Vermont Business Magazine People's United Financial, Inc(NASDAQ: PBCT), parent of People's United Bank,today reported net income of$70.8 million, or$0.23per share, for the fourth quarter of 2015, compared to$64.7 million, or$0.22per share, for the fourth quarter of 2014, and$68.4 million, or$0.23per share, for the third quarter of 2015. Included in this quarter's results is a net after-tax gain of$6.1 million($0.02per share) resulting from the sale of the company's payroll services business as well as non-operating expenses of$2.5 millionafter-tax ($0.01per share).Operating earnings were$67.2 million, or$0.22per share, for the fourth quarter of 2015, compared to$65.1 million, or$0.22per share, for the fourth quarter of 2014, and$68.4 million, or$0.23per share, for the third quarter of 2015.
For the year endedDecember 31, 2015, net income totaled$260.1 million, or$0.86per share, compared to$251.7 million, or$0.84per share, for 2014. Operating earnings were$262.5 million, or$0.87per share, for 2015, compared to$244.5 million, or$0.82per share, for 2014.
The Company's Board of Directors declared a$0.1675per share quarterly dividend, payableFebruary 15, 2016to shareholders of record onFebruary 1, 2016. Based on the closing stock price onJanuary 20, 2016, the dividend yield on People's United Financial common stock is 4.6 percent.
"We are pleased to report growth in full-year operating earnings per share for the sixth consecutive year, particularly given the prolonged low interest rate environment," commentedJack Barnes, President and Chief Executive Officer. "These results are driven by the strategic investments we have made in talent, products and services. Throughout 2015, we continued to move the Company forward by organically growing loans and deposits, strengthening fee businesses, implementing technology enhancements and furthering cross-sell efforts."
Barnes continued, "As we continually evaluate the best ways to serve customers and improve operating efficiency, we sold our payroll services business in the fourth quarter to the Company's current payroll software licensor and entered into a long-term referral agreement. The sale provides customers high-quality payroll solutions at comparable costs and minimal transition impact."
Barnes concluded, "Entering 2016, the franchise is well-positioned to achieve ongoing growth as we continue to execute on the significant opportunities that exist across our attractive footprint, especially within theBostonandNew Yorkmarkets. We remain focused on improving profitability, while continuing to build the business for long-term success."
"Our 2015 financial performance reflects ongoing revenue growth and proactive expense management," statedDavid Rosato, Senior Executive Vice President and Chief Financial Officer. "Record full year operating earnings of$263 millionincreased over seven percent from the prior year and benefited from both higher net interest income and fee revenues. We achieved strong annual loan and deposit growth of seven percent and nine percent, respectively. At the same time we maintained excellent asset quality across each portfolio as evidenced by net charge-offs as a percentage of average loans of only eight basis points for the full year."
Rosato concluded, "Capital ratios continue to be strong, especially given the Company's diversified business mix and history of exceptional credit risk management. Our balance sheet remains asset sensitive which positions us well to benefit from a rising interest rate environment."
AtDecember 31, 2015, People's United Financial's common equity tier 1 capital and total risk-based capital ratios were 9.8 percent and 11.7 percent, respectively, and the tangible 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 10.2 percent and 12.6 percent, respectively, atDecember 31, 2015.
Net loan charge-offs as a percentage of average total loans on an annualized basis were 0.09 percent in the fourth quarter of 2015, a slight increase from 0.06 percent in the third quarter of 2015, but an improvement from 0.13 percent in the fourth quarter of 2014. For the originated loan portfolio, non-performing loans equaled 0.58 percent of loans atDecember 31, 2015, compared to 0.68 percent atSeptember 30, 2015and 0.77 percent atDecember 31, 2014.
Operating return on average assets of 0.71 percent for the fourth quarter of 2015 declined from 0.73 percent in the third quarter of 2015 and 0.75 percent in the fourth quarter of 2014. Operating return on average tangible stockholders' equity of 10.2 percent in the fourth quarter of 2015 declined from 10.5 percent in the third quarter of 2015, but increased from 10.1 percent in the fourth quarter of 2014.
People's United Financial, a diversified financial services company with$39 billion in assets, provides commercial and retail banking, as well as wealth management services through a network of approximately 400 branches inConnecticut,New York,Massachusetts,Vermont,New Hampshireand Maine. Through its subsidiaries, People's United Financial provides equipment financing, brokerage and insurance services. Assets managed and administered, which are not reported as assets of People's United Financial, totaled$15.4 billionatDecember 31, 2015compared to$15.1 billionatSeptember 30, 2015.
4Q 2015 Financial Highlights
Summary
- Net income totaled$70.8 million, or$0.23per share.
- Operating earnings totaled$67.2 million, or$0.22per share.
- Net interest income totaled$238.8 millionin 4Q15 compared to$234.8 millionin 3Q15.
- Interest income on acquired loans decreased$0.7 millionto$12.6 million.
- Net interest margin of 2.87% unchanged from 3Q15 reflecting:
- Increase in average investment balances (increase of one basis point).
- New loan volume at rates lower than the existing portfolio (decrease of one basis point).
- Provision for loan losses totaled$9.7 million.
- Net loan charge-offs totaled$6.2 million, of which$3.3 millionrelated to loans with previously-established specific reserves.
- Net loan charge-off ratio of 0.09% in 4Q15.
- Reflects an$8.1 millionincrease in the originated allowance for loan losses due to loan growth and a$1.3 millionallowance reversal related to acquired loans.
- Non-interest income was$93.3 millionin 4Q15 compared to$87.1 millionin 3Q15.
- Gain on sale of the payroll services business totaled$9.2 millionin 4Q15.
- Insurance revenue decreased$1.6 million.
- Bank service charges decreased$1.4 million.
- Commercial banking lending fees decreased$1.1 million.
- Assets under administration and those under full discretionary management, neither of which are reported as assets of People's United Financial, totaled$9.8 billionand$5.6 billion, respectively, atDecember 31, 2015, compared to$9.7 billionand$5.4 billion, respectively, atSeptember 30, 2015.
- Non-interest expense totaled$217.0 millionin 4Q15 compared to$214.2 millionin 3Q15.
- Operating non-interest expense was$213.2 millionin 4Q15 compared to$214.1 millionin 3Q15.
- Compensation and benefits decreased$1.4 million, primarily reflecting lower payroll and benefit-related costs in 4Q15.
- Regulatory assessments expense decreased$2.4 million.
- Professional and outside services expense increased$0.9 million.
- The efficiency ratio was 61.0% in 4Q15 compared to 61.7% in 3Q15.
- Non-operating expenses totaled$3.8 millionin 4Q15 compared to$0.1 millionin 3Q15.
- The effective income tax rate was 32.8% for 4Q15 and 33.4% for the full-year of 2015, compared to 33.9% for the full-year of 2014 (33.5% for 4Q14).
Commercial Banking
- Commercial loans increased$652 million, or 13% annualized, fromSeptember 30, 2015.
- Excluding the mortgage warehouse portfolio, commercial loans increased$528 million, or 11% annualized, in 4Q15.
- Average commercial loans totaled$20.2 billionin 4Q15, an increase of$196 million, or 4% annualized, from 3Q15.
- The ratio of originated non-performing commercial loans to originated commercial loans was 0.51% atDecember 31, 2015compared to 0.64% atSeptember 30, 2015.
- Non-performing commercial assets, excluding acquired non-performing loans, totaled$117.6 millionatDecember 31, 2015compared to$139.6 millionatSeptember 30, 2015.
- Net loan charge-offs totaled$4.8 million, or 0.09% annualized, of average commercial loans in 4Q15, compared to$2.9 million, or 0.06% annualized, in 3Q15.
- For the originated commercial portfolio, the allowance for loan losses as a percentage of loans was 0.90% atDecember 31, 2015compared to 0.91% atSeptember 30, 2015.
