People’s United reports earnings up for fourth quarter, down for year; additional share repurchase approved

first_img    charges totaling $58.9 million and $4.5 million for the twelve months ended Dec. 31, 2010 Borrowings: Net interest income (1)$            702.3$            580.2    Stockholders’ equity to total assets20.824.524.725.424.0  Non-interest-bearing$   3,320.4$        —   %    Close (end of period)14.0113.0913.5015.6216.70  Average Balances: Originated non-performing loans as a percentage of originated loans (3)1.68%1.77%1.56%1.36%1.19% (dollars in millions, except per share data)20102010201020102009 Yield/ 3.19% Net interest income/spread (3)  Stock price:  Non-interest expense (1)206.9194.2209.8200.3172.2 Other assets3,163.5  Net income (2, 4)32.024.116.013.624.9 Selected Statistical Data: NON-PERFORMING ASSETS AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)  Return on average tangible assets (3)0.610.480.320.280.51  Return on average stockholders’ equity (3)2.41.81.21.02.0  Return on average tangible stockholders’ equity (3)3.72.71.71.52.8 (1)  Average balances and yields for securities available for sale are based on amortized cost. Dec. 31,Sept. 30,June 30,March 31,Dec. 31, SOURCE People’s United Financial, Inc.CONTACT: Investors, Peter Goulding, CFA, Investor Relations, +1-203-338-6799, [email protected](link sends e-mail), or Media, Brent DiGiorgio, Corporate Communications, +1-203-338-3135, [email protected](link sends e-mail) Web Site: http://www.peoples.com(link is external) Non-interest expense:     at People’s United Financial, Inc. People’s United Bank’s Dec. 31, 2010 total risk-based capital ratio is preliminary.  Net income (3,4)85.7101.2  Tangible book value (end of period) (4)9.3010.0710.1410.2510.68 Interest expense:  Provision for loan losses10.921.817.89.513.6    Low12.2012.5613.4915.0715.15 Other assets604.7559.1445.9 Three Months Ended  Merchant services expense5.35.85.34.85.2  Net security gains (losses)(1.0)22.0      been considered by virtue of our estimate of acquisition-date fair value and/or the existence of an FDIC loss-share agreement. Financial Results: Recoveries1.30.81.21.40.9      months ended Dec. 31, 2010, Sept. 30, 2010, June 30, 2010, March 31, 2010 and Dec. 31, 2009, respectively.      REO and repossessed assets (2)2.072.182.011.741.44 NET LOAN CHARGE-OFFS CONSOLIDATED STATEMENTS OF INCOME    Total funding liabilities16,263.2$ 129.80.80%15,237.6$ 190.01.25% (1) Fully taxable equivalent Other liabilities384.7 Add: Fair value adjustments(2.5)1.01.01.61.6    Operating earnings$            125.4$            104.3 (in millions, except per share data)20102010201020102009 16,550.4    Total assets22,96121,95521,87221,26021,132  Short-term investments0.60.81.51.71.8 (dollars in millions)20102009    Loans17,51815,21515,21515,31114,234 Selected Statistical Data: $ 190.73.76%  Consumer2,177.92,176.52,245.0 (4) See non-GAAP financial measures and reconciliation to GAAP.  Return on average stockholders’ equity1.62.0 (2)  The FTE adjustment was $3.3 million and $3.4 million for the twelve months     ended Dec. 31, 2010 and 2009, respectively. Less: Net security gains-22.0    Close (end of period)14.0116.70  Occupancy and equipment114.4109.8    Total non-interest expense811.2684.6  Other non-interest income16.915.014.511.010.6      June 30, 2010, March 31, 2010 and Dec. 31, 2009, respectively, less related income taxes.    and money market7,145.411.90.66 Securities (2)887.18.43.76    High17.0818.54 3.73%  Return on average tangible assets0.420.53  Residential mortgage111.8145.0    Deposits17,93315,67515,83415,39715,446 Total non-interest income75.975.976.870.671.7 Other assets2,969.9  Net gains on sales of residential mortgage loans4.22.42.72.83.0 (dollars in millions)BalanceInterestRateBalanceInterestRate    Operating earnings$              36.7$              27.7$              31.8$              29.2$              28.0    Stockholders’ equity5,2195,3655,4135,4795,101 NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP (3) Annualized.      and Dec. 31, 2009, respectively.    Total earning assets19,79718,95618,95018,46918,582 (dollars in millions, except per share data)20102009 Three Months Ended  Trading account securities, at fair value83.583.575.7  376.6 million shares, 374.6 million shares and 348.2 million shares issued)3.73.73.5  Non-interest income75.975.976.870.671.7  Originated non-performing loans70.368.678.589.7102.2  Repurchase agreements501.3244.2144.1 TANGIBLE BOOK VALUE    Total liabilities17,625.6    Total interest on loans779.8727.1 (1) Includes securities purchased under agreements to resell. Stockholders’ equity5,368.3    Subordinated notes182183183182182 Liabilities and stockholders’ equity:    Average stockholders’ equity to average total assets23.224.625.024.824.2 Dec. 31, 2010Dec. 31, 2009 share are used to analyze the relative strength of People’s United Financial’s capital position. 