      0.21


$      0.30


$      0.31


$      1.32


$      1.27

Adjustments to arrive at operating EPS:















  Merger-related expenses


-


-


0.03


0.03


0.04


0.09


0.10

  Gain on sale of business, net of expenses


(0.14)


-


-


-


-


(0.14)


-

  Intangible asset write-down


-


-


-


-


0.03


-


0.03

  Gain on sale of branches, net of expenses


-


-


-


-


(0.01)


-


(0.01)

    Total adjustments per common share 


(0.14)


-


0.03


0.03


0.06


(0.05)


0.12

    Operating EPS


$      0.35


$      0.34


$      0.24


$      0.33


$      0.37


$      1.27


$      1.39
















Average total assets


$ 62,396


$ 61,293


$ 61,841


$ 58,603


$ 56,130


$ 61,038


$ 51,658
















Operating return on















  average assets (annualized)


0.95%


0.94%


0.65%


0.96%


1.13%


0.88%


1.07%
















(1) The sum of the quarterly amounts for certain line items may not equal twelve months amounts 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)


2020


2020


2020


2020


2019


2020


2019

Operating earnings


$   147.7


$   144.7


$   101.0


$   141.1


$   158.8


$   534.6


$   552.1
















Average stockholders' equity


$   7,884


$   7,801


$   7,757


$   7,804


$   7,654


$   7,812


$   7,071

Less: Average preferred stock


244


244


244


244


244


244


244

Average common equity


7,640


7,557


7,513


7,560


7,410


7,568


6,827

Less: Average goodwill and average other















         acquisition-related intangible assets


3,213


3,249


3,259


3,269


3,226


3,247


3,060

Average tangible common equity


$   4,427


$   4,308


$   4,254


$   4,291


$   4,184


$   4,321


$   3,767
















Operating return on average tangible















  common equity (annualized)


13.3%


13.4%


9.5%


13.2%


15.2%


12.4%


14.7%

 

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)


2020


2020


2020


2020


2019


2020 (1)


2019

Common dividends paid


$      75.6


$      75.7


$      75.5


$      77.3


$      69.9


$   304.1


$   274.8

Operating earnings


$   147.7


$   144.7


$   101.0


$   141.1


$   158.8


$   534.6


$   552.1
















Operating common dividend payout ratio


51.2%


52.3%


74.8%


54.8%


44.0%


56.9%


49.8%
















(1) The sum of the quarterly amounts for certain line items may not equal twelve months amounts due to rounding.

















TANGIBLE COMMON EQUITY RATIO

















Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,





(dollars in millions)


2020


2020


2020


2020


2019





Total stockholders' equity


$   7,956


$   7,831


$   7,763


$   7,726


$   7,947





Less: Preferred stock


244


244


244


244


244





Common equity


7,712


7,587


7,519


7,482


7,703





Less: Goodwill and other















         acquisition-related intangible assets


3,199


3,244


3,254


3,264


3,275





Tangible common equity


$   4,513


$   4,343


$   4,265


$   4,218


$   4,428




















Total assets


$ 63,445


$ 60,871


$ 61,510


$ 60,433


$ 58,590





Less: Goodwill and other















         acquisition-related intangible assets


3,199


3,244


3,254


3,264


3,275





Tangible assets


$ 60,246


$ 57,627


$ 58,256


$ 57,169


$ 55,315




















Tangible common equity ratio


7.5%


7.5%


7.3%


7.4%


8.0%




















TANGIBLE BOOK VALUE PER COMMON SHARE















Dec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,





(in millions, except per common share data)

2020


2020


2020


2020


2019





Tangible common equity


$   4,513


$   4,343


$   4,265


$   4,218


$   4,428




















Common shares issued


533.68


533.67


533.59


533.47


532.83





Less: Shares classified as treasury shares


109.00


109.00


109.00


109.00


89.17





Common shares outstanding


424.68


424.67


424.59


424.47


443.66





Less: Unallocated ESOP shares


5.57


5.66


5.75


5.84


5.92





Common shares


419.11


419.01


418.84


418.63


437.74




















Tangible book value per common share


$   10.77


$   10.36


$   10.18


$   10.07


$   10.12





 

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SOURCE People's United Financial, Inc.