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Press release from PR Newswire

People's United Financial Reports Second Quarter Operating Earnings And Net Income Of $0.20 Per Share

Thursday, July 18, 2013

People's United Financial Reports Second Quarter Operating Earnings And Net Income Of $0.20 Per Share

16:03 EDT Thursday, July 18, 2013

BRIDGEPORT, Conn., July 18, 2013 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported net income of $62.1 million, or $0.20 per share, for the second quarter of 2013, compared to $64.6 million, or $0.19 per share, for the second quarter of 2012, and $52.5 million, or $0.16 per share, for the first quarter of 2013.  Operating earnings were $62.4 million, or $0.20 per share, for the second quarter of 2013, compared to $67.0 million, or $0.20 per share, for the second quarter of 2012, and $57.9 million, or $0.18 per share, for the first quarter of 2013.

The Company's Board of Directors declared a $0.1625 per share quarterly dividend, payable August 15, 2013 to shareholders of record on August 1, 2013.  Based on the closing stock price on July 17, 2013, the dividend yield on People's United Financial common stock is 4.2 percent.

During the second quarter of 2013 the Company repurchased 11.2 million shares of People's United Financial common stock at a weighted average price of $13.63 per share and, during the first six months of 2013, the Company repurchased 22.4 million shares of common stock at a weighted average price of $13.30 per share.  Under the existing share repurchase authorization, 11.0 million shares of common stock remain available for repurchase.

"Our results continue to reflect the benefits from the investments we have made in talent over the past three years that have strengthened, and will continue to strengthen, both our robust product offerings and expanded geographic footprint," stated Jack Barnes, President and Chief Executive Officer. "This quarter we experienced annualized loan growth of 13 percent and deposit growth of 4 percent. Our continued progress in loan growth, both this quarter and over the past 11 quarters, is a tribute to both our relationship managers and our customers. These relationships bring our brand to life every day."

Barnes concluded, "As we expected, our net interest margin has now largely stabilized. This should allow net interest income to increase at a pace more closely aligned with our earning asset growth in the quarters ahead and, in fact, net interest income this quarter increased slightly from the first quarter.  Our strong business fundamentals, ongoing ability to leverage our brand in attractive markets, and prospects for growth continue to be the foundations of our strength relative to others in the industry."

"On an operating basis, earnings were $62 million, or 20 cents per share, this quarter," stated Kirk W. Walters, Senior Executive Vice President and Chief Financial Officer.  "The net interest margin reflects the impact of strong loan originations and the benefit of one more calendar day in this quarter, while non-interest income demonstrates the ongoing improvement in most of our fee-based businesses.  Cost control continues to remain an important area of focus.  The modest increase in operating expenses this quarter primarily reflects the timing of certain advertising and promotion expenses."

Walters concluded, "We certainly are pleased with the continued improvement in asset quality.  Our low loan charge-off ratio is a reflection of the Company's historically strong underwriting standards, the economic strength of the geography in which we operate and the resilience of our customers.  Of particular note, non-performing loans in the acquired portfolio declined $22 million, or 12 percent, from March 31, 2013."

Net loan charge-offs as a percentage of average loans on an annualized basis were 0.19 percent in the second quarter of 2013 compared to 0.24 percent in the first quarter of 2013.  For the originated loan portfolio, non-performing loans equaled 1.18 percent of loans at June 30, 2013, compared to 1.25 percent at March 31, 2013 and 1.52 percent at June 30, 2012.  Non-performing assets (excluding acquired non-performing loans) equaled 1.33 percent of originated loans, REO and repossessed assets at June 30, 2013, compared to 1.42 percent at March 31, 2013 and 1.67 percent at June 30, 2012.

Operating return on average assets was 0.81 percent for the second quarter of 2013, compared to 0.77 percent for the first quarter of 2013 and 0.97 percent for the second quarter of 2012.  Operating return on average tangible stockholders' equity was 9.3 percent for the second quarter of 2013, compared to 8.1 percent for the first quarter of 2013 and 8.9 percent for the second quarter of 2012.

At June 30, 2013, People's United Financial's tier 1 common and total risk-based capital ratios were 10.8 percent and 12.8 percent, respectively, and the tangible equity ratio stood at 8.7 percent. People's United Bank's tier 1 and total risk-based capital ratios were 11.9 percent and 13.2 percent, respectively, at June 30, 2013.

People's United Financial, a diversified financial services company with $31 billion in assets, provides commercial and retail banking, as well as wealth management services through a network of 418 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.  Through its subsidiaries, People's United Financial provides equipment financing, brokerage and insurance services.  Assets managed and administered, which are not reported as assets of People's United Financial, totaled $15.5 billion at June 30, 2013.

2Q 2013 Financial Highlights

Summary

  • Net income was $62.1 million, or $0.20 per share.
    • Operating earnings were $62.4 million, or $0.20 per share.
  • Net interest income totaled $220.9 million in 2Q13 compared to $219.3 million in 1Q13.
    • Interest income on acquired loans decreased $3.1 million from 1Q13 to $34.0 million.
  • Net interest margin decreased 5 basis points from 1Q13 to 3.33%.
    • The effect of one more calendar day in 2Q13 benefited the margin by 2 basis points.
    • The effects of new loan volume at lower rates, and loan repricing and amortization reduced the margin by 5 and 1 basis points, respectively.
  • Provision for loan losses totaled $9.2 million.
    • Net loan charge-offs totaled $10.8 million, of which $4.3 million related to loans with specific reserves established in prior periods.
    • Reflects a $3.6 million increase in the originated allowance for loan losses due to loan growth and a $0.9 million allowance reversal related to acquired loans sold during the period.
  • Non-interest income was $86.1 million in 2Q13 compared to $82.9 million in 1Q13.
    • Bank service charges increased $2.0 million from 1Q13, in part due to the seasonal nature of certain fee categories.
    • Investment management fees increased $0.4 million from 1Q13.
    • Insurance revenue decreased $1.2 million from 1Q13, primarily reflecting the seasonal nature of insurance renewals.
    • Net gains on sales of acquired loans totaled $5.8 million in 2Q13.
    • Assets under administration and those under full discretionary management, neither of which are reported as assets of People's United Financial, totaled $10.7 billion and $4.8 billion, respectively, at June 30, 2013.
  • Non-interest expense totaled $205.8 million in 2Q13 compared to $212.0 million in 1Q13.
    • Operating non-interest expense was $205.4 million in 2Q13 compared to $204.0 million in 1Q13. Excluding operating lease expense and amortization of acquisition-related intangible assets, operating non-interest expense totaled $191.2 million in 2Q13 compared to $190.0 million in 1Q13.
    • Compensation and benefits expense decreased $3.8 million from 1Q13, primarily reflecting lower payroll-related costs in 2Q13.
    • Compared to 1Q13, real estate owned expenses increased $2.0 million, advertising and promotion expenses increased $1.9 million and professional and outside service fees increased $1.0 million.
    • Efficiency ratio in 2Q13 decreased to 62.7% from 64.1% in 1Q13, primarily reflecting the increase in total revenues.
  • Effective income tax rate was 32.5% for 2Q13 and 32.4% for the full year of 2012.

