PEOPLE'S UNITED FINANCIAL, INC. BRIDGEPORT, Conn., Jan. 19, 2017 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported net income of $75.9 million, or $0.24 per common share, for the fourth quarter of 2016, compared to $70.8 million, or $0.23 per common share, for the fourth quarter of 2015, and $73.7 million, or $0.24 per common share, for the third quarter of 2016.
Included in this quarter's results were merger-related and acquisition integration costs of $1.6 million ($1.0 million after-tax), or less than $0.01 per common share, compared to $3.1 million ($2.1 million after-tax), or $0.01 per common share, for the third quarter of 2016. Fourth quarter 2015 results included a gain of $9.2 million ($6.1 million after-tax), or $0.02 per common share, resulting from the sale of the Company's payroll services business.
For the year ended December 31, 2016, net income totaled $281.0 million, or $0.92 per common share, compared to $260.1 million, or $0.86 per common share, for 2015.
The Company's Board of Directors declared a $0.17 per share quarterly dividend, payable February 15, 2017 to shareholders of record on February 1, 2017. Based on the closing stock price on January 18, 2017, the dividend yield on People's United Financial common stock is 3.5 percent.
"We are pleased with the Company's financial and operating performance this year," commented Jack Barnes, President and Chief Executive Officer. "Full year net income of $281 million is the highest in the Company's history and return on average tangible common equity was 10.2 percent. Our straightforward, solutions-oriented approach to banking enabled us to further expand client relationships and forge new ones as demonstrated by another year of growth in loans, deposits and wealth management assets. We continued to improve operating leverage during the year through revenue growth as well as proactive expense management which has limited the increase in expenses to an average annual rate of less than one percent over the last five years."
Barnes continued, "We strengthened fee income generating capabilities over the course of the year through infrastructure investments and acquisitions, most notably the addition of Gerstein Fisher which closed in early November. We also continued to strategically add talent across the organization to further drive revenue growth. Earlier in the year, we announced the acquisition of Suffolk Bancorp which upon closing will deepen our presence in the New York metro area."
Barnes concluded, "We continually strive to balance and utilize six levers to create shareholder value: enhancing client-focused capabilities, growing the balance sheet, maintaining excellent asset quality, diversifying revenues, controlling costs and deploying capital efficiently. As such, we enter 2017 well-positioned across our diverse portfolio of businesses and attractive Northeast footprint to further deliver exceptional service to clients and profitable growth to shareholders."
"Our fourth quarter performance provided a strong finish to the year as evidenced by record quarterly net income of $75.9 million and a return on average tangible common equity of 10.7 percent," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Net income increased seven percent from the prior year quarter due to higher net interest income and continued expense control. As a result, the efficiency ratio was 59.3 percent, an improvement of 170 basis points from a year ago."
Rosato concluded, "Loans grew five percent on an annualized basis, marking the 25(th) consecutive quarter of growth. The increase was driven by strong results in commercial real estate and residential mortgage, partially offset by lower mortgage warehouse lending balances. We maintained excellent asset quality across each portfolio, reflected by net charge-offs as a percentage of average loans of only six basis points for the quarter. Deposit growth was three percent annualized, while the overall cost of deposits remained consistent with the third quarter. Furthermore, we issued $250 million of preferred stock which enhanced our already strong capital position."
At December 31, 2016, People's United Financial's common equity tier 1 capital and total risk-based capital ratios were 9.9 percent and 12.5 percent, respectively, and the tangible common equity ratio stood at 7.2 percent. For People's United Bank, N.A., common equity tier 1 capital and total risk-based capital ratios were 11.3 percent and 13.4 percent, respectively, at December 31, 2016.
Net loan charge-offs as a percentage of average total loans on an annualized basis were 0.06 percent in the fourth quarter of 2016, a slight increase from 0.04 percent in the third quarter of 2016, but lower than 0.09 percent in the fourth quarter of 2015. For the originated loan portfolio, non-performing loans equaled 0.51 percent of loans at December 31, 2016, a decrease from 0.54 percent at September 30, 2016 and 0.58 percent at December 31, 2015.
Return on average assets of 0.75 percent for the fourth quarter of 2016 was an increase from 0.73 percent in the third quarter of 2016 and unchanged from the fourth quarter of 2015. Return on average tangible common equity of 10.7 percent in the fourth quarter of 2016 was unchanged from both the third quarter of 2016 and fourth quarter of 2015.
People's United Financial, Inc., a diversified financial services company with $41 billion in total assets, provides commercial and retail banking, as well as wealth management services through a network of approximately 400 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine. Through its subsidiaries, People's United Financial provides equipment financing, brokerage and insurance services.
4Q 2016 Financial Highlights
Summary
-- Net income totaled $75.9 million, or $0.24 per common share.
-- Net income available to common shareholders totaled $74.1 million.
-- Operating earnings totaled $75.1 million, or $0.24 per common share (see
Non-GAAP Financial Measures and Reconciliation to GAAP).
-- Net interest income totaled $246.8 million in 4Q16 compared to $245.3
million in 3Q16.
-- Net interest margin decreased two basis points from 3Q16 to 2.78%
reflecting:
-- Higher yield on the securities portfolio (increase of two basis
points).
-- New loan volume at rates lower than the existing portfolio (decrease
of three basis points).
-- Higher rate on borrowings (decrease of one basis point).
-- Provision for loan losses totaled $7.7 million.
-- Net loan charge-offs totaled $4.7 million.
-- Net loan charge-off ratio of 0.06% in 4Q16.
-- Non-interest income was $84.2 million in 4Q16 compared to $90.8 million
in 3Q16.
-- Investment management fees increased $2.6 million, primarily
reflecting the benefit from the addition of Gerstein Fisher in early
November.
-- Net gains on sales of residential mortgages increased $0.7 million.
-- Recorded a $6.3 million gain in 4Q16 (included in other non-interest
income) from the sale of an ownership interest in a legacy
privately-held investment.
-- Insurance revenue decreased $3.0 million, reflecting the seasonal
nature of commercial insurance renewals.
-- Operating lease income decreased $1.7 million.
-- Bank service charges decreased $1.1 million.
-- Net security losses in 4Q16 totaled $6.0 million.
-- At December 31, 2016, assets under administration, which are not
reported as assets of People's United Financial, totaled $21.3
billion, of which $8.0 billion are under discretionary management,
compared to $18.2 billion and $5.7 billion, respectively, at
September 30, 2016.
-- Non-interest expense totaled $217.2 million in 4Q16 compared to $221.4
million in 3Q16.
-- Operating non-interest expense totaled $215.6 million in 4Q16 (see
Non-GAAP Financial Measures and Reconciliation to GAAP).
