People’s United reports increased first quarter earnings of $52 million

first_img   Net interest income220.3189.8175.8173.8159.6  Professional and outside service fees15.919.818.520.813.6 (1) Income and expenses associated with merchant services and customer derivatives are presented net within  Borrowings2.51.20.30.30.5 (dollars in millions)20112010201020102010  Consumer2,151.220.93.882,169.522.14.07 Earnings Data:  Net interest income$          220.3$          189.8$          175.8$          173.8$          159.6 (in millions)201120102010  Non-interest income (1)74.668.168.069.764.2  Other consumer0.40.81.10.81.0        and March 31, 2010, respectively.  Net income51.732.024.116.013.6  Federal Home Loan Bank advances11.20.15.49  Merchant services income, net1.01.11.11.11.0  Net interest margin (4)4.16%3.87%3.74%3.69%3.49%  Return on average assets (4)0.840.560.440.290.26  Return on average tangible assets (4)0.910.610.480.320.28 (in millions, except per share data)20112010201020102010 People’s United Financial, Inc. 3.87%    Total wealth management income19.317.718.717.718.0 Three Months Ended Deposits: Tangible book value per share$            9.27$            9.30$          10.07$          10.14$          10.25 (2) Reported net of government guarantees totaling $10.0 million at March 31, 2011, $9.4 million at Dec. 31, 2010, $8.8 million at    Allowance for loan losses178173173173173       commercial real estate loans to commercial loans as of March 31, 2011. Securities purchased under Net interest income/spread (3)  Amortization of other acquisition-related intangibles5.96.16.14.84.7 NET LOAN CHARGE-OFFS    Total liabilities and stockholders’ equity$     24,622.5  Repurchase agreements164.60.20.45 Net income, as reported$            51.7$            32.0$            24.1$            16.0$            13.6      real estate owned and repossessed assets (2)1.962.092.192.021.75  Short-term investments0.60.60.81.51.7 Securities:  Bank-owned life insurance1.21.01.42.61.8  Residential mortgage2,707.929.34.332,459.927.14.41 People’s United Financial, Inc.    Total non-interest expense202.8199.1186.3202.7193.9 (3)  The FTE adjustment was $1.2 million, $0.9 million and $0.8 million for the three months ended March 31, 2011, Dec. 31. 2010 March 31,Dec. 31,Sept. 30,June 30,March 31, (dollars in millions)20112010201020102010 Commercial Banking:  Commercial (1)6,046.75,196.05,178.3 Other assets583.6706.7467.5    Goodwill and other acquisition-related intangibles1,9531,9621,7721,7781,767    Securities3,2033,0332,4781,787886    Total earning assets18,414.2$          194.44.22% Less: Common shares classified as treasury shares22.0117.498.756.903.19 Charge-offs(10.4)(12.2)(22.6)(19.0)(10.9)    Deposits18,11017,93315,67515,83415,397 Yield/ OPERATING EARNINGS People’s United Financial, Inc.    Non-performing assets (2)292303312285248 Three Months Ended (dollars in millions)BalanceInterestRate    Total originated non-performing loans (2)240.5245.2251.4219.7192.3  originated commercial banking loans1.611.611.661.711.73    Total assets$     21,259.6  Investment management fees8.27.97.68.67.9 (4) Total risk-based capital ratios are for People’s United Bank and, as such, do not reflect the additional capital residing  Ratios:    Total liabilities and stockholders’ equity$     24,962.3$     25,037.1$     21,588.1 390.0 Premises and equipment326.0325.1258.2  General:  originated retail banking loans0.260.250.240.210.18 (2) Includes a total of $3.1 million, $7.0 million, $5.3 million, $23.2 million and $23.4 million of merger-related expenses,    Non-performing assets to originated loans,  Tangible stockholders’ equity and allowance for loan losses8.638.848.297.476.37 Other liabilities411.3    Loans17,52317,32815,12015,14015,253    Total borrowings1,157.91,010.6174.6    Total risk-based capital (4)14.914.516.416.616.3    Total deposits15,201.829.70.78 17,625.6  agreements to resell226.70.11.15 Accumulated other comprehensive loss(98.4)(99.0)(72.8) Net loan charge-offs to average loans (annualized)0.22%0.28%0.58%0.47%0.26% (3) See non-GAAP financial measures and reconciliation to GAAP beginning on page 12.  