Commercial Banking

  • Commercial banking loans, excluding acquired loans, increased $747 million from March 31, 2013.
  • Average commercial banking loans totaled $16.2 billion in 2Q13, an increase of $538 million, or 14% annualized, from 1Q13.
  • The ratio of originated non-performing commercial banking loans to originated commercial banking loans was 1.10% at June 30, 2013 compared to 1.13% at March 31, 2013.
    • Non-performing commercial banking assets, excluding acquired non-performing loans, totaled $183.8 million at June 30, 2013 compared to $179.0 million at March 31, 2013.
  • Net loan charge-offs totaled $6.9 million, or 0.17% annualized, of average commercial banking loans in 2Q13, compared to $9.4 million, or 0.24% annualized, in 1Q13.
    • Excluding acquired loan charge-offs, net loan charge-offs totaled $6.4 million, or 0.16% annualized, in 1Q13.
  • For the originated commercial banking portfolio, the allowance for loan losses as a percentage of loans was 1.05% at June 30, 2013 compared to 1.11% at March 31, 2013.
  • The commercial banking originated allowance for loan losses represented 96% of originated non-performing commercial banking loans at June 30, 2013, compared to 98% at March 31, 2013.
  • Commercial deposits totaled $5.8 billion at June 30, 2013 compared to $5.6 billion at March 31, 2013.

Retail Banking

  • Residential mortgage loans, excluding acquired loans, increased $144 million from March 31, 2013.
  • Average residential mortgage loans totaled $4.0 billion in 2Q13, an increase of $116 million, or 12% annualized, from 1Q13.
  • The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 1.58% at June 30, 2013 compared to 1.84% at March 31, 2013.
  • Net loan charge-offs totaled $2.3 million, or 0.23% annualized, of average residential mortgage loans in 2Q13, compared to $1.9 million, or 0.19% annualized, in 1Q13.
  • Home equity loans, excluding acquired loans, increased $21 million from March 31, 2013.
  • Average home equity loans totaled $2.0 billion in 2Q13, unchanged from 1Q13.
  • The ratio of originated non-performing home equity loans to originated home equity loans was 1.06% at June 30, 2013 compared to 1.13% at March 31, 2013.
  • Net loan charge-offs totaled $1.4 million, or 0.28% annualized, of average home equity loans in 2Q13, compared to $1.5 million, or 0.30% annualized, in 1Q13.
  • Retail deposits totaled $16.2 billion at both June 30, 2013 and March 31, 2013.

Conference Call On July 18, 2013, at 5 p.m., Eastern Time, People's United Financial will host a conference call to discuss this earnings announcement.  The call may be heard through www.peoples.com by selecting "Investor Relations" in the "About Us" section on the home page, and then selecting "Conference Calls" in the "News and Events" section.  Additional materials relating to the call may also be accessed at People's United Bank's web site.  The call will be archived on the web site and available for approximately 90 days.

Certain statements contained in this release are forward-looking in nature. These include all statements about People's United Financial's plans, objectives, expectations and other statements that are not historical facts, and usually use words such as "expect," "anticipate," "believe," "should" and similar expressions. Such statements represent management's current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People's United Financial's actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People's United Financial include, but are not limited to: (1) changes in general, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) residential mortgage and secondary market activity; (7) changes in accounting and regulatory guidance applicable to banks; (8) price levels and conditions in the public securities markets generally; (9) competition and its effect on pricing, spending, third-party relationships and revenues; (10) the successful integration of acquisitions; and (11) changes in regulation resulting from or relating to financial reform legislation. People's United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Access Information About People's United Financial at www.peoples.com.

 

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS

Three Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions, except per share data)

2013

2013

2012

2012

2012

Earnings Data:

  Net interest income

$         220.9

$         219.3

$         225.1

$         234.8

$         235.6

  Provision for loan losses

9.2

12.4

12.0

15.1

10.6

  Non-interest income

86.1

82.9

84.3

81.4

75.7

  Non-interest expense

205.8

212.0

207.4

208.9

205.7

  Operating non-interest expense (1)

205.4

204.0

204.5

205.7

202.1

  Income before income tax expense

92.0

77.8

90.0

92.2

95.0

  Net income

62.1

52.5

61.2

62.2

64.6

  Operating earnings (1)

62.4

57.9

63.2

64.4

67.0

Selected Statistical Data:

  Net interest margin (2)

3.33%

3.38%

3.63%

3.89%

3.96%

  Operating net interest margin (1), (2)

3.33

3.38

3.63

3.82

3.88

  Return on average assets (2)

0.81

0.70

0.85

0.88

0.93

  Operating return on average assets (1), (2)

0.81

0.77

0.87

0.91

0.97

  Return on average tangible assets (2)

0.87

0.75

0.91

0.95

1.01

  Return on average stockholders' equity (2)

5.2

4.2

4.8

4.8

5.0

  Return on average tangible stockholders' equity (2)