-- Compensation and benefits expense, excluding $0.7 million of
acquisition integration costs in 4Q16, decreased $2.8 million,
primarily reflecting lower payroll and benefit-related costs in
4Q16.
-- Professional and outside services expense, excluding $0.9 million
and $3.1 million of merger-related expenses in 4Q16 and 3Q16,
respectively, increased $0.8 million.
-- Regulatory assessments expense increased $0.5 million.
-- The efficiency ratio was 59.3% in 4Q16 compared to 59.9% in 3Q16
(see Non-GAAP Financial Measures and Reconciliation to GAAP).
-- The effective income tax rate was 28.5% for 4Q16 and 31.4% for the
full-year of 2016, compared to 33.4% for the full-year of 2015 (32.8%
for 4Q15).
-- The lower full-year rate reflects an increase in tax advantaged
investments as well as the effects of certain tax planning
strategies.
Commercial Banking
-- Commercial loans totaled $21.4 billion at December 31, 2016, an increase
of $214 million, or 4% annualized, from September 30, 2016.
-- The mortgage warehouse portfolio decreased $107 million from
September 30, 2016.
-- Average commercial loans totaled $21.1 billion in 4Q16, a $57 million
increase from 3Q16.
-- The average mortgage warehouse portfolio decreased $18 million in
4Q16.
-- Commercial deposits totaled $10.4 billion at December 31, 2016 compared
to $10.3 billion at September 30, 2016.
-- The ratio of originated non-performing commercial loans to originated
commercial loans was 0.49% at December 31, 2016 compared to 0.53% at
September 30, 2016.
-- Non-performing commercial assets, excluding acquired non-performing
loans, totaled $114.4 million at December 31, 2016 compared to $127.4
million at September 30, 2016.
-- For the originated commercial portfolio, the allowance for loan losses
as a percentage of loans was 0.95% at December 31, 2016 compared to
0.94% at September 30, 2016.
-- The commercial originated allowance for loan losses represented 193% of
originated non-performing commercial loans at December 31, 2016 compared
to 178% at September 30, 2016.
Retail Banking
-- Residential mortgage loans totaled $6.2 billion at December 31, 2016, an
increase of $189 million, or 13% annualized, from September 30, 2016.
-- Average residential mortgage loans totaled $6.1 billion in 4Q16, an
increase of $201 million, or 14% annualized, from 3Q16.
-- Home equity loans totaled $2.1 billion at December 31, 2016, a $27
million decrease from September 30, 2016.
-- Average home equity loans totaled $2.1 billion in 4Q16, a $21
million decrease from 3Q16.
-- Retail deposits totaled $19.5 billion at December 31, 2016 compared to
$19.4 billion at September 30, 2016.
-- The ratio of originated non-performing residential mortgage loans to
originated residential mortgage loans was 0.45% at December 31, 2016
compared to 0.48% at September 30, 2016.
-- The ratio of originated non-performing home equity loans to originated
home equity loans was 0.85% at December 31, 2016 compared to 0.80% at
September 30, 2016.
Conference Call
On January 19, 2017, 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, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; (9) the successful integration of acquisitions; and (10) changes in regulation resulting from or relating to financial reform legislation. People's United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Access Information About People's United Financial at www.peoples.com.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions, except per share data) 2016 2016 2016 2016 2015
------------------------------------------- ---- ---- ---- ---- ----
Earnings Data:
Net interest income (fully taxable equivalent) $255.2 $254.2 $247.7 $247.4 $245.3
Net interest income 246.8 245.3 240.0 240.1 238.8
Provision for loan losses 7.7 8.4 10.0 10.5 9.7
Non-interest income (1) 84.2 90.8 85.4 82.3 93.3
Non-interest expense (2) 217.2 221.4 212.9 217.3 217.0
Income before income tax expense 106.1 106.3 102.5 94.6 105.4
Net income 75.9 73.7 68.5 62.9 70.8
Net income available to common shareholders (2) 74.1 73.7 68.5 62.9 70.8
---------------------------------------------- ---- ---- ---- ---- ----
Selected Statistical Data:
Net interest margin (3) 2.78% 2.80% 2.79% 2.83% 2.87%
Return on average assets (2), (3) 0.75 0.73 0.70 0.65 0.75
Return on average common equity (3) 6.1 6.1 5.7 5.3 6.0
Return on average tangible common equity (2), (3) 10.7 10.7 10.1 9.4 10.7
Efficiency ratio (2) 59.3 59.9 60.4 62.7 61.0
------------------- ---- ---- ---- ---- ----
Common Share Data:
Basic and diluted earnings per common share (2) $0.24 $0.24 $0.23 $0.21 $0.23
Dividends paid per share 0.17 0.17 0.17 0.1675 0.1675
Dividend payout ratio (2) 69.8% 70.1% 75.4% 80.6% 71.5%
Book value per share (end of period) $15.85 $15.99 $15.91 $15.80 $15.62
Tangible book value per share (end of period) (2) 8.92 9.18 9.07 8.94 8.73
Stock price:
High 20.13 16.40 16.68 16.27 16.93
Low 15.28 14.22 13.80 13.62 15.00
Close (end of period) 19.36 15.82 14.66 15.93 16.15
Common shares (end of period) (in millions) 308.97 304.02 303.55 303.27 302.86
Weighted average diluted common shares (in millions) 306.23 303.24 302.48 301.86 301.38
--------------------------------------------------- ------ ------ ------ ------ ------
(1) Three months ended December 31, 2015 includes a $9.2 million net gain resulting from the sale of People's United
Bank's payroll services business.
(2) See Non-GAAP Financial Measures and Reconciliation to GAAP.
(3) Annualized.
People's United Financial,
Inc.
FINANCIAL HIGHLIGHTS
Twelve Months Ended
December 31,
------------
(dollars in millions,
except per share data) 2016 2015
----------------------- ---- ----
Earnings Data:
Net interest
income (fully
taxable
equivalent) $1,004.5 $957.3
Net interest income 972.2 932.1
Provision for loan losses 36.6 33.4
Non-interest income (1) 342.7 352.4
Non-interest expense (2) 868.8 860.6
Income before income tax
expense 409.5 390.5
Net income 281.0 260.1
Net income available to
common shareholders (2) 279.2 260.1
------------------------ ----- -----
Selected Statistical Data:
Net interest margin 2.80% 2.88%
Return on average assets
(2) 0.71 0.71
Return on average common
equity 5.8 5.5
Return on average tangible
common equity (2) 10.2 10.0
Efficiency ratio (2) 60.5 61.5
------------------- ---- ----
Common Share Data:
Basic and diluted
earnings per
common share (2) $0.92 $0.86
Dividends paid per share 0.6775 0.6675
Dividend payout ratio (2) 73.7% 77.3%
Book value per
share (end of
period) $15.85 $15.62
Tangible book value per
share (end of period) (2) 8.92 8.73
Stock price:
High 20.13 16.95
Low 13.62 13.97
Close (end of period) 19.36 16.15
Common shares (end of
period) (in millions) 308.97 302.86
Weighted average diluted
common shares (in
millions) 303.99 300.41
------------------------ ------ ------
(1) Twelve months ended December 31, 2015 includes a $9.2 million net gain resulting
from the sale of People's United Bank's payroll services
business.