- The commercial originated allowance for loan losses represented 177% of originated non-performing commercial loans atDecember 31, 2015compared to 143% atSeptember 30, 2015.
- Commercial deposits totaled$8.9 billionatDecember 31, 2015compared to$9.0 billionatSeptember 30, 2015.
Retail Banking
- Residential mortgage loans increased$76 million, or 6% annualized, fromSeptember 30, 2015.
- Average residential mortgage loans totaled$5.4 billionin 4Q15, an increase of$153 million, or 12% annualized, from 3Q15.
- The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.71% atDecember 31, 2015compared to 0.74% atSeptember 30, 2015.
- Net loan charge-offs totaled$0.1 million, or less than 0.01% annualized, of average residential mortgage loans in 4Q15, compared to$0.4 million, or 0.03% annualized, in 3Q15.
- Home equity loans increased$12 million, or 2% annualized, fromSeptember 30, 2015.
- Average home equity loans totaled$2.1 billionin 4Q15, unchanged from 3Q15.
- The ratio of originated non-performing home equity loans to originated home equity loans was 0.92% atDecember 31, 2015compared to 1.00% atSeptember 30, 2015.
- Net loan charge-offs totaled$1.1 million, or 0.22% annualized, of average home equity loans in 4Q15, compared to$0.6 million, or 0.11% annualized, in 3Q15.
- Retail deposits (excluding brokered deposits) totaled$16.9 billionatDecember 31, 2015compared to$16.6 billionatSeptember 30, 2015.
Conference Call
OnJanuary 21, 2016, at5 p.m., Eastern Time, People's United Financial will host a conference call to discuss this earnings announcement. The call may be heard throughwww.peoples.comby 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; and (9) 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 atwww.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) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||||
|
Earnings Data: |
|||||||||||
|
Net interest income (fully taxable equivalent) |
$ |
245.3 |
$ |
241.1 |
$ |
237.0 |
$ |
233.9 |
$ |
233.2 |
|
|
Net interest income |
238.8 |
234.8 |
230.4 |
228.1 |
228.1 |
||||||
|
Provision for loan losses |
9.7 |
6.2 |
7.7 |
9.8 |
9.9 |
||||||
|
Non-interest income (1) |
93.3 |
87.1 |
83.0 |
89.0 |
86.8 |
||||||
|
Non-interest expense |
217.0 |
214.2 |
211.8 |
217.6 |
207.7 |
||||||
|
Operating non-interest expense (2) |
213.2 |
214.1 |
208.8 |
211.6 |
207.1 |
||||||
|
Income before income tax expense |
105.4 |
101.5 |
93.9 |
89.7 |
97.3 |
||||||
|
Net income |
70.8 |
68.4 |
61.7 |
59.2 |
64.7 |
||||||
|
Operating earnings (2) |
67.2 |
68.4 |
63.7 |
63.2 |
65.1 |
||||||
|
Selected Statistical Data: |
|||||||||||
|
Net interest margin (3) |
2.87 |
% |
2.87 |
% |
2.88 |
% |
2.91 |
% |
3.00 |
% |
|
|
Return on average assets (3) |
0.75 |
0.73 |
0.67 |
0.66 |
0.74 |
||||||
|
Operating return on average assets (2), (3) |
0.71 |
0.73 |
0.70 |
0.71 |
0.75 |
||||||
|
Return on average tangible assets (3) |
0.79 |
0.78 |
0.71 |
0.70 |
0.79 |
||||||
|
Return on average stockholders' equity (3) |
6.0 |
5.8 |
5.3 |
5.1 |
5.5 |
||||||
|
Return on average tangible stockholders' equity (3) |
10.7 |
10.5 |
9.5 |
9.2 |
10.1 |
||||||
|
Operating return on average tangible |
|||||||||||
|
stockholders' equity (2), (3) |
10.2 |
10.5 |
9.8 |
9.9 |
10.1 |
||||||
|
Efficiency ratio (2) |
61.0 |
61.7 |
61.6 |
61.9 |
61.3 |
||||||
|
Common Share Data: |
|||||||||||
|
Basic and diluted earnings per share |
$ |
0.23 |
$ |
0.23 |
$ |
0.20 |
$ |
0.20 |
$ |
0.22 |
|
|
Operating earnings per share (2) |
0.22 |
0.23 |
0.21 |
0.21 |
0.22 |
||||||
|
Dividends paid per share |
0.1675 |
0.1675 |
0.1675 |
0.165 |
0.165 |
||||||
|
Dividend payout ratio |
71.5 |
% |
73.9 |
% |
81.8 |
% |
83.7 |
% |
76.5 |
% |
|
|
Operating dividend payout ratio (2) |
75.3 |
73.9 |
79.2 |
78.3 |
76.0 |
||||||
|
Book value per share (end of period) |
$ |
15.62 |
$ |
15.64 |
$ |
15.51 |
$ |
15.55 |
$ |
15.44 |
|
|
Tangible book value per share (end of period) (2) |
8.73 |
8.75 |
8.59 |
8.58 |
8.43 |
||||||
|
Stock price: |
|||||||||||
|
High |
16.93 |
16.95 |
16.64 |
15.45 |
15.50 |
||||||
|
Low |
15.00 |
14.69 |
14.92 |
13.97 |
13.61 |
||||||
|
Close (end of period) |
16.15 |
15.73 |
16.21 |
15.20 |
15.18 |
||||||
|
Common shares (end of period) (in millions) |
302.86 |
302.39 |
302.11 |
301.18 |
300.13 |
||||||
|
Weighted average diluted common shares (in millions) |
301.38 |
301.00 |
300.09 |
299.15 |
298.65 |
||||||
|
(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) |
2015 |
2014 |
|||
|
Earnings Data: |
|||||
|
Net interest income (fully taxable equivalent) |
$ |
957.3 |
$ |
931.1 |
|
|
Net interest income |
932.1 |
911.9 |
|||
|
Provision for loan losses |
33.4 |
40.6 |
|||
|
Non-interest income (1) |
352.4 |
350.8 |
|||
|
Non-interest expense |
860.6 |
841.5 |
|||
|
Operating non-interest expense (2) |
847.7 |
832.0 |
|||
|
Income before income tax expense |
390.5 |
380.6 |
|||
|
Net income |
260.1 |
251.7 |
|||
|
Operating earnings (2) |
262.5 |
244.5 |
|||
|
Selected Statistical Data: |
|||||
|
Net interest margin |
2.88 |
% |
3.09 |
% |
|
|
Return on average assets |
0.71 |
0.75 |
|||
|
Operating return on average assets (2) |
0.71 |
0.72 |
|||
|
Return on average tangible assets |
0.75 |
0.80 |
|||
|
Return on average stockholders' equity |
5.5 |
5.4 |
|||
|
Return on average tangible stockholders' equity |
10.0 |
10.0 |
|||
|
Operating return on average tangible stockholders' equity (2) |
10.1 |
9.7 |
|||
|
Efficiency ratio (2) |
61.5 |
62.1 |
|||
|
Common Share Data: |
|||||
|
Basic and diluted earnings per share |
$ |
0.86 |
$ |
0.84 |
|
|
Operating earnings per share (2) |