9.3

7.4

8.3

8.3

8.5

  Operating return on average tangible

    stockholders' equity (1), (2)

9.3

8.1

8.6

8.6

8.9

  Efficiency ratio (1)

62.7

64.1

63.0

61.4

61.4

Common Share Data:

  Basic and diluted earnings per share

$           0.20

$           0.16

$           0.18

$           0.18

$           0.19

  Operating earnings per share (1)

0.20

0.18

0.19

0.19

0.20

  Dividends paid per share

0.1625

0.16

0.16

0.16

0.16

  Dividend payout ratio

83.6%

100.6%

87.4%

87.3%

85.4%

  Operating dividend payout ratio (1)

83.2

91.2

84.8

84.3

82.2

  Book value per share (end of period)

$         15.11

$         15.24

$         15.21

$         15.20

$         15.09

  Tangible book value per share (end of period) (1)

8.20

8.54

8.71

8.77

8.72

  Stock price:

    High

15.00

13.61

12.50

12.55

13.50

    Low

12.62

12.22

11.36

11.20

11.25

    Close (end of period)

14.90

13.42

12.09

12.14

11.61

  Common shares (end of period) (in millions)

309.59

320.65

331.27

335.95

340.33

  Weighted average diluted common shares (in millions)

313.52

325.21

331.39

336.48

340.67

(1) See Non-GAAP financial measures and reconciliation to GAAP.

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS - Continued

Six Months Ended

June 30,

(dollars in millions, except per share data)

2013

2012

Earnings Data:

  Net interest income

$         440.2

$         468.8

  Provision for loan losses

21.6

22.1

  Non-interest income

169.0

148.1

  Non-interest expense

417.8

414.3

  Operating non-interest expense (1)

409.4

407.7

  Income before income tax expense

169.8

180.5

  Net income

114.6

121.9

  Operating earnings (1)

120.3

126.3

Selected Statistical Data:

  Net interest margin (2)

3.35%

3.97%

  Operating net interest margin (1), (2)

3.35

3.93

  Return on average assets (2)

0.75

0.88

  Operating return on average assets (1), (2)

0.79

0.91

  Return on average tangible assets (2)

0.81

0.96

  Return on average stockholders' equity (2)

4.7

4.7

  Return on average tangible stockholders' equity (2)

8.3

8.0

  Operating return on average tangible

    stockholders' equity (1), (2)

8.7

8.3

  Efficiency ratio (1)

63.4

62.5

Common Share Data:

  Basic and diluted earnings per share

$           0.36

$           0.36

  Operating earnings per share (1)

0.38

0.38

  Dividends paid per share

0.3225

0.3175

  Dividend payout ratio

91.3%

90.3%

  Operating dividend payout ratio (1)

87.0

87.1

  Book value per share (end of period)

$         15.11

$         15.09

  Tangible book value per share (end of period) (1)

8.20

8.72

  Stock price:

    High

15.00

13.79

    Low

12.22

11.25

    Close (end of period)

14.90

11.61

  Common shares (end of period) (in millions)

309.59

340.33

  Weighted average diluted common shares (in millions)

319.33

342.82

(1) See Non-GAAP financial measures and reconciliation to GAAP.

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS - Continued

As of and for the Three Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

Financial Condition Data:

  General:

    Total assets

$       31,345

$       30,598

$       30,324

$       28,576

$       28,137

    Loans 

22,866

22,161

21,737

21,040

20,588

    Securities

4,618

4,716

4,669

3,787

3,702

    Short-term investments

120

127

131

64

73

    Allowance for loan losses

186

187

188

186

180

    Goodwill and other acquisition-related intangible assets

2,140

2,147

2,154

2,160

2,166

    Deposits

21,982

21,792

21,751

21,363

21,458

    Borrowings

3,626

2,849

2,386

1,524

960

    Notes and debentures

639

659

659

160

160

    Stockholders' equity

4,678

4,886

5,039

5,107

5,135

    Total risk-weighted assets (1)

23,498

22,918

22,764

21,682

21,841

    Non-performing assets (2)

281

285

290

294

295

    Net loan charge-offs

10.8

13.1

10.0

9.4

13.5

  Average Balances:

    Loans

$       22,369

$       21,727

$       21,211

$       20,758

$       20,514

    Securities

4,557

4,548

3,867

3,608

2,964

    Short-term investments

153

146

128

108

562

    Total earning assets

27,079

26,421

25,206

24,474

24,040

    Total assets

30,799

30,178

28,991

28,234

27,753

    Deposits

21,835

21,558

21,557

21,372

21,190

    Total funding liabilities

25,548

24,726

23,487

22,709

22,184

    Stockholders' equity

4,825

5,005

5,107

5,161

5,188

  Ratios:

    Net loan charge-offs to average loans (annualized)

0.19%

0.24%

0.19%

0.18%

0.26%

    Non-performing assets to originated loans,

      real estate owned and repossessed assets (2)

1.33

1.42

1.48

1.59

1.67

    Originated allowance for loan losses to:

      Originated loans (2)

0.85

0.88

0.91

0.95

1.00

      Originated non-performing loans (2)

71.8

70.6

70.3

66.0

65.6

    Average stockholders' equity to average total assets

15.7

16.6

17.6

18.3

18.7

    Stockholders' equity to total assets

14.9

16.0

16.6

17.9

18.3

    Tangible stockholders' equity to tangible assets (3)

8.7

9.6

10.2

11.2

11.4

    Total risk-based capital (1)

12.8

13.7

14.7

15.6

15.6

(1) Consolidated.

(2) Excludes acquired loans.

(3) See Non-GAAP financial measures and reconciliation to GAAP.