Basic and diluted earnings per share$            0.15$            0.09$            0.07$            0.04$            0.04    Total stockholders’ equity5,160.35,219.35,478.6 Total stockholders’ equity$          5,160$          5,219$          5,365$          5,413$          5,479 (dollars in millions)20112010201020102010 March 31,Dec. 31,March 31, 4.16%    Securities3,0892,4571,8561,097888 Cash and due from banks$          315.2$          354.7$          296.3    Net loan charge-offs9.610.921.817.89.5 NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued Residential mortgage loans held for sale36.30.55.51  Compensation and benefits105.498.393.292.696.3 Deposits: (1) Represents pre-tax merger-related expenses, core system conversion costs and one-time charges totaling  Securities held to maturity, at amortized cost55.155.155.3  Federal Home Loan Bank stock, at cost59.563.631.1    Total cash and cash equivalents1,241.4954.52,823.6    Total liabilities19,802.019,817.816,109.5 Efficiency ratio66.2%71.1%71.2%72.2%75.2%  Residential mortgage loans held for sale0.70.70.60.60.5 3,263.3  Equipment financing1.23.01.63.70.9 Residential mortgage loans held for sale52.50.75.7851.70.75.74      Originated loans (2)1.191.191.221.231.22 Loans: NON-PERFORMING ASSETS Goodwill and other acquisition-related intangibles1,952.61,962.01,766.5 Tangible stockholders’ equity$          3,207$          3,257$          3,593$          3,635$          3,712 Bank-owned life insurance291.8291.8251.1    Tangible stockholders’ equity to tangible assets (3)13.914.117.818.018.7  Trading account securities, at fair value84.983.575.7 REO38.139.834.937.223.4 Deposits:    Total earning assets21,27419,69718,91518,91518,414 Loans:       $3.1 million, $7.0 million, $5.3 million, $23.2 million and $23.4 million for the three months ended March 31, 2011,  Subordinated notes and debentures3.43.33.83.83.8  Securities available for sale, at fair value3,003.82,831.1724.1    Allowance for loan losses to:  Savings, interest-bearing checking    Stockholders’ equity5,1855,3355,4045,4585,275 CONSOLIDATED STATEMENTS OF INCOME March 31, 2010 Repossessed assets13.518.125.727.631.8 Loans: (3) Represents acquired loans that meet People’s United’s definition of a non-performing loan but for which the risk of credit loss has  Other4.7-0.095.2-0.39 Three Months Ended      core system conversion costs and one-time charges for the three months ended March 31, 2011, Dec. 31, 2010, $          160.43.35%       Sept. 30, 2010, $6.8 million at June 30, 2010 and $7.3 million at March 31, 2010.       charged against the non-accretable difference established in purchase accounting and, as such, are not reported as charge-offs. (3) See non-GAAP financial measures and reconciliation to GAAP beginning on page 12.  (9.0 million shares, 9.1 million shares and 9.3 million shares)(186.1)(187.9)(193.3) People’s United Financial, Inc.  Operating earnings (3)53.836.727.731.829.2 Yield/  Home equity10.59.19.38.57.0  Originated non-performing loans73.870.368.678.589.7  Commercial4,545.358.95.18    Total loans17,523.117,327.715,252.6 Short-term investments926.2599.82,527.3 Provision for loan losses14.610.921.817.89.5 Total assets$        24,962$        25,037$        21,897$        21,950$        21,588  Commercial real estate$          101.6$            85.9$            76.3$            75.6$            74.3 Short-term investments$       2,673.5$              1.70.26% Tangible assets$        23,009$        23,075$        20,125$        20,172$        19,821 Conference CallOn April 20, 2011, 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(link is external) 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.1Q 2011 Financial HighlightsSummaryNet income totaled $51.7 million, or $0.15 per share.Operating earnings were $53.8 million, or $0.15 per share.Net interest income totaled $220.3 million.Net interest margin increased 29 basis points from 4Q10 to 4.16%.Additional interest accretion on acquired loans of $9.0 million in 1Q11 contributed 16 basis points.The interest cost on deposits declined 5 basis points to 59 basis points from 4Q10.Provision for loan losses totaled $14.6 million.Net loan charge-offs totaled $9.6 million or 0.22% of average loans.Non-interest income totaled $74.6 million in 1Q11 compared to $68.1 million in 4Q10.1Q11 includes a full quarter of non-interest income from acquisitions completed onNovember 30, 2010 (approximately a $2.0 million increase in 1Q11).1Q11 includes $5.5 million of net gains on sales of acquired non-performing loans.Net gains on sales of residential mortgages declined $1.1 million from 4Q10.Other non-interest income includes a $2.2 million charge for other asset write-offs.Non-interest expense