15,616.1 Allowance for loan losses as a percentage of:    Total interest on loans206.3193.7196.1183.7177.1 As of and for the Three Months Ended Yield/  Merger-related expenses4.81.02.814.72.0 2,546.0    Stockholders’ equity5,3355,4045,4585,2755,106 NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued    Total deposits15,813.1112.80.7114,888.3173.41.16 Three Months Ended Financial Results: Yield/Average system conversion costs, and one-time charges related to executive-level management separation    Income before income tax expense47.935.723.020.433.4    In addition to evaluating People’s United Financial’s results of operations in accordance with U.S. generally  Securities43.532.4 real estate assets and non-recurring expenses) (the numerator) to (ii) net interest income on a fully taxable  Bank service charges126.3128.8    Total risk-based capital (3)14.816.416.616.314.1 Deposits:  Net gains on sales of residential mortgage loans12.113.9    Net loan charge-offs to  Dividend payout ratio172.5%230.4%352.0%376.2%204.7% 3.85% CONSOLIDATED STATEMENTS OF CONDITION Dec. 31,Sept. 30,Dec. 31,    Total liabilities and stockholders’ equity$ 21,132.1    Goodwill and other acquisition-related intangibles1,9621,7721,7781,7671,515 Three months endedAverage Tangible book value per share$              9.30$            10.07$            10.14$            10.25$            10.68  Weighted average diluted common shares (in millions)352.53354.99358.24344.82332.56 Dec. 31,Dec. 31,    Total earning assets18,581.8$ 188.34.05%    Borrowings1,011254141175159    Net interest income699.0576.8  Securities held to maturity, at amortized cost55.155.155.3 Short-term investments$   1,725.0$     4.60.27%$   2,386.5$     6.50.27% 3.69% Dec. 31, 2009    Operating earnings per share$              0.10$              0.08$              0.09$              0.08$              0.08    Total$            265.6$            254.2$            253.8$            233.6$            222.4    Net income$        85.7$      101.2    Total assets$ 25,037$ 21,897$ 21,950$ 21,588$ 21,257  Federal Home Loan Bank stock, at cost63.633.931.1 goodwill and other acquisition-related intangibles) (the denominator). Tangible book value per share is  Equipment financing36.035.137.023.120.6 Goodwill and other acquisition-related intangibles1,962.01,772.31,515.2 Other liabilities390.0 Bank-owned life insurance291.8253.6250.5 378.5 Securities purchased under agreements to resell456.20.90.20421.10.80.19  Originated loans, REO and repossessed assets (3)2.072.182.011.741.44  Repurchase agreements350.00.50.54178.50.20.47 AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) Represents pre-tax merger-related expenses, core system conversion costs and one-time Interest and dividend income:    Total deposits17,933.115,674.915,445.6 (3) Operating earnings were $125.4 million and $104.3 million for the twelve months ended Dec. 31, 2010 (3) Total risk-based capital ratios are for People’s United Bank and, as such, do not reflect the additional capital residing Assets: Common stock ($0.01 par value; 1.95 billion shares authorized; Non-interest income: Other liabilities691.9421.1370.2 common shares classified as treasury shares and unallocated ESOP common shares). AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued  Commercial real estate6,054.385.95.675,464.776.35.59    Total liabilities19,817.816,532.816,156.5 equivalent adjustment on bank-owned life insurance income, and excluding gains and losses on sales of      includes an FDIC special assessment charge of $8.4 million for the twelve months ended Dec. 31, 2009. Per Common Share Data:  Insurance revenue6.98.36.37.37.0 Originated non-performing loans: Financial Condition Data:    Total liabilities and stockholders’ equity$ 25,037.1$ 21,897.3$ 21,257.2 Stockholders’ equity5,334.9  Non-interest expense (2)811.2684.6  Residential mortgage2,529.7111.84.422,880.1145.05.04 $ 21,954.6 FINANCIAL HIGHLIGHTS – Continued Twelve months endedAverage  Commercial real estate$        85.9$        76.3$        75.6$     74.3$   74.1 (dollars in millions)20102010201020102009         Fair value adjustments0.80.80.80.80.8  