PEOPLE'S UNITED FINANCIAL, INC. 
By BRIDGEPORT, Conn., Jan. 21 /PRNewswire-FirstCall/ -- People's United Financial, Inc. (Nasdaq: PBCT) today announced net income of $24.9 million, or $0.07 per share, for the fourth quarter of 2009, compared to $26.8 million, or $0.08 per share, for the third quarter of 2009, and $33.7 million, or $0.10 per share, for the fourth quarter of 2008. Fourth quarter 2009 earnings reflect a 3.19 percent net interest margin, unchanged from the third quarter of 2009, despite continued pressure associated with the historically low interest rate environment and the company's asset sensitive balance sheet, and a modest increase in non-interest expenses. For the year ended December 31, 2009, net income totaled $101.2 million, or $0.30 per share, compared to $137.8 million, or $0.42 per share, for 2008.
Included in fourth quarter 2009 results are system conversion and merger-related expenses totaling $4.5 million (included in non-interest expense). After taxes, these expenses reduced 2009 fourth quarter net income by $3.1 million, or $0.01 per share. Excluding the effect of these expenses, net income would have been $28.0 million, or $0.08 per share, for the fourth quarter of 2009.
The Board of Directors of People's United Financial declared a $0.1525 per share quarterly dividend, payable February 15, 2010 to shareholders of record on February 1, 2010. Based on the closing stock price on January 20, 2010, the dividend yield on People's United Financial common stock is 3.7 percent.
"Our pending acquisition of Financial Federal reflects our strategic focus on expansion through opportunistic acquisitions," stated Philip R. Sherringham, President and Chief Executive Officer. "At the same time, we remain committed to organic growth throughout our franchise. Our performance during 2009 reflects continued growth in our core loan portfolios as well as deposits in spite of a clearly very challenging economic environment. Year-over-year core commercial and home equity lending portfolios increased five percent and deposits grew eight percent. In addition, the pillars of our financial position - strong asset quality and prudent management of our excess capital - have served us well in these challenging times."
Sherringham added, "We feel our asset quality has held up very well on both a relative and absolute basis through the recent recessionary cycle and continue to believe that most of the bad news is substantially behind us. The strength of our capital and liquidity, asset quality and earnings, as well as the fact that our balance sheet remains funded almost entirely by deposits and stockholders' equity, continue to set us apart from most in the industry."
"On an operating basis, excluding system conversion and merger-related costs, earnings were $28 million, or 8 cents per share this quarter," said Paul D. Burner, Senior Executive Vice President and Chief Financial Officer. "Significant drivers of the company's performance this quarter were a stable net interest margin, modest loan growth across our strategic lending businesses, and lower net loan charge-offs. In spite of a 19 basis point reduction in our cost of deposits, the net interest margin was unchanged from the third quarter due to the combined effects of a 15 basis point decline in the yield on average earning assets and a 6 percent annualized increase in average deposits."
Commenting on asset quality, Burner stated, "Non-performing loans decreased $7 million this quarter, a further sign of what we believe is stabilization across the loan portfolio. Our continued modest level of net loan charge-offs in this current economic environment remains a testament to our disciplined underwriting standards."
Fourth quarter net loan charge-offs totaled $13.6 million compared to $16.0 million in the third quarter of 2009. Net loan charge-offs as a percent of average loans on an annualized basis were 0.38 percent in the fourth quarter of 2009 compared to 0.44 percent in this year's third quarter. For the full year, net loan charge-offs as a percent of average loans were 0.29 percent compared to 0.10 percent in 2008. The level of the allowance for loan losses is unchanged from September 30, 2009.
At December 31, 2009, non-performing loans totaled $168.8 million and the ratio of non-performing loans to total loans was 1.19 percent, compared to $175.7 million and 1.23 percent, respectively, at September 30, 2009. Non-performing assets totaled $205.6 million at December 31, 2009, a $12.9 million increase from September 30, 2009. Non-performing assets equaled 1.44 percent of total loans, REO and repossessed assets at December 31, 2009 compared to 1.35 percent at September 30, 2009. At December 31, 2009, the allowance for loan losses as a percentage of total loans was 1.21 percent and as a percentage of non-performing loans was 102 percent, compared to 1.21 percent and 98 percent, respectively, at September 30, 2009.
For the fourth quarter of 2009, return on average tangible assets was 0.51 percent and return on average tangible stockholders' equity was 2.8 percent, compared to 0.55 percent and 3.0 percent, respectively, for the third quarter of 2009. At December 31, 2009, People's United Financial's tangible equity ratio stood at 18.2 percent.
Conference Call
On January 22, 2010, at 11 a.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 People's" 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.
Selected Financial Terms
In addition to evaluating People's United Financial's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, and tangible book value per share. Management believes these non-GAAP financial measures provide information useful to investors in understanding People's United Financial's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts. Further, the efficiency ratio is used by management in its assessment of financial performance specifically as it relates to non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of People's United Financial's capital position.