0.87 |
0.82 |
|||
|
Dividends paid per share |
0.6675 |
0.6575 |
|||
|
Dividend payout ratio |
77.3 |
% |
78.2 |
% |
|
|
Operating dividend payout ratio (2) |
76.6 |
80.6 |
|||
|
Book value per share (end of period) |
$ |
15.62 |
$ |
15.44 |
|
|
Tangible book value per share (end of period) (2) |
8.73 |
8.43 |
|||
|
Stock price: |
|||||
|
High |
16.95 |
15.70 |
|||
|
Low |
13.97 |
13.61 |
|||
|
Close (end of period) |
16.15 |
15.18 |
|||
|
Common shares (end of period) (in millions) |
302.86 |
300.13 |
|||
|
Weighted average diluted common shares (in millions) |
300.41 |
298.26 |
|||
|
(1) |
Includes a $9.2 million net gain resulting from the sale of People's United Bank's payroll services business and a $20.6 million net gain resulting from the formation of a merchant services joint venture for the twelve months ended December 31, 2015 and 2014, respectively. |
|
(2) |
See Non-GAAP Financial Measures and Reconciliation to GAAP. |
|
People's United Financial, Inc. |
|||||||||||
|
FINANCIAL HIGHLIGHTS - Continued |
|||||||||||
|
As of and for the Three Months Ended |
|||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
|||||||
|
(dollars in millions) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||||
|
Financial Condition Data: |
|||||||||||
|
Total assets |
$ |
38,877 |
$ |
37,478 |
$ |
37,183 |
$ |
36,407 |
$ |
35,997 |
|
|
Loans |
28,411 |
27,672 |
27,562 |
26,929 |
26,592 |
||||||
|
Securities |
6,449 |
5,921 |
5,756 |
5,577 |
5,012 |
||||||
|
Short-term investments (1) |
380 |
245 |
196 |
250 |
769 |
||||||
|
Allowance for loan losses |
211 |
208 |
205 |
201 |
198 |
||||||
|
Goodwill and other acquisition-related intangible assets |
2,088 |
2,085 |
2,091 |
2,097 |
2,103 |
||||||
|
Deposits |
28,417 |
28,280 |
27,435 |
27,150 |
26,138 |
||||||
|
Borrowings |
4,307 |
2,997 |
3,563 |
3,143 |
3,692 |
||||||
|
Notes and debentures |
1,039 |
1,045 |
1,030 |
1,042 |
1,034 |
||||||
|
Stockholders' equity |
4,732 |
4,731 |
4,686 |
4,682 |
4,633 |
||||||
|
Total risk-weighted assets (2): |
|||||||||||
|
People's United Financial, Inc. |
29,678 |
28,990 |
28,688 |
28,100 |
27,513 |
||||||
|
People's United Bank |
29,653 |
28,953 |
28,648 |
28,084 |
27,454 |
||||||
|
Non-performing assets (3) |
182 |
210 |
221 |
209 |
224 |
||||||
|
Net loan charge-offs |
6.2 |
4.1 |
3.2 |
7.2 |
8.5 |
||||||
|
Average Balances: |
|||||||||||
|
Loans |
$ |
27,853 |
$ |
27,496 |
$ |
27,125 |
$ |
26,504 |
$ |
26,136 |
|
|
Securities (4) |
6,133 |
5,880 |
5,577 |
5,325 |
4,718 |
||||||
|
Short-term investments (1) |
247 |
245 |
223 |
276 |
276 |
||||||
|
Total earning assets |
34,233 |
33,621 |
32,925 |
32,105 |
31,130 |
||||||
|
Total assets |
37,906 |
37,257 |
36,617 |
35,768 |
34,763 |
||||||
|
Deposits |
28,481 |
27,810 |
27,236 |
26,579 |
25,781 |
||||||
|
Borrowings |
3,187 |
3,304 |
3,215 |
3,018 |
2,854 |
||||||
|
Notes and debentures |
1,043 |
1,034 |
1,040 |
1,041 |
1,027 |
||||||
|
Total funding liabilities |
32,711 |
32,148 |
31,491 |
30,638 |
29,662 |
||||||
|
Stockholders' equity |
4,736 |
4,700 |
4,689 |
4,663 |
4,679 |
||||||
|
Ratios: |
|||||||||||
|
Net loan charge-offs to average total loans (annualized) |
0.09 |
% |
0.06 |
% |
0.05 |
% |
0.11 |
% |
0.13 |
% |
|
|
Non-performing assets to originated loans, |
|||||||||||
|
real estate owned and repossessed assets (3) |
0.66 |
0.78 |
0.83 |
0.80 |
0.88 |
||||||
|
Originated allowance for loan losses to: |
|||||||||||
|
Originated loans (3) |
0.73 |
0.74 |
0.73 |
0.74 |
0.74 |
||||||
|
Originated non-performing loans (3) |
127.3 |
108.1 |
102.9 |
107.5 |
95.5 |
||||||
|
Average stockholders' equity to average total assets |
12.5 |
12.6 |
12.8 |
13.0 |
13.5 |
||||||
|
Stockholders' equity to total assets |
12.2 |
12.6 |
12.6 |
12.9 |
12.9 |
||||||
|
Tangible stockholders' equity to tangible assets (5) |
7.2 |
7.5 |
7.4 |
7.5 |
7.5 |
||||||
|
Total risk-based capital (2): |
|||||||||||
|
People's United Financial, Inc. |
11.7 |
11.8 |
11.8 |
11.9 |
12.2 |
||||||
|
People's United Bank |
12.6 |
12.8 |
12.9 |
13.1 |
13.0 |
||||||
|
(1) |
Includes securities purchased under agreements to resell. |
|
(2) |
Effective January 1, 2015, calculated in accordance with Basel III capital rules. December 31, 2015 amounts are preliminary. |
|
(3) |
Excludes acquired loans. |
|
(4) |
Average balances for securities are based on amortized cost. |
|
(5) |
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) |
2015 |
2015 |
2015 |
2014 |
|
Assets |
||||
|
Cash and due from banks |
$ 334.8 |
$ 300.3 |
$ 362.8 |
$ 345.1 |
|
Short-term investments |
380.5 |
244.6 |
195.5 |
668.6 |
|
Total cash and cash equivalents |
715.3 |
544.9 |
558.3 |
1,013.7 |
|
Securities purchased under agreements to resell |
- |
- |
- |
100.0 |
|
Securities: |
||||
|
Trading account securities, at fair value |
6.7 |
8.3 |
8.3 |
8.3 |
|
Securities available for sale, at fair value |
4,527.7 |
4,221.2 |
4,518.7 |
3,993.7 |
|
Securities held to maturity, at amortized cost |
1,609.6 |
1,377.1 |
913.6 |
834.3 |
|
Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
305.4 |
314.7 |
315.1 |
175.7 |
|
Total securities |
6,449.4 |
5,921.3 |
5,755.7 |
5,012.0 |
|
Loans held for sale |
34.5 |
36.2 |
56.8 |
34.2 |
|
Loans: |
||||
|
Commercial |
10,722.0 |
10,313.3 |
10,580.9 |
10,055.1 |
|
Commercial real estate |
10,028.8 |
9,785.4 |
9,600.4 |
9,404.3 |
|
Residential mortgage |
5,457.0 |
5,381.4 |
5,191.6 |
4,932.0 |
|
Consumer |
2,203.1 |
2,192.1 |
2,189.4 |
2,200.6 |
|
Total loans |
28,410.9 |
27,672.2 |
27,562.3 |
26,592.0 |
|
Less allowance for loan losses |
(211.0) |
(207.5) |
(205.4) |