Federal Home Loan Bank advances178.20.71.689.80.15.19 Twelve Months Ended  Securities13.612.69.28.18.4  Net loan charge-offs(10.9)(21.8)(17.8)(9.5)(13.6)    Tangible assets$          23,075$          20,125$          20,172$          19,821$          19,742 Acquired non-performing loans (2)$ 359.8$    59.4$   60.1$     51.7$        – Dec. 31,Dec. 31, calculated by dividing tangible stockholders’ equity by common shares (total common shares issued, less      one-time charges totaling $7.0 million, $5.3 million, $23.2 million, $23.4 million and Less: Goodwill and other    Total interest expense31.031.733.134.040.0 5,404.2 Provision for loan losses10.921.817.89.513.6         Fair value adjustments3.23.1    Total loans14,231.1177.95.00  Commercial real estate$   82.5$    85.0$   67.2$     65.8$   72.4  Weighted average diluted common shares (in millions)352.67333.17 (dollars in millions)BalanceInterestRate  Non-interest-bearing$   3,426.0$        —   %$   3,210.8$        —   %  Bank service charges30.731.532.931.232.2  Securities available for sale, at fair value2,831.12,305.0739.7 (dollars in millions)20102010201020102009  (9.0 million shares, 9.1 million shares and 9.4 million shares)(187.9)(189.7)(195.2) Other liabilities410.3 Financial generally considers an item of income or expense to be non-recurring if it is not similar to an item    Total non-interest income75.975.976.870.671.7 EFFICIENCY RATIO Charge-offs(12.2)(22.6)(19.0)(10.9)(14.5) Less: Amortization of other Net interest income/spread (3) People’s United Financial, Inc. Less: Common shares classified as treasury shares17.498.756.903.193.21  Merchant services income6.46.96.45.86.3  Other non-interest expense44.541.655.036.432.8 (dollars in millions)20102010201020102009  Securities purchased under agreements to resell0.30.40.10.10.2 Income tax expense15.911.67.06.88.5    Net income$        32.0$        24.1$        16.0$     13.6$   24.9 Securities (1)1,579.543.52.76934.232.43.47  Repurchase agreements146.30.20.49  Other non-interest expense177.5136.7    In light of diversity in presentation among financial institutions, the methodologies used by People’s United Dec. 31,Sept. 30,June 30,March 31,Dec. 31,    Total interest and dividend income220.8207.5206.9193.6187.5  Compensation and benefits98.393.292.696.389.2  Commercial real estate$      312.1$      287.8  Subordinated notes3.33.83.83.83.7  Compensation and benefits380.4350.5  Consumer89.695.4 Financial to generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding goodwill Yield/Average People’s United Financial, Inc.  Securities purchased under agreements to resell0.90.8 Efficiency ratio73.3%73.5%  Stock price:    Total loans15,921.7207.25.2115,208.4194.55.12 Borrowings:  Investment management fees32.032.4 CONSOLIDATED STATEMENTS OF INCOME Premises and equipment325.1254.1264.5 Liabilities and stockholders’ equity: Accumulated other comprehensive loss(99.0)(59.4)(74.8) Loans: (1)  Average yields earned and rates paid are annualized.      average loans (annualized)0.28%0.57%0.46%0.26%0.38% Residential mortgage2.01.20.40.11.2 Deposits: Less: Amortization of other  Consumer22.122.222.522.823.5    Allowance for loan losses to:  Bank-owned life insurance6.78.4 accepted accounting principles (’GAAP’), management routinely supplements this evaluation with an  Commercial38.234.325.228.917.4        Net security losses1.0—0.1    Net interest income after provision for loan losses178.9154.0156.0150.1133.9 People’s United Financial, Inc. Short-term investments599.8478.13,092.0  Commercial real estate7,306.35,493.15,399.4    Total earning assets19,797.0$ 221.74.48%18,956.3$ 208.34.40% Dec. 31,Sept. 30,June 30,March 31,Dec. 31,  General: agreements, are generally also excluded when calculating the efficiency ratio.  Operating earnings per share November 30, 2010.  Accordingly, Smithtown’s and LSB’s results of operations are included beginning with the  Professional and outside service fees72.744.0  Borrowings1.20.30.30.50.4 Subordinated notes179.614.78.17181.215.18.35 Basic and diluted earnings per common share$        0.24$        0.30 Net interest margin    Securities3,0332,4781,787886902 (dollars in millions, except per share data)20102009  Net interest income$   699.0$   576.8  Bank-owned life insurance1.01.42.61.81.9  Commercial5,086.571.45.625,096.468.95.40 Balance at beginning of period$ 172.5$  172.5$ 172.5$   172.5$ 172.5  Consumer2,258.923.54.16  Brokerage commissions11.312.2 Securities purchased under    Securities2,4571,8561,097888887 Securities (2)2,456.713.62.221,855.912.62.72 other financial institutions. Dec. 31,Sept. 30,June 30,March 31,Dec. 31, $ 21,954.6  Residential mortgage2,611.427.84.272,463.227.14.41 Provision for loan losses60.057.0 (in millions, except per share data)20102009    Total deposits15,273.035.90.94      June 30, 2010, March 31, 2010 and Dec. 31, 2009, respectively. Net loan charge-offs to average loans (annualized)0.28%0.57%0.46%0.26%0.38%  Professional and outside service fees19.818.520.813.610.0  Time4,533.565.41.444,966.9125.22.52 Short-term investments$      814.7$     0.60.29%$   1,176.2$     0.80.28% Treasury stock, at cost (17.5 million shares, 8.8 million shares and 3.2 million shares)(248.9)(134.6)(58.6) Dec. 31, 2010Sept. 30, 2010    Total wealth management72.174.6         Other-1.9    Loans$ 15,922$ 15,208$ 15,319$ 14,680$ 14,231center_img      $4.5 million for the three months ended Dec. 31, 2010, Sept. 30, 2010, FINANCIAL HIGHLIGHTS – Continued    The tangible equity ratio is the ratio of (i) tangible stockholders’ equity (total stockholders’ equity less Less: Goodwill and other Three Months Ended    Total borrowings533.41.20.92191.00.30.71 book value per share, and operating earnings. Management believes these non-GAAP financial measures  Net interest income$   189.8$   175.8$   173.8$   159.6$   147.5  Residential mortgage27.827.128.328.631.4      Originated loans (2)1.181.211.231.221.21    Total liabilities and stockholders’ equity$ 22,016.2 analysis of certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible People’s United Financial, Inc.  Other non-interest income57.536.5  Merchant services expense21.221.0    Total assets$ 21,132.1  Time5,162.74,367.64,608.7 People’s United Financial, Inc.  Return on average tangible stockholders’ equity2.42.8    Short-term investments (1)1,4181,8922,5342,9013,464 (4) See non-GAAP financial measures and reconciliation to GAAP. Consumer1.92.40.91.92.6  Net security losses(1.0)—(0.1)  Commercial266.3198.9 (3)  The FTE adjustment was $0.9 million, $0.8 million and $0.8 million for the three months ended Dec. 31. 2010, Sept. 30, 2010      and Dec. 31, 2009, respectively. (3)  The FTE adjustment was $0.9 million, $0.8 million and $0.8 million for the three     months ended Dec. 31. 2010, Sept. 30, 2010 and Dec. 31, 2009, respectively. Net interest margin (1) Includes a total of $7.0 million, $5.3 million, $23.2 million, $23.4 million and $4.5 million of merger-related expenses,  Non-interest-bearing$   3,872.6$   3,427.2$   3,509.0    Low12.2014.72 Total non-interest income299.2309.1 Assets: Short-term investments$   2,822.4$     1.80.26%    Total funding liabilities17,23616,17516,05215,57315,616 excluded from operating earnings, which include, but are not limited to, merger-related expenses, core (dollars in millions)BalanceInterestRateBalanceInterestRate Loans:  Commercial real estate5,352.074.15.53         Other—-0.3  Less allowance for loan losses(172.5)(172.5)(172.5) Assets: Real estate owned (“REO”)39.834.937.223.423.9 Dec. 31,Sept. 30,June 30,March 31,Dec. 31, Further, the efficiency ratio and operating earnings are used by management in its assessment of financial    and money market8,249.011.50.567,929.612.00.61 $ 702.33.57%    Total non-interest income299.2309.1    Total$            738.5$            644.0 People’s United Financial, Inc.  Tangible book value (end of period) (4)9.3010.68  Efficiency ratio (4)73.373.5 Net income, as reported$              32.0$              24.1$              16.0$              13.6$              24.9  Commercial4,010.848.94.88  Net interest margin3.69%3.19% Yield/ $ 580.22.98% Net interest income (1)$            190.7$            176.6$            174.6$            160.4$            148.3 Subordinated notes181.73.78.32 Financial for determining the non-GAAP financial measures discussed above may differ from those used by Securities: of income or expense of a type incurred within the last two years and is not similar to an item of income or Add: Adjustments, net of tax (1)                39.7                  3.1 performance, including non-interest expense control, while the tangible equity ratio and tangible book value per  Tangible stockholders’ equity and allowance for loan losses8.828.297.476.375.47 Net interest income/spread (2) Net interest margin  Dividends paid per share0.61750.6075 EFFICIENCY RATIO  Savings, interest-bearing checking and money market8,897.87,880.17,327.9  Merger-related expenses23.32.0 People’s United Financial, Inc.    