 

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF CONDITION

June 30,

March 31,

Dec. 31,

June 30,

(in millions)

2013

2013

2012

2012

Assets

Cash and due from banks

$     379.6

$     320.5

$     470.0

$     415.1

Short-term investments

119.5

127.2

131.4

72.8

    Total cash and cash equivalents

499.1

447.7

601.4

487.9

Securities:

  Trading account securities, at fair value

6.4

6.4

6.5

12.0

  Securities available for sale, at fair value

4,439.9

4,570.4

4,532.3

3,560.0

  Securities held to maturity, at amortized cost

56.1

56.1

56.2

56.4

  Federal Home Loan Bank stock, at cost

115.4

83.0

73.7

73.7

    Total securities

4,617.8

4,715.9

4,668.7

3,702.1

Loans held for sale

68.3

50.7

77.0

57.1

Loans: 

  Commercial

8,560.8

8,469.5

8,400.0

7,590.1

  Commercial real estate

8,077.3

7,599.2

7,294.2

6,999.7

  Residential mortgage

4,084.2

3,958.8

3,886.1

3,831.9

  Consumer

2,143.9

2,133.4

2,156.3

2,166.7

    Total loans

22,866.2

22,160.9

21,736.6

20,588.4

  Less allowance for loan losses

(185.7)

(187.3)

(188.0)

(180.3)

    Total loans, net

22,680.5

21,973.6

21,548.6

20,408.1

Goodwill and other acquisition-related intangible assets

2,140.4

2,147.0

2,153.5

2,166.4

Premises and equipment

320.1

327.0

330.4

337.4

Bank-owned life insurance

337.2

336.3

336.5

334.6

Other assets

681.5

600.0

608.3

643.0

    Total assets

$ 31,344.9

$ 30,598.2

$ 30,324.4

$ 28,136.6

Liabilities

Deposits: 

  Non-interest-bearing

$   5,116.0

$   4,994.3

$   5,084.3

$   4,799.2

  Savings, interest-bearing checking and money market

12,278.6

12,210.8

11,959.8

11,617.9

  Time

4,587.2

4,586.5

4,706.4

5,040.7

    Total deposits

21,981.8

21,791.6

21,750.5

21,457.8

Borrowings:

  Federal Home Loan Bank advances

2,206.4

1,407.4

1,178.3

330.3

  Federal funds purchased

931.0

934.0

619.0

150.0

  Retail repurchase agreements

487.7

506.9

588.2

452.7

  Other borrowings

1.0

1.0

1.0

26.6

    Total borrowings

3,626.1

2,849.3

2,386.5

959.6

Notes and debentures

638.9

659.3

659.0

160.1

Other liabilities 

420.2

411.9

489.6

423.7

    Total liabilities

26,667.0

25,712.1

25,285.6

23,001.2

Stockholders' Equity

Common stock

3.9

3.9

3.9

3.9

Additional paid-in capital 

5,268.8

5,265.2

5,261.3

5,258.5

Retained earnings

763.1

753.6

756.2

743.2

Treasury stock, at cost

(1,009.3)

(856.4)

(712.2)

(602.9)

Accumulated other comprehensive loss

(178.8)

(108.5)

(96.9)

(90.2)

Unallocated common stock of Employee Stock Ownership Plan, at cost

(169.8)

(171.7)

(173.5)

(177.1)

    Total stockholders' equity

4,677.9

4,886.1

5,038.8

5,135.4

    Total liabilities and stockholders' equity

$ 31,344.9

$ 30,598.2

$ 30,324.4

$ 28,136.6

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(in millions, except per share data)

2013

2013

2012

2012

2012

Interest and dividend income:

  Commercial

$       87.2

$       86.7

$       90.7

$       91.3

$       91.1

  Commercial real estate

87.2

85.5

86.0

91.3

96.4

  Residential mortgage

34.3

34.5

34.6

37.1

35.8

  Consumer

18.7

18.8

19.5

19.8

20.0

    Total interest on loans

227.4

225.5

230.8

239.5

243.3

  Securities

22.2

22.7

20.7

20.3

18.3

  Loans held for sale

0.4

0.4

0.4

0.5

0.4

  Short-term investments

0.1

0.1

0.1

-

0.4

    Total interest and dividend income

250.1

248.7

252.0

260.3

262.4

Interest expense:

  Deposits 

20.5

20.8

21.9

22.1

23.6

  Borrowings 

2.6

2.3

2.0

1.8

1.6

  Notes and debentures

6.1

6.3

3.0

1.6

1.6

    Total interest expense

29.2

29.4

26.9

25.5

26.8

    Net interest income

220.9

219.3

225.1

234.8

235.6

Provision for loan losses 

9.2

12.4

12.0

15.1

10.6

    Net interest income after provision for loan losses

211.7

206.9

213.1

219.7

225.0

Non-interest income:

  Bank service charges

32.1

30.1

31.4

33.0

32.5

  Investment management fees

9.4

9.0

8.9

8.7

8.7

  Insurance revenue

7.1

8.3

6.7

9.5

7.2

  Brokerage commissions

3.4

3.3

2.9

2.8

3.4

  Operating lease income

8.1

8.3

8.5

8.3

7.7

  Net gains on sales of residential mortgage loans

4.2

5.7

6.1

3.6

2.8

  Net gains on sales of acquired loans

5.8

-

0.3

-

0.7

  Merchant services income, net

1.2

1.2

1.3

1.2

1.3

  Bank-owned life insurance

1.0

0.9

1.1

1.3

1.2

  Other non-interest income

13.8

16.1

17.1

13.0

10.2

    Total non-interest income

86.1

82.9

84.3

81.4

75.7

Non-interest expense:

  Compensation and benefits 

104.4

108.2

97.4

106.7

104.5

  Occupancy and equipment 

36.9

37.9

37.9

36.5

34.1

  Professional and outside service fees

14.9

13.9

16.8

15.8

17.5

  Operating lease expense

7.6

7.5

7.5

6.8

6.4

  Amortization of other acquisition-related intangible assets

6.6

6.5

6.7

6.7

6.8

  Other non-interest expense

35.4

38.0

41.1

36.4

36.4

    Total non-interest expense (1)

205.8

212.0

207.4

208.9

205.7

    Income before income tax expense

92.0

77.8

90.0

92.2

95.0

Income tax expense 

29.9

25.3

28.8

30.0

30.4

    Net income

$       62.1

$       52.5

$       61.2

$       62.2

$       64.6

Basic and diluted earnings per common share

$       0.20

$       0.16

$       0.18

$       0.18

$       0.19

(1) Total non-interest expense includes $0.4 million, $8.0 million, $2.9 million, $3.2 million and $3.6 million of

      non-operating expenses for the three months ended June 30, 2013, March 31, 2013, Dec. 31, 2012, Sept. 30, 2012

      and June 30, 2012, respectively. See Non-GAAP financial measures and reconciliation to GAAP.

