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17.01.2019 22:01:00
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People's United Financial Reports Fourth Quarter Net Income of $132.9 Million, or $0.35 per Common Share
BRIDGEPORT, Conn., Jan. 17, 2019 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the fourth quarter and full year 2018. These results along with comparison periods are summarized below:
($ in millions, except per common share data) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | ||||||||
Net income | $ 132.9 | $ 117.0 | $ 106.2 | $ 468.1 | $ 337.2 | |||||||
Net income available | 129.4 | 113.5 | 102.7 | 454.0 | 323.1 | |||||||
to common shareholders | ||||||||||||
Per common share | 0.35 | 0.33 | 0.30 | 1.29 | 0.97 | |||||||
Operating earnings1 | 134.2 | 113.8 | 104.5 | 461.4 | 345.8 | |||||||
Per common share | 0.36 | 0.33 | 0.31 | 1.31 | 1.04 | |||||||
Net interest income | $ 332.6 | $ 306.4 | $ 292.3 | $ 1,236.0 | $ 1,100.5 | |||||||
Net interest margin | 3.17% | 3.15% | 3.07% | 3.12% | 2.98% | |||||||
Non-interest income | 88.7 | 92.3 | 87.3 | 366.4 | 352.9 | |||||||
Operating non-interest income1 | 98.7 | 92.3 | 97.3 | 376.4 | 362.9 | |||||||
Non-interest expense | $ 262.7 | $ 241.3 | $ 239.7 | $ 996.1 | $ 960.3 | |||||||
Operating non-interest expense1 | 254.7 | 240.8 | 238.1 | 984.7 | 929.7 | |||||||
Efficiency ratio | 55.1% | 56.7% | 56.1% | 57.4% | 57.7% | |||||||
Average balances | ||||||||||||
Loans | $ 35,016 | $ 32,166 | $ 32,271 | $ 32,854 | $ 31,265 | |||||||
Deposits | 35,959 | 33,058 | 32,879 | 33,601 | 31,732 | |||||||
End of period balances | ||||||||||||
Loans | 35,241 | 32,199 | 32,575 | |||||||||
Deposits | 36,159 | 33,210 | 33,056 | |||||||||
1 See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||||||||||
"We are pleased with the advancements made in 2018 to further build our franchise for the long-term with investments in revenue producing initiatives and talent as well as enhancements to our digital capabilities and technology infrastructure," said Jack Barnes, Chairman and Chief Executive Officer. "While making these important strategic investments, we continued to strengthen the profitability of the Company. Full year operating earnings of $461.4 million were up 33 percent from a year ago despite loan growth headwinds. In addition, operating earnings per common share of $1.31 increased for the ninth consecutive year. We also remain focused on balancing organic growth with thoughtful M&A. The integration of First Connecticut continues to progress extremely well and we were excited to announce in November the acquisition of BSB Bancorp, which will deepen our presence in the Greater Boston area. Consistent with this strategy, we disclosed today the all-cash acquisition of VAR Technology Finance, which focuses on serving the technology sector and is ranked among the top independent, privately held equipment finance companies nationwide for new business volume. Similar to our recent equipment financing acquisitions, this transaction further deepens the Company's network of specialty finance experts and bolsters our nationwide businesses. Looking ahead to 2019, we are excited about realizing on the opportunities across our diverse portfolio of businesses, deepening customer relationships and delivering value to shareholders."
"Our fourth quarter financial performance resulted in a strong finish to the year as evidenced by another quarter of record earnings, an operating return on average tangible common equity of 15.5 percent and a 160 basis point improvement in the efficiency ratio compared to the third quarter," said David Rosato, Senior Executive Vice President and Chief Financial Officer. "Operating earnings of $134.2 million increased 18 percent linked-quarter and benefited from the First Connecticut acquisition and further net interest margin expansion. The quarter was also favorably impacted by a lower effective tax rate which reflected discrete tax benefits associated with certain tax-advantaged investments as well as a benefit realized in connection with tax reform. Excluding the addition of First Connecticut, period-end loan and deposit balances grew one percent and two percent, respectively, from September 30th. Loan growth benefited from strong production in equipment financing as well as in our healthcare and large corporate verticals. These results were partially offset by lower mortgage warehouse lending balances and continued runoff of the transactional portion of the New York multifamily portfolio."
As of and for the Three Months Ended | ||||||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | ||||
Asset Quality | ||||||
Net loan charge-offs | 0.09% | 0.09% | 0.08% | |||
to average total loans | ||||||
Originated non-performing loans | 0.55% | 0.53% | 0.49% | |||
as a percentage of originated loans | ||||||
Returns | ||||||
Return on average assets1 | 1.11% | 1.06% | 0.96% | |||
Return on average tangible common equity1 | 14.9% | 14.5% | 13.8% | |||
Capital Ratios | ||||||
People's United Financial, Inc. | ||||||
Tangible common equity / tangible assets | 7.6% | 7.6% | 7.2% | |||
Tier 1 leverage | 8.7% | 8.7% | 8.3% | |||
Common equity tier 1 | 10.3% | 10.3% | 9.7% | |||
Tier 1 risk-based | 11.0% | 11.1% | 10.4% | |||
Total risk-based | 12.6% | 12.8% | 12.2% | |||
People's United Bank, N.A. | ||||||
Tier 1 leverage | 9.0% | 9.2% | 8.5% | |||
Common equity tier 1 | 11.4% | 11.6% | 10.7% | |||
Tier 1 risk-based | 11.4% | 11.6% | 10.7% | |||
Total risk-based | 13.2% | 13.6% | 12.6% | |||
1 See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||||
The Company's Board of Directors declared a $0.1750 per common share quarterly dividend payable February 15, 2019 to shareholders of record on February 1, 2019. Based on the closing stock price on January 16, 2019, the dividend yield on People's United Financial common stock is 4.5 percent.
People's United Financial, Inc., a diversified financial services company with $48 billion in total assets, provides commercial and retail banking, as well as wealth management services through a network of over 400 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.
4Q 2018 Financial Highlights
Summary
- Net income totaled $132.9 million, or $0.35 per common share.
- Net income available to common shareholders totaled $129.4 million.
- Operating earnings totaled $134.2 million, or $0.36 per common share (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- Net interest income totaled $332.6 million in 4Q18 compared to $306.4 million in 3Q18.
- Net interest margin increased two basis points from 3Q18 to 3.17% reflecting:
- Higher yields on the loan portfolio (increase of 17 basis points).
- Higher yields on the securities portfolio (increase of one basis point).
- Higher rates on deposits and borrowings (decrease of 16 basis points).
- Provision for loan losses totaled $9.9 million.
- Net loan charge-offs totaled $7.5 million.
- Net loan charge-off ratio of 0.09% in 4Q18.
- Non-interest income totaled $88.7 million in 4Q18 compared to $92.3 million in 3Q18.
- Operating non-interest income totaled $98.7 million in 4Q18 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- Customer interest rate swap income increased $3.5 million.
- Bank service charges increased $2.0 million.
- Commercial banking lending fees increased $1.7 million.
- Insurance revenue decreased $3.1 million.
- Net security losses of $10.0 million in 4Q18 incurred in response to a tax reform-related benefit realized in the period (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- At December 31, 2018, assets under administration totaled $23.2 billion, of which $8.6 billion are under discretionary management, compared to $23.8 billion and $9.3 billion, respectively, at September 30, 2018.
- Non-interest expense totaled $262.7 million in 4Q18 compared to $241.3 million in 3Q18.
- Operating non-interest expense totaled $254.7 million in 4Q18 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- Compensation and benefits expense, excluding $3.5 million of merger-related expenses, increased $12.3 million, primarily reflecting additional employees resulting from the First Connecticut acquisition.
- Regulatory assessment expense decreased $2.6 million.
- Professional and outside services expense, excluding $3.7 million and $0.4 million of merger-related expenses in 4Q18 and 3Q18, respectively, increased $1.1 million.
- Other non-interest expense includes merger-related expenses of $0.2 million and $0.1 million in 4Q18 and 3Q18, respectively.
- The efficiency ratio was 55.1% for 4Q18 compared to 56.7% for 3Q18 and 56.1% for 4Q17 (see Non-GAAP Financial Measures and Reconciliation to GAAP).