Total loans17,518.215,214.814,233.8  Dividend payout ratio254.5%201.1% People’s United Bank,People’s United Financial, Inc. (Nasdaq: PBCT) has announced net income of $32.0 million, or $0.09 per share, for the fourth quarter of 2010, compared to $24.1 million, or $0.07 per share, for the third quarter of 2010, and $24.9 million, or $0.07 per share, for the fourth quarter of 2009.  Included in each of these quarter’s results are pre-tax merger-related expenses and core system conversion costs totaling $7.0 million, $5.3 million and $4.5 million, respectively.  Excluding the effect of these items, net income would have been $36.7 million, or $0.10 per share, for the fourth quarter of 2010, $27.7 million, or $0.08 per share for the third quarter of 2010 and $28.0 million, or$0.08 per share, for the fourth quarter of 2009.For the year ended December 31, 2010, net income totaled $85.7 million, or $0.24 per share, compared to$101.2 million, or $0.30 per share, for 2009.  Included in both the 2010 and 2009 results are pre-tax merger-related expenses, core system conversion costs and one-time charges totaling $58.9 million and$4.5 million, respectively.  Excluding the effect of these items, net income would have been $125.4 million, or $0.35 per share, for 2010 and $104.3 million, or $0.31 per share, for 2009.As previously reported, People’s United Financial completed its acquisitions of Smithtown Bancorp, Inc. and LSB Corporation on November 30, 2010.  Accordingly, Smithtown’s and LSB’s results of operations are included as of the acquisition date, and prior period results have not been restated to include Smithtown and LSB.People’s United Financial announced today a definitive agreement to acquire Danvers Bancorp, Inc. based in Danvers, Massachusetts.  Further information regarding this acquisition is included in a separate release.People’s United Financial’s Board of Directors has authorized an additional repurchase of common stock.  Up to 5 percent of People’s United Financial’s then-outstanding common stock, or up to 17.5 million shares, can be repurchased, either directly or through agents, in the open market at prices and terms satisfactory to management.  Under the stock repurchase authorization announced in April 2008, 14.3 million shares out of a maximum of 17.3 million shares authorized for repurchase, at a total cost of $191.2 million, had been repurchased as of December 31, 2010.The Board of Directors of People’s United Financial declared a $0.1550 per share quarterly dividend, payable February 15, 2011 to shareholders of record on February 1, 2011.  Based on the closing stock price on January 19, 2011, the dividend yield on People’s United Financial common stock is 4.4 percent.”Our announcement today of the acquisition of Danvers Bancorp furthers our strategy of acquiring financial institutions in attractive markets and continues to build on what was an exciting and transformational 2010 for the bank,” stated Jack Barnes, President and Chief Executive Officer.  “The successful completion of our core system conversion and the rebranding of our branches throughout New England to People’s United Bank, in addition to closing four acquisitions during 2010, position us well for future growth.”Barnes added, “Our performance throughout 2010 continues to reflect the benefits from our focused commercial, wealth management and retail banking strategy.  Excluding acquired loans, our commercial banking portfolio increased 7 percent on an annualized basis this quarter, while our residential mortgage portfolio increased 14 percent, and we continue to strengthen our position in the critical Boston and New York markets.”Barnes concluded, “We operate from a position of competitive strength characterized by our strong business fundamentals, ability to further leverage our brand in attractive markets and our prospects for organic growth.  Furthermore, we have demonstrated our ability to prudently and effectively deploy capital through acquisitions, adherence to a strong dividend policy and share repurchases.””On an operating basis earnings were $37 million or 10 cents per share this quarter,” said Paul D. Burner, Senior Executive Vice President and Chief Financial Officer.  “Significant drivers of the company’s performance in the fourth quarter were an improvement in the net interest margin and lower net loan charge-offs.  The net interest margin improved 12 basis points to 3.85 percent, primarily reflecting a reduction in our cost of deposits and the partial benefit from our two acquisitions completed during the fourth quarter.