The efficiency ratio, which represents an approximate measure of the cost required by People's United Financial to generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding goodwill impairment charges, amortization of acquisition-related intangibles and fair value adjustments, losses on real estate assets and nonrecurring expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent basis (excluding fair value adjustments) plus total non-interest income (including the fully taxable equivalent adjustment on bank-owned life insurance income, and excluding gains and losses on sales of assets, other than residential mortgage loans, and nonrecurring income) (the denominator). People's United Financial generally considers an item of income or expense to be nonrecurring 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.
The tangible equity ratio is the ratio of (i) tangible stockholders' equity (total stockholders' equity less goodwill and other acquisition-related intangibles) (the numerator) to (ii) tangible assets (total assets less goodwill and other acquisition-related intangibles) (the denominator). Tangible book value per share is calculated by dividing tangible stockholders' equity by common shares outstanding (total common shares issued, less common shares classified as treasury shares and unallocated ESOP common shares).
4Q 2009 Financial Highlights
Summary
-- Net income totaled $24.9 million, or $0.07 per share.
-- Net interest income totaled $147.5 million.
-- Net interest margin unchanged from 3Q09 at 3.19%.
-- Average short-term investments and securities purchased under
agreements to resell totaled $3.5 billion, or 19% of average earning
assets, and yielded 0.24% in 4Q09.
-- Average deposits increased $236 million, or 6% annualized, from
3Q09.
-- Provision for loan losses totaled $13.6 million.
-- Net loan charge-offs totaled $13.6 million in 4Q09.
-- Non-interest income totaled $71.7 million in 4Q09, compared to $75.5
million (excluding $4.7 million of security gains) in 3Q09.
-- Total wealth management income decreased $1.3 million from 3Q09.
-- Net gains on sales of residential mortgage loans decreased $2.2
million from 3Q09.
-- Non-interest expense totaled $172.2 million in 4Q09 compared to $165.1
million in 3Q09.
-- 4Q09 includes $4.5 million of system conversion and merger-related
costs.
-- Effective income tax rate was 25.5% in 4Q09.
-- Reflects a $2.0 million deferred tax benefit due to a reduction in
the combined state income tax rate following the charter
consolidations of the former Chittenden banks.
Commercial Banking
-- Average commercial banking loans, excluding shared national credits,
increased $41 million from 3Q09 to $8.8 billion.
-- Shared national credits totaled $566.8 million (4% of total loans) at
December 31, 2009, a $47.4 million decrease from September 30, 2009.
-- Non-performing commercial banking assets totaled $142.4 million at
December 31, 2009, an $11.1 million increase from September 30, 2009.
-- Includes two previously disclosed non-performing shared national
credits ($16.3 million in non-performing loans and $9.8 million in
real estate owned).
-- The ratio of non-performing commercial banking loans to total commercial
banking loans was 1.17% at December 31, 2009 compared to 1.28% at
September 30, 2009.
-- Net loan charge-offs totaled $9.8 million, or 0.42% annualized, of
average commercial banking loans in 4Q09, compared to $11.2 million, or
0.48% annualized, in 3Q09.
Retail & Small Business Banking
-- Average residential mortgage loans totaled $2.6 billion, a $200 million
decrease from 3Q09, reflecting People's United Financial's strategy to
sell essentially all newly-originated loans.
-- Net loan charge-offs totaled $1.2 million, or 0.19% annualized, of
average residential mortgage loans.
-- The ratio of non-performing residential mortgage loans to total
residential mortgage loans was 2.07% at December 31, 2009 compared
to 1.88% at September 30, 2009.
-- Average home equity loans totaled $2.0 billion, unchanged from 3Q09.
-- Net loan charge-offs totaled $1.3 million, or 0.26% annualized, of
average home equity loans.
-- Average indirect auto loans totaled $0.2 billion, unchanged from 3Q09.
-- Net loan charge-offs totaled $0.7 million, or 1.38% annualized, of
average indirect auto loans.
Wealth Management
-- Wealth Management income decreased $1.3 million from 3Q09.
-- Insurance revenue decreased $0.9 million, reflecting the seasonal
nature of insurance renewals.
-- Assets managed and administered, which are not reported as assets of
People's United Financial, totaled $16.1 billion at December 31, 2009
compared to $16.4 billion at September 30, 2009, primarily reflecting a
decline in the market value of fixed-income assets due to an increase in
interest rates.
People's United Financial, a diversified financial services company with $21 billion in assets, provides commercial banking, retail and small business banking, and wealth management services through a network of nearly 300 branches in Connecticut, Vermont, New Hampshire, Maine, Massachusetts and New York. Through its subsidiaries, People's United Financial provides equipment financing, asset management, brokerage and financial advisory services, and insurance services.