(2) See Non-GAAP Financial Measures and Reconciliation to
GAAP.
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) 2016 2016 2016 2016 2015
-------------------- ---- ---- ---- ---- ----
Financial Condition Data:
Total assets $40,610 $40,692 $40,150 $39,264 $38,947
Loans 29,745 29,368 29,038 28,511 28,411
Securities 6,738 7,046 6,785 6,732 6,449
Short-term investments 182 373 364 251 380
Allowance for loan losses 229 226 220 216 211
Goodwill and other acquisition-related intangible assets 2,142 2,070 2,076 2,079 2,088
Deposits 29,861 29,656 28,999 29,105 28,417
Borrowings 4,057 4,437 4,563 3,717 4,307
Notes and debentures 1,030 1,054 1,058 1,050 1,033
Stockholders' equity 5,142 4,862 4,830 4,791 4,732
Total risk-weighted assets (1):
People's United Financial, Inc. 30,508 30,451 30,267 29,832 29,646
People's United Bank, N.A. 30,440 30,415 30,232 29,826 29,621
Non-performing assets (2) 167 180 182 189 182
Net loan charge-offs 4.7 2.5 5.1 6.0 6.2
-------------------- --- --- --- --- ---
Average Balances:
Loans $29,346 $29,107 $28,558 $28,159 $27,853
Securities (3) 7,074 6,873 6,699 6,498 6,133
Short-term investments 308 361 298 348 247
Total earning assets 36,728 36,341 35,555 35,005 34,233
Total assets 40,623 40,304 39,422 38,773 37,955
Deposits 29,773 29,437 29,079 28,721 28,481
Borrowings 4,148 4,296 3,895 3,664 3,187
Notes and debentures 1,045 1,056 1,049 1,044 1,037
Total funding liabilities 34,966 34,789 34,023 33,429 32,705
Stockholders' equity 5,039 4,841 4,795 4,761 4,736
-------------------- ----- ----- ----- ----- -----
Ratios:
Net loan charge-offs to average total loans (annualized) 0.06% 0.04% 0.07% 0.09% 0.09%
Non-performing assets to originated loans,
real estate owned and repossessed assets (2) 0.57 0.63 0.64 0.68 0.66
Originated allowance for loan losses to:
Originated loans (2) 0.77 0.76 0.75 0.75 0.73
Originated non-performing loans (2) 150.6 142.0 135.3 123.3 127.3
Average stockholders' equity to average total assets 12.4 12.0 12.2 12.3 12.5
Stockholders' equity to total assets 12.7 11.9 12.0 12.2 12.2
Tangible common equity to tangible assets (4) 7.2 7.2 7.2 7.3 7.2
Total risk-based capital (1):
People's United Financial, Inc. 12.5 11.5 11.5 11.5 11.7
People's United Bank, N.A. 13.4 12.8 12.8 12.9 12.6
-------------------------- ---- ---- ---- ---- ----
(1) December 31, 2016 amounts and ratios are preliminary.
(2) Excludes acquired loans.
(3) Average balances for securities are based on amortized cost.
(4) See Non-GAAP Financial Measures and Reconciliation to GAAP.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF CONDITION
Dec. 31, Sept. 30, June 30, Dec. 31,
(in millions) 2016 2016 2016 2015
------------ ---- ---- ---- ----
Assets
Cash and due from banks $432.4 $347.5 $343.9 $334.8
Short-term investments 181.7 372.8 363.9 380.5
---------------------- ----- ----- ----- -----
Total cash and cash equivalents 614.1 720.3 707.8 715.3
------------------------------- ----- ----- ----- -----
Securities:
Trading account securities, at fair value 6.8 6.8 6.8 6.7
Securities available for sale, at fair value 4,409.9 4,906.5 4,711.8 4,527.7
Securities held to maturity, at amortized cost 2,005.4 1,817.5 1,749.4 1,609.6
Federal Home Loan Bank and Federal Reserve Bank stock, at cost 315.8 315.5 317.4 305.4
--------------------------------------------------------------
Total securities 6,737.9 7,046.3 6,785.4 6,449.4
---------------- ------- ------- ------- -------
Loans held for sale 39.3 46.5 61.4 34.5
------------------- ---- ---- ---- ----
Loans:
Commercial real estate 10,247.3 10,001.7 10,011.3 10,028.8
Commercial and industrial 8,125.1 8,201.2 8,066.1 7,748.7
Equipment financing (1) 3,032.5 2,987.6 3,005.9 2,973.3
Total Commercial Portfolio 21,404.9 21,190.5 21,083.3 20,750.8
-------------------------- -------- -------- -------- --------
Residential mortgage 6,216.7 6,028.0 5,789.0 5,457.0
Home equity and other consumer 2,123.3 2,149.3 2,166.0 2,203.1
------------------------------ ------- ------- ------- -------
Total Retail Portfolio 8,340.0 8,177.3 7,955.0 7,660.1
---------------------- ------- ------- ------- -------
Total loans 29,744.9 29,367.8 29,038.3 28,410.9
Less allowance for loan losses (229.3) (226.3) (220.4) (211.0)
------------------------------ ------ ------ ------ ------
Total loans, net 29,515.6 29,141.5 28,817.9 28,199.9
---------------- -------- -------- -------- --------
Goodwill and other acquisition-related intangible assets 2,142.0 2,070.3 2,076.1 2,087.8
Bank-owned life insurance 349.1 347.8 346.8 346.5
Premises and equipment 244.5 245.1 249.5 257.8
Other assets 967.3 1,074.3 1,105.1 855.5
Total assets $40,609.8 $40,692.1 $40,150.0 $38,946.7
------------ --------- --------- --------- ---------
Liabilities
Deposits:
Non-interest-bearing $6,660.8 $6,521.8 $6,226.8 $6,178.6
Savings 4,397.7 4,391.4 4,474.2 4,199.9
Interest-bearing checking and money market 14,260.1 14,055.5 13,566.0 13,220.8
Time 4,542.2 4,686.8 4,732.1 4,818.1
---- ------- ------- ------- -------
Total deposits 29,860.8 29,655.5 28,999.1 28,417.4