(198.3) |
|
Total loans, net |
28,199.9 |
27,464.7 |
27,356.9 |
26,393.7 |
|
Goodwill and other acquisition-related intangible assets |
2,087.8 |
2,084.7 |
2,090.6 |
2,102.5 |
|
Bank-owned life insurance |
346.5 |
345.6 |
345.9 |
343.3 |
|
Premises and equipment |
257.8 |
258.7 |
262.9 |
277.8 |
|
Other assets |
786.2 |
821.6 |
756.1 |
719.9 |
|
Total assets |
$ 38,877.4 |
$ 37,477.7 |
$ 37,183.2 |
$ 35,997.1 |
|
Liabilities |
||||
|
Deposits: |
||||
|
Non-interest-bearing |
$ 6,178.6 |
$ 5,877.2 |
$ 5,893.1 |
$ 5,655.1 |
|
Savings, interest-bearing checking and money market |
17,420.7 |
17,236.6 |
16,084.2 |
15,252.4 |
|
Time |
4,818.1 |
5,165.9 |
5,457.5 |
5,230.7 |
|
Total deposits |
28,417.4 |
28,279.7 |
27,434.8 |
26,138.2 |
|
Borrowings: |
||||
|
Federal Home Loan Bank advances |
3,463.8 |
2,164.5 |
2,615.2 |
2,291.7 |
|
Customer repurchase agreements |
469.5 |
472.3 |
472.6 |
486.0 |
|
Federal funds purchased |
374.0 |
360.0 |
474.0 |
913.0 |
|
Other borrowings |
- |
- |
1.0 |
1.0 |
|
Total borrowings |
4,307.3 |
2,996.8 |
3,562.8 |
3,691.7 |
|
Notes and debentures |
1,038.7 |
1,044.9 |
1,029.8 |
1,033.5 |
|
Other liabilities |
382.4 |
425.5 |
470.1 |
500.6 |
|
Total liabilities |
34,145.8 |
32,746.9 |
32,497.5 |
31,364.0 |
|
Stockholders' Equity |
||||
|
Common stock |
3.9 |
3.9 |
3.9 |
3.9 |
|
Additional paid-in capital |
5,337.7 |
5,327.3 |
5,319.6 |
5,291.2 |
|
Retained earnings |
880.8 |
861.0 |
843.8 |
826.7 |
|
Unallocated common stock of Employee Stock Ownership Plan, at cost |
(151.8) |
(153.6) |
(155.4) |
(159.0) |
|
Accumulated other comprehensive loss |
(177.2) |
(146.1) |
(164.5) |
(168.2) |
|
Treasury stock, at cost |
(1,161.8) |
(1,161.7) |
(1,161.7) |
(1,161.5) |
|
Total stockholders' equity |
4,731.6 |
4,730.8 |
4,685.7 |
4,633.1 |
|
Total liabilities and stockholders' equity |
$ 38,877.4 |
$ 37,477.7 |
$ 37,183.2 |
$ 35,997.1 |
|
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) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||
|
Interest and dividend income: |
|||||||||
|
Commercial |
$ 92.7 |
$ 92.5 |
$ 90.3 |
$ 88.9 |
$ 89.1 |
||||
|
Commercial real estate |
86.1 |
85.7 |
86.4 |
85.3 |
87.7 |
||||
|
Residential mortgage |
43.0 |
41.9 |
40.3 |
40.2 |
39.8 |
||||
|
Consumer |
18.1 |
18.1 |
18.0 |
18.1 |
18.7 |
||||
|
Total interest on loans |
239.9 |
238.2 |
235.0 |
232.5 |
235.3 |
||||
|
Securities |
33.8 |
31.2 |
29.0 |
27.5 |
24.0 |
||||
|
Loans held for sale |
0.3 |
0.4 |
0.4 |
0.2 |
0.2 |
||||
|
Short-term investments |
0.2 |
0.1 |
0.1 |
0.1 |
0.1 |
||||
|
Total interest and dividend income |
274.2 |
269.9 |
264.5 |
260.3 |
259.6 |
||||
|
Interest expense: |
|||||||||
|
Deposits |
24.6 |
24.8 |
23.9 |
22.2 |
21.7 |
||||
|
Borrowings |
3.3 |
2.9 |
2.7 |
2.6 |
2.4 |
||||
|
Notes and debentures |
7.5 |
7.4 |
7.5 |
7.4 |
7.4 |
||||
|
Total interest expense |
35.4 |
35.1 |
34.1 |
32.2 |
31.5 |
||||
|
Net interest income |
238.8 |
234.8 |
230.4 |
228.1 |
228.1 |
||||
|
Provision for loan losses |
9.7 |
6.2 |
7.7 |
9.8 |
9.9 |
||||
|
Net interest income after provision for loan losses |
229.1 |
228.6 |
222.7 |
218.3 |
218.2 |
||||
|
Non-interest income: |
|||||||||
|
Bank service charges |
31.1 |
32.5 |
31.5 |
30.1 |
32.0 |
||||
|
Investment management fees |
10.8 |
10.8 |
11.3 |
10.8 |
10.5 |
||||
|
Operating lease income |
10.5 |
10.5 |
10.5 |
10.8 |
10.2 |
||||
|
Commercial banking lending fees |
9.2 |
10.3 |
9.8 |
13.3 |
9.5 |
||||
|
Insurance revenue |
7.5 |
9.1 |
6.5 |
7.6 |
6.6 |
||||
|
Customer interest rate swap income, net |
3.6 |
3.4 |
2.2 |
5.3 |
3.2 |
||||
|
Brokerage commissions |
3.1 |
3.1 |
3.2 |
3.2 |
3.4 |
||||
|
Net gains on sale of residential mortgage loans |
1.3 |
1.5 |
2.0 |
0.7 |
1.0 |
||||
|
Net (losses) gains on sales of acquired loans |
- |
- |
(0.2) |
1.9 |
(0.3) |
||||
|
Net security gains |
- |
- |
- |
- |
2.7 |
||||
|
Gain on sale of business, net of expenses |
9.2 |
- |
- |
- |
- |
||||
|
Other non-interest income |
7.0 |
5.9 |
6.2 |
5.3 |
8.0 |
||||
|
Total non-interest income (1) |
93.3 |
87.1 |
83.0 |
89.0 |
86.8 |
||||
|
Non-interest expense: |
|||||||||
|
Compensation and benefits |
112.0 |
113.4 |
109.3 |
114.8 |
108.2 |
||||
|
Occupancy and equipment |
37.0 |
37.0 |
36.8 |
38.7 |
36.3 |
||||
|
Professional and outside services |
17.9 |
17.0 |
17.3 |
15.8 |
14.7 |
||||
|
Operating lease expense |
9.4 |
9.2 |
9.2 |
9.3 |
8.9 |
||||
|
Regulatory assessments |
7.1 |
9.5 |
9.2 |
9.3 |
9.4 |
||||
|
Amortization of other acquisition-related intangible assets |
6.1 |
5.9 |
6.0 |
5.9 |
6.2 |
||||
|
Other non-interest expense |
27.5 |
22.2 |
24.0 |
23.8 |
24.0 |
||||
|
Total non-interest expense (1) |
217.0 |
214.2 |
211.8 |
217.6 |
207.7 |
||||
|
Income before income tax expense |
105.4 |
101.5 |
93.9 |
89.7 |
97.3 |
||||
|
Income tax expense |
34.6 |
33.1 |
32.2 |
30.5 |
32.6 |
||||
|
Net income |
$ 70.8 |
$ 68.4 |
$ 61.7 |
$ 59.2 |
$ 64.7 |
||||
|
Basic and diluted earnings per common share |
$ 0.23 |
$ 0.23 |
$ 0.20 |
$ 0.20 |
$ 0.22 |
||||
|
(1) |
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 $3.8 million, $0.1 million, $3.0 million, $6.0 million and $0.6 million of non-operating expenses for the three months ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, 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) |
2015 |
2014 |
|
|
Interest and dividend income: |
|||
|
Commercial |
$ 364.4 |
$ 351.0 |
|
|
Commercial real estate |
343.5 |
354.2 |
|
|
Residential mortgage |
165.4 |
153.5 |
|
|
Consumer |
72.3 |
73.9 |
|
|
Total interest on loans |
945.6 |
932.6 |
|
|
Securities |
121.5 |
96.8 |
|
|