totaled $202.8 million in 1Q11 compared to $199.1 million in 4Q10.1Q11 and 4Q10 include a total of $3.1 million and $7.0 million, respectively, of merger-related expenses and core system conversion costs.1Q11 includes a full quarter of non-interest expense from acquisitions completed onNovember 30, 2010 (approximately a $7.2 million increase in 1Q11).Effective income tax rate was 33.3% in 1Q11 compared to 32.5% for 2010.1Q11 rate reflects a higher state effective income tax rate resulting from our further expansion into states with higher income tax rates.Commercial BankingExcluding acquired loans, commercial banking loans increased $277 million, or 11% annualized, from December 31, 2010.Approximately $875 million of loans secured, in part, by owner-occupied commercial properties were reclassified from commercial real estate loans to commercial and industrial loans as of March 31, 2011.Average commercial banking loans totaled $12.4 billion, a $1.3 billion increase from 4Q10.Non-performing commercial banking assets, excluding acquired non-performing loans, totaled$192.2 million at March 31, 2011, a slight decrease from December 31, 2010.The ratio of originated non-performing commercial banking loans to originated commercial banking loans was 1.54% at March 31, 2011 compared to 1.56% at December 31, 2010.Net loan charge-offs totaled $6.8 million, or 0.22% annualized, of average commercial banking loans in 1Q11, compared to $7.0 million, or 0.25% annualized, in 4Q10.For the originated commercial banking portfolio, the allowance for loan losses as a percentage of loans was 1.61% at both March 31, 2011 and December 31, 2010.The commercial banking allowance for loan losses represented 104 percent of non-performing commercial banking loans at March 31, 2011.Retail and Business BankingExcluding acquired loans, residential mortgage loans increased $183 million, or 32% annualized, from December 31, 2010.Average residential mortgage loans totaled $2.7 billion, a $248 million increase from 4Q10.Net loan charge-offs totaled $1.6 million, or 0.23% annualized, of average residential mortgage loans in 1Q11, compared to $2.0 million, or 0.32% annualized, in 4Q10.The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 2.84% at March 31, 2011 compared to 3.44% at December 31, 2010.Excluding acquired loans, home equity loans declined $38 million, or 8% annualized, fromDecember 31, 2010.Average home equity loans totaled $2.0 billion in 1Q11, unchanged from 4Q10.Net loan charge-offs totaled $0.8 million, or 0.16% annualized, of average home equity loans in 1Q11, compared to $1.1 million, or 0.23% annualized, in 4Q10.Wealth ManagementWealth Management income increased $1.6 million from 4Q10.Insurance revenue increased $1.0 million and investment management fees and brokerage commissions each increased $0.3 million.Assets under administration and those under full discretionary management, neither of which are reported as assets of People’s United Financial, totaled $12.7 billion and $4.3 billion, respectively.Certain statements contained in this release are forward-looking in nature. These include all statements about People’s United Financial’s plans, objectives, expectations and other statements that are not historical facts, and usually use words such as “expect,” “anticipate,” “believe” and similar expressions. Such statements represent management’s current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People’s United Financial’s actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People’s United Financial include, but are not limited to: (1) changes in general, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) residential mortgage and secondary market activity; (7) changes in accounting and regulatory guidance applicable to banks; (8) price levels and conditions in the public securities markets generally; (9) competition and its effect on pricing, spending, third-party relationships and revenues; (10) the successful integration of acquired companies; and (11) possible changes in regulation resulting from or relating to recently enacted 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(link is external) .People’s United Financial, Inc. FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS – Continued  Net loan charge-offs(9.6)(10.9)(21.8)(17.8)(9.5) Three months endedAverage    Income before income tax expense77.547.935.723.020.4    Total interest and dividend