-------------- -------- -------- -------- --------
Borrowings:
Federal Home Loan Bank advances 3,061.1 3,261.8 3,562.4 3,463.8
Federal funds purchased and other borrowings 652.4 844.0 680.0 374.0
Customer repurchase agreements 343.3 330.7 320.8 469.5
Total borrowings 4,056.8 4,436.5 4,563.2 4,307.3
---------------- ------- ------- ------- -------
Notes and debentures 1,030.1 1,053.9 1,058.2 1,033.1
Other liabilities 520.2 683.9 699.8 457.3
----------------- ----- ----- ----- -----
Total liabilities 35,467.9 35,829.8 35,320.3 34,215.1
----------------- -------- -------- -------- --------
Stockholders' Equity
Preferred stock 244.1 - - -
Common stock 4.0 4.0 3.9 3.9
Additional paid-in capital 5,446.1 5,359.8 5,350.4 5,337.7
Retained earnings 949.3 927.3 905.8 880.8
Accumulated other comprehensive loss (195.0) (120.4) (120.3) (177.2)
Unallocated common stock of Employee Stock Ownership Plan, at cost (144.6) (146.4) (148.1) (151.8)
Treasury stock, at cost (1,162.0) (1,162.0) (1,162.0) (1,161.8)
----------------------- -------- -------- -------- --------
Total stockholders' equity 5,141.9 4,862.3 4,829.7 4,731.6
-------------------------- ------- ------- ------- -------
Total liabilities and stockholders' equity $40,609.8 $40,692.1 $40,150.0 $38,946.7
------------------------------------------ --------- --------- --------- ---------
(1) Represents loans and leases held by People's Capital and Leasing Corp. and People's United Equipment Finance Corp.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions, except per share data) 2016 2016 2016 2016 2015
----------------------------------- ---- ---- ---- ---- ----
Interest and dividend income:
Commercial real estate $86.8 $85.7 $85.3 $86.8 $86.1
Commercial and industrial 65.0 66.9 62.8 60.3 59.6
Equipment financing (1) 31.8 32.8 33.0 33.3 33.1
Residential mortgage 47.0 45.7 43.8 43.9 43.0
Consumer 18.1 18.4 18.4 18.6 18.1
-------- ---- ---- ---- ---- ----
Total interest on loans 248.7 249.5 243.3 242.9 239.9
Securities 36.9 34.2 34.7 34.5 33.8
Loans held for sale 0.3 0.4 0.2 0.2 0.3
Short-term investments 0.4 0.4 0.3 0.4 0.2
---------------------- --- --- --- --- ---
Total interest and dividend income 286.3 284.5 278.5 278.0 274.2
---------------------------------- ----- ----- ----- ----- -----
Interest expense:
Deposits 25.1 25.2 25.4 25.2 24.6
Borrowings 6.4 6.1 5.3 5.0 3.3
Notes and debentures 8.0 7.9 7.8 7.7 7.5
-------------------- --- --- --- --- ---
Total interest expense 39.5 39.2 38.5 37.9 35.4
---------------------- ---- ---- ---- ---- ----
Net interest income 246.8 245.3 240.0 240.1 238.8
Provision for loan losses 7.7 8.4 10.0 10.5 9.7
------------------------- --- --- ---- ---- ---
Net interest income after provision for loan losses 239.1 236.9 230.0 229.6 229.1
--------------------------------------------------- ----- ----- ----- ----- -----
Non-interest income:
Bank service charges 24.2 25.3 24.7 23.8 25.0
Investment management fees 14.2 11.6 11.4 11.1 10.8
Operating lease income 9.5 11.2 10.1 10.4 10.5
Commercial banking lending fees 7.2 7.1 9.2 8.1 9.2
Insurance revenue 6.8 9.8 7.0 9.3 7.5
Cash management fees 6.2 6.5 6.3 6.0 6.1
Customer interest rate swap income, net 3.8 3.7 3.6 3.3 3.6
Brokerage commissions 2.8 3.2 3.2 3.0 3.1
Net gains on sales of residential mortgage loans 2.6 1.9 0.9 0.9 1.3
Bank-owned life insurance 1.5 1.2 2.0 1.0 1.0
Net security (losses) gains (6.0) - - 0.1 -
Gain on sale of business, net of expenses - - - - 9.2
Other non-interest income 11.4 9.3 7.0 5.3 6.0
------------------------- ---- --- --- --- ---
Total non-interest income (2) 84.2 90.8 85.4 82.3 93.3
---------------------------- ---- ---- ---- ---- ----
Non-interest expense:
Compensation and benefits 114.0 116.1 111.4 114.1 112.0
Occupancy and equipment 37.8 37.7 37.4 37.5 37.0
Professional and outside services 16.3 17.7 16.4 17.4 17.9
Regulatory assessments 10.4 9.9 9.2 8.0 7.1
Operating lease expense 8.3 9.7 9.1 9.2 9.4
Amortization of other acquisition-related intangible assets 6.2 5.8 5.8 5.8 6.1
Other non-interest expense 24.2 24.5 23.6 25.3 27.5
-------------------------- ---- ---- ---- ---- ----
Total non-interest expense (2) 217.2 221.4 212.9 217.3 217.0
----------------------------- ----- ----- ----- ----- -----
Income before income tax expense 106.1 106.3 102.5 94.6 105.4
Income tax expense 30.2 32.6 34.0 31.7 34.6
------------------ ---- ---- ---- ---- ----
Net income 75.9 73.7 68.5 62.9 70.8
Preferred stock dividend 1.8 - - - -
------------------------ --- --- --- --- ---
Net income available to common shareholders $74.1 $73.7 $68.5 $62.9 $70.8
------------------------------------------- ----- ----- ----- ----- -----
Basic and diluted earnings per common share $0.24 $0.24 $0.23 $0.21 $0.23
------------------------------------------- ----- ----- ----- ----- -----
(1) Represents loans and leases held by People's Capital and Leasing Corp. and People's United Equipment Finance Corp.
(2) Total non-interest income includes $9.2 million of non-operating income for the three months ended December 31, 2015.