Loans held for sale |
1.3 |
0.8 |
|
|
Short-term investments |
0.5 |
0.4 |
|
|
Total interest and dividend income |
1,068.9 |
1,030.6 |
|
|
Interest expense: |
|||
|
Deposits |
95.5 |
80.9 |
|
|
Borrowings |
11.5 |
11.1 |
|
|
Notes and debentures |
29.8 |
26.7 |
|
|
Total interest expense |
136.8 |
118.7 |
|
|
Net interest income |
932.1 |
911.9 |
|
|
Provision for loan losses |
33.4 |
40.6 |
|
|
Net interest income after provision for loan losses |
898.7 |
871.3 |
|
|
Non-interest income: |
|||
|
Bank service charges |
125.2 |
128.6 |
|
|
Investment management fees |
43.7 |
41.6 |
|
|
Commercial banking lending fees |
42.6 |
36.4 |
|
|
Operating lease income |
42.3 |
41.6 |
|
|
Insurance revenue |
30.7 |
29.9 |
|
|
Customer interest rate swap income, net |
14.5 |
8.6 |
|
|
Brokerage commissions |
12.6 |
13.6 |
|
|
Net gains on sale of residential mortgage loans |
5.5 |
2.9 |
|
|
Net gains (losses) on sales of acquired loans |
1.7 |
(0.9) |
|
|
Net security gains |
- |
3.0 |
|
|
Gain on sale of business, net of expenses |
9.2 |
20.6 |
|
|
Other non-interest income |
24.4 |
24.9 |
|
|
Total non-interest income (1) |
352.4 |
350.8 |
|
|
Non-interest expense: |
|||
|
Compensation and benefits |
449.5 |
436.0 |
|
|
Occupancy and equipment |
149.5 |
147.3 |
|
|
Professional and outside services |
68.0 |
59.2 |
|
|
Operating lease expense |
37.1 |
37.4 |
|
|
Regulatory assessments |
35.1 |
35.6 |
|
|
Amortization of other acquisition-related intangible assets |
23.9 |
24.8 |
|
|
Other non-interest expense |
97.5 |
101.2 |
|
|
Total non-interest expense (1) |
860.6 |
841.5 |
|
|
Income before income tax expense |
390.5 |
380.6 |
|
|
Income tax expense |
130.4 |
128.9 |
|
|
Net income |
$ 260.1 |
$ 251.7 |
|
|
Basic and diluted earnings per common share |
$ 0.86 |
$ 0.84 |
|
|
(1) |
Total non-interest income includes $9.2 million and $20.6 million of non-operating income for the twelve months ended December 31, 2015 and 2014, respectively. Total non-interest expense includes $12.9 million and $9.5 million of non-operating expenses for the twelve months ended December 31, 2015 and 2014, 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, 2015 |
September 30, 2015 |
December 31, 2014 |
|||||||||
|
Three months ended |
Average |
Yield/ |
Average |
Yield/ |
Average |
Yield/ |
|||||
|
(dollars in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
||
|
Assets: |
|||||||||||
|
Short-term investments (2) |
$ 247.1 |
$ 0.2 |
0.21% |
$ 245.3 |
$ 0.1 |
0.19% |
$ 276.1 |
$ 0.1 |
0.20% |
||
|
Securities (3) |
6,133.1 |
37.7 |
2.46 |
5,879.9 |
34.8 |
2.37 |
4,718.4 |
26.7 |
2.26 |
||
|
Loans: |
|||||||||||
|
Commercial (4) |
10,300.8 |
95.3 |
3.70 |
10,327.7 |
95.2 |
3.69 |
9,694.2 |
91.5 |
3.78 |
||
|
Commercial real estate |
9,911.1 |
86.1 |
3.48 |
9,688.4 |
85.7 |
3.54 |
9,368.8 |
87.7 |
3.75 |
||
|
Residential mortgage |
5,440.6 |
43.3 |
3.17 |
5,293.2 |
42.3 |
3.20 |
4,877.8 |
40.0 |
3.28 |
||
|
Consumer |
2,200.7 |
18.1 |
3.31 |
2,186.9 |
18.1 |
3.30 |
2,195.0 |
18.7 |
3.40 |
||
|
Total loans |
27,853.2 |
242.8 |
3.49 |
27,496.2 |
241.3 |
3.51 |
26,135.8 |
237.9 |
3.64 |
||
|
Total earning assets |
34,233.4 |
$280.7 |
3.28% |
33,621.4 |
$276.2 |
3.29% |
31,130.3 |
$264.7 |
3.40% |
||
|
Other assets |
3,672.4 |
3,635.6 |
3,633.1 |
||||||||
|
Total assets |
$ 37,905.8 |
$ 37,257.0 |
$ 34,763.4 |
||||||||
|
Liabilities and stockholders' equity: |
|||||||||||
|
Deposits: |
|||||||||||
|
Non-interest-bearing |
$ 6,049.3 |
$ - |
- % |
$ 5,853.7 |
$ - |
- % |
$ 5,575.7 |
$ - |
- % |
||
|
Savings, interest-bearing checking |
|||||||||||
|
and money market |
17,453.7 |
11.6 |
0.27 |
16,634.9 |
11.1 |
0.27 |
15,035.6 |
9.8 |
0.26 |
||
|
Time |
4,977.6 |
13.0 |
1.05 |
5,321.6 |
13.7 |
1.03 |
5,169.5 |
11.9 |
0.92 |
||
|
Total deposits |
28,480.6 |
24.6 |
0.35 |
27,810.2 |
24.8 |
0.36 |
25,780.8 |
21.7 |
0.34 |
||
|
Borrowings: |
|||||||||||
|
Federal Home Loan Bank advances |
2,353.8 |
2.8 |
0.47 |
2,444.2 |
2.5 |
0.41 |
1,943.4 |
2.0 |
0.42 |
||
|
Customer repurchase agreements |
434.9 |
0.2 |
0.20 |
481.1 |
0.2 |
0.19 |
461.1 |
0.2 |
0.19 |
||
|
Federal funds purchased |
398.5 |
0.3 |
0.23 |
378.4 |
0.2 |
0.19 |
447.8 |
0.2 |
0.16 |
||
|
Repurchase agreements |
- |
- |
- |
0.5 |
- |
1.75 |
1.0 |
- |
1.75 |
||
|
Other borrowings |
- |
- |
- |
- |
- |
- |
0.3 |
- |
- |
||
|
Total borrowings |
3,187.2 |
3.3 |
0.40 |
3,304.2 |
2.9 |
0.35 |
2,853.6 |
2.4 |
0.34 |
||
|
Notes and debentures |
1,043.3 |
7.5 |
2.89 |
1,034.1 |
7.4 |
2.88 |
1,027.5 |
7.4 |
2.90 |
||
|
Total funding liabilities |
32,711.1 |
$ 35.4 |
0.43% |
32,148.5 |
$ 35.1 |
0.44% |
29,661.9 |
$ 31.5 |
0.43% |
||
|
Other liabilities |
458.7 |
408.0 |
422.3 |
||||||||
|
Total liabilities |
33,169.8 |
32,556.5 |
30,084.2 |
||||||||
|
Stockholders' equity |
4,736.0 |
4,700.5 |
4,679.2 |
||||||||
|
Total liabilities and |
|||||||||||
|
stockholders' equity |
$ 37,905.8 |
$ 37,257.0 |
$ 34,763.4 |
||||||||
|
Net interest income/spread (5) |
$245.3 |
2.85% |
$241.1 |
2.85% |
$233.2 |
2.97% |
|||||
|
Net interest margin |
2.87% |
2.87% |
3.00% |
||||||||
|
(1) |
Average yields earned and rates paid are annualized. |
|
(2) |
Includes securities purchased under agreements to resell. |
|
(3) |
Average balances and yields for securities are based on amortized cost. |
|
(4) |
Includes commercial and industrial loans and equipment financing loans. |
|
(5) |
The fully taxable equivalent adjustment was $6.5 million, $6.3 million and $5.1 million for the three months ended December 31, 2015, September 30, 2015 and December 31, 2014, respectively. |
|
People's United Financial, Inc. |