- The effective income tax rate was 10.6% for 4Q18 and 18.8% for the full-year of 2018, compared to 27.8% for the full-year of 2017 (19.8% for 4Q17).
- The rates in 2018 reflect the benefit from a reduction in the U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018, as well as a $9.2 million benefit realized in connection with tax reform. The rates in 2017 reflect a $6.5 million benefit realized in connection with tax reform (see Non-GAAP Financial Measures and Reconciliation to GAAP).
Commercial Banking
- Commercial loans totaled $25.1 billion at December 31, 2018, an increase of $1.7 billion from September 30, 2018.
- Organic loan growth of $292 million.
- The equipment financing portfolio increased $130 million from September 30, 2018.
- The mortgage warehouse portfolio decreased $80 million from September 30, 2018.
- The New York multifamily portfolio decreased $79 million from September 30, 2018.
- Average commercial loans totaled $24.8 billion in 4Q18, an increase of $1.5 billion from 3Q18.
- The average equipment financing portfolio increased $122 million from 3Q18.
- The average mortgage warehouse portfolio decreased $142 million from 3Q18.
- The average New York multifamily portfolio decreased $99 million from 3Q18.
- Commercial deposits totaled $13.1 billion at December 31, 2018 compared to $11.9 billion at September 30, 2018.
- The ratio of originated non-performing commercial loans to originated commercial loans was 0.52% at both December 31, 2018 and September 30, 2018.
- Non-performing commercial assets, excluding acquired non-performing loans, totaled $126.1 million at December 31, 2018 compared to $122.1 million at September 30, 2018.
- For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.93% at December 31, 2018 compared to 0.94% at September 30, 2018.
- The originated commercial allowance for loan losses represented 181% of originated non-performing commercial loans at December 31, 2018 compared to 182% at September 30, 2018.
Retail Banking
- Residential mortgage loans totaled $8.2 billion at December 31, 2018, an increase of $1.2 billion from September 30, 2018.
- Organic loan growth of $28 million.
- Average residential mortgage loans totaled $8.2 billion in 4Q18, an increase of $1.3 billion from 3Q18.
- Home equity loans totaled $2.0 billion at December 31, 2018, an increase of $95 million from September 30, 2018.
- Average home equity loans totaled $2.0 billion in 4Q18, an increase of $105 million from 3Q18.
- Retail deposits totaled $23.1 billion at December 31, 2018 compared to $21.3 billion at September 30, 2018.
- The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.57% at December 31, 2018 compared to 0.48% at September 30, 2018.
- The ratio of originated non-performing home equity loans to originated home equity loans was 0.85% at December 31, 2018 compared to 0.80% at September 30, 2018.
Conference Call
On January 17, 2019, at 5 p.m., Eastern Time, People's United Financial will host a conference call to discuss this earnings announcement. The call may be heard through www.peoples.com by selecting "Investor Relations" in the "About Us" section on the home page, and then selecting "Conference Calls" in the "News and Events" section. Additional materials relating to the call may also be accessed at People's United Bank's web site. The call will be archived on the web site and available for approximately 90 days.
Certain statements contained in this release are forward-looking in nature. These include all statements about People's United Financial's plans, objectives, expectations and other statements that are not historical facts, and usually use words such as "expect," "anticipate," "believe," "should" and similar expressions. Such statements represent management's current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People's United Financial's actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People's United Financial include, but are not limited to: (1) changes in general, international, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; (9) the successful integration of acquisitions; and (10) changes in regulation resulting from or relating to financial reform legislation. People's United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Access Information About People's United Financial at www.peoples.com.
People's United Financial, Inc. | |||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||
People's United Financial completed its acquisition of First Connecticut Bancorp effective October 1, 2018. Accordingly, | |||||||||||
First Connecticut's results of operations are included beginning with the effective date, and prior period results have not | |||||||||||
been restated to include First Connecticut. | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions, except per common share data) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Earnings Data: | |||||||||||
Net interest income (fully taxable equivalent) | $ | 339.5 | $ | 313.0 | $ | 307.8 | $ | 302.1 | $ | 304.1 | |
Net interest income | 332.6 | 306.4 | 301.2 | 295.8 | 292.3 | ||||||
Provision for loan losses | 9.9 | 8.2 | 6.5 | 5.4 | 7.5 | ||||||
Non-interest income (1) | 88.7 | 92.3 | 94.9 | 90.4 | 87.3 | ||||||
Non-interest expense (1) | 262.7 | 241.3 | 248.6 | 243.5 | 239.7 | ||||||
Income before income tax expense | 148.7 | 149.2 | 141.0 | 137.3 | 132.4 | ||||||
Net income | 132.9 | 117.0 | 110.2 | 107.9 | 106.2 | ||||||
Net income available to common shareholders (1) | 129.4 | 113.5 | 106.7 | 104.4 | 102.7 | ||||||
Selected Statistical Data: | |||||||||||
Net interest margin (2) | 3.17 | % | 3.15 | % | 3.10 | % | 3.05 | % | 3.07 | % | |
Return on average assets (1), (2) | 1.11 | 1.06 | 1.00 | 0.98 | 0.96 | ||||||
Return on average common equity (2) | 8.3 | 8.0 | 7.6 | 7.5 | 7.4 | ||||||
Return on average tangible common equity (1), (2) | 14.9 | 14.5 | 13.9 | 13.8 | 13.8 | ||||||
Efficiency ratio (1) | 55.1 | 56.7 | 58.4 | 59.4 | 56.1 | ||||||
Common Share Data: | |||||||||||
Earnings per common share: | |||||||||||
Basic | $ | 0.35 | $ | 0.33 | $ | 0.31 | $ | 0.31 | $ | 0.30 | |
Diluted (1) | 0.35 | 0.33 | 0.31 | 0.30 | 0.30 | ||||||
Dividends paid per common share | 0.1750 | 0.1750 | 0.1750 | 0.1725 | 0.1725 | ||||||
Common dividend payout ratio (1) | 50.3 | % | 52.9 | % | 56.2 | % | 56.3 | % | 57.1 | % | |
Book value per common share (end of period) | $ | 16.95 | $ | 16.69 | $ | 16.56 | $ | 16.43 | $ | 16.40 | |
Tangible book value per common share (end of period) (1) | 9.23 | 9.19 | 9.02 | 8.93 | 8.87 | ||||||
Stock price: | |||||||||||
High | 17.46 | 19.00 | 19.37 | 20.26 | 19.50 | ||||||