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" 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, 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) residential mortgage and secondary market activity; (7) changes in accounting and regulatory guidance applicable to banks; (8) price levels and conditions in the public securities markets generally; (9) competition and its effect on pricing, spending, third-party relationships and revenues; and (10) the successful integration of acquired companies. 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 on the World Wide Web at www.peoples.com.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS
Three Months Ended
Dec. 31, Sept. 30, June 30,
(dollars in millions, except per share
data) 2009 2009 2009(1)
Operating Data:
Net interest income $147.5 $145.3 $141.2
Provision for loan losses 13.6 21.5 14.0
Non-interest income (2) 71.7 80.2 85.0
Non-interest expense (3) 172.2 165.1 176.2
Income before income tax expense 33.4 38.9 36.0
Net income 24.9 26.8 25.3
Selected Statistical Data:
Net interest margin (4) 3.19% 3.19% 3.12%
Return on average assets (4) 0.47 0.51 0.49
Return on average tangible assets (4) 0.51 0.55 0.53
Return on average stockholders' equity
(4) 2.0 2.1 2.0
Return on average tangible stockholders'
equity (4) 2.8 3.0 2.8
Efficiency ratio 73.7 71.3 73.9
Per Common Share Data:
Diluted earnings per share $0.07 $0.08 $0.08
Dividends paid per share 0.15 0.15 0.15
Dividend payout ratio 204.7% 191.3% 202.0%
Book value (end of period) $15.19 $15.24 $15.29
Tangible book value (end of period) 10.68 10.71 10.75
Stock price:
High 17.16 17.41 18.54
Low 15.15 14.84 14.72
Close (end of period) 16.70 15.56 15.07
Average diluted common shares outstanding
(in millions) 333.64 333.38 332.97
Three Months Ended
March 31, Dec. 31,
(dollars in millions, except per share data) 2009(1) 2008(1)
Operating Data:
Net interest income $142.8 $153.3
Provision for loan losses 7.9 8.7
Non-interest income (2) 72.2 73.7
Non-interest expense (3) 171.1 168.2
Income before income tax expense 36.0 50.1
Net income 24.2 33.7
Selected Statistical Data:
Net interest margin (4) 3.25% 3.55%
Return on average assets (4) 0.48 0.67
Return on average tangible assets (4) 0.52 0.73
Return on average stockholders' equity (4) 1.9 2.6
Return on average tangible stockholders'
equity (4) 2.7 3.6
Efficiency ratio 75.3 70.3
Per Common Share Data:
Diluted earnings per share $0.07 $0.10
Dividends paid per share 0.15 0.15
Dividend payout ratio 207.3% 149.1%
Book value (end of period) $15.38 $15.44
Tangible book value (end of period) 10.81 10.86
Stock price:
High 18.18 20.15
Low 15.61 14.75
Close (end of period) 17.97 17.83
Average diluted common shares outstanding
(in millions) 332.78 332.33
(1) As previously disclosed, reported amounts for the three months ended
June 30, 2009, March 31, 2009 and December 31, 2008 were revised to
reflect the recognition of additional non-interest expense, which,
after taxes, reduced net income by $2.1 million, $2.5 million and
$1.7 million, respectively. Diluted earnings per share were
reduced by $0.01 in both the three months ended March 31, 2009 and
December 31, 2008 (no impact on the three months ended June 30,
2009). The revision of fourth quarter 2008 results also increased
other liabilities and reduced retained earnings by $1.7 million at
December 31, 2008. Certain statistical data and other per common
share data was revised as necessary.
(2) Includes net security gains of $4.7 million, $12.0 million and $5.4
million for the three months ended September 30, 2009, June 30, 2009
and March 31, 2009, respectively.
(3) Includes $4.5 million of system conversion and merger-related
expenses for the three months ended December 31, 2009, and an FDIC
special assessment charge of $8.4 million for the three months ended
June 30, 2009.
(4) Annualized.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS - Continued
Twelve Months Ended
Dec. 31, Dec. 31,
(dollars in millions, except per share
data) 2009 (1) 2008 (1)
Operating Data:
Net interest income $576.8 $636.4
Provision for loan losses 57.0 26.2
Non-interest income (2) 309.1 303.6
Non-interest expense (3) 684.6 709.0
Income before income tax expense 144.3 204.8
Net income 101.2 137.8
Selected Statistical Data:
Net interest margin 3.19% 3.62%
Return on average assets 0.49 0.68
Return on average tangible assets 0.53 0.73
Return on average stockholders' equity 2.0 2.6
Return on average tangible stockholders'
equity 2.8 3.7
Efficiency ratio 73.5 66.6
Per Common Share Data:
Diluted earnings per share $0.30 $0.42
Dividends paid per share 0.61 0.58
Dividend payout ratio 201.1% 141.1%
Book value (end of period) $15.19 $15.44
Tangible book value (end of period) 10.68 10.86
Stock price:
High 18.54 21.76
Low 14.72 13.92
Close (end of period) 16.70 17.83
Average diluted common shares outstanding
(in millions) 333.17 330.75
(1) See Financial Highlights footnote (1).