income252.8220.8207.5206.9193.6  Commercial real estate (1)6,565.77,306.35,442.1  Deposits26.626.527.629.029.7 March 31,Dec. 31,Sept. 30,June 30,March 31,  Time4,516.818.11.60    Total interest expense32.531.031.733.134.0  Commercial5,377.379.65.925,086.571.45.62    Close (end of period)12.5814.0113.0913.5015.62    Net interest income after provision for loan losses205.7178.9154.0156.0150.1 Non-interest income:  Dividends paid per share0.15500.15500.15500.15500.1525  Insurance revenue7.96.98.36.37.3  Brokerage commissions3.22.92.82.82.8  Efficiency ratio (3)66.271.171.272.275.2    Deposits17,94416,53115,80115,70415,202  Book value (end of period)$          14.92$          14.91$          15.04$          15.10$          15.12 March 31,Dec. 31,Sept. 30,June 30,March 31, Securities purchased under agreements to resell-520.0-  Commercial and industrial (1)48.938.234.325.228.9  Other non-interest income13.414.412.912.79.4 March 31,Dec. 31,Sept. 30,June 30,March 31, Tangible equity ratio13.9%14.1%17.8%18.0%18.7%    Total$          288.3$          259.7$          246.3$          246.7$          227.2    Total assets$        24,962$        25,037$        21,897$        21,950$        21,588 $     22,960.5    Total liabilities and stockholders’ equity$     21,259.6 TANGIBLE BOOK VALUE PER SHARE  Other non-interest expense39.442.039.553.234.8  Stock price:        Net security losses-1.0— Income tax expense25.815.911.67.06.8 Less: Amortization of other Basic and diluted earnings per common share$            0.15$            0.09$            0.07$            0.04$            0.04 $          190.73.78% (3)  The FTE adjustment was $1.2 million, $0.9 million and $0.8 million for the three months ended March 31, 2011, Dec. 31. 2010 (dollars in millions)20112010201020102010 Three months endedAverage  Net security gains (losses)0.1(1.0)— Provision for loan losses14.610.921.817.89.5 (dollars in millions)BalanceInterestRateBalanceInterestRate AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) Other liabilities316.3 Three Months Ended  Less allowance for loan losses(177.5)(172.5)(172.5) Securities (2)3,088.521.22.752,456.713.62.22       Dec. 31, 2010, Sept. 30, 2010, June 30, 2010 and March 31, 2010, respectively, less related income taxes. Net interest income (1)$          221.5$          190.7$          176.6$          174.6$          160.4 5,334.9 Net interest margin (dollars in millions)20112010201020102010 Securities (2)888.38.13.65    Total loans17,289.7231.45.3515,770.2206.55.24center_img    Total loans14,589.4184.05.04 Other assets3,348.8 Assets:    Total assets$     24,622.5 Adjustments, net of tax (1)2.14.73.615.815.6 TANGIBLE EQUITY RATIO    High14.4914.1714.3516.7917.08 Retail Banking: Interest expense: (dollars in millions)20112010201020102010 Net interest margin    Total deposits17,944.026.60.5916,530.926.50.64 (1)  Average yields earned and rates paid are annualized. Borrowings: 3.49% As of and for the Three Months Ended    Total borrowings997.12.50.98533.41.20.92 Securities purchased under  Other13.60.25.06 (4) Annualized.         Merger-related expenses3.14.81.02.814.7 Three Months Ended Add: Fair value adjustments–1.01.01.6 Acquired non-performing loans (contractual amount) (3)$          324.4$          359.8$            59.4$            60.1$            51.7 (in millions, except per share data)20112010201020102010 Less: Goodwill and other Borrowings: Assets March 31,Dec. 31,Sept. 30,June 30,March 31, Assets:      average loans (annualized)0.22%0.28%0.58%0.47%0.26%  Commercial78.670.568.169.758.0    Total securities3,203.33,033.3886.2    Residential mortgage loans held for sale5252473836 (2)  Average balances and yields for securities available for sale are based on amortized cost. Liabilities and stockholders’ equity: People’s United Financial, Inc.  Commercial real estate$              3.3$              2.6$            13.5$              4.8$              5.8    and money market7,417.811.60.62    Average stockholders’ equity to average total assets21.123.224.625.024.8 Stockholders’ Equity    Net loan charge-offs to  Return on average stockholders’ equity (4)4.02.41.81.21.0         Fair value adjustments0.80.80.80.80.8 (1)  Average yields earned and rates paid are annualized.       Because acquired loans are initially recorded at an amount estimated to be collectible, losses on such loans, when incurred, are  Equipment financing38.636.035.137.023.1    Total liabilities15,984.5 March 31,Dec. 31,Sept. 30,June 30,March 31, (2) Excludes acquired loans.  