Low | 13.66 | 16.95 | 18.00 | 18.18 | 17.58 | ||||||
Close (end of period) | 14.43 | 17.12 | 18.09 | 18.66 | 18.70 | ||||||
Common shares (end of period) (in millions) | 371.02 | 342.36 | 341.59 | 341.01 | 339.98 | ||||||
Weighted average diluted common shares (in millions) | 372.83 | 345.04 | 344.47 | 344.00 | 341.11 | ||||||
(1) See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||||||||
(2) Annualized. | |||||||||||
People's United Financial, Inc. | |||||
FINANCIAL HIGHLIGHTS | |||||
People's United Financial completed its acquisition of First Connecticut Bancorp effective October 1, 2018. | |||||
Accordingly, First Connecticut's results of operations are included beginning with the effective date, | |||||
and prior period results have not been restated to include First Connecticut. | |||||
Twelve Months Ended | |||||
December 31, | |||||
(dollars in millions, except per common share data) | 2018 | 2017 | |||
Earnings Data: | |||||
Net interest income (fully taxable equivalent) | $ | 1,262.4 | $ | 1,143.2 | |
Net interest income | 1,236.0 | 1,100.5 | |||
Provision for loan losses | 30.0 | 26.0 | |||
Non-interest income (1) | 366.4 | 352.9 | |||
Non-interest expense (1) | 996.1 | 960.3 | |||
Income before income tax expense | 576.3 | 467.1 | |||
Net income | 468.1 | 337.2 | |||
Net income available to common shareholders (1) | 454.0 | 323.1 | |||
Selected Statistical Data: | |||||
Net interest margin | 3.12 | % | 2.98 | % | |
Return on average assets (1) | 1.04 | 0.79 | |||
Return on average common equity | 7.8 | 6.0 | |||
Return on average tangible common equity (1) | 14.3 | 11.0 | |||
Efficiency ratio (1) | 57.4 | 57.7 | |||
Common Share Data: | |||||
Earnings per common share: | |||||
Basic | $ | 1.30 | $ | 0.97 | |
Diluted (1) | 1.29 | 0.97 | |||
Dividends paid per common share | 0.6975 | 0.6875 | |||
Common dividend payout ratio (1) | 53.7 | % | 70.6 | % | |
Book value per common share (end of period) | $ | 16.95 | $ | 16.40 | |
Tangible book value per common share (end of period) (1) | 9.23 | 8.87 | |||
Stock price: | |||||
High | 20.26 | 19.85 | |||
Low | 13.66 | 15.97 | |||
Close (end of period) | 14.43 | 18.70 | |||
Common shares (end of period) (in millions) | 371.02 | 339.98 | |||
Weighted average diluted common shares (in millions) | 351.66 | 332.36 | |||
(1) See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||
People's United Financial, Inc. | |||||||||||
FINANCIAL HIGHLIGHTS - Continued | |||||||||||
People's United Financial completed its acquisition of First Connecticut Bancorp effective October 1, 2018. Accordingly, | |||||||||||
First Connecticut's results of operations are included beginning with the effective date, and prior period results have not | |||||||||||
been restated to include First Connecticut. | |||||||||||
As of and for the Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Financial Condition Data: | |||||||||||
Total assets | $ | 47,877 | $ | 44,133 | $ | 44,575 | $ | 44,101 | $ | 44,453 | |
Loans | 35,241 | 32,199 | 32,512 | 32,104 | 32,575 | ||||||
Securities | 7,233 | 7,385 | 7,324 | 7,173 | 7,043 | ||||||
Short-term investments | 266 | 128 | 253 | 470 | 378 | ||||||
Allowance for loan losses | 240 | 238 | 237 | 235 | 234 | ||||||
Goodwill and other acquisition-related intangible assets | 2,866 | 2,569 | 2,574 | 2,555 | 2,560 | ||||||
Deposits | 36,159 | 33,210 | 32,468 | 32,894 | 33,056 | ||||||
Borrowings | 3,593 | 3,392 | 4,639 | 3,877 | 4,104 | ||||||
Notes and debentures | 896 | 886 | 889 | 892 | 902 | ||||||
Stockholders' equity | 6,534 | 5,959 | 5,900 | 5,845 | 5,820 | ||||||
Total risk-weighted assets (1): | |||||||||||
People's United Financial, Inc. | 35,859 | 33,181 | 33,369 | 32,833 | 33,256 | ||||||
People's United Bank, N.A. | 35,809 | 33,132 | 33,317 | 32,784 | 33,202 | ||||||
Non-performing assets (2) | 186 | 173 | 187 | 174 | 168 | ||||||
Net loan charge-offs | 7.5 | 7.0 | 5.0 | 4.5 | 6.5 | ||||||
Average Balances: | |||||||||||
Loans | $ | 35,016 | $ | 32,166 | $ | 32,116 | $ | 32,096 | $ | 32,271 | |
Securities (3) | 7,479 | 7,404 | 7,302 | 7,186 | 7,022 | ||||||
Short-term investments | 292 | 193 | 267 | 366 | 361 | ||||||
Total earning assets | 42,786 | 39,763 | 39,685 | 39,648 | 39,654 | ||||||
Total assets | 47,721 | 44,245 | 44,110 | 44,011 | 44,039 | ||||||
Deposits | 35,959 | 33,058 | 32,535 | 32,824 | 32,879 | ||||||
Borrowings | 3,456 | 3,539 | 4,031 | 3,752 | 3,836 | ||||||
Notes and debentures | 886 | 888 | 890 | 895 | 904 | ||||||
Total funding liabilities | 40,302 | 37,485 | 37,456 | 37,471 | 37,619 | ||||||
Stockholders' equity | 6,515 | 5,937 | 5,870 | 5,820 | 5,774 | ||||||
Ratios: | |||||||||||
Net loan charge-offs to average total loans (annualized) | 0.09 | % | 0.09 | % | 0.06 | % | 0.06 | % | 0.08 | % | |
Non-performing assets to originated loans, | |||||||||||
real estate owned and repossessed assets (2) | 0.61 | 0.57 | 0.62 | 0.58 | 0.56 | ||||||
Originated allowance for loan losses to: | |||||||||||
Originated loans (2) | 0.77 | 0.78 | 0.77 | 0.78 | 0.77 | ||||||
Originated non-performing loans (2) | 140.9 | 147.9 | 138.4 | 149.3 | 155.2 | ||||||
Average stockholders' equity to average total assets | 13.7 | 13.4 | 13.3 | 13.2 | 13.1 | ||||||
Stockholders' equity to total assets | 13.6 | 13.5 | 13.2 | 13.3 | 13.1 | ||||||
Tangible common equity to tangible assets (4) | 7.6 | 7.6 | 7.3 | 7.3 | 7.2 | ||||||
Total risk-based capital (1): | |||||||||||
People's United Financial, Inc. | 12.6 | 12.8 | 12.5 | 12.6 | 12.2 | ||||||
People's United Bank, N.A. | 13.2 | 13.6 | 13.4 | 12.9 | 12.6 | ||||||
(1) December 31, 2018 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) | 2018 | 2018 | 2018 | 2017 |
Assets | ||||
Cash and due from banks | $ 665.7 | $ 410.5 | $ 462.7 | $ 505.1 |
Short-term investments | 266.3 | 127.5 | 253.1 | 377.5 |
Securities: | ||||
Trading debt securities, at fair value | 8.4 | 8.3 | 8.2 | 8.2 |
Equity securities, at fair value | 8.1 | 8.9 | 9.9 | 8.7 |
Debt securities available-for-sale, at fair value | 3,121.0 | 3,312.1 | 3,245.1 | 3,125.3 |
Debt securities held-to-maturity, at amortized cost | 3,792.3 | 3,742.9 | 3,718.7 | 3,588.1 |
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 303.4 | 312.4 | 342.2 | 312.3 |
Total securities | 7,233.2 | 7,384.6 | 7,324.1 | 7,042.6 |
Loans held-for-sale | 19.5 | 15.2 | 17.1 | 16.6 |
Loans: | ||||
Commercial real estate | 11,649.6 | 10,595.5 | 10,761.1 | 11,068.7 |
Commercial and industrial | 9,088.9 | 8,568.6 | 8,823.3 | 8,731.1 |
Equipment financing | 4,339.2 | 4,209.3 | 4,103.9 | 3,905.4 |
Total Commercial Portfolio | 25,077.7 | 23,373.4 | 23,688.3 | 23,705.2 |
Residential mortgage | 8,154.2 | 6,911.9 | 6,866.2 | 6,805.7 |