(2) Includes net security gains of $22.0 million and $8.3
million for the twelve months ended December 31, 2009
and 2008, respectively.
(3) Includes $4.5 million of system conversion and merger-
related expenses and an FDIC special assessment charge of
$8.4 million for the twelve months ended December 31, 2009,
and merger-related expenses of $36.5 million and other one-time
charges of $14.8 million for the twelve months ended December 31,
2008.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS - Continued
As of and for the Three
Months Ended
Dec. 31, Sept. 30, June 30,
(dollars in millions) 2009 2009 2009
Financial Condition Data:
General:
Total assets $21,256 $20,810 $20,812
Loans 14,234 14,302 14,553
Short-term investments (1) 3,492 3,077 3,073
Securities 902 550 491
Allowance for loan losses 173 173 167
Goodwill and other acquisition-related
intangibles 1,515 1,520 1,525
Deposits 15,446 15,050 15,023
Borrowings 159 154 160
Subordinated notes 182 182 181
Stockholders' equity 5,100 5,115 5,130
Non-performing assets 206 193 182
Net loan charge-offs 13.6 16.0 6.0
Average Balances:
Loans $14,231 $14,454 $14,595
Short-term investments (1) 3,463 3,105 2,816
Securities 887 782 799
Total earning assets 18,582 18,341 18,210
Total assets 21,132 20,870 20,759
Deposits 15,273 15,037 14,886
Total funding liabilities 15,616 15,365 15,237
Stockholders' equity 5,106 5,135 5,162
Ratios:
Net loan charge-offs to
average loans (annualized) 0.38% 0.44% 0.16%
Non-performing assets to total loans,
REO and repossessed assets 1.44 1.35 1.25
Allowance for loan losses to non-
performing loans 102.2 98.2 99.4
Allowance for loan losses to total
loans 1.21 1.21 1.15
Average stockholders' equity to average
total assets 24.2 24.6 24.9
Stockholders' equity to total assets 24.0 24.6 24.7
Tangible stockholders' equity to tangible
assets 18.2 18.6 18.7
Total risk-based capital (2) 14.1 14.0 13.7
As of and for the
Three Months Ended
March 31, Dec. 31,
(dollars in millions) 2009 2008
Financial Condition Data:
General:
Total assets $20,681 $20,168
Loans 14,648 14,566
Short-term investments (1) 2,756 1,139
Securities 806 1,902
Allowance for loan losses 159 158
Goodwill and other acquisition-related
intangibles 1,531 1,536
Deposits 14,846 14,269
Borrowings 185 188
Subordinated notes 181 181
Stockholders' equity 5,156 5,174
Non-performing assets 142 94
Net loan charge-offs 6.4 5.7
Average Balances:
Loans $14,603 $14,371
Short-term investments (1) 1,824 1,610
Securities 1,275 1,393
Total earning assets 17,702 17,374
Total assets 20,258 20,057
Deposits 14,346 14,117
Total funding liabilities 14,721 14,479
Stockholders' equity 5,164 5,230
Ratios:
Net loan charge-offs to
average loans (annualized) 0.18% 0.16%
Non-performing assets to total loans,
REO and repossessed assets 0.97 0.64
Allowance for loan losses to non-
performing loans 126.1 186.8
Allowance for loan losses to total
loans 1.09 1.08
Average stockholders' equity to average
total assets 25.5 26.1
Stockholders' equity to total assets 24.9 25.7
Tangible stockholders' equity to tangible
assets 18.9 19.5
Total risk-based capital (2) 13.5 13.4
(1) Includes securities purchased under agreements to resell.