Total non-interest expense includes $1.6 million, $3.1 million and $3.8 million of non-operating expenses for the three
months ended December 31, 2016, September 30, 2016 and December 31, 2015, respectively. See Non-GAAP Financial
Measures and Reconciliation to GAAP.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF
INCOME
Twelve Months Ended
December 31,
------------
(in
millions,
except
per
share
data) 2016 2015
---------- ---- ----
Interest and dividend income:
Commercial
real
estate $344.6 $343.5
Commercial
and
industrial 255.0 234.8
Equipment
financing
(1) 130.9 129.6
Residential
mortgage 180.4 165.4
Consumer 73.5 72.3
-------- ---- ----
Total
interest
on
loans 984.4 945.6
Securities 140.3 121.5
Loans
held
for
sale 1.1 1.3
Short-
term
investments 1.5 0.5
------------ --- ---
Total
interest
and
dividend
income 1,127.3 1,068.9
--------- ------- -------
Interest expense:
Deposits 100.9 95.5
Borrowings 22.8 11.5
Notes
and
debentures 31.4 29.8
----------- ---- ----
Total
interest
expense 155.1 136.8
--------- ----- -----
Net
interest
income 972.2 932.1
Provision
for
loan
losses 36.6 33.4
--------- ---- ----
Net
interest
income
after
provision
for
loan
losses 935.6 898.7
---------- ----- -----
Non-interest income:
Bank
service
charges 98.0 100.7
Investment
management
fees 48.3 43.7
Operating
lease
income 41.2 42.3
Insurance
revenue 32.9 30.7
Commercial
banking
lending
fees 31.6 42.6
Cash
management
fees 25.0 24.5
Customer
interest
rate
swap
income,
net 14.4 14.5
Brokerage
commissions 12.2 12.6
Net
gains
on
sales
of
residential
mortgage
loans 6.3 5.5
Bank-
owned
life
insurance 5.7 4.6
Net
security
losses (5.9) -
Gain on
sale of
business,
net of
expenses - 9.2
Net
gains
on
sales
of
acquired
loans - 1.7
Other
non-
interest
income 33.0 19.8
--------- ---- ----
Total
non-
interest
income
(2) 342.7 352.4
--------- ----- -----
Non-interest expense:
Compensation
and
benefits 455.6 449.5
Occupancy
and
equipment 150.4 149.5
Professional
and
outside
services 67.8 68.0
Regulatory
assessments 37.5 35.1
Operating
lease
expense 36.3 37.1
Amortization
of
other
acquisition-
related
intangible
assets 23.6 23.9
Other
non-
interest
expense 97.6 97.5
--------- ---- ----
Total
non-
interest
expense
(2) 868.8 860.6
--------- ----- -----
Income
before
income
tax
expense 409.5 390.5
Income
tax
expense 128.5 130.4
-------- ----- -----
Net
income 281.0 260.1
Preferred
stock
dividend 1.8 -
--------- --- ---
Net
income
available
to
common
shareholders $279.2 $260.1
------------- ------ ------
Basic
and
diluted
earnings
per
common
share $0.92 $0.86
--------- ----- -----
(1) Represents loans and leases held by People's Capital and
Leasing Corp. and People's United
Equipment Finance Corp.
(2) Total non-interest income includes $9.2 million of non-
operating income for the twelve months
ended December 31, 2015. Total non-interest expense includes
$4.7 million and $12.9 million of
non-operating expenses for the twelve months ended December
31, 2016 and 2015, 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, 2016 September 30, 2016 December 31, 2015
----------------- ------------------ -----------------
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 $307.9 $0.4 0.44% $361.0 $0.4 0.47% $247.1 $0.2 0.21%
Securities (2) 7,073.5 42.1 2.38 6,872.5 38.9 2.26 6,133.1 37.7 2.46
Loans:
Commercial real estate 10,079.4 86.8 3.44 9,978.8 85.7 3.44 9,911.1 86.1 3.48
Commercial and industrial 8,023.3 68.2 3.40 8,053.2 71.1 3.53 7,426.5 62.2 3.35
Equipment financing 2,971.4 31.8 4.29 2,984.7 32.8 4.39 2,874.3 33.1 4.61
Residential mortgage 6,136.2 47.3 3.09 5,935.3 46.1 3.11 5,440.6 43.3 3.17
Home equity and other consumer 2,135.9 18.1 3.39 2,155.4 18.4 3.41 2,200.7 18.1 3.31
------------------------------
Total loans 29,346.2 252.2 3.44 29,107.4 254.1 3.49 27,853.2 242.8 3.49
----------- -------- ----- ---- -------- ----- ---- -------- ----- ----
Total earning assets 36,727.6 $294.7 3.21% 36,340.9 $293.4 3.23% 34,233.4 $280.7 3.28%
======== ====== ======== ====== ======== ======
Other assets 3,895.4 3,963.1 3,721.8
------------ ------- ------- -------
Total assets $40,623.0 $40,304.0 $37,955.2
========= ========= =========
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $6,524.5 $ - - % $6,325.3 $ - - % $6,049.3 $ - - %
Savings, interest-bearing checking
and money market 18,614.5 14.1 0.30 18,356.6 13.3 0.29 17,453.7 11.6 0.27
Time 4,634.4 11.0 0.95 4,755.1 11.9 1.00 4,977.6 13.0 1.05
---- ------- ---- ------- ---- ------- ----
Total deposits 29,773.4 25.1 0.34 29,437.0 25.2 0.34 28,480.6 24.6 0.35
-------------- -------- ---- ---- -------- ---- ---- -------- ---- ----
Borrowings:
Federal Home Loan Bank advances 3,028.8 5.1 0.67 3,306.7 5.1 0.62 2,353.8 2.8 0.47
Federal funds purchased and
other borrowings 790.3 1.1 0.54 674.1 0.9 0.51 398.5 0.3 0.23
Customer repurchase agreements 328.8 0.2 0.20 314.8 0.1 0.19 434.9 0.2 0.20
Total borrowings 4,147.9 6.4 0.61 4,295.6 6.1 0.57 3,187.2 3.3 0.40
---------------- ------- --- ---- ------- --- ---- ------- --- ----
Notes and debentures 1,045.0 8.0 3.08 1,056.4 7.9 2.97 1,037.6 7.5 2.90
--------------------
Total funding liabilities 34,966.3 $39.5 0.45% 34,789.0 $39.2 0.45% 32,705.4 $35.4 0.43%
======== ===== ======== ===== ======== =====
Other liabilities 617.4 674.5 513.8
----------------- ----- ----- -----
Total liabilities 35,583.7 35,463.5 33,219.2
Stockholders' equity 5,039.3 4,840.5 4,736.0
-------------------- ------- ------- -------
Total liabilities and
stockholders' equity $40,623.0 $40,304.0 $37,955.2
========= ========= =========
Net interest income/spread (3) $255.2 2.76% $254.2 2.78% $245.3 2.85%
====== ==== ====== ==== ====== ====
Net interest margin 2.78% 2.80% 2.87%
=================== ==== ==== ====
(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 $8.4 million, $8.9 million and $6.5 million for the three months ended December 31, 2016,
September 30, 2016 and December 31, 2015, respectively.