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

Six Months Ended

June 30,

(in millions, except per share data)

2013

2012

Interest and dividend income:

  Commercial

$     173.9

$     183.9

  Commercial real estate

172.7

188.1

  Residential mortgage

68.8

72.0

  Consumer

37.5

40.7

    Total interest on loans

452.9

484.7

  Securities

44.9

36.3

  Loans held for sale

0.8

0.9

  Short-term investments

0.2

0.7

    Total interest and dividend income

498.8

522.6

Interest expense:

  Deposits 

41.3

46.7

  Borrowings 

4.9

3.3

  Notes and debentures

12.4

3.8

    Total interest expense

58.6

53.8

    Net interest income

440.2

468.8

Provision for loan losses 

21.6

22.1

    Net interest income after provision for loan losses

418.6

446.7

Non-interest income:

  Bank service charges

62.2

62.8

  Investment management fees

18.4

17.3

  Insurance revenue

15.4

15.6

  Brokerage commissions

6.7

6.5

  Operating lease income

16.4

14.4

  Net gains on sales of residential mortgage loans

9.9

6.4

  Net gains on sales of acquired loans

5.8

0.7

  Merchant services income, net

2.4

2.4

  Bank-owned life insurance

1.9

3.0

  Other non-interest income

29.9

19.0

    Total non-interest income

169.0

148.1

Non-interest expense:

  Compensation and benefits 

212.6

214.8

  Occupancy and equipment 

74.8

67.5

  Professional and outside service fees

28.8

32.8

  Operating lease expense

15.1

12.0

  Amortization of other acquisition-related intangible assets

13.1

13.4

  Other non-interest expense

73.4

73.8

    Total non-interest expense (1)

417.8

414.3

    Income before income tax expense

169.8

180.5

Income tax expense 

55.2

58.6

    Net income

$     114.6

$     121.9

Basic and diluted earnings per common share

$       0.36

$       0.36

(1) Total non-interest expense includes $8.4 million and $6.6 million of non-operating expenses for

      the six months ended June 30, 2013 and 2012, respectively. See Non-GAAP financial measures

      and reconciliation to GAAP.

 

People's United Financial, Inc.

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)

June 30, 2013

March 31, 2013

Three months ended

Average

Yield/

Average

Yield/

(dollars in millions)

Balance

Interest

Rate

Balance

Interest

Rate

Assets:

Short-term investments

$        152.4

$           0.1

0.18%

$        146.3

$           0.1

0.21%

Securities (2)

4,556.9

24.3

2.13

4,548.2

24.5

2.15

Loans:

  Commercial (3)

8,424.6

89.4

4.25

8,244.1

88.9

4.31

  Commercial real estate

7,757.5

87.2

4.50

7,399.5

85.5

4.62

  Residential mortgage

4,048.5

34.7

3.43

3,934.5

34.9

3.55

  Consumer

2,138.6

18.7

3.49

2,148.1

18.8

3.50

    Total loans

22,369.2

230.0

4.11

21,726.2

228.1

4.20

    Total earning assets

27,078.5

$        254.4

3.76%

26,420.7

$        252.7

3.83%

Other assets

3,720.3

3,757.3

    Total assets

$    30,798.8

$    30,178.0

Liabilities and stockholders' equity:

Deposits:

  Non-interest-bearing

$     4,960.8

$              -

-   %

$     4,879.0

$              -

-   %

  Savings, interest-bearing checking

    and money market

12,316.4

8.3

0.27

12,042.2

8.0

0.27

  Time

4,558.2

12.2

1.07

4,637.2

12.8

1.10

    Total deposits

21,835.4

20.5

0.38

21,558.4

20.8

0.39

Borrowings:

  Federal Home Loan Bank advances

1,778.3

2.0

0.44

1,344.0

1.7

0.52

  Federal funds purchased

788.0

0.4

0.19

603.3

0.3

0.20

  Retail repurchase agreements

492.3

0.2

0.19

559.6

0.3

0.20

  Other borrowings  

1.0

-

1.75

1.1

-

1.60

    Total borrowings

3,059.6

2.6

0.34

2,508.0

2.3

0.37

Notes and debentures

653.1

6.1

3.75

659.1

6.3

3.81

    Total funding liabilities

25,548.1

$          29.2

0.46%

24,725.5

$          29.4

0.48%

Other liabilities

425.8

448.0

    Total liabilities

25,973.9

25,173.5

Stockholders' equity

4,824.9

5,004.5

    Total liabilities and

      stockholders' equity

$    30,798.8

$    30,178.0

Net interest income/spread (4)

$        225.2

3.30%

$        223.3

3.35%

Net interest margin

3.33%

3.38%

Operating net interest margin (5)

3.33%

3.38%

(1) Average yields earned and rates paid are annualized.

(2) Average balances and yields for securities available for sale are based on amortized cost.

(3) Includes commercial and industrial loans and equipment financing loans.

(4) The fully taxable equivalent adjustment was $4.3 million, $4.0 million and $2.7 million for the three months ended

     June 30, 2013, March 31, 2013 and June 30, 2012, respectively.

(5) See Non-GAAP financial measures and reconciliation to GAAP.

People's United Financial, Inc.