|||||||
|
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS |
|||||||
|
December 31, 2015 |
December 31, 2014 |
||||||
|
Twelve months ended |
Average |
Yield/ |
Average |
Yield/ |
|||
|
(dollars in millions) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|
|
Assets: |
|||||||
|
Short-term investments (1) |
$ 247.8 |
$ 0.5 |
0.20% |
$ 214.9 |
$ 0.4 |
0.20% |
|
|
Securities (2) |
5,731.5 |
135.7 |
2.37 |
4,746.9 |
106.3 |
2.24 |
|
|
Loans: |
|||||||
|
Commercial (3) |
10,189.5 |
375.4 |
3.68 |
9,266.2 |
360.7 |
3.89 |
|
|
Commercial real estate |
9,643.9 |
343.5 |
3.56 |
9,145.0 |
354.2 |
3.87 |
|
|
Residential mortgage |
5,222.4 |
166.7 |
3.19 |
4,635.1 |
154.3 |
3.33 |
|
|
Consumer |
2,193.1 |
72.3 |
3.30 |
2,172.7 |
73.9 |
3.40 |
|
|
Total loans |
27,248.9 |
957.9 |
3.52 |
25,219.0 |
943.1 |
3.74 |
|
|
Total earning assets |
33,228.2 |
$ 1,094.1 |
3.29% |
30,180.8 |
$ 1,049.8 |
3.48% |
|
|
Other assets |
3,665.8 |
3,572.0 |
|||||
|
Total assets |
$ 36,894.0 |
$ 33,752.8 |
|||||
|
Liabilities and stockholders' equity: |
|||||||
|
Deposits: |
|||||||
|
Non-interest-bearing |
$ 5,801.9 |
$ - |
- % |
$ 5,390.1 |
$ - |
- % |
|
|
Savings, interest-bearing checking |
|||||||
|
and money market |
16,489.3 |
43.5 |
0.26 |
14,238.9 |
36.7 |
0.26 |
|
|
Time |
5,241.4 |
52.0 |
0.99 |
4,668.7 |
44.2 |
0.95 |
|
|
Total deposits |
27,532.6 |
95.5 |
0.35 |
24,297.7 |
80.9 |
0.33 |
|
|
Borrowings: |
|||||||
|
Federal Home Loan Bank advances |
2,306.6 |
9.8 |
0.42 |
2,593.7 |
9.2 |
0.36 |
|
|
Customer repurchase agreements |
463.6 |
0.9 |
0.19 |
482.0 |
1.0 |
0.20 |
|
|
Federal funds purchased |
411.0 |
0.8 |
0.19 |
471.8 |
0.8 |
0.17 |
|
|
Repurchase agreements |
0.6 |
- |
1.76 |
53.5 |
0.1 |
0.26 |
|
|
Other borrowings |
- |
- |
- |
3.6 |
- |
0.08 |
|
|
Total borrowings |
3,181.8 |
11.5 |
0.36 |
3,604.6 |
11.1 |
0.31 |
|
|
Notes and debentures |
1,039.4 |
29.8 |
2.87 |
839.1 |
26.7 |
3.19 |
|
|
Total funding liabilities |
31,753.8 |
$ 136.8 |
0.43% |
28,741.4 |
$ 118.7 |
0.41% |
|
|
Other liabilities |
443.2 |
386.0 |
|||||
|
Total liabilities |
32,197.0 |
29,127.4 |
|||||
|
Stockholders' equity |
4,697.0 |
4,625.4 |
|||||
|
Total liabilities and |
|||||||
|
stockholders' equity |
$ 36,894.0 |
$ 33,752.8 |
|||||
|
Net interest income/spread (4) |
$ 957.3 |
2.86% |
$ 931.1 |
3.07% |
|||
|
Net interest margin |
2.88% |
3.09% |
|||||
|
(1) |
Includes securities purchased under agreements to resell. |
|
(2) |
Average balances and yields for securities are based on amortized cost. |
|
(3) |
Includes commercial and industrial loans and equipment financing loans. |
|
(4) |
The fully taxable equivalent adjustment was $25.2 million and $19.2 million for the twelve months ended December 31, 2015 and 2014, 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) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||||
|
Originated non-performing loans: |
|||||||||||
|
Commercial: |
|||||||||||
|
Commercial and industrial |
$ |
44.9 |
$ |
62.9 |
$ |
52.4 |
$ |
42.6 |
$ |
55.8 |
|
|
Commercial real estate |
30.2 |
31.8 |
36.5 |
43.3 |
60.2 |
||||||
|
Equipment financing |
27.5 |
29.4 |
38.3 |
34.9 |
25.4 |
||||||
|
Total |
102.6 |
124.1 |
127.2 |
120.8 |
141.4 |
||||||
|
Retail: |
|||||||||||
|
Residential mortgage |
37.2 |
38.2 |
40.9 |
37.5 |
37.6 |
||||||
|
Home equity |
19.5 |
21.0 |
21.4 |
19.4 |
17.9 |
||||||
|
Other consumer |
0.1 |
- |
0.1 |
0.1 |
0.1 |
||||||
|
Total |
56.8 |
59.2 |
62.4 |
57.0 |
55.6 |
||||||
|
Total originated non-performing loans (1) |
159.4 |
183.3 |
189.6 |
177.8 |
197.0 |
||||||
|
REO: |
|||||||||||
|
Residential |
7.1 |
10.8 |
14.8 |
16.5 |
13.6 |
||||||
|
Commercial |
5.5 |
8.2 |
10.6 |
10.2 |
11.0 |
||||||
|
Total REO |
12.6 |
19.0 |
25.4 |
26.7 |
24.6 |
||||||
|
Repossessed assets |
9.5 |
7.3 |
5.5 |
4.3 |
2.5 |
||||||
|
Total non-performing assets |
$ |
181.5 |
$ |
209.6 |
$ |
220.5 |
$ |
208.8 |
$ |
224.1 |
|
|
Acquired non-performing loans (contractual amount) (2) |
$ |
30.0 |
$ |
38.4 |
$ |
41.5 |
$ |
74.8 |
$ |
103.6 |
|
|
Originated non-performing loans as a percentage |
|||||||||||
|
of originated loans |
0.58 |
% |
0.68 |
% |
0.71 |
% |
0.68 |
% |
0.77 |
% |
|
|
Non-performing assets as a percentage of: |
|||||||||||
|
Originated loans, REO and repossessed assets |
0.66 |
0.78 |
0.83 |
0.80 |
0.88 |
||||||
|
Tangible stockholders' equity and originated |
|||||||||||
|
allowance for loan losses |
6.38 |
7.37 |
7.91 |
7.52 |
8.24 |
||||||
|
(1) |
Reported net of government guarantees totaling $16.9 million at December 31, 2015, $17.3 million at September 30, 2015, $16.6 million at June 30, 2015, $17.5 million at March 31, 2015 and $17.6 million at December 31, 2014. |
|
(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) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||||
|
Allowance for loan losses on originated loans: |
|||||||||||
|
Balance at beginning of period |
$ |
198.1 |
$ |
195.1 |
$ |
191.1 |
$ |
188.1 |
$ |
185.0 |
|
|
Charge-offs |
(7.8) |
(6.1) |
(6.0) |
(8.1) |
(9.7) |
||||||
|
Recoveries |
1.6 |
2.0 |
2.8 |
0.9 |
1.2 |
||||||
|
Net loan charge-offs |
(6.2) |
(4.1) |
(3.2) |
(7.2) |
(8.5) |
||||||
|
Provision for loan losses |
11.0 |
7.1 |
7.2 |
10.2 |
11.6 |
||||||
|
Balance at end of period |
202.9 |
198.1 |
195.1 |
191.1 |
188.1 |
||||||
|
Allowance for loan losses on acquired loans: |
|||||||||||
|
Balance at beginning of period |
9.4 |
10.3 |
9.8 |
10.2 |
11.9 |
||||||
|
Provision for loan losses |
(1.3) |
(0.9) |
0.5 |
(0.4) |
(1.7) |
||||||
|
Balance at end of period |
8.1 |
9.4 |
10.3 |
9.8 |
10.2 |
||||||
|