Home equity and other consumer | 2,009.5 | 1,914.0 | 1,957.5 | 2,064.4 |
Total Retail Portfolio | 10,163.7 | 8,825.9 | 8,823.7 | 8,870.1 |
Total loans | 35,241.4 | 32,199.3 | 32,512.0 | 32,575.3 |
Less allowance for loan losses | (240.4) | (238.0) | (236.8) | (234.4) |
Total loans, net | 35,001.0 | 31,961.3 | 32,275.2 | 32,340.9 |
Goodwill and other acquisition-related intangible assets | 2,865.7 | 2,568.9 | 2,573.8 | 2,560.0 |
Bank-owned life insurance | 467.0 | 407.7 | 407.2 | 405.0 |
Premises and equipment, net | 267.3 | 243.8 | 246.3 | 253.0 |
Other assets | 1,091.6 | 1,013.7 | 1,015.0 | 952.7 |
Total assets | $ 47,877.3 | $ 44,133.2 | $ 44,574.5 | $ 44,453.4 |
Liabilities | ||||
Deposits: | ||||
Non-interest-bearing | $ 8,543.0 | $ 8,060.2 | $ 8,002.4 | $ 8,002.4 |
Savings | 4,116.5 | 4,048.8 | 4,184.9 | 4,410.5 |
Interest-bearing checking and money market | 16,583.3 | 15,065.3 | 14,659.4 | 15,189.1 |
Time | 6,916.2 | 6,035.9 | 5,621.5 | 5,454.3 |
Total deposits | 36,159.0 | 33,210.2 | 32,468.2 | 33,056.3 |
Borrowings: | ||||
Federal Home Loan Bank advances | 2,404.5 | 2,369.7 | 3,510.1 | 2,774.4 |
Federal funds purchased | 845.0 | 735.0 | 855.0 | 820.0 |
Customer repurchase agreements | 332.9 | 261.3 | 254.9 | 301.6 |
Other borrowings | 11.0 | 26.0 | 19.1 | 207.8 |
Total borrowings | 3,593.4 | 3,392.0 | 4,639.1 | 4,103.8 |
Notes and debentures | 895.8 | 885.6 | 888.7 | 901.6 |
Other liabilities | 695.2 | 686.5 | 678.3 | 571.8 |
Total liabilities | 41,343.4 | 38,174.3 | 38,674.3 | 38,633.5 |
Stockholders' Equity | ||||
Preferred stock | 244.1 | 244.1 | 244.1 | 244.1 |
Common stock | 4.7 | 4.4 | 4.4 | 4.4 |
Additional paid-in capital | 6,549.3 | 6,054.3 | 6,040.3 | 6,012.3 |
Retained earnings | 1,284.8 | 1,220.9 | 1,167.9 | 1,040.2 |
Unallocated common stock of Employee Stock Ownership Plan, at cost | (130.1) | (131.9) | (133.7) | (137.3) |
Accumulated other comprehensive loss | (256.8) | (270.8) | (260.7) | (181.7) |
Treasury stock, at cost | (1,162.1) | (1,162.1) | (1,162.1) | (1,162.1) |
Total stockholders' equity | 6,533.9 | 5,958.9 | 5,900.2 | 5,819.9 |
Total liabilities and stockholders' equity | $ 47,877.3 | $ 44,133.2 | $ 44,574.5 | $ 44,453.4 |
People's United Financial, Inc. | |||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(in millions, except per common share data) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Interest and dividend income: | |||||||||||
Commercial real estate | $ 130.2 | $ 114.7 | $ 111.5 | $ 107.0 | $ 106.2 | ||||||
Commercial and industrial | 100.1 | 93.2 | 90.1 | 82.3 | 80.1 | ||||||
Equipment financing | 56.7 | 56.2 | 50.5 | 48.9 | 47.4 | ||||||
Residential mortgage | 70.2 | 56.0 | 55.3 | 54.7 | 53.4 | ||||||
Home equity and other consumer | 24.4 | 22.0 | 21.4 | 20.8 | 20.7 | ||||||
Total interest on loans | 381.6 | 342.1 | 328.8 | 313.7 | 307.8 | ||||||
Securities | 48.5 | 46.6 | 45.1 | 44.0 | 41.6 | ||||||
Short-term investments | 1.4 | 1.1 | 1.3 | 1.2 | 1.0 | ||||||
Loans held-for-sale | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | ||||||
Total interest and dividend income | 431.8 | 390.0 | 375.4 | 359.1 | 350.6 | ||||||
Interest expense: | |||||||||||
Deposits | 70.6 | 56.9 | 47.3 | 41.3 | 38.3 | ||||||
Borrowings | 20.0 | 18.2 | 18.5 | 14.2 | 12.4 | ||||||
Notes and debentures | 8.6 | 8.5 | 8.4 | 7.8 | 7.6 | ||||||
Total interest expense | 99.2 | 83.6 | 74.2 | 63.3 | 58.3 | ||||||
Net interest income | 332.6 | 306.4 | 301.2 | 295.8 | 292.3 | ||||||
Provision for loan losses | 9.9 | 8.2 | 6.5 | 5.4 | 7.5 | ||||||
Net interest income after provision for loan losses | 322.7 | 298.2 | 294.7 | 290.4 | 284.8 | ||||||
Non-interest income: | |||||||||||
Bank service charges | 26.9 | 24.9 | 24.3 | 23.8 | 24.7 | ||||||
Investment management fees | 16.4 | 17.4 | 17.2 | 17.7 | 17.3 | ||||||
Operating lease income | 12.0 | 11.0 | 11.2 | 10.7 | 11.7 | ||||||
Commercial banking lending fees | 9.6 | 7.9 | 9.4 | 10.4 | 8.8 | ||||||
Insurance revenue | 6.7 | 9.8 | 8.3 | 9.8 | 6.9 | ||||||
Cash management fees | 6.5 | 7.0 | 7.0 | 6.6 | 6.5 | ||||||
Customer interest rate swap income, net | 6.3 | 2.8 | 4.0 | 1.5 | 5.2 | ||||||
Brokerage commissions | 3.3 | 3.2 | 3.2 | 3.1 | 2.9 | ||||||
Net security (losses) gains (1) | (10.0) | 0.1 | - | 0.1 | (9.8) | ||||||
Other non-interest income | 11.0 | 8.2 | 10.3 | 6.7 | 13.1 | ||||||
Total non-interest income | 88.7 | 92.3 | 94.9 | 90.4 | 87.3 | ||||||
Non-interest expense: | |||||||||||
Compensation and benefits (2) | 151.5 | 135.7 | 135.0 | 140.7 | 132.7 | ||||||
Occupancy and equipment | 44.6 | 41.6 | 40.8 | 41.2 | 41.0 | ||||||
Professional and outside services | 21.4 | 17.0 | 20.6 | 18.6 | 18.7 | ||||||
Operating lease expense | 9.8 | 8.9 | 8.7 | 9.0 | 8.9 | ||||||
Regulatory assessments | 7.4 | 10.0 | 9.9 | 10.6 | 11.9 | ||||||
Amortization of other acquisition-related intangible assets | 6.9 | 4.9 | 4.9 | 5.1 | 7.9 | ||||||
Other non-interest expense (2) | 21.1 | 23.2 | 28.7 | 18.3 | 18.6 | ||||||
Total non-interest expense (1) | 262.7 | 241.3 | 248.6 | 243.5 | 239.7 | ||||||
Income before income tax expense | 148.7 | 149.2 | 141.0 | 137.3 | 132.4 | ||||||
Income tax expense (1) | 15.8 | 32.2 | 30.8 | 29.4 | 26.2 | ||||||
Net income | 132.9 | 117.0 | 110.2 | 107.9 | 106.2 | ||||||
Preferred stock dividend | 3.5 | 3.5 | 3.5 | 3.5 | 3.5 | ||||||
Net income available to common shareholders | $ 129.4 | $ 113.5 | $ 106.7 | $ 104.4 | $ 102.7 | ||||||
Earnings per common share: | |||||||||||
Basic | $ 0.35 | $ 0.33 | $ 0.31 | $ 0.31 | $ 0.30 | ||||||
Diluted | 0.35 | 0.33 | 0.31 | 0.30 | 0.30 | ||||||
(1) Includes $10.0 million of security losses for both the three months ended December 31, 2018 and 2017, which are considered | |||||||||||
non-operating, incurred in response to tax reform-related benefits realized in each period. Total non-interest expense includes | |||||||||||
$8.0 million, $0.5 million, $2.9 million and $1.6 million of non-operating expenses for the three months ended December 31, 2018, | |||||||||||
September 30, 2018, June 30, 2018 and December 31, 2017, respectively. Income tax expense includes $9.2 million and $6.5 million | |||||||||||
of benefits realized in connection with tax reform, which are considered non-operating, for the three months ended | |||||||||||
December 31, 2018 and 2017, respectively. See Non-GAAP Financial Measures and Reconciliation to GAAP. | |||||||||||
(2) In accordance with GAAP, effective January 1, 2018, net periodic pension and postretirement benefit costs are reported within other | |||||||||||
non-interest expense rather than compensation and benefits. Prior period amounts have been reclassified to conform to this | |||||||||||