Weighted average diluted common shares (in millions)346.01352.53354.99358.24344.82 Stockholders’ equity5,275.1         Other2.12.73.00.82.9  Consumer2,235.522.84.07 Allowance for loan losses as a percentage of:  Residential mortgage2,783.62,647.52,409.6 (1) Approximately $875 million of loans secured, in part, by owner-occupied commercial properties were reclassified from  Consumer20.922.122.222.522.8         Executive-level separation agreement—15.3-    Total funding liabilities19,12117,23616,17516,05215,573 Earnings per share, as reported$            0.15$            0.09$            0.07$            0.04$            0.04 NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued    Loans$        17,290$        15,770$        15,120$        15,247$        14,589  Commercial and industrial2.31.43.18.00.8      Sept. 30, 2010, June 30, 2010 and March 31, 2010, respectively.    Total funding liabilities15,573.2$            34.00.87%  Dividend payout ratio104.9%172.5%230.4%352.0%376.2%       been considered by virtue of our estimate of acquisition-date fair value and/or the existence of an FDIC loss-share agreement.         acquisition-related intangibles5.96.16.14.84.7  Securities21.013.612.69.28.1 Originated non-performing loans as a percentage of originated loans1.62%1.70%1.77%1.57%1.36% People’s United Bank,People’s United Financial, Inc. (Nasdaq: PBCT) today announced net income of $51.7 million, or $0.15 per share, for the first quarter of 2011, compared to $32 million, or $0.09 per share, for the fourth quarter of 2010, and $13.6 million, or $0.04 per share, for the first quarter of 2010. The company’s Board of Directors voted to increase the common stock dividend to an annual dividend rate of $0.63 per share. Based on the closing stock price on April 19, 2011, the dividend yield on People’s United Financial common stock is 4.9 percent. The quarterly dividend of$0.1575 per share is payable May 15, 2011 to shareholders of record on May 1, 2011. First quarter 2011 earnings were driven by higher net interest income and continued growth in fee-based businesses, partially offset by an increase in the provision for loan losses. In the first quarter of 2011, the return on average assets was 0.84 percent and the return on average tangible stockholders’ equity was 6.4 percent, compared to 0.56 percent and 3.7 percent, respectively, for the fourth quarter of 2010. At March 31, 2011, People’s United Financial’s tangible equity ratio stood at 13.9 percent.”Our performance this quarter reflects meaningful organic loan and deposit growth, encouraging trends in asset quality, as well as the benefit of acquisitions completed in 2010,” stated Jack Barnes, President and Chief Executive Officer. “In fact, on an annualized basis, both loans and deposits increased over 4 percent this quarter; our net interest margin reached its highest level since the end of 2007; and our non-performing assets ratio declined to under 2 percent.”Barnes added, “We continue to invest in our commercial, retail and business banking, and wealth management businesses throughout our franchise. Increases in our originated commercial banking and retail banking loan portfolios of $277 million, or 11 percent annualized, and $136 million, or 12 percent annualized, respectively, were effectively funded by growth in our retail deposits. The revenue increases in all of our wealth management product lines this quarter are further evidence of the progress we are making in this highly competitive area. In addition, our efforts with respect to both the Bank of Smithtown integration and Danversbank planning are well under way. We expect to close the Danversbank acquisition later in the second quarter, pending regulatory and shareholder approvals.”Barnes concluded, “We are pleased to reward our shareholders with a 19th consecutive annual dividend increase. Operating from a position of competitive strength, characterized by our strong business fundamentals, the ability to further leverage our brand in attractive markets and our prospects for organic growth, continues to set us apart from most in the industry. Furthermore, we have demonstrated our ability to prudently and effectively deploy capital through organic loan and deposit growth, adherence to a strong dividend policy, share repurchases and a thoughtful acquisition strategy.””The company’s performance