Total allowance for loan losses |
$ |
211.0 |
$ |
207.5 |
$ |
205.4 |
$ |
200.9 |
$ |
198.3 |
|
|
Commercial originated allowance for loan loss |
|||||||||||
|
as a percentage of originated commercial loans |
0.90 |
% |
0.91 |
% |
0.90 |
% |
0.91 |
% |
0.91 |
% |
|
|
Retail originated allowance for loan losses |
|||||||||||
|
as a percentage of originated retail loans |
0.28 |
0.28 |
0.26 |
0.26 |
0.27 |
||||||
|
Total originated allowance for loan losses |
|||||||||||
|
as a percentage of: |
|||||||||||
|
Originated loans |
0.73 |
0.74 |
0.73 |
0.74 |
0.74 |
||||||
|
Originated non-performing loans |
127.3 |
108.1 |
102.9 |
107.5 |
95.5 |
||||||
|
NET LOAN CHARGE-OFFS (RECOVERIES) |
|||||||||||
|
Three Months Ended |
|||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
|||||||
|
(dollars in millions) |
2015 |
2015 |
2015 |
2015 |
2014 |
||||||
|
Commercial: |
|||||||||||
|
Commercial and industrial |
$ |
3.5 |
$ |
1.4 |
$ |
1.4 |
$ |
2.1 |
$ |
3.2 |
|
|
Commercial real estate |
(0.1) |
0.5 |
(0.4) |
2.8 |
3.3 |
||||||
|
Equipment financing |
1.4 |
1.0 |
0.5 |
1.1 |
- |
||||||
|
Total |
4.8 |
2.9 |
1.5 |
6.0 |
6.5 |
||||||
|
Retail: |
|||||||||||
|
Residential mortgage |
0.1 |
0.4 |
0.5 |
0.4 |
0.2 |
||||||
|
Home equity |
1.1 |
0.6 |
1.1 |
0.5 |
1.3 |
||||||
|
Other consumer |
0.2 |
0.2 |
0.1 |
0.3 |
0.5 |
||||||
|
Total |
1.4 |
1.2 |
1.7 |
1.2 |
2.0 |
||||||
|
Total net loan charge-offs |
$ |
6.2 |
$ |
4.1 |
$ |
3.2 |
$ |
7.2 |
$ |
8.5 |
|
|
Net loan charge-offs to |
|||||||||||
|
average total loans (annualized) |
0.09 |
% |
0.06 |
% |
0.05 |
% |
0.11 |
% |
0.13 |
% |
|
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP
In addition to evaluating People's United Financial's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible 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 Financial'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 equity ratio and tangible book value per share are used to analyze the relative strength of People's United Financial's capital position.
The efficiency ratio, which represents an approximate measure of the cost required by People's United Financial to generate a dollar of revenue, is the ratio of (i)total non-interest expense (excluding goodwill impairment charges, amortization of 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, and excluding gains and losses on sales of assets other than residential mortgage loans and acquired loans, and non-recurring income) (the denominator). In addition, operating lease expense is excluded from total non-interest expense and netted against operating lease income within non-interest income to conform with the reporting approach applied to fee-based businesses already presented on a net basis. People's United Financial 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 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 Financial'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) writedowns of banking house assets and related lease termination costs; (iii) severance-related costs; (iv) merger-related expenses, including acquisition integration and other costs; and (v) charges related to executive-level management separation costs, are generally also excluded when calculating the efficiency ratio. Operating earnings per 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) GAAP earnings per share. Operating return on average assets is calculated by dividing operating earnings (annualized) by average total assets. Operating return on average tangible stockholders' equity is calculated by dividing operating earnings (annualized) by average tangible stockholders' equity. The operating dividend payout ratio is calculated by dividing dividends paid by operating earnings for the respective period.
The tangible equity ratio is the ratio of (i)tangible stockholders' equity (total stockholders' equity less 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 stockholders' 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 Financial 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) |
2015 |
2015 |
2015 |
2015 |
2014 |
2015 |
2014 |
|||||||
|
Total non-interest expense |
$ 217.0 |
$ 214.2 |
$ 211.8 |
$ 217.6 |
$ 207.7 |
$ 860.6 |
$ 841.5 |
|||||||
|
Adjustments to arrive at operating |
||||||||||||||
|
non-interest expense: |
||||||||||||||
|
Writedowns of banking house assets |
(2.5) |
- |
(2.7) |
(5.3) |
- |
(10.5) |
(6.2) |
|||||||
|
Severance-related costs |
(1.3) |
(0.1) |
(0.3) |
(0.7) |
(0.6) |
(2.4) |
(3.3) |
|||||||
|
Total |
(3.8) |
(0.1) |
(3.0) |
(6.0) |
(0.6) |
(12.9) |
(9.5) |
|||||||
|
Operating non-interest expense |
213.2 |
214.1 |
208.8 |
211.6 |
207.1 |
847.7 |
832.0 |
|||||||
|
Operating lease expense (1) |
(9.4) |
(9.2) |
(9.2) |
(9.3) |
(8.9) |
(37.1) |
(37.4) |
|||||||
|
Amortization of other acquisition-related |
||||||||||||||
|
intangible assets |
(6.1) |
(5.9) |
(6.0) |
(5.9) |
(6.2) |
(23.9) |
(24.8) |
|||||||
|
Other (2) |
(2.2) |
(1.8) |
(1.8) |
(2.0) |
(2.4) |
(7.8) |
(10.3) |
|||||||
|
Total non-interest expense for |
||||||||||||||
|
efficiency ratio |
$ 195.5 |
$ 197.2 |
$ 191.8 |
$ 194.4 |
$ 189.6 |
$ 778.9 |
$ 759.5 |
|||||||
|
Net interest income (FTE basis) |
$ 245.3 |
$ 241.1 |
$ 237.0 |
$ 233.9 |
$ 233.2 |
$ 957.3 |
$ 931.1 |
|||||||
|
Total non-interest income |
93.3 |
87.1 |
83.0 |
89.0 |
86.8 |
352.4 |
350.8 |
|||||||
|
Total revenues |
338.6 |
328.2 |
320.0 |
322.9 |
320.0 |
1,309.7 |
1,281.9 |
|||||||
|
Adjustments: |
||||||||||||||
|
Operating lease expense (1) |
(9.4) |
(9.2) |
(9.2) |
(9.3) |
(8.9) |
(37.1) |
(37.4) |
|||||||
|
BOLI FTE adjustment |
0.5 |