(2) Total risk-based capital ratios are for People's United Bank and, as
such, do not reflect the additional capital residing at People's
United Financial, Inc. People's United Bank's December 31, 2009 total
risk-based capital ratio is preliminary.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF CONDITION
Dec. 31, Sept. 30, Dec. 31,
(in millions) 2009 2009 2008 (1)
Assets
Cash and due from banks $326.0 $410.9 $345.1
Short-term investments 3,092.0 1,933.0 1,138.8
Total cash and cash equivalents 3,418.0 2,343.9 1,483.9
Securities:
Trading account securities, at fair
value 75.7 10.3 21.4
Securities available for sale, at fair
value 739.7 453.4 1,848.3
Securities held to maturity, at
amortized cost 55.3 55.3 0.9
Federal Home Loan Bank stock, at cost 31.1 31.1 31.1
Total securities 901.8 550.1 1,901.7
Securities purchased under agreements to
resell 400.0 1,144.0 -
Loans:
Commercial real estate 5,399.4 5,365.8 4,967.3
Commercial 4,042.5 4,011.4 4,226.4
Residential mortgage 2,546.9 2,654.0 3,144.6
Consumer 2,245.0 2,270.4 2,227.4
Total loans 14,233.8 14,301.6 14,565.7
Less allowance for loan losses (172.5) (172.5) (157.5)
Total loans, net 14,061.3 14,129.1 14,408.2
Goodwill and other acquisition-related
intangibles 1,515.2 1,520.2 1,535.8
Premises and equipment 264.5 261.7 262.4
Bank-owned life insurance 235.1 235.2 228.6
Other assets 459.6 625.9 347.1
Total assets $21,255.5 $20,810.1 $20,167.7
Liabilities
Deposits:
Non-interest-bearing $3,509.0 $3,192.8 $3,173.4
Savings, interest-bearing checking and
money market 7,327.9 6,926.0 6,214.7
Time 4,608.7 4,931.6 4,881.3
Total deposits 15,445.6 15,050.4 14,269.4
Borrowings:
Repurchase agreements 144.1 139.0 156.7
Federal Home Loan Bank advances 14.8 15.0 15.1
Other - - 16.1
Total borrowings 158.9 154.0 187.9
Subordinated notes 181.8 181.5 180.5
Other liabilities 369.5 309.0 356.1
Total liabilities 16,155.8 15,694.9 14,993.9
Stockholders' Equity
Common stock ($0.01 par value; 1.95 billion shares authorized;
348.2 million shares, 348.4 million
shares and 347.9 million shares issued) 3.5 3.5 3.5
Additional paid-in capital 4,511.3 4,506.3 4,485.1
Retained earnings 914.5 943.4 1,020.9
Treasury stock, at cost (3.2 million
shares, 3.3 million shares and 3.2
million shares) (58.6) (59.6) (57.9)
Accumulated other comprehensive loss (75.8) (81.4) (75.4)
Unallocated common stock of Employee
Stock Ownership Plan (195.2) (197.0) (202.4)
Total stockholders' equity 5,099.7 5,115.2 5,173.8
Total liabilities and stockholders'
equity $21,255.5 $20,810.1 $20,167.7
(1) See Financial Highlights footnote (1).
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Dec. 31, Sept. 30, June 30,
(in millions, except per share data) 2009 2009 2009 (1)
Interest and dividend income:
Commercial real estate $74.1 $73.9 $70.8
Commercial 48.1 49.6 50.6
Residential mortgage 31.4 35.1 37.8
Consumer 23.5 24.0 24.0
Total interest on loans 177.1 182.6 183.2
Securities 8.4 7.5 7.2
Short-term investments 1.8 1.4 1.6
Securities purchased under agreements to
resell 0.2 0.4 0.2
Total interest and dividend income 187.5 191.9 192.2
Interest expense:
Deposits 35.9 42.5 46.8
Borrowings 0.4 0.3 0.4
Subordinated notes 3.7 3.8 3.8
Total interest expense 40.0 46.6 51.0
Net interest income 147.5 145.3 141.2
Provision for loan losses 13.6 21.5 14.0
Net interest income after provision for
loan losses 133.9 123.8 127.2
Non-interest income:
Investment management fees 7.9 8.4 8.6
Insurance revenue 7.0 7.9 6.8
Brokerage commissions 2.9 2.8 3.2
Total wealth management income 17.8 19.1 18.6
Bank service charges 32.2 33.3 32.9
Merchant services income 6.3 6.7 6.1
Bank-owned life insurance 1.9 2.2 2.7
Net security gains (losses) (0.1) 4.7 12.0
Net gains on sales of residential
mortgage loans 3.0 5.2 3.8
Other non-interest income 10.6 9.0 8.9
Total non-interest income 71.7 80.2 85.0
Non-interest expense:
Compensation and benefits 89.2 86.0 86.6
Occupancy and equipment 28.0 27.5 26.3
Professional and outside service fees 10.0 11.6 11.7
Amortization of other acquisition-
related intangibles 5.0 5.1 5.3
Merchant services expense 5.2 5.7 5.2
Merger-related expenses 2.0 - -
Other non-interest expense 32.8 29.2 41.1
Total non-interest expense 172.2 165.1 176.2
Income before income tax expense 33.4 38.9 36.0
Income tax expense 8.5 12.1 10.7
Net income $24.9 $26.8 $25.3
Basic and diluted earnings per common
share $0.07 $0.08 $0.08
Three Months Ended
March 31, Dec. 31,
(in millions, except per share data) 2009 (1) 2008 (1)
Interest and dividend income:
Commercial real estate $69.0 $73.9
Commercial 50.6 54.9
Residential mortgage 40.7 43.2
Consumer 23.9 25.8
Total interest on loans 184.2 197.8
Securities 9.3 8.5
Short-term investments 1.7 6.1
Securities purchased under agreements to
resell - -
Total interest and dividend income 195.2 212.4
Interest expense:
Deposits 48.2 54.6
Borrowings 0.4 0.7
Subordinated notes 3.8 3.8
Total interest expense 52.4 59.1
Net interest income 142.8 153.3
Provision for loan losses 7.9 8.7