this quarter reflects a solid improvement in the net interest margin and continued positive momentum in our fee businesses, which were partially offset by our decision to increase the allowance for loan losses in response to loan growth,” said Kirk W. Walters, Senior Executive Vice President and Chief Financial Officer.Walters continued, “The net interest margin improved 29 basis points to 4.16 percent, primarily reflecting the benefit of our two acquisitions completed during the fourth quarter of 2010, an increase in investment income, a reduction in our cost of deposits and additional interest accretion from the Financial Federal acquisition as a result of better than expected credit experience and slower than anticipated pre-payment activity. If credit experience within acquired loan portfolios continues to be better than originally expected, we will likely benefit from additional interest accretion over the remaining life of those loans.”Regarding asset quality, Walters stated, “While the overall level of non-performing loans is reflective of a period of prolonged economic weakness, we are pleased with the improvements noted over the past few quarters. In addition, the decline in acquired non-performing loans this quarter reflects our efforts to proactively reduce this portfolio through loan sales. During the first quarter, loans with a contractual balance of approximately $50 million (carrying amount of approximately $25 million) were sold at a gain of approximately $6 million and we continue to evaluate loan sales from within the acquired loan portfolios. The increase in the allowance for loan losses this quarter was driven by loan growth and is not an indication of weakening asset quality.”Loans acquired in connection with acquisitions have been recorded at fair value, including a reduction for estimated credit losses, and without carryover of the respective portfolio’s historical allowance for loan losses. As such, selected asset quality metrics have been highlighted to distinguish between the ‘originated’ portfolio and the ‘acquired’ portfolios.For the originated portfolio, representing all loans other than those acquired, non-performing loans totaled$240.5 million at March 31, 2011, or 1.62 percent of originated loans, compared to $245.2 million and 1.70 percent, respectively, at December 31, 2010. Non-performing loans in the acquired portfolios, which represent the contractual balances of loans acquired that meet our definition of non-performing but for which the risk of loss has already been considered by virtue of our estimate of acquisition-date fair value and/or the existence of an FDIC loss-share agreement, totaled $324.4 million at March 31, 2011compared to $359.8 million at December 31, 2010.Non-performing assets (excluding acquired non-performing loans) totaled $292.1 million at March 31, 2011, down from $303.1 million at December 31, 2010. Non-performing assets equaled 1.96 percent of originated loans, REO and repossessed assets at March 31, 2011 compared to 2.09 percent at December 31, 2010.First quarter net loan charge-offs totaled $9.6 million compared to $10.9 million in the fourth quarter of 2010. Net loan charge-offs as a percent of average loans on an annualized basis were 0.22 percent in the first quarter of 2011 compared to 0.28 percent in the prior year’s fourth quarter. The provision for loan losses in the first quarter of 2011 reflects a $5.0 million increase in the allowance for loan losses to $177.5 million at March 31, 2011 due to strong growth in the commercial and residential mortgage loan portfolios.At March 31, 2011, the allowance for loan losses as a percentage of originated loans was 1.19 percent and as a percentage of originated non-performing loans was 74 percent, compared to 1.19 percent and 70 percent, respectively, at December 31, 2010. For the originated commercial banking portfolio, the allowance for loan losses ratio was 1.61 percent at both March 31, 2011 and December 31, 2010. The commercial banking allowance for loan losses represented 104 percent of non-performing commercial banking loans at March 31, 2011.People’s United Financial, a diversified financial services company with $25 billion in assets, provides commercial banking, retail and business banking, and wealth management services through a network of 341 branches in Connecticut, Vermont, New York, New Hampshire, Maine and Massachusetts. Through its subsidiaries, People’s United Financial provides equipment financing, asset management, brokerage and financial advisory services, and insurance services.  