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)

June 30, 2012

Three months ended

Average

Yield/

(dollars in millions)

Balance

Interest

Rate

Assets:

Short-term investments

$        561.6

$           0.4

0.25%

Securities (2)

2,964.4

19.1

2.58

Loans:

  Commercial (3)

7,493.5

93.0

4.97

  Commercial real estate

7,011.9

96.4

5.50

  Residential mortgage

3,832.5

36.2

3.78

  Consumer

2,176.0

20.0

3.68

    Total loans

20,513.9

245.6

4.79

    Total earning assets

24,039.9

$        265.1

4.41%

Other assets

3,713.2

    Total assets

$    27,753.1

Liabilities and stockholders' equity:

Deposits:

  Non-interest-bearing

$     4,596.5

$              -

-   %

  Savings, interest-bearing checking

    and money market

11,511.4

10.1

0.35

  Time

5,081.8

13.5

1.06

    Total deposits

21,189.7

23.6

0.45

Borrowings:

  Federal Home Loan Bank advances

330.8

1.2

1.48

  Federal funds purchased

10.5

-

0.21

  Retail repurchase agreements

465.9

0.3

0.27

  Other borrowings  

26.8

0.1

0.98

    Total borrowings

834.0

1.6

0.77

Notes and debentures

160.0

1.6

4.05

    Total funding liabilities

22,183.7

$          26.8

0.48%

Other liabilities

381.4

    Total liabilities

22,565.1

Stockholders' equity

5,188.0

    Total liabilities and

      stockholders' equity

$    27,753.1

Net interest income/spread (4)

$        238.3

3.93%

Net interest margin

3.96%

Operating net interest margin (5)

3.88%

(1) Average yields earned and rates paid are annualized.

(2) Average balances and yields for securities available for sale are based on amortized cost.

(3) Includes commercial and industrial loans and equipment financing loans.

(4) The fully taxable equivalent adjustment was $4.3 million, $4.0 million and $2.7 million for the three months ended

     June 30, 2013, March 31, 2013 and June 30, 2012, respectively.

(5) See Non-GAAP financial measures and reconciliation to GAAP.

People's United Financial, Inc.

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)

June 30, 2013

June 30, 2012

Six months ended

Average

Yield/

Average

Yield/

(dollars in millions)

Balance

Interest

Rate

Balance

Interest

Rate

Assets:

Short-term investments

$        149.4

$           0.2

0.19%

$        548.3

$           0.7

0.25%

Securities (2)

4,552.5

48.8

2.14

2,857.5

37.8

2.65

Loans:

  Commercial (3)

8,334.8

178.3

4.28

7,433.5

187.6

5.05

  Commercial real estate

7,579.5

172.7

4.56

7,065.3

188.1

5.32

  Residential mortgage

3,991.8

69.6

3.49

3,792.4

72.9

3.84

  Consumer

2,143.3

37.5

3.50

2,188.7

40.7

3.72

    Total loans

22,049.4

458.1

4.16

20,479.9

489.3

4.78

    Total earning assets

26,751.3

$        507.1

3.79%

23,885.7

$        527.8

4.42%

Other assets

3,738.8

3,722.1

    Total assets

$    30,490.1

$    27,607.8

Liabilities and stockholders' equity:

Deposits:

  Non-interest-bearing

$     4,920.1

$              -

-   %

$     4,501.6

$              -

-   %

  Savings, interest-bearing checking and money market

12,180.0

16.3

0.27

11,349.0

21.1

0.37

  Time

4,597.5

25.0

1.09

5,165.9

25.6

0.99

    Total deposits

21,697.6

41.3

0.38

21,016.5

46.7

0.45

Borrowings:

  Federal Home Loan Bank advances

1,562.3

3.7

0.48

331.4

2.4

1.48

  Federal funds purchased

696.2

0.7

0.19

7.9

-

0.19

  Retail repurchase agreements

525.8

0.5

0.20

480.3

0.7

0.28

  Other borrowings  

1.0

-

1.67

26.9

0.2

0.98

    Total borrowings

2,785.3

4.9

0.35

846.5

3.3

0.77

Notes and debentures

656.1

12.4

3.78

159.9

3.8

4.76

    Total funding liabilities

25,139.0

$          58.6

0.47%

22,022.9

$          53.8

0.49%

Other liabilities

436.9

382.4

    Total liabilities

25,575.9

22,405.3

Stockholders' equity

4,914.2

5,202.5

    Total liabilities and stockholders' equity

$    30,490.1

$    27,607.8

Net interest income/spread (4)

$        448.5

3.32%

$        474.0

3.93%

Net interest margin

3.35%

3.97%

Operating net interest margin (5)

3.35%

3.93%

(1) Average yields earned and rates paid are annualized.

(2) Average balances and yields for securities available for sale are based on amortized cost.

(3) Includes commercial and industrial loans and equipment financing loans.

(4) The fully taxable equivalent adjustment was $8.3 million and $5.2 million for the six months ended June 30, 2013 and 

     2012, respectively.

(5) See Non-GAAP financial measures and reconciliation to GAAP.

 

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

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

Originated non-performing loans:

Commercial Banking:

  Commercial real estate

$         70.2

$         86.5

$         84.4

$         88.5

$         90.5

  Commercial and industrial

68.6

50.9

54.8

64.6

62.2

  Equipment financing

27.8

24.8

27.2

37.4

37.3

    Total

166.6

162.2

166.4

190.5

190.0

Retail:

  Residential mortgage

59.6

66.8

65.0

60.6

63.7

  Home equity

21.0

22.2

21.0

14.6

13.7

  Other consumer

0.1

0.2

0.3

0.3

0.2

    Total

80.7

89.2

86.3

75.5

77.6

    Total originated non-performing loans (1)

247.3

251.4

252.7

266.0

267.6

REO:

  Residential

16.0

16.9

17.2

7.2

5.6

  Commercial

10.9

9.6

11.4

12.6

14.1

    Total REO

26.9

26.5

28.6

19.8

19.7

Repossessed assets

6.3

7.2

8.3

8.2

7.2

    Total non-performing assets

$       280.5

$       285.1

$       289.6

$       294.0

$       294.5

Acquired non-performing loans (contractual amount) (2)

$       159.0

$       180.7

$       181.6

$       202.0

$       236.6

Originated non-performing loans as a percentage

  of originated loans

1.18%

1.25%

1.30%

1.45%

1.52%

Non-performing assets as a percentage of:

  Originated loans, REO and repossessed assets

1.33

1.42

1.48

1.59

1.67

  Tangible stockholders' equity and originated

     allowance for loan losses

10.33

9.78

9.45

9.41

9.37

(1) Reported net of government guarantees totaling $20.4 million at June 30, 2013, $9.9 million at March 31, 2013, 

     $9.7 million at Dec. 31, 2012, $14.1 million at Sept. 30, 2012 and $14.8 million at June 30, 2012.