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
December 31, 2016 December 31, 2015
----------------- -----------------
Twelve months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
-------------------- ------- -------- ---- ------- -------- ----
Assets:
Short-term investments $328.7 $1.5 0.45% $247.8 $0.5 0.20%
Securities (1) 6,786.7 158.8 2.34 5,731.5 135.7 2.37
Loans:
Commercial real estate 10,013.3 344.6 3.44 9,643.9 343.5 3.56
Commercial and industrial 7,821.8 268.8 3.44 7,357.8 245.8 3.34
Equipment financing 2,972.3 130.9 4.40 2,831.7 129.6 4.58
Residential mortgage 5,824.1 181.5 3.12 5,222.4 166.7 3.19
Home equity and other consumer 2,163.8 73.5 3.40 2,193.1 72.3 3.30
------------------------------
Total loans 28,795.3 999.3 3.47 27,248.9 957.9 3.52
----------- -------- ----- ---- -------- ----- ----
Total earning assets 35,910.7 $1,159.6 3.23% 33,228.2 $1,094.1 3.29%
======== ======== ======== ========
Other assets 3,873.6 3,698.7
------------ ------- -------
Total assets $39,784.3 $36,926.9
========= =========
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $6,236.1 $ - - % $5,801.9 $ - - %
Savings, interest-bearing checking
and money market 18,258.2 53.0 0.29 16,489.3 43.5 0.26
Time 4,760.4 47.9 1.01 5,241.4 52.0 0.99
---- ------- ---- ------- ----
Total deposits 29,254.7 100.9 0.34 27,532.6 95.5 0.35
-------------- -------- ----- ---- -------- ---- ----
Borrowings:
Federal Home Loan Bank advances 3,093.7 19.2 0.62 2,306.6 9.8 0.42
Federal funds purchased and other borrowings 570.9 2.9 0.50 464.2 0.9 0.19
Customer repurchase agreements 337.2 0.7 0.19 411.0 0.8 0.19
Total borrowings 4,001.8 22.8 0.57 3,181.8 11.5 0.34
---------------- ------- ---- ---- ------- ---- ----
Notes and debentures 1,048.5 31.4 3.00 1,033.4 29.8 2.88
--------------------
Total funding liabilities 34,305.0 $155.1 0.45% 31,747.8 $136.8 0.43%
======== ====== ======== ======
Other liabilities 619.9 481.8
----------------- ----- -----
Total liabilities 34,924.9 32,229.6
Stockholders' equity 4,859.4 4,697.3
-------------------- ------- -------
Total liabilities and
stockholders' equity $39,784.3 $36,926.9
========= =========
Net interest income/spread (2) $1,004.5 2.78% $957.3 2.86%
======== ==== ====== ====
Net interest margin 2.80% 2.88%
=================== ==== ====
(1) Average balances and yields for securities are based on amortized cost.
(2) The fully taxable equivalent adjustment was $32.3 million and $25.2 million for the years ended
December 31, 2016 and 2015, respectively.
People's United Financial, Inc.
Loans acquired in connection with business combinations are initially recorded at fair value, determined based
upon an estimate of expected cash flows, including a reduction for estimated credit losses, and without carryover
of the respective portfolio's historical allowance for loan losses. A decrease in expected cash flows in subsequent
periods may indicate that a loan is impaired, which would require the establishment of an allowance for loan
losses. As such, selected asset quality metrics have been highlighted to distinguish between the 'originated'
portfolio and the 'acquired' portfolio.
NON-PERFORMING ASSETS
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2016 2016 2016 2016 2015
-------------------- ---- ---- ---- ---- ----
Originated non-performing loans:
Commercial:
Commercial real estate $22.3 $23.4 $35.4 $35.9 $30.2
Commercial and industrial 41.5 40.0 34.7 41.5 44.9
Equipment financing 39.4 46.0 40.0 41.1 27.5
Total 103.2 109.4 110.1 118.5 102.6
----- ----- ----- ----- ----- -----
Retail:
Residential mortgage 27.4 28.2 29.9 31.1 37.2
Home equity 17.4 16.5 17.4 18.9 19.5
Other consumer - - - - 0.1
Total 44.8 44.7 47.3 50.0 56.8
----- ---- ---- ---- ---- ----
Total originated non-performing loans (1) 148.0 154.1 157.4 168.5 159.4
---------------------------------------- ----- ----- ----- ----- -----
REO:
Commercial 4.0 11.2 3.3 5.4 5.5
Residential 8.1 7.9 9.7 8.2 7.1
----------- --- --- --- --- ---
Total REO 12.1 19.1 13.0 13.6 12.6
--------- ---- ---- ---- ---- ----
Repossessed assets 7.2 6.9 11.6 7.3 9.5
Total non-performing assets $167.3 $180.1 $182.0 $189.4 $181.5
--------------------------- ------ ------ ------ ------ ------
Acquired non-performing loans (contractual amount) (2) $24.7 $24.6 $25.5 $27.4 $30.0
----------------------------------------------------- ----- ----- ----- ----- -----
Originated non-performing loans as a percentage
of originated loans 0.51% 0.54% 0.56% 0.61% 0.58%
Non-performing assets as a percentage of:
Originated loans, REO and repossessed assets 0.57 0.63 0.64 0.68 0.66
Tangible stockholders' equity and originated
allowance for loan losses 5.19 5.98 6.14 6.49 6.38
(1) Reported net of government guarantees totaling $13.1 million at December 31, 2016, $13.0 million at September 30, 2016,
$15.8 million at June 30, 2016, $16.2 million at March 31, 2016 and $16.9 million at December 31, 2015.
(2) Represents acquired loans that meet People's United Financial's definition of a non-performing loan but are not, under the
accounting model for acquired loans, subject to classification as non-accrual in the same manner as originated loans.
Because acquired loans are initially recorded at an amount estimated to be collectible, losses on such loans, when incurred,
are first applied against the non-accretable difference established in purchase accounting and then to any allowance for
loan losses recognized subsequent to acquisition.