Repurchase agreements476.3501.3164.1  Return on average tangible stockholders’ equity (4)6.43.72.71.71.5 Balance at end of period$          177.5$          172.5$          172.5$          172.5$          172.5 Treasury stock, at cost (22.0 million shares, 17.5 million shares and 3.2 million shares)(307.6)(248.9)(58.2) March 31,Dec. 31,Sept. 30,June 30,March 31,  Income before income tax expense77.547.935.723.020.4 $     22,960.5  Repurchase agreements492.80.60.46350.00.50.54  Non-interest-bearing$       3,789.5$       3,872.6$       3,305.7  Savings, interest-bearing checking and money market9,255.78,897.87,649.1 Liabilities      Originated non-performing loans (2)73.870.368.678.589.7  Time5,131.514.51.134,648.415.01.29 Total non-interest income74.668.168.069.764.2  Residential mortgage1.62.01.20.40.1 $          221.54.10% Less: Goodwill and other  Federal funds purchased200.0–    and money market9,015.112.10.548,249.011.50.56 Subordinated notes and debentures179.73.47.61171.33.37.75 Net interest income/spread (3)  Non-interest-bearing$       3,797.4$                —   %$       3,633.5$                —   % Total non-interest expense$          202.8$          199.1$          186.3$          202.7$          193.9 Subordinated notes and debentures182.03.88.31  Net gains on sales of loans8.64.22.42.72.8  Bank service charges31.030.731.532.931.2  Residential mortgage29.327.126.527.728.1 (1) Fully taxable equivalent    Total non-performing assets$          292.1$          303.1$          312.0$          284.5$          247.5 Liabilities and stockholders’ equity:  Residential mortgage2,415.928.14.66         Unallocated ESOP common shares8.979.069.159.239.32    Short-term investments (1)8431,4181,8922,5332,901         acquisition-related intangibles1,9531,9621,7721,7781,767 (1) Non-performing commercial and industrial loans at March 31, 2011 include approximately $10.7 million of loans secured, in part,  Commercial real estate5,392.774.25.51 SOURCE People’s United Financial, Inc. BRIDGEPORT, Conn., April 20, 2011 /PRNewswire/ —    Total borrowings189.40.51.08        and March 31, 2010, respectively.    Total deposits18,110.117,933.115,397.4 Non-performing assets as a percentage of: Additional paid-in capital4,981.54,978.84,924.6 Per Common Share Data: Common stock ($0.01 par value; 1.95 billion shares authorized; March 31,Dec. 31,Sept. 30,June 30,March 31,  Federal Home Loan Bank advances481.6509.310.5         Net security gains0.1—-       by owner-occupied commercial properties that were previously classified as non-performing commercial real estate loans. Recoveries0.81.30.81.21.4 People’s United Financial, Inc.NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAPIn addition to evaluating People’s United Financial’s results of operations in accordance with U.S. generally accepted accounting principles (“GAAP”), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible book value per share, and operating earnings. 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 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 intangibles and fair value adjustments, losses on real estate assets and non-recurring expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent basis (excluding fair value adjustments) plus total non-interest income (including the fully taxable equivalent adjustment on bank-owned life insurance income, and excluding gains and losses on sales of assets, other than residential mortgage loans, and 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, merger-related expenses, core system conversion costs, and one-time charges related to executive-level management separation agreements, are generally also excluded when calculating the efficiency ratio.  Operating earnings per share is calculated by dividing operating earnings by the weighted average number of dilutive common shares outstanding 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 intangibles) (the numerator) to (ii) tangible assets (total assets less goodwill and other acquisition-related intangibles) (the denominator). Tangible book value per share is calculated by dividing tangible stockholders’ equity by common shares (total common shares issued, less common shares classified as treasury shares and unallocated 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.         