Net interest income after provision for
loan losses 134.9 144.6
Non-interest income:
Investment management fees 7.5 9.6
Insurance revenue 8.3 7.3
Brokerage commissions 3.3 3.2
Total wealth management income 19.1 20.1
Bank service charges 30.4 31.5
Merchant services income 5.8 6.6
Bank-owned life insurance 1.6 1.5
Net security gains (losses) 5.4 0.2
Net gains on sales of residential
mortgage loans 1.9 0.8
Other non-interest income 8.0 13.0
Total non-interest income 72.2 73.7
Non-interest expense:
Compensation and benefits 88.7 83.2
Occupancy and equipment 28.0 26.5
Professional and outside service fees 10.7 12.8
Amortization of other acquisition-
related intangibles 5.2 5.5
Merchant services expense 4.9 5.6
Merger-related expenses - -
Other non-interest expense 33.6 34.6
Total non-interest expense 171.1 168.2
Income before income tax expense 36.0 50.1
Income tax expense 11.8 16.4
Net income $24.2 $33.7
Basic and diluted earnings per common
share $0.07 $0.10
(1) See Financial Highlights footnote (1).
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Twelve Months Ended
Dec. 31, Dec. 31,
(in millions, except per share data) 2009 (1) 2008 (1)
Interest and dividend income:
Commercial real estate $287.8 $301.4
Commercial 198.9 229.8
Residential mortgage 145.0 189.9
Consumer 95.4 110.9
Total interest on loans 727.1 832.0
Securities 32.4 30.8
Short-term investments 6.5 46.9
Securities purchased under agreements to
resell 0.8 7.5
Total interest and dividend income 766.8 917.2
Interest expense:
Deposits 173.4 262.1
Borrowings 1.5 3.5
Subordinated notes 15.1 15.2
Total interest expense 190.0 280.8
Net interest income 576.8 636.4
Provision for loan losses 57.0 26.2
Net interest income after provision for
loan losses 519.8 610.2
Non-interest income:
Investment management fees 32.4 36.8
Insurance revenue 30.0 33.3
Brokerage commissions 12.2 16.0
Total wealth management 74.6 86.1
Bank service charges 128.8 127.7
Merchant services income 24.9 27.6
Bank-owned life insurance 8.4 8.3
Net security gains 22.0 8.3
Net gains on sales of residential
mortgage loans 13.9 6.5
Other non-interest income 36.5 39.1
Total non-interest income 309.1 303.6
Non-interest expense:
Compensation and benefits 350.5 344.6
Occupancy and equipment 109.8 110.3
Professional and outside service fees 44.0 48.0
Amortization of other acquisition-
related intangibles 20.6 21.3
Merchant services expense 21.0 23.9
Merger-related expenses 2.0 36.5
Other non-interest expense 136.7 124.4
Total non-interest expense 684.6 709.0
Income before income tax expense 144.3 204.8
Income tax expense 43.1 67.0
Net income $101.2 $137.8
Basic and diluted earnings per common
share $0.30 $0.42
(1) See Financial Highlights footnote (1).
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2009
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $2,822.4 $1.8 0.26%
Securities purchased under
agreements to resell 641.2 0.2 0.17
Securities (2) 887.1 8.4 3.76
Loans:
Commercial real estate 5,352.0 74.1 5.53
Commercial 4,010.8 48.9 4.88
Residential mortgage 2,609.4 31.4 4.81
Consumer 2,258.9 23.5 4.16
Total loans 14,231.1 177.9 5.00
Total earning assets 18,581.8 $188.3 4.05%
Other assets 2,550.3
Total assets $21,132.1
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $3,320.4 $- -%
Savings, interest-bearing checking
and money market 7,145.4 11.9 0.66
Time 4,807.2 24.0 2.00
Total deposits 15,273.0 35.9 0.94
Borrowings:
Repurchase agreements 146.3 0.2 0.49
Federal Home Loan Bank advances 14.9 0.2 5.25
Other - - -
Total borrowings 161.2 0.4 0.93
Subordinated notes 181.7 3.7 8.32
Total funding liabilities 15,615.9 $40.0 1.03%
Other liabilities 410.3
Total liabilities 16,026.2
Stockholders' equity 5,105.9
Total liabilities and stockholders'
equity $21,132.1
Net interest income/spread (3) $148.3 3.02%
Net interest margin 3.19%
September 30, 2009
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $2,344.7 $1.4 0.23%
Securities purchased under
agreements to resell 760.0 0.4 0.19
Securities (2) 782.5 7.5 3.84
Loans:
Commercial real estate 5,302.3 73.9 5.58
Commercial 4,072.8 50.4 4.94
Residential mortgage 2,808.9 35.1 5.00
Consumer 2,269.9 24.0 4.24
Total loans 14,453.9 183.4 5.08
Total earning assets 18,341.1 $192.7 4.20%
Other assets 2,529.0
Total assets $20,870.1
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $3,222.4 $- -%
Savings, interest-bearing checking
and money market 6,798.0 11.6 0.68
Time 5,016.4 30.9 2.47
Total deposits 15,036.8 42.5 1.13
Borrowings:
Repurchase agreements 132.1 0.1 0.47
Federal Home Loan Bank advances 14.6 0.2 5.30
Other - - -
Total borrowings 146.7 0.3 0.95
Subordinated notes 181.3 3.8 8.34
Total funding liabilities 15,364.8 $46.6 1.21%
Other liabilities 370.8
Total liabilities 15,735.6
Stockholders' equity 5,134.5
Total liabilities and stockholders'
equity $20,870.1
Net interest income/spread (3) $146.1 2.99%
Net interest margin 3.19%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for
sale are based on amortized cost.