-------------------------------------------------
People's United Financial, Inc.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2016 2016 2016 2016 2015
-------------------- ---- ---- ---- ---- ----
Allowance for loan losses on originated loans:
Balance at beginning of period $219.0 $213.0 $207.6 $202.9 $198.1
Charge-offs (4.7) (3.8) (6.1) (7.4) (7.8)
Recoveries 1.0 1.4 1.0 1.7 1.6
---------- --- --- --- --- ---
Net loan charge-offs (3.7) (2.4) (5.1) (5.7) (6.2)
Provision for loan losses 7.7 8.4 10.5 10.4 11.0
Balance at end of period 223.0 219.0 213.0 207.6 202.9
------------------------ ----- ----- ----- ----- -----
Allowance for loan losses on acquired loans:
Balance at beginning of period 7.3 7.4 7.9 8.1 9.4
Charge-offs (1.0) (0.1) - (0.3) -
Provision for loan losses - - (0.5) 0.1 (1.3)
Balance at end of period 6.3 7.3 7.4 7.9 8.1
------------------------ --- --- --- --- ---
Total allowance for loan losses $229.3 $226.3 $220.4 $215.5 $211.0
Commercial originated allowance for loan loss
as a percentage of originated commercial loans 0.95% 0.94% 0.92% 0.92% 0.90%
Retail originated allowance for loan losses
as a percentage of originated retail loans 0.30 0.30 0.30 0.30 0.28
Total originated allowance for loan losses
as a percentage of:
Originated loans 0.77 0.76 0.75 0.75 0.73
Originated non-performing loans 150.6 142.0 135.3 123.3 127.3
------------------------------- ----- ----- ----- ----- -----
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2016 2016 2016 2016 2015
-------------------- ---- ---- ---- ---- ----
Commercial:
Commercial real estate $0.9 $0.2 $(0.1) $0.7 $(0.1)
Commercial and industrial 1.1 0.4 1.1 2.2 3.5
Equipment financing 1.3 1.3 2.1 1.6 1.4
Total 3.3 1.9 3.1 4.5 4.8
----- --- --- --- --- ---
Retail:
Residential mortgage - 0.4 0.7 - 0.1
Home equity 1.3 0.1 1.2 1.4 1.1
Other consumer 0.1 0.1 0.1 0.1 0.2
Total 1.4 0.6 2.0 1.5 1.4
----- --- --- --- --- ---
Total net loan charge-offs $4.7 $2.5 $5.1 $6.0 $6.2
-------------------------- ---- ---- ---- ---- ----
Net loan charge-offs to
average total loans (annualized) 0.06% 0.04% 0.07% 0.09% 0.09%
------------------------------- ---- ---- ---- ---- ----
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATION TO GAAP
In addition to evaluating People's United
Financial Inc. ("People's United") results
of operations in accordance with U.S.
generally accepted accounting principles
("GAAP"), management routinely supplements
its evaluation with an analysis of certain
non-GAAP financial measures, such as the
efficiency and tangible common equity
ratios, tangible book value per 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
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, which
are also excluded in arriving at operating
non-interest expense) (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. Effective with the quarter ended
March 31, 2016, recurring writedowns of
banking house assets and certain severance-
related costs are no longer considered to
be non-operating expenses. Operating
earnings per common share is derived by
determining the per share impact of the
respective adjustments to arrive at
operating earnings and adding (subtracting)
such amounts to (from) earnings per common
share, 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 dividend payout ratio is
calculated by dividing dividends paid by
operating earnings for the respective
period.
The tangible common equity ratio is the
ratio of (i) tangible common equity (total
stockholders' equity less preferred stock,
goodwill and other acquisition-related
intangible assets) (the numerator) to (ii)
tangible assets (total assets less goodwill
and other acquisition-related intangible
assets) (the denominator). Tangible book
value per 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
EFFICIENCY RATIO AND OPERATING NON-INTEREST EXPENSE
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions) 2016 2016 2016 2016 2015 2016 2015
-------------------- ---- ---- ---- ---- ---- ---- ----
Total non-interest expense $217.2 $221.4 $212.9 $217.3 $217.0 $868.8 $860.6
-------------------------- ------ ------ ------ ------ ------ ------ ------
Adjustments to arrive at operating
non-interest expense:
Merger-related expenses (0.9) (3.1) - - - (4.0) -
Acquisition integration and other costs (0.7) - - - - (0.7) -
Writedowns of banking house assets - - - - (2.5) - (10.5)
Severance-related costs - - - - (1.3) - (2.4)
Total (1.6) (3.1) n/a n/a (3.8) (4.7) (12.9)
----- ---- ---- ---- ---- ---- ---- -----
Operating non-interest expense 215.6 218.3 n/a n/a 213.2 864.1 847.7
------------------------------ ----- ----- ---- ---- ----- ----- -----
Operating lease expense (8.3) (9.7) (9.1) (9.2) (9.4) (36.3) (37.1)
Amortization of other acquisition-related
intangible assets (6.2) (5.8) (5.8) (5.8) (6.1) (23.6) (23.9)
Other (1) (0.6) (1.8) (1.8) (1.5) (2.2) (5.7) (7.8)
-------- ---- ---- ---- ---- ---- ---- ----
Total non-interest expense for
efficiency ratio $200.5 $201.0 $196.2 $200.8 $195.5 $798.5 $778.9
---------------- ------ ------ ------ ------ ------ ------ ------
Net interest income (FTE basis) $255.2 $254.2 $247.7 $247.4 $245.3 $1,004.5 $957.3
Total non-interest income 84.2 90.8 85.4 82.3 93.3 342.7 352.4
------------------------- ---- ---- ---- ---- ---- ----- -----
Total revenues 339.4 345.0 333.1 329.7 338.6 1,347.2 1,309.7
Adjustments:
Operating lease expense (8.3) (9.7) (9.1) (9.2) (9.4) (36.3) (37.1)
BOLI FTE adjustment 0.7 0.6 1.0 0.5 0.5 2.8 2.4
Net security losses (gains) 6.0 - - (0.1) - 5.9 -
Gain on sale of business, net of expenses - - - - (9.2) - (9.2)
Other (2) 0.2 (0.3) - (0.7) - (0.8) (0.1)
Total revenues for efficiency ratio $338.0 $335.6 $325.0 $320.2 $320.5 $1,318.8 $1,265.7
----------------------------------- ------ ------ ------ ------ ------ -------- --------
Efficiency ratio 59.3% 59.9% 60.4% 62.7% 61.0% 60.5% 61.5%
---------------- ---- ---- ---- ---- ---- ---- ----
n/a For the three months ended June 30, 2016 and March 31, 2016, no expenses were considered to be non-operating expenses.
Accordingly, operating metrics were not applicable.
(1) Items classified as "other" and deducted from non-interest expense for purposes of calculating the efficiency ratio include,
as applicable, certain franchise taxes, real estate owned expenses, contract termination costs and non-recurring expenses.