presentation. | |||||||||||
People's United Financial, Inc. | ||||
CONSOLIDATED STATEMENTS OF INCOME | ||||
Twelve Months Ended | ||||
December 31, | ||||
(in millions, except per common share data) | 2018 | 2017 | ||
Interest and dividend income: | ||||
Commercial real estate | $ 463.4 | $ 405.7 | ||
Commercial and industrial | 365.7 | 298.8 | ||
Equipment financing | 212.3 | 152.1 | ||
Residential mortgage | 236.2 | 207.5 | ||
Home equity and other consumer | 88.6 | 80.0 | ||
Total interest on loans | 1,366.2 | 1,144.1 | ||
Securities | 184.2 | 153.7 | ||
Short-term investments | 5.0 | 3.7 | ||
Loans held for sale | 0.9 | 0.9 | ||
Total interest and dividend income | 1,556.3 | 1,302.4 | ||
Interest expense: | ||||
Deposits | 216.1 | 130.7 | ||
Borrowings | 70.9 | 41.3 | ||
Notes and debentures | 33.3 | 29.9 | ||
Total interest expense | 320.3 | 201.9 | ||
Net interest income | 1,236.0 | 1,100.5 | ||
Provision for loan losses | 30.0 | 26.0 | ||
Net interest income after provision for loan losses | 1,206.0 | 1,074.5 | ||
Non-interest income: | ||||
Bank service charges | 99.9 | 98.5 | ||
Investment management fees | 68.7 | 66.5 | ||
Operating lease income | 44.9 | 43.8 | ||
Commercial banking lending fees | 37.3 | 35.5 | ||
Insurance revenue | 34.6 | 33.2 | ||
Cash management fees | 27.1 | 26.1 | ||
Customer interest rate swap income, net | 14.6 | 12.3 | ||
Brokerage commissions | 12.8 | 12.1 | ||
Net security (losses) gains (1) | (9.8) | (25.4) | ||
Other non-interest income | 36.3 | 50.3 | ||
Total non-interest income | 366.4 | 352.9 | ||
Non-interest expense: | ||||
Compensation and benefits (2) | 562.9 | 522.7 | ||
Occupancy and equipment | 168.2 | 159.6 | ||
Professional and outside services | 77.6 | 81.5 | ||
Regulatory assessments | 37.9 | 41.7 | ||
Operating lease expense | 36.4 | 35.2 | ||
Amortization of other acquisition-related intangible assets | 21.8 | 30.0 | ||
Other non-interest expense (2) | 91.3 | 89.6 | ||
Total non-interest expense (1) | 996.1 | 960.3 | ||
Income before income tax expense | 576.3 | 467.1 | ||
Income tax expense (1) | 108.2 | 129.9 | ||
Net income | 468.1 | 337.2 | ||
Preferred stock dividend | 14.1 | 14.1 | ||
Net income available to common shareholders | $ 454.0 | $ 323.1 | ||
Earnings per common share: | ||||
Basic | $ 1.30 | $ 0.98 | ||
Diluted | 1.29 | 0.97 | ||
(1) Includes $10.0 million of security losses for both the twelve months ended December 31, 2018 and 2017, | ||||
which are considered non-operating, incurred in response to tax reform-related benefits realized in | ||||
each period. Total non-interest expense includes $11.4 million and $30.6 million of non-operating | ||||
expenses for the twelve months ended December 31, 2018 and 2017, respectively. Income tax | ||||
expense includes $9.2 million and $6.5 million of benefits realized in connection with tax reform, | ||||
which are considered non-operating, for the twelve months ended December 31, 2018 and 2017, | ||||
respectively. See Non-GAAP Financial Measures and Reconciliation to GAAP. | ||||
(2) In accordance with GAAP, effective January 1, 2018, net periodic pension and postretirement benefit | ||||
costs are reported within other non-interest expense rather than compensation and benefits. Prior | ||||
period amounts have been reclassified to conform to this presentation. | ||||
People's United Financial, Inc. | |||||||||||
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) | |||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||
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 | $ 291.6 | $ 1.4 | 2.02% | $ 192.5 | $ 1.1 | 2.06% | $ 360.7 | $ 1.0 | 1.16% | ||
Securities (2) | 7,478.7 | 52.9 | 2.83 | 7,404.2 | 50.8 | 2.75 | 7,022.6 | 49.2 | 2.80 | ||
Loans: | |||||||||||
Commercial real estate | 11,688.1 | 130.2 | 4.45 | 10,641.4 | 114.7 | 4.31 | 11,101.5 | 106.2 | 3.83 | ||
Commercial and industrial | 8,880.3 | 102.6 | 4.62 | 8,584.8 | 95.6 | 4.45 | 8,533.3 | 84.3 | 3.95 | ||
Equipment financing | 4,243.2 | 56.7 | 5.34 | 4,120.8 | 56.2 | 5.47 | 3,750.4 | 47.4 | 5.05 | ||
Residential mortgage | 8,165.4 | 70.5 | 3.46 | 6,887.3 | 56.2 | 3.27 | 6,806.5 | 53.6 | 3.15 | ||
Home equity and other consumer | 2,038.5 | 24.4 | 4.80 | 1,931.8 | 22.0 | 4.55 | 2,079.0 | 20.7 | 3.99 | ||
Total loans | 35,015.5 | 384.4 | 4.39 | 32,166.1 | 344.7 | 4.29 | 32,270.7 | 312.2 | 3.87 | ||
Total earning assets | 42,785.8 | $ 438.7 | 4.10% | 39,762.8 | $ 396.6 | 3.99% | 39,654.0 | $ 362.4 | 3.66% | ||
Other assets | 4,935.3 | 4,481.8 | 4,384.6 | ||||||||
Total assets | $ 47,721.1 | $ 44,244.6 | $ 44,038.6 | ||||||||
Liabilities and stockholders' equity: | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ 8,576.4 | $ - | - % | $ 8,025.2 | $ - | - % | $ 7,855.0 | $ - | - % | ||
Savings, interest-bearing checking | |||||||||||
and money market | 20,621.7 | 41.7 | 0.81 | 19,031.4 | 32.6 | 0.68 | 19,605.7 | 22.7 | 0.46 | ||
Time | 6,761.1 | 28.9 | 1.71 | 6,001.3 | 24.3 | 1.62 | 5,417.8 | 15.6 | 1.15 | ||
Total deposits | 35,959.2 | 70.6 | 0.79 | 33,057.9 | 56.9 | 0.69 | 32,878.5 | 38.3 | 0.47 | ||
Borrowings: | |||||||||||
Federal Home Loan Bank advances | 2,371.9 | 14.9 | 2.51 | 2,560.6 | 14.0 | 2.18 | 2,616.7 | 9.2 | 1.40 | ||
Federal funds purchased | 761.4 | 4.5 | 2.38 | 722.7 | 3.8 | 2.11 | 690.5 | 2.3 | 1.32 | ||
Customer repurchase agreements | 285.1 | 0.4 | 0.56 | 234.3 | 0.3 | 0.53 | 309.2 | 0.1 | 0.19 | ||
Other borrowings | 37.5 | 0.2 | 2.26 | 20.9 | 0.1 | 2.05 | 219.4 | 0.8 | 1.46 | ||
Total borrowings | 3,455.9 | 20.0 | 2.32 | 3,538.5 | 18.2 | 2.05 | 3,835.8 | 12.4 | 1.29 | ||
Notes and debentures | 886.4 | 8.6 | 3.90 | 888.3 | 8.5 | 3.83 | 904.4 | 7.6 | 3.36 | ||
Total funding liabilities | 40,301.5 | $ 99.2 | 0.99% | 37,484.7 | $ 83.6 | 0.89% | 37,618.7 | $ 58.3 | 0.62% | ||
Other liabilities | 904.2 | 823.3 | 645.9 | ||||||||
Total liabilities | 41,205.7 | 38,308.0 | 38,264.6 | ||||||||
Stockholders' equity | 6,515.4 | 5,936.6 | 5,774.0 | ||||||||
Total liabilities and | |||||||||||
stockholders' equity | $ 47,721.1 | $ 44,244.6 | $ 44,038.6 | ||||||||
Net interest income/spread (3) | $ 339.5 | 3.11% | $ 313.0 | 3.10% | $ 304.1 | 3.04% | |||||
Net interest margin | 3.17% | 3.15% | 3.07% | ||||||||
(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 $6.9 million, $6.6 million and $11.8 million for the three months ended | |||||||||||
December 31, 2018, September 30, 2018 and December 31, 2017, respectively. | |||||||||||
People's United Financial, Inc. | ||||||||
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS | ||||||||
December 31, 2018 | December 31, 2017 | |||||||
Twelve months ended | Average | Yield/ | Average | Yield/ | ||||