(3) The FTE adjustment was $0.8 million, $0.8 million and
$1.0 million for the three months ended December 31, 2009,
September 30, 2009, and December 31, 2008, respectively.
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2008
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $1,610.0 $6.1 1.52%
Securities purchased under
agreements to resell - - -
Securities (2) 1,393.1 8.5 2.43
Loans:
Commercial real estate 4,897.3 74.7 6.11
Commercial 4,105.9 55.1 5.37
Residential mortgage 3,189.7 43.2 5.42
Consumer 2,177.6 25.8 4.73
Total loans 14,370.5 198.8 5.53
Total earning assets 17,373.6 $213.4 4.91%
Other assets 2,682.9
Total assets $20,056.5
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $3,096.1 $- -%
Savings, interest-bearing checking
and money market 6,143.6 16.6 1.08
Time 4,877.1 38.0 3.11
Total deposits 14,116.8 54.6 1.55
Borrowings:
Repurchase agreements 151.1 0.4 1.11
Federal Home Loan Bank advances 15.1 0.2 5.32
Other 15.8 0.1 2.93
Total borrowings 182.0 0.7 1.62
Subordinated notes 180.3 3.8 8.39
Total funding liabilities 14,479.1 $59.1 1.63%
Other liabilities 347.5
Total liabilities 14,826.6
Stockholders' equity 5,229.9
Total liabilities and stockholders'
equity $20,056.5
Net interest income/spread (3) $154.3 3.28%
Net interest margin 3.55%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
(3) The FTE adjustment was $0.8 million, $0.8 million and $1.0 million
for the three months ended December 31, 2009, September 30, 2009, and
December 31, 2008, respectively.
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
December 31, 2009
Twelve months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $2,386.5 $6.5 0.27%
Securities purchased under
agreements to resell 421.1 0.8 0.19
Securities (1) 934.2 32.4 3.47
Loans:
Commercial real estate 5,208.5 287.8 5.52
Commercial 4,116.7 202.3 4.91
Residential mortgage 2,880.1 145.0 5.04
Consumer 2,264.4 95.4 4.21
Total loans 14,469.7 730.5 5.05
Total earning assets 18,211.5 $770.2 4.23%
Other assets 2,546.0
Total assets $20,757.5
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $3,210.8 $- -%
Savings, interest-bearing checking
and money market 6,710.6 48.2 0.72
Time 4,966.9 125.2 2.52
Total deposits 14,888.3 173.4 1.16
Borrowings:
Repurchase agreements 151.2 0.7 0.46
Federal Home Loan Bank advances 14.8 0.8 5.28
Other 2.1 - 1.92
Total borrowings 168.1 1.5 0.90
Subordinated notes 181.2 15.1 8.35
Total funding liabilities 15,237.6 $190.0 1.25%
Other liabilities 378.5
Total liabilities 15,616.1
Stockholders' equity 5,141.4
Total liabilities and stockholders'
equity $20,757.5
Net interest income/spread (2) $580.2 2.98%
Net interest margin 3.19%
December 31, 2008
Twelve months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $1,946.7 $46.9 2.41%
Securities purchased under
agreements to resell 310.2 7.5 2.43
Securities (1) 1,009.1 30.8 3.05
Loans:
Commercial real estate 4,820.8 301.4 6.27
Commercial 4,011.1 233.7 5.81
Residential mortgage 3,519.9 189.9 5.40
Consumer 2,058.4 110.9 5.39
Total loans 14,410.2 835.9 5.80
Total earning assets 17,676.2 $921.1 5.21%
Other assets 2,696.8
Total assets $20,373.0
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $3,137.9 $- -%
Savings, interest-bearing checking
and money market 6,203.9 78.5 1.27
Time 5,125.0 183.6 3.58
Total deposits 14,466.8 262.1 1.81
Borrowings:
Repurchase agreements 123.0 2.1 1.72
Federal Home Loan Bank advances 16.2 0.8 5.16
Other 19.1 0.6 3.01
Total borrowings 158.3 3.5 2.23
Subordinated notes 181.4 15.2 8.34
Total funding liabilities 14,806.5 $280.8 1.90%
Other liabilities 353.9
Total liabilities 15,160.4
Stockholders' equity 5,212.6
Total liabilities and stockholders'
equity $20,373.0
Net interest income/spread (2) $640.3 3.31%
Net interest margin 3.62%
(1) Average balances and yields for securities available for
sale are based on amortized cost.