0.6 |
0.7 |
0.6 |
0.9 |
2.4 |
2.8 |
|||||||
|
Net security gains |
- |
- |
- |
- |
(2.7) |
- |
(3.0) |
|||||||
|
Gain on sale of business, net of expenses |
(9.2) |
- |
- |
- |
- |
(9.2) |
(20.6) |
|||||||
|
Other (3) |
- |
(0.1) |
- |
- |
0.1 |
(0.1) |
(0.5) |
|||||||
|
Total revenues for efficiency ratio |
$ 320.5 |
$ 319.5 |
$ 311.5 |
$ 314.2 |
$ 309.4 |
$ 1,265.7 |
$ 1,223.2 |
|||||||
|
Efficiency ratio |
61.0% |
61.7% |
61.6% |
61.9% |
61.3% |
61.5% |
62.1% |
|||||||
|
(1) |
Operating lease expense is excluded from total non-interest expense and netted against operating lease income within non-interest income to conform with the reporting approach applied to fee-based businesses already presented on a net basis. |
|
(2) |
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. |
|
(3) |
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) |
2015 |
2015 |
2015 |
2015 |
2014 |
2015 |
2014 |
|||||||
|
Net income, as reported |
$ 70.8 |
$ 68.4 |
$ 61.7 |
$ 59.2 |
$ 64.7 |
$ 260.1 |
$ 251.7 |
|||||||
|
Adjustments to arrive at operating earnings: |
||||||||||||||
|
Writedowns of banking house assets |
2.5 |
- |
2.7 |
5.3 |
- |
10.5 |
6.2 |
|||||||
|
Severance-related costs |
1.3 |
0.1 |
0.3 |
0.7 |
0.6 |
2.4 |
3.3 |
|||||||
|
Gain on sale of business, net of expenses |
(9.2) |
- |
- |
- |
- |
(9.2) |
(20.6) |
|||||||
|
Total pre-tax adjustments |
(5.4) |
0.1 |
3.0 |
6.0 |
0.6 |
3.7 |
(11.1) |
|||||||
|
Tax effect |
1.8 |
(0.1) |
(1.0) |
(2.0) |
(0.2) |
(1.3) |
3.9 |
|||||||
|
Total adjustments, net of tax |
(3.6) |
- |
2.0 |
4.0 |
0.4 |
2.4 |
(7.2) |
|||||||
|
Operating earnings |
$ 67.2 |
$ 68.4 |
$ 63.7 |
$ 63.2 |
$ 65.1 |
$ 262.5 |
$ 244.5 |
|||||||
|
Earnings per share, as reported |
$ 0.23 |
$ 0.23 |
$ 0.20 |
$ 0.20 |
$ 0.22 |
$ 0.86 |
$ 0.84 |
|||||||
|
Adjustments to arrive at operating |
||||||||||||||
|
earnings per share: |
||||||||||||||
|
Writedowns of banking house assets |
0.01 |
- |
0.01 |
0.01 |
- |
0.03 |
0.01 |
|||||||
|
Severance-related costs |
- |
- |
- |
- |
- |
- |
0.01 |
|||||||
|
Gain on sale of business, net of expenses |
(0.02) |
- |
- |
- |
- |
(0.02) |
(0.04) |
|||||||
|
Total adjustments per share |
(0.01) |
- |
0.01 |
0.01 |
- |
0.01 |
(0.02) |
|||||||
|
Operating earnings per share |
$ 0.22 |
$ 0.23 |
$ 0.21 |
$ 0.21 |
$ 0.22 |
$ 0.87 |
$ 0.82 |
|||||||
|
Average total assets |
$37,906 |
$37,257 |
$36,617 |
$35,768 |
$34,763 |
$36,894 |
$33,753 |
|||||||
|
Operating return on |
||||||||||||||
|
average assets (annualized) |
0.71% |
0.73% |
0.70% |
0.71% |
0.75% |
0.71% |
0.72% |
|||||||
|
OPERATING RETURN ON AVERAGE TANGIBLE STOCKHOLDERS' EQUITY |
||||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
Dec. 31, |
Dec. 31, |
||||||||
|
(dollars in millions) |
2015 |
2015 |
2015 |
2015 |
2014 |
2015 |
2014 |
|||||||
|
Operating earnings |
$ 67.2 |
$ 68.4 |
$ 63.7 |
$ 63.2 |
$ 65.1 |
$ 262.5 |
$ 244.5 |
|||||||
|
Average stockholders' equity |
$ 4,736 |
$ 4,700 |
$ 4,689 |
$ 4,663 |
$ 4,679 |
$ 4,697 |
$ 4,625 |
|||||||
|
Less: Average goodwill and average other |
||||||||||||||
|
acquisition-related intangible assets |
2,092 |
2,088 |
2,094 |
2,100 |
2,106 |
2,094 |
2,115 |
|||||||
|
Average tangible stockholders' equity |
$ 2,644 |
$ 2,612 |
$ 2,595 |
$ 2,563 |
$ 2,573 |
$ 2,603 |
$ 2,510 |
|||||||
|
Operating return on average tangible |
||||||||||||||
|
stockholders' equity (annualized) |
10.2% |
10.5% |
9.8% |
9.9% |
10.1% |
10.1% |
9.7% |
|||||||
People's United Financial, Inc.
|
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued |
||||||||||||||
|
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) |
2015 |
2015 |
2015 |
2015 |
2014 |
2015 |
2014 |
|||||||
|
Dividends paid |
$ 50.6 |
$ 50.6 |
$ 50.5 |
$ 49.5 |
$ 49.5 |
$ 201.2 |
$ 196.9 |
|||||||
|
Operating earnings |
$ 67.2 |
$ 68.4 |
$ 63.7 |
$ 63.2 |
$ 65.1 |
$ 262.5 |
$ 244.5 |
|||||||
|
Operating dividend payout ratio |
75.3% |
73.9% |
79.2% |
78.3% |
76.0% |
76.6% |
80.6% |
|||||||
|
TANGIBLE EQUITY RATIO |
||||||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
||||||||||
|
(dollars in millions) |
2015 |
2015 |
2015 |
2015 |
2014 |
|||||||||
|
Total stockholders' equity |
$ 4,732 |
$ 4,731 |
$ 4,686 |
$ 4,682 |
$ 4,633 |
|||||||||
|
Less: Goodwill and other |
||||||||||||||
|
acquisition-related intangible assets |
2,088 |
2,085 |
2,091 |
2,097 |
2,103 |
|||||||||
|
Tangible stockholders' equity |
$ 2,644 |
$ 2,646 |
$ 2,595 |
$ 2,585 |
$ 2,530 |
|||||||||
|
Total assets |
$38,877 |
$37,478 |
$37,183 |
$36,407 |
$35,997 |
|||||||||
|
Less: Goodwill and other |
||||||||||||||
|
acquisition-related intangible assets |
2,088 |
2,085 |
2,091 |
2,097 |
2,103 |
|||||||||
|
Tangible assets |
$36,789 |
$35,393 |
$35,092 |
$34,310 |
$33,894 |
|||||||||
|
Tangible equity ratio |
7.2% |
7.5% |
7.4% |
7.5% |
7.5% |
|||||||||
|
TANGIBLE BOOK VALUE PER SHARE |
||||||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
||||||||||
|
(in millions, except per share data) |
2015 |
2015 |
2015 |
2015 |
2014 |
|||||||||
|
Tangible stockholders' equity |
$ 2,644 |
$ 2,646 |
$ 2,595 |
$ 2,585 |
$ 2,530 |
|||||||||
|
Common shares issued |
399.24 |
398.84 |
398.66 |
397.81 |
396.85 |
|||||||||
|
Less: Shares classified as treasury shares |
89.06 |
89.05 |
89.06 |
89.05 |
89.05 |
|||||||||
|
Unallocated ESOP shares |
7.32 |
7.40 |
7.49 |
7.58 |
7.67 |
|||||||||
|
Common shares |
302.86 |
302.39 |
302.11 |
301.18 |
300.13 |
|||||||||
|
Tangible book value per share |
$ 8.73 |
$ 8.75 |
$ 8.59 |
$ 8.58 |
$ 8.43 |
|||||||||
SOURCE BRIDGEPORT, Conn.,Jan. 21, 2016/PRNewswire/ --People's United Financial, Inc.