(dollars in millions) | Balance | Interest | Rate | Balance | Interest | Rate | ||
Assets: | ||||||||
Short-term investments | $ 278.9 | $ 5.0 | 1.81% | $ 358.3 | $ 3.7 | 1.04% | ||
Securities (1) | 7,343.7 | 200.9 | 2.74 | 6,785.0 | 181.3 | 2.67 | ||
Loans: | ||||||||
Commercial real estate | 11,017.7 | 463.4 | 4.21 | 10,961.2 | 405.7 | 3.70 | ||
Commercial and industrial | 8,611.7 | 375.4 | 4.36 | 8,278.6 | 313.9 | 3.79 | ||
Equipment financing | 4,040.8 | 212.3 | 5.25 | 3,264.3 | 152.1 | 4.66 | ||
Residential mortgage | 7,188.6 | 237.1 | 3.30 | 6,653.0 | 208.4 | 3.13 | ||
Home equity and other consumer | 1,995.6 | 88.6 | 4.44 | 2,107.9 | 80.0 | 3.80 | ||
Total loans | 32,854.4 | 1,376.8 | 4.19 | 31,265.0 | 1,160.1 | 3.71 | ||
Total earning assets | 40,477.0 | $ 1,582.7 | 3.91% | 38,408.3 | $ 1,345.1 | 3.50% | ||
Other assets | 4,552.7 | 4,173.3 | ||||||
Total assets | $ 45,029.7 | $ 42,581.6 | ||||||
Liabilities and stockholders' equity: | ||||||||
Deposits: | ||||||||
Non-interest-bearing | $ 8,069.8 | $ - | - % | $ 7,329.3 | $ - | - % | ||
Savings, interest-bearing checking | ||||||||
and money market | 19,630.1 | 127.4 | 0.65 | 19,486.7 | 80.1 | 0.41 | ||
Time | 5,901.4 | 88.7 | 1.50 | 4,915.7 | 50.6 | 1.03 | ||
Total deposits | 33,601.3 | 216.1 | 0.64 | 31,731.7 | 130.7 | 0.41 | ||
Borrowings: | ||||||||
Federal Home Loan Bank advances | 2,653.6 | 54.5 | 2.05 | 2,677.5 | 31.5 | 1.17 | ||
Federal funds purchased | 682.2 | 13.6 | 2.00 | 643.5 | 7.1 | 1.11 | ||
Customer repurchase agreements | 252.7 | 1.0 | 0.40 | 311.0 | 0.6 | 0.19 | ||
Other borrowings | 104.5 | 1.8 | 1.66 | 132.0 | 2.1 | 1.60 | ||
Total borrowings | 3,693.0 | 70.9 | 1.92 | 3,764.0 | 41.3 | 1.10 | ||
Notes and debentures | 889.8 | 33.3 | 3.75 | 921.3 | 29.9 | 3.25 | ||
Total funding liabilities | 38,184.1 | $ 320.3 | 0.84% | 36,417.0 | $ 201.9 | 0.55% | ||
Other liabilities | 808.4 | 573.0 | ||||||
Total liabilities | 38,992.5 | 36,990.0 | ||||||
Stockholders' equity | 6,037.2 | 5,591.6 | ||||||
Total liabilities and | ||||||||
stockholders' equity | $ 45,029.7 | $ 42,581.6 | ||||||
Net interest income/spread (2) | $ 1,262.4 | 3.07% | $ 1,143.2 | 2.95% | ||||
Net interest margin | 3.12% | 2.98% | ||||||
(1) Average balances and yields for securities are based on amortized cost. | ||||||||
(2) The fully taxable equivalent adjustment was $26.4 million and $42.7 million for the twelve months ended | ||||||||
December 31, 2018 and 2017, respectively. | ||||||||
People's United Financial, Inc. | |||||||||||
Loans acquired in a business combination are initially recorded at fair value with no carryover of an acquired entity's previous | |||||||||||
established allowance for loan losses. Accordingly, selected asset quality metrics have been highlighted to distinguish between | |||||||||||
the 'originated' portfolio and the 'acquired' portfolio. | |||||||||||
NON-PERFORMING ASSETS | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Originated non-performing loans: | |||||||||||
Commercial: | |||||||||||
Commercial real estate | $ | 33.5 | $ | 17.2 | $ | 20.3 | $ | 21.0 | $ | 23.7 | |
Commercial and industrial | 38.0 | 44.9 | 50.1 | 34.6 | 32.6 | ||||||
Equipment financing | 42.0 | 49.3 | 49.2 | 47.7 | 44.3 | ||||||
Total | 113.5 | 111.4 | 119.6 | 103.3 | 100.6 | ||||||
Retail: | |||||||||||
Residential mortgage | 38.9 | 32.0 | 33.5 | 35.4 | 32.7 | ||||||
Home equity | 15.3 | 14.6 | 15.1 | 16.1 | 15.4 | ||||||
Other consumer | - | 0.1 | - | - | - | ||||||
Total | 54.2 | 46.7 | 48.6 | 51.5 | 48.1 | ||||||
Total originated non-performing loans (1) | 167.7 | 158.1 | 168.2 | 154.8 | 148.7 | ||||||
REO: | |||||||||||
Commercial | 8.7 | 8.7 | 9.3 | 10.6 | 9.3 | ||||||
Residential | 5.5 | 4.4 | 5.8 | 6.8 | 7.6 | ||||||
Total REO | 14.2 | 13.1 | 15.1 | 17.4 | 16.9 | ||||||
Repossessed assets | 3.9 | 2.0 | 3.7 | 1.8 | 2.5 | ||||||
Total non-performing assets | $ | 185.8 | $ | 173.2 | $ | 187.0 | $ | 174.0 | $ | 168.1 | |
Acquired non-performing loans (contractual amount) | $ | 50.1 | $ | 32.3 | $ | 26.7 | $ | 30.1 | $ | 29.7 | |
Originated non-performing loans as a percentage | |||||||||||
of originated loans | 0.55 | % | 0.53 | % | 0.56 | % | 0.52 | % | 0.49 | % | |
Non-performing assets as a percentage of: | |||||||||||
Originated loans, REO and repossessed assets | 0.61 | 0.57 | 0.62 | 0.58 | 0.56 | ||||||
Tangible stockholders' equity and originated | |||||||||||
allowance for loan losses | 4.76 | 4.78 | 5.25 | 4.94 | 4.81 | ||||||
(1) Reported net of government guarantees totaling $1.9 million at December 31, 2018, $2.5 million at September 30, 2018, | |||||||||||
$2.6 million at June 30, 2018, $3.0 million at March 31, 2018 and $3.1 million at December 31, 2017. | |||||||||||
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) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Allowance for loan losses on originated loans: | |||||||||||
Balance at beginning of period | $ | 233.9 | $ | 232.8 | $ | 231.3 | $ | 230.8 | $ | 229.2 | |
Charge-offs | (7.3) | (6.4) | (4.7) | (4.4) | (6.4) | ||||||
Recoveries | 1.3 | 1.0 | 1.9 | 1.4 | 1.2 | ||||||
Net loan charge-offs | (6.0) | (5.4) | (2.8) | (3.0) | (5.2) | ||||||
Provision for loan losses | 8.4 | 6.5 | 4.3 | 3.5 | 6.8 | ||||||
Balance at end of period | 236.3 | 233.9 | 232.8 | 231.3 | 230.8 | ||||||
Allowance for loan losses on acquired loans: | |||||||||||
Balance at beginning of period | 4.1 | 4.0 | 4.0 | 3.6 | 4.2 | ||||||
Charge-offs | (1.8) | (2.0) | (2.5) | (1.8) | (1.5) | ||||||
Recoveries | 0.3 | 0.4 | 0.3 | 0.3 | 0.2 | ||||||
Net loan charge-offs | (1.5) | (1.6) | (2.2) | (1.5) | (1.3) | ||||||
Provision for loan losses | 1.5 | 1.7 | 2.2 | 1.9 | 0.7 | ||||||
Balance at end of period | 4.1 | 4.1 | 4.0 | 4.0 | 3.6 | ||||||
Total allowance for loan losses | $ | 240.4 | $ | 238.0 | $ | 236.8 | $ | 235.3 | $ | 234.4 | |
Originated commercial allowance for loan losses | |||||||||||
as a percentage of originated commercial loans | 0.93 | % | 0.94 | % | 0.93 | % | 0.94 | % | 0.93 | % | |
Originated retail allowance for loan losses | |||||||||||
as a percentage of originated retail loans | 0.36 | 0.36 | 0.36 | 0.36 | 0.35 | ||||||
Total originated allowance for loan losses | |||||||||||
as a percentage of: | |||||||||||
Originated loans | 0.77 | 0.78 | 0.77 | 0.78 | 0.77 | ||||||
Originated non-performing loans | 140.9 | 147.9 | 138.4 | 149.3 | 155.2 | ||||||
NET LOAN CHARGE-OFFS (RECOVERIES) | |||||||||||
Three Months Ended | |||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||
Commercial: | |||||||||||
Commercial real estate | $ | 1.4 | $ | 1.7 | $ | 0.7 | $ | 0.5 | $ | 1.5 | |