(2) The FTE adjustment was $3.4 million and $3.9 million for
the twelve months ended December 31, 2009 and 2008, respectively.
People's United Financial, Inc.
NON-PERFORMING ASSETS
Dec. 31, Sept. 30, June 30,
(dollars in millions) 2009 2009 2009
Non-accrual loans:
Commercial real estate $72.4 $80.2 $75.0
Residential mortgage 52.7 49.8 51.4
PCLC 20.6 18.6 16.5
Commercial 17.4 21.0 21.3
Consumer 5.7 6.1 3.8
Indirect auto - - -
Total non-accrual loans (1) 168.8 175.7 168.0
Real estate owned ("REO") and
repossessed assets, net 36.8 17.0 14.0
Total non-performing assets $205.6 $192.7 $182.0
Non-performing loans as a percentage of
total loans 1.19% 1.23% 1.15%
Non-performing assets as a percentage of:
Total loans, REO and repossessed assets 1.44 1.35 1.25
Tangible stockholders' equity and
allowance for loan losses 5.47 5.11 4.82
March 31, Dec. 31,
(dollars in millions) 2009 2008
Non-accrual loans:
Commercial real estate $53.8 $29.8
Residential mortgage 42.3 24.2
PCLC 9.0 5.8
Commercial 16.3 21.1
Consumer 4.6 3.3
Indirect auto 0.1 0.1
Total non-accrual loans (1) 126.1 84.3
Real estate owned ("REO") and
repossessed assets, net 15.9 9.4
Total non-performing assets $142.0 $93.7
Non-performing loans as a percentage of
total loans 0.86% 0.58%
Non-performing assets as a percentage of:
Total loans, REO and repossessed assets 0.97 0.64
Tangible stockholders' equity and
allowance for loan losses 3.75 2.47
(1) Reported net of government guarantees totaling $8.3 million at
December 31, 2009, $7.2 million at September 30, 2009, $7.1 million
at June 30, 2009, $7.2 million at March 31, 2009 and $6.5 million at
December 31, 2008.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Three Months Ended
Dec. 31, Sept. 30, June 30,
(dollars in millions) 2009 2009 2009
Balance at beginning of period $172.5 $167.0 $159.0
Charge-offs (14.5) (17.2) (6.9)
Recoveries 0.9 1.2 0.9
Net loan charge-offs (13.6) (16.0) (6.0)
Provision for loan losses 13.6 21.5 14.0
Balance at end of period $172.5 $172.5 $167.0
Allowance for loan losses as a percentage of:
Total loans 1.21% 1.21% 1.15%
Non-performing loans 102.2 98.2 99.4
Three Months Ended
March 31, Dec. 31,
(dollars in millions) 2009 2008
Balance at beginning of period $157.5 $154.5
Charge-offs (6.9) (6.9)
Recoveries 0.5 1.2
Net loan charge-offs (6.4) (5.7)
Provision for loan losses 7.9 8.7
Balance at end of period $159.0 $157.5
Allowance for loan losses as a percentage of:
Total loans 1.09% 1.08%
Non-performing loans 126.1 186.8
NET LOAN CHARGE-OFFS
Three Months Ended
Dec. 31, Sept. 30, June 30,
(dollars in millions) 2009 2009 2009
Commercial $4.3 $1.5 $1.1
PCLC 4.0 2.0 1.8
Consumer 1.9 1.3 1.2
Commercial real estate 1.5 7.7 0.4
Residential mortgage 1.2 2.6 0.8
Indirect auto 0.7 0.9 0.7
Total $13.6 $16.0 $6.0
Net loan charge-offs to average loans
(annualized) 0.38% 0.44% 0.16%
Three Months Ended
March 31, Dec. 31,
(dollars in millions) 2009 2008
Commercial $1.9 $1.2
PCLC 0.8 0.5
Consumer 1.2 0.9
Commercial real estate 1.0 1.5
Residential mortgage 0.5 0.8
Indirect auto 1.0 0.8
Total $6.4 $5.7
Net loan charge-offs to average loans
(annualized) 0.18% 0.16%
SOURCE People's United Financial, Inc.