(2) Items classified as "other" and added to (deducted from) total revenues for purposes of calculating the efficiency ratio include,
as applicable, asset write-offs and gains associated with the sale of branch locations.
---------------------------------------------------------------------------------------
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued
OPERATING EARNINGS
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions, except per share data) 2016 2016 2016 2016 2015 2016 2015
Net income available to common shareholders $74.1 $73.7 $68.5 $62.9 $70.8 $279.2 $260.1
------------------------------------------- ----- ----- ----- ----- ----- ------ ------
Adjustments to arrive at operating earnings:
Merger-related expenses 0.9 3.1 - - - 4.0 -
Acquisition integration and other costs 0.7 - - - - 0.7 -
Writedowns of banking house assets - - - - 2.5 - 10.5
Severance-related costs - - - - 1.3 - 2.4
Gain on sale of business, net of expenses - - - - (9.2) - (9.2)
--- --- ----
Total pre-tax adjustments 1.6 3.1 n/a n/a (5.4) 4.7 3.7
Tax effect (0.6) (1.0) n/a n/a 1.8 (1.6) (1.3)
---------- ---- ---- ---- ---- --- ---- ----
Total adjustments, net of tax 1.0 2.1 n/a n/a (3.6) 3.1 2.4
----------------------------- --- --- ---- ---- ---- --- ---
Operating earnings $75.1 $75.8 n/a n/a $67.2 $282.3 $262.5
------------------ ----- ----- ---- ---- ----- ------ ------
Earnings per common share, as reported $0.24 $0.24 $0.23 $0.21 $0.23 $0.92 $0.86
-------------------------------------- ----- ----- ----- ----- ----- ----- -----
Adjustments to arrive at operating
earnings per common share:
Merger-related expenses - 0.01 - - - 0.01 -
Acquisition integration and other costs - - - - - - -
Writedowns of banking house assets - - - - 0.01 - 0.03
Severance-related costs - - - - - - -
Gain on sale of business, net of expenses - - - - (0.02) - (0.02)
----------------------------------------- --- --- --- --- ----- --- -----
Total adjustments per share - 0.01 n/a n/a (0.01) 0.01 0.01
--------------------------- --- ---- ---- ---- ----- ---- ----
Operating earnings per common share $0.24 $0.25 n/a n/a $0.22 $0.93 $0.87
----------------------------------- ----- ----- ---- ---- ----- ----- -----
Average total assets $40,623 $40,304 $39,422 $38,773 $37,955 $39,784 $36,894
-------------------- ------- ------- ------- ------- ------- ------- -------
Operating return on
average assets (annualized) 0.74% 0.75% n/a n/a 0.71% 0.71% 0.71%
-------------------------- ---- ---- ---- ---- ---- ---- ----
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) 2016 2016 2016 2016 2015 2016 2015
-------------------- ---- ----
Operating earnings $75.1 $75.8 n/a n/a $67.2 $282.3 $262.5
------------------ ----- ----- ---- ---- ----- ------ ------
Average stockholders' equity $5,039 $4,841 $4,795 $4,761 $4,736 $4,859 $4,697
Less: Average preferred stock 165 - - - - 41 -
----------------------------- --- --- --- --- --- --- ---
Average common equity 4,874 4,841 4,795 4,761 4,736 4,818 4,697
Less: Average goodwill and average other
acquisition-related intangible assets 2,094 2,073 2,079 2,085 2,092 2,083 2,094
------------------------------------- ----- ----- ----- ----- ----- ----- -----
Average tangible common equity $2,780 $2,768 $2,716 $2,676 $2,644 $2,735 $2,603
------------------------------ ------ ------ ------ ------ ------ ------ ------
Operating return on average tangible
common equity (annualized) 10.8% 11.0% n/a n/a 10.2% 10.3% 10.1%
------------------------- ---- ---- --- --- ---- ---- ----
OPERATING 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) 2016 2016 2016 2016 2015 2016 2015
-------------------- ----
Dividends paid $51.7 $51.7 $51.7 $50.6 $50.6 $205.7 $201.2
-------------- ----- ----- ----- ----- ----- ------ ------
Operating earnings $75.1 $75.8 n/a n/a $67.2 $282.3 $262.5
------------------ ----- ----- ---- ---- ----- ------ ------
Operating dividend payout ratio 68.8% 68.2% n/a n/a 75.3% 72.9% 76.6%
------------------------------- ---- ---- ---- ---- ---- ---- ----
n/a For the three months ended June 30, 2016 and March 31, 2016, no expenses were considered to be non-operating expenses.
Accordingly, operating metrics were not applicable.
---------------------------------------------------
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued
TANGIBLE COMMON EQUITY RATIO
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2016 2016 2016 2016 2015
-------------------- ---- ---- ---- ---- ----
Total stockholders' equity $5,142 $4,862 $4,830 $4,791 $4,732
Less: Preferred stock 244 - - - -
--------------------- --- --- --- --- ---
Common equity 4,898 4,862 4,830 4,791 4,732
Less: Goodwill and other
acquisition-related intangible assets 2,142 2,070 2,076 2,079 2,088
-------------------------------------
Tangible common equity $2,756 $2,792 $2,754 $2,712 $2,644
---------------------- ------ ------ ------ ------ ------
Total assets $40,610 $40,692 $40,150 $39,264 $38,947
Less: Goodwill and other
acquisition-related intangible assets 2,142 2,070 2,076 2,079 2,088
------------------------------------- ----- ----- ----- ----- -----
Tangible assets $38,468 $38,622 $38,074 $37,185 $36,859
--------------- ------- ------- ------- ------- -------
Tangible common equity ratio 7.2% 7.2% 7.2% 7.3% 7.2%
---------------------------- --- --- --- --- ---
TANGIBLE BOOK VALUE PER SHARE
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions, except per share data) 2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Tangible common equity $2,756 $2,792 $2,754 $2,712 $2,644
---------------------- ------ ------ ------ ------ ------
Common shares issued 405.00 400.13 399.74 399.54 399.24
Less: Shares classified as treasury shares 89.06 89.05 89.05 89.04 89.06
Unallocated ESOP shares 6.97 7.06 7.14 7.23 7.32
----------------------- ---- ---- ---- ---- ----
Common shares 308.97 304.02 303.55 303.27 302.86
------------- ------ ------ ------ ------ ------
Tangible book value per share $8.92 $9.18 $9.07 $8.94 $8.73
----------------------------- ----- ----- ----- ----- -----
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/peoples-united-financial-reports-fourth-quarter-net-income-of-759-million-or-024-per-common-share-300393843.html
SOURCE People's United Bank