(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

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

Allowance for loan losses on originated loans:

  Balance at beginning of period

$       177.5

$       177.5

$       175.5

$       175.5

$       175.5

  Charge-offs

(12.0)

(11.3)

(11.6)

(11.1)

(12.3)

  Recoveries

1.9

1.5

1.6

1.7

1.5

    Net loan charge-offs

(10.1)

(9.8)

(10.0)

(9.4)

(10.8)

  Provision for loan losses

10.1

9.8

12.0

9.4

10.8

    Balance at end of period

177.5

177.5

177.5

175.5

175.5

Allowance for loan losses on acquired loans:

  Balance at beginning of period

9.8

10.5

10.5

4.8

7.7

  Charge-offs

(0.7)

(3.3)

-

-

(2.7)

  Provision for loan losses

(0.9)

2.6

-

5.7

(0.2)

    Balance at end of period

8.2

9.8

10.5

10.5

4.8

    Total allowance for loan losses

$       185.7

$       187.3

$       188.0

$       186.0

$       180.3

Originated allowance for loan losses as a percentage of:

    Originated loans

0.85%

0.88%

0.91%

0.95%

1.00%

    Originated non-performing loans

71.8

70.6

70.3

66.0

65.6

Commercial banking originated allowance

  for loan losses as a percentage of

  originated commercial banking loans

1.05

1.11

1.13

1.22

1.29

Retail originated allowance for loan losses

  as a percentage of originated retail loans

0.31

0.32

0.36

0.35

0.37

NET LOAN CHARGE-OFFS (RECOVERIES)

Three Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

Commercial Banking:

  Commercial real estate

$           4.7

$           6.1

$           2.5

$           3.5

$           6.1

  Commercial and industrial

1.5

3.7

2.7

2.6

3.1

  Equipment financing

0.7

(0.4)

1.0

1.1

1.2

    Total

6.9

9.4

6.2

7.2

10.4

Retail:

  Residential mortgage

2.3

1.9

1.7

1.3

1.4

  Home equity

1.4

1.5

1.7

0.6

1.4

  Other consumer

0.2

0.3

0.4

0.3

0.3

    Total

3.9

3.7

3.8

2.2

3.1

    Total

$         10.8

$         13.1

$         10.0

$           9.4

$         13.5

Net loan charge-offs to average loans (annualized)

0.19%

0.24%

0.19%

0.18%

0.26%

 

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 their 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 banks and thrifts. 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) (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). 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) merger-related expenses, including acquisition integration and other costs;

(ii) charges related to executive-level management separation costs; (iii) severance-related costs; and 

(iv) writedowns of banking house assets, 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 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.

    Operating net interest margin excludes from the net interest margin those items that management considers to

be of such a discrete nature that, by excluding such items, People's United Financial's net interest margin can be

measured and assessed on a more consistent basis from period to period. Excluded from operating net interest

margin is cost recovery income on acquired loans.  Operating net interest margin is calculated by dividing

operating net interest income (annualized) by average earning assets.

    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

Six Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

June 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

2013

2012

Total non-interest expense

$       205.8

$       212.0

$       207.4

$       208.9

$       205.7

$       417.8

$       414.3

Adjustments to arrive at operating

  non-interest expense:

  Writedowns of banking house assets

-

(6.2)

-

-

-

(6.2)

-

  Severance-related costs

(0.4)

(1.5)

(2.9)

(0.9)

(1.1)

(1.9)

(3.5)

  Acquisition integration and other costs

-

(0.3)

-

(2.3)

(2.5)

(0.3)

(3.1)

    Total

(0.4)

(8.0)

(2.9)

(3.2)

(3.6)

(8.4)

(6.6)

    Operating non-interest expense

205.4

204.0

204.5

205.7

202.1

409.4

407.7

  Amortization of other acquisition-related

    intangible assets

(6.6)

(6.5)

(6.7)

(6.7)

(6.8)

(13.1)

(13.4)

  Other (1)

(3.4)

(1.5)

(0.6)

(2.7)

(2.1)

(4.9)

(4.5)

    Total

$       195.4

$       196.0

$       197.2

$       196.3

$       193.2

$       391.4

$       389.8

Net interest income (FTE basis)

$       225.2

$       223.3

$       228.6

$       237.8

$       238.3

$       448.5

$       474.0

Total non-interest income

86.1

82.9

84.3

81.4

75.7

169.0

148.1

  Total revenues

311.3

306.2

312.9

319.2

314.0

617.5

622.1

Adjustments:

  BOLI FTE adjustment

0.4

0.4

0.6

0.7

0.6

0.8

1.5

  Other (2)

(0.2)

(0.7)

(0.7)

-

-

(0.9)

-

    Total

$       311.5

$       305.9

$       312.8

$       319.9

$       314.6

$       617.4

$       623.6

    Efficiency ratio

62.7%

64.1%

63.0%

61.4%

61.4%

63.4%

62.5%

(1)  Items classified as "other" and deducted from non-interest expense for purposes of calculating the efficiency ratio include, 

       as applicable, certain franchise taxes, real estate owned expenses, contract termination costs and non-recurring expenses.

(2)  Items classified as "other" and added to (deducted from) total revenues for purposes of calculating the efficiency ratio include, 

      as applicable, asset write-offs and gains associated with the sale of branch locations.