acquisition-related intangibles1,9531,9621,7721,7781,767    Net income$            51.7$            32.0$            24.1$            16.0$            13.6  Common shares (end of period) (in millions)345.97350.07356.73358.51362.25  Originated loans1.19%1.19%1.22%1.23%1.22% People’s United Financial, Inc. Commercial banking allowance for loan losses as a percentage of CONSOLIDATED STATEMENTS OF CONDITION Retail banking allowance for loan losses as a percentage of Other assets2,845.4 Selected Statistical Data: Commercial Banking: Less: Fair value adjustments5.00.6— Borrowings: Retail Banking: Originated non-performing loans:  Residential mortgage70.478.887.080.966.7  Tangible book value (end of period) (3)9.279.3010.0710.1410.25    Total loans, net17,345.617,155.215,080.1    Low12.1712.2012.5613.4915.07  Home equity0.81.11.30.10.9 Yield/Average Retained earnings767.2772.6874.5  377.0 million shares, 376.6 million shares and 374.8 million shares issued)3.73.73.8 Balance at beginning of period$          172.5$          172.5$          172.5$          172.5$          172.5 (dollars in millions, except per share data)20112010201020102010 EFFICIENCY RATIO Subordinated notes and debentures176.3182.2182.2      non-interest income for all periods.    Total interest on loans230.4205.6193.1195.5183.2    Total funding liabilities19,120.8$            32.50.68%17,235.6$            31.00.72% Other liabilities357.7691.9355.3 People’s United Financial, Inc. AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)       at People’s United Financial, Inc. People’s United Bank’s March 31, 2011 total risk-based capital ratio is preliminary.    Borrowings1,1581,011254141175 Adjustments-0.010.010.050.04 Financial Condition Data: Three Months Ended  Commercial real estate7,053.3101.65.766,054.385.95.67  agreements to resell110.60.10.17603.90.30.21    Total non-interest income74.668.168.069.764.2    Subordinated notes and debentures176182183183182  Consumer2,127.12,177.92,222.6  Savings, interest-bearing checking    Total assets24,62322,96121,95521,87221,260 March 31,Dec. 31,Sept. 30,June 30,March 31,         Other3.3—- Interest and dividend income:    Total$          190.9$          184.7$          175.4$          178.2$          170.8  Securities purchased under agreements to resell0.10.30.40.10.1    Stockholders’ equity to total assets20.720.824.524.725.4 (in millions, except per share data)20112010201020102010 PROVISION AND ALLOWANCE FOR LOAN LOSSES  Non-interest-bearing$       3,267.2$                —   %    Operating earnings$            53.8$            36.7$            27.7$            31.8$            29.2    Total earning assets21,273.7$          254.04.78%19,697.2$          221.74.50% March 31,Dec. 31,Sept. 30,June 30,March 31,    Operating earnings per share$            0.15$            0.10$            0.08$            0.09$            0.08 Tangible stockholders’ equity$          3,207$          3,257$          3,593$          3,635$          3,712  Originated loans, REO and repossessed assets1.962.092.192.021.75  Time5,064.95,162.74,442.6 (1) Includes securities purchased under agreements to resell. Residential mortgage loans held for sale18.088.554.9    Total liabilities19,437.1    Stockholders’ equity5,1605,2195,3655,4135,479    Short-term investments (1)9261,1201,2181,9442,527    Total assets$     24,962.3$     25,037.1$     21,588.1  Commercial real estate (1)$            71.7$            82.5$            85.0$            67.2$            65.8  Total$              9.6$            10.9$            21.8$            17.8$              9.5  Provision for loan losses14.610.921.817.89.5 Stockholders’ equity5,185.4        BOLI FTE adjustment (1)0.60.50.71.41.0  Non-interest expense (1), (2)202.8199.1186.3202.7193.9  Other consumer0.40.60.70.90.8 Non-interest expense:  Merger-related expenses3.14.81.02.814.7 Unallocated common stock of Employee Stock Ownership Plan, at cost Short-term investments$          732.4$              0.60.31%$          814.7$              0.60.29%  Federal Home Loan Bank advances499.61.91.49178.20.71.68 Common shares issued376.95376.62374.63374.64374.76 (2)  Average balances and yields for securities available for sale are based on amortized cost.  Average Balances: Common shares345.97350.07356.73358.51362.25  Occupancy and equipment33.128.128.028.529.8 March 31, 2011Dec. 31, 2010last_img


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