Commercial and industrial | 1.4 | 2.2 | 1.7 | 1.7 | 2.1 | ||||||
Equipment financing | 4.4 | 2.9 | 2.6 | 1.6 | 2.0 | ||||||
Total | 7.2 | 6.8 | 5.0 | 3.8 | 5.6 | ||||||
Retail: | |||||||||||
Residential mortgage | - | 0.1 | (0.1) | 0.2 | 0.2 | ||||||
Home equity | 0.1 | (0.1) | - | 0.4 | 0.5 | ||||||
Other consumer | 0.2 | 0.2 | 0.1 | 0.1 | 0.2 | ||||||
Total | 0.3 | 0.2 | - | 0.7 | 0.9 | ||||||
Total net loan charge-offs | $ | 7.5 | $ | 7.0 | $ | 5.0 | $ | 4.5 | $ | 6.5 | |
Net loan charge-offs to | |||||||||||
average total loans (annualized) | 0.09 | % | 0.09 | % | 0.06 | % | 0.06 | % | 0.08 | % | |
People's United Financial, Inc. | ||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP | ||||||||||||
In addition to evaluating People's United Financial Inc. ("People's United") results of operations in accordance with | ||||||||||||
U.S. generally accepted accounting principles ("GAAP"), management routinely supplements its evaluation with an analysis | ||||||||||||
of certain non-GAAP financial measures, such as the efficiency and tangible common equity ratios, tangible book value per | ||||||||||||
common share and operating earnings metrics. Management believes these non-GAAP financial measures provide | ||||||||||||
information useful to investors in understanding People's United's underlying operating performance and trends, and | ||||||||||||
facilitates comparisons with the performance of other financial institutions. Further, the efficiency ratio and operating | ||||||||||||
earnings metrics are used by management in its assessment of financial performance, including non-interest expense | ||||||||||||
control, while the tangible common equity ratio and tangible book value per common share are used to analyze the | ||||||||||||
relative strength of People's United's capital position. | ||||||||||||
The efficiency ratio, which represents an approximate measure of the cost required by People's United to generate a | ||||||||||||
dollar of revenue, is the ratio of (i) total non-interest expense (excluding operating lease expense, goodwill impairment | ||||||||||||
charges, amortization of other acquisition-related intangible assets, losses on real estate assets and non-recurring | ||||||||||||
expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent ("FTE") basis plus total non-interest | ||||||||||||
income (including the FTE adjustment on bank-owned life insurance ("BOLI") income, the netting of operating lease | ||||||||||||
expense and excluding gains and losses on sales of assets other than residential mortgage loans and acquired loans, and | ||||||||||||
non-recurring income) (the denominator). People's United generally considers an item of income or expense to be | ||||||||||||
non-recurring if it is not similar to an item of income or expense of a type incurred within the last two years and is not | ||||||||||||
similar to an item of income or expense of a type reasonably expected to be incurred within the following two years. | ||||||||||||
Operating earnings exclude from net income available to common shareholders those items that management considers | ||||||||||||
to be of such a non-recurring or infrequent nature that, by excluding such items (net of income taxes), People's United's | ||||||||||||
results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating | ||||||||||||
earnings, which include, but are not limited to: (i) non-recurring gains/losses; (ii) merger-related expenses, including | ||||||||||||
acquisition integration and other costs; (iii) writedowns of banking house assets and related lease termination costs; | ||||||||||||
(iv) severance-related costs; and (v) charges related to executive-level management separation costs, are generally also | ||||||||||||
excluded when calculating the efficiency ratio. Operating earnings per common share ("EPS") is derived by determining the | ||||||||||||
per common share impact of the respective adjustments to arrive at operating earnings and adding (subtracting) such | ||||||||||||
amounts to (from) diluted EPS, as reported. Operating return on average assets is calculated by dividing operating earnings | ||||||||||||
(annualized) by average total assets. Operating return on average tangible common equity is calculated by dividing | ||||||||||||
operating earnings (annualized) by average tangible common equity. The operating common dividend payout ratio is | ||||||||||||
calculated by dividing common dividends paid by operating earnings for the respective period. | ||||||||||||
The tangible common equity ratio is the ratio of (i) tangible common equity (total stockholders' equity less preferred | ||||||||||||
stock, goodwill and other acquisition-related intangible assets) (the numerator) to (ii) tangible assets (total assets less | ||||||||||||
goodwill and other acquisition-related intangible assets) (the denominator). Tangible book value per common share is | ||||||||||||
calculated by dividing tangible common equity by common shares (total common shares issued, less common shares | ||||||||||||
classified as treasury shares and unallocated Employee Stock Ownership Plan ("ESOP") common shares). | ||||||||||||
In light of diversity in presentation among financial institutions, the methodologies used by People's United for | ||||||||||||
determining the non-GAAP financial measures discussed above may differ from those used by other financial | ||||||||||||
institutions. | ||||||||||||
People's United Financial, Inc. | ||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued | ||||||||||||||
OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||
Total non-interest expense | $ 262.7 | $ 241.3 | $ 248.6 | $ 243.5 | $ 239.7 | $ 996.1 | $ 960.3 | |||||||
Adjustments to arrive at operating | ||||||||||||||
non-interest expense: | ||||||||||||||
Merger-related expenses | (8.0) | (0.5) | (2.9) | - | (1.6) | (11.4) | (30.6) | |||||||
Total | (8.0) | (0.5) | (2.9) | - | (1.6) | (11.4) | (30.6) | |||||||
Operating non-interest expense | 254.7 | 240.8 | 245.7 | 243.5 | 238.1 | 984.7 | 929.7 | |||||||
Operating lease expense | (9.8) | (8.9) | (8.7) | (9.0) | (8.9) | (36.4) | (35.2) | |||||||
Amortization of other acquisition-related | ||||||||||||||
intangible assets | (6.9) | (4.9) | (4.9) | (5.1) | (7.9) | (21.8) | (30.0) | |||||||
Other (1) | (1.6) | (1.8) | (1.7) | (1.3) | (1.4) | (6.4) | (5.1) | |||||||
Total non-interest expense for | ||||||||||||||
efficiency ratio | $ 236.4 | $ 225.2 | $ 230.4 | $ 228.1 | $ 219.9 | $ 920.1 | $ 859.4 | |||||||
Net interest income (FTE basis) | $ 339.5 | $ 313.0 | $ 307.8 | $ 302.1 | $ 304.1 | $ 1,262.4 | $ 1,143.2 | |||||||
Total non-interest income | 88.7 | 92.3 | 94.9 | 90.4 | 87.3 | 366.4 | 352.9 | |||||||