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued

OPERATING EARNINGS

Three Months Ended

Six Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

June 30,

June 30,

(dollars in millions, except per share data)

2013

2013

2012

2012

2012

2013

2012

Net income, as reported

$         62.1

$         52.5

$         61.2

$         62.2

$         64.6

$       114.6

$       121.9

Adjustments to arrive at operating earnings:

  Writedowns of banking house assets

-

6.2

-

-

-

6.2

-

  Severance-related costs

0.4

1.5

2.9

0.9

1.1

1.9

3.5

  Acquisition integration and other costs

-

0.3

-

2.3

2.5

0.3

3.1

    Total pre-tax adjustments

0.4

8.0

2.9

3.2

3.6

8.4

6.6

Tax effect

(0.1)

(2.6)

(0.9)

(1.0)

(1.2)

(2.7)

(2.2)

    Total adjustments, net of tax

0.3

5.4

2.0

2.2

2.4

5.7

4.4

    Operating earnings

$         62.4

$         57.9

$         63.2

$         64.4

$         67.0

$       120.3

$       126.3

Earnings per share, as reported

$         0.20

$         0.16

$         0.18

$         0.18

$         0.19

$         0.36

$         0.36

Adjustments to arrive at operating

  earnings per share:

  Writedowns of banking house assets

-

0.02

-

-

-

0.02

-

  Severance-related costs

-

-

0.01

-

-

-

0.01

  Acquisition integration and other costs

-

-

-

0.01

0.01

-

0.01

    Total adjustments per share

-

0.02

0.01

0.01

0.01

0.02

0.02

    Operating earnings per share

$         0.20

$         0.18

$         0.19

$         0.19

$         0.20

$         0.38

$         0.38

Average total assets

$     30,799

$     30,178

$     28,991

$     28,234

$     27,753

$     30,490

$     27,608

Operating return on

  average assets (annualized)

0.81%

0.77%

0.87%

0.91%

0.97%

0.79%

0.91%

OPERATING NET INTEREST MARGIN

Three Months Ended

Six Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

June 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

2013

2012

Net interest income (FTE basis)

$       225.2

$       223.3

$       228.6

$       237.8

$       238.3

$       448.5

$       474.0

Adjustments to arrive at operating

  net interest income:

  Cost recovery income

-

-

-

(4.1)

(4.7)

-

(4.7)

    Total adjustments

-

-

-

(4.1)

(4.7)

-

(4.7)

    Operating net interest income

$       225.2

$       223.3

$       228.6

$       233.7

$       233.6

$       448.5

$       469.3

Net interest margin, as reported (1)

3.33%

3.38%

3.63%

3.89%

3.96%

3.35%

3.97%

Adjustments to arrive at operating

  net interest margin (1):

  Cost recovery income

-

-

-

(0.07)

(0.08)

-

(0.04)

    Total adjustments

-

-

-

(0.07)

(0.08)

-

(0.04)

    Operating net interest margin (1)

3.33%

3.38%

3.63%

3.82%

3.88%

3.35%

3.93%

Average total earning assets

$     27,079

$     26,421

$     25,206

$     24,474

$     24,040

$     26,751

$     23,886

(1)  Annualized.

 

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued

OPERATING RETURN ON AVERAGE TANGIBLE STOCKHOLDERS' EQUITY

Three Months Ended

Six Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

June 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

2013

2012

Operating earnings

$    62.4

$    57.9

$    63.2

$    64.4

$    67.0

$  120.3

$  126.3

Average stockholders' equity

$  4,825

$  5,005

$  5,107

$  5,161

$  5,188

$  4,914

$  5,203

Less: Average goodwill and average other

         acquisition-related intangible assets

2,144

2,151

2,157

2,164

2,166

2,147

2,169

Average tangible stockholders' equity

$  2,681

$  2,854

$  2,950

$  2,997

$  3,022

$  2,767

$  3,034

Operating return on average tangible

  stockholders' equity (annualized)

9.3%

8.1%

8.6%

8.6%

8.9%

8.7%

8.3%

OPERATING DIVIDEND PAYOUT RATIO

Three Months Ended

Six Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

June 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

2013

2012

Dividends paid

$    51.9

$    52.8

$    53.6

$    54.3

$    55.1

$  104.7

$  110.0

Operating earnings

$    62.4

$    57.9

$    63.2

$    64.4

$    67.0

$  120.3

$  126.3

Operating dividend payout ratio

83.2%

91.2%

84.8%

84.3%

82.2%

87.0%

87.1%

TANGIBLE EQUITY RATIO

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(dollars in millions)

2013

2013

2012

2012

2012

Total stockholders' equity

$  4,678

$  4,886

$  5,039

$  5,107

$  5,135

Less: Goodwill and other

         acquisition-related intangible assets

2,140

2,147

2,154

2,160

2,166

Tangible stockholders' equity

$  2,538

$  2,739

$  2,885

$  2,947

$  2,969

Total assets

$31,345

$30,598

$30,324

$28,576

$28,137

Less: Goodwill and other

         acquisition-related intangible assets

2,140

2,147

2,154

2,160

2,166

Tangible assets

$29,205

$28,451

$28,170

$26,416

$25,971

Tangible equity ratio

8.7%

9.6%

10.2%

11.2%

11.4%

TANGIBLE BOOK VALUE PER SHARE

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(in millions, except per share data)

2013

2013

2012

2012

2012

Tangible stockholders' equity

$  2,538

$  2,739

$  2,885

$  2,947

$  2,969

Common shares issued

396.32

396.24

395.81

395.88

395.87

Less: Shares classified as treasury shares

78.54

67.31

56.18

51.48

47.00

         Unallocated ESOP shares

8.19

8.28

8.36

8.45

8.54

Common shares

309.59

320.65

331.27

335.95

340.33

Tangible book value per share

$    8.20

$    8.54

$    8.71

$    8.77

$    8.72

 

 

SOURCE People's United Financial, Inc.

For further information: INVESTOR CONTACT: Peter Goulding, CFA, Investor Relations, 203.338.6799, peter.goulding@peoples.com; MEDIA CONTACT: Valerie Carlson, Corporate Communications, 203.338.2351, valerie.carlson@peoples.com

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