Total revenues | 428.2 | 405.3 | 402.7 | 392.5 | 391.4 | 1,628.8 | 1,496.1 | |||||||
Adjustments: | ||||||||||||||
Operating lease expense | (9.8) | (8.9) | (8.7) | (9.0) | (8.9) | (36.4) | (35.2) | |||||||
BOLI FTE adjustment | 0.5 | 0.6 | 0.4 | 0.4 | 0.8 | 1.9 | 3.4 | |||||||
Net security losses (gains) | 10.0 | (0.1) | - | (0.1) | 9.8 | 9.8 | 25.4 | |||||||
Other (2) | - | - | - | - | (1.3) | - | (1.3) | |||||||
Total revenues for efficiency ratio | $ 428.9 | $ 396.9 | $ 394.4 | $ 383.8 | $ 391.8 | $ 1,604.1 | $ 1,488.4 | |||||||
Efficiency ratio | 55.1% | 56.7% | 58.4% | 59.4% | 56.1% | 57.4% | 57.7% | |||||||
(1) Items classified as "other" and deducted from non-interest expense for purposes of calculating the efficiency ratio include | ||||||||||||||
certain franchise taxes and real estate owned expenses. | ||||||||||||||
(2) Items classified as "other" and deducted from total revenues for purposes of calculating the efficiency ratio | ||||||||||||||
include, as applicable, asset write-offs and gains associated with the sale of branch locations. | ||||||||||||||
People's United Financial, Inc. | ||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued | ||||||||||||||
OPERATING EARNINGS | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions, except per common share data) | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||
Net income available to common shareholders | $ 129.4 | $ 113.5 | $ 106.7 | $ 104.4 | $ 102.7 | $ 454.0 | $ 323.1 | |||||||
Adjustments to arrive at operating earnings: | ||||||||||||||
Merger-related expenses | 8.0 | 0.5 | 2.9 | - | 1.6 | 11.4 | 30.6 | |||||||
Security losses associated with tax reform (1) | 10.0 | - | - | - | 10.0 | 10.0 | 10.0 | |||||||
Total pre-tax adjustments | 18.0 | 0.5 | 2.9 | - | 11.6 | 21.4 | 40.6 | |||||||
Tax effect (2) | (13.2) | (0.2) | (0.6) | - | (9.8) | (14.0) | (17.9) | |||||||
Total adjustments, net of tax | 4.8 | 0.3 | 2.3 | - | 1.8 | 7.4 | 22.7 | |||||||
Operating earnings | $ 134.2 | $ 113.8 | $ 109.0 | $ 104.4 | $ 104.5 | $ 461.4 | $ 345.8 | |||||||
Diluted EPS, as reported | $ 0.35 | $ 0.33 | $ 0.31 | $ 0.30 | $ 0.30 | $ 1.29 | $ 0.97 | |||||||
Adjustments to arrive at operating EPS: | ||||||||||||||
Merger-related expenses | 0.01 | - | 0.01 | - | 0.01 | 0.02 | 0.07 | |||||||
Security losses associated with tax reform | 0.02 | - | - | - | 0.02 | 0.02 | 0.02 | |||||||
Tax benefit associated with tax reform | (0.02) | - | - | - | (0.02) | (0.02) | (0.02) | |||||||
Total adjustments per common share | 0.01 | - | 0.01 | - | 0.01 | 0.02 | 0.07 | |||||||
Operating EPS | $ 0.36 | $ 0.33 | $ 0.32 | $ 0.30 | $ 0.31 | $ 1.31 | $ 1.04 | |||||||
Average total assets | $ 47,721 | $ 44,245 | $ 44,110 | $ 44,011 | $ 44,039 | $ 45,030 | $ 42,582 | |||||||
Operating return on | ||||||||||||||
average assets (annualized) | 1.12% | 1.03% | 0.99% | 0.95% | 0.95% | 1.02% | 0.81% | |||||||
(1) Security losses incurred as a tax planning strategy in response to tax reform-related benefits are considered non-operating. | ||||||||||||||
(2) Includes $9.2 million for the three and twelve months ended December 31, 2018 and $6.5 million for the three and twelve | ||||||||||||||
months ended December 31, 2017 of benefits realized in connection with tax reform. | ||||||||||||||
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) | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||
Operating earnings | $ 134.2 | $ 113.8 | $ 109.0 | $ 104.4 | $ 104.5 | $ 461.4 | $ 345.8 | |||||||
Average stockholders' equity | $ 6,515 | $ 5,937 | $ 5,870 | $ 5,820 | $ 5,774 | $ 6,037 | $ 5,592 | |||||||
Less: Average preferred stock | 244 | 244 | 244 | 244 | 244 | 244 | 244 | |||||||
Average common equity | 6,271 | 5,693 | 5,626 | 5,576 | 5,530 | 5,793 | 5,348 | |||||||
Less: Average goodwill and average other | ||||||||||||||
acquisition-related intangible assets | 2,807 | 2,572 | 2,554 | 2,558 | 2,564 | 2,623 | 2,410 | |||||||
Average tangible common equity | $ 3,464 | $ 3,121 | $ 3,072 | $ 3,018 | $ 2,966 | $ 3,170 | $ 2,938 | |||||||
Operating return on average tangible | ||||||||||||||
common equity (annualized) | 15.5% | 14.6% | 14.2% | 13.8% | 14.1% | 14.6% | 11.8% | |||||||
People's United Financial, Inc. | ||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued | ||||||||||||||
OPERATING COMMON DIVIDEND PAYOUT RATIO | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||
Common dividends paid | $ 65.1 | $ 60.0 | $ 59.9 | $ 58.8 | $ 58.6 | $ 243.8 | $ 227.9 | |||||||
Operating earnings | $ 134.2 | $ 113.8 | $ 109.0 | $ 104.4 | $ 104.5 | $ 461.4 | $ 345.8 | |||||||
Operating common dividend payout ratio | 48.5% | 52.7% | 55.0% | 56.3% | 56.1% | 52.8% | 65.9% | |||||||
TANGIBLE COMMON EQUITY RATIO | ||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||
(dollars in millions) | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||
Total stockholders' equity | $ 6,534 | $ 5,959 | $ 5,900 | $ 5,845 | $ 5,820 | |||||||||
Less: Preferred stock | 244 | 244 | 244 | 244 | 244 | |||||||||
Common equity | 6,290 | 5,715 | 5,656 | 5,601 | 5,576 | |||||||||
Less: Goodwill and other | ||||||||||||||
acquisition-related intangible assets | 2,866 | 2,569 | 2,574 | 2,555 | 2,560 | |||||||||
Tangible common equity | $ 3,424 | $ 3,146 | $ 3,082 | $ 3,046 | $ 3,016 | |||||||||
Total assets | $ 47,877 | $ 44,133 | $ 44,575 | $ 44,101 | $ 44,453 | |||||||||
Less: Goodwill and other | ||||||||||||||
acquisition-related intangible assets | 2,866 | 2,569 | 2,574 | 2,555 | 2,560 | |||||||||
Tangible assets | $ 45,011 | $ 41,564 | $ 42,001 | $ 41,546 | $ 41,893 | |||||||||
Tangible common equity ratio | 7.6% | 7.6% | 7.3% | 7.3% | 7.2% | |||||||||
TANGIBLE BOOK VALUE PER COMMON SHARE | ||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||
(in millions, except per common share data) | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||
Tangible common equity | $ 3,424 | $ 3,146 | $ 3,082 | $ 3,046 | $ 3,016 | |||||||||
Common shares issued | 466.32 | 437.74 | 437.06 | 436.56 | 435.64 | |||||||||
Less: Shares classified as treasury shares | 89.03 | 89.02 | 89.02 | 89.02 | 89.04 | |||||||||
Unallocated ESOP shares | 6.27 | 6.36 | 6.45 | 6.53 | 6.62 | |||||||||
Common shares | 371.02 | 342.36 | 341.59 | 341.01 | 339.98 | |||||||||
Tangible book value per common share | $ 9.23 | $ 9.19 | $ 9.02 | $ 8.93 | $ 8.87 | |||||||||
View original content:http://www.prnewswire.com/news-releases/peoples-united-financial-reports-fourth-quarter-net-income-of-132-9-million-or-0-35-per-common-share-300780338.html
SOURCE People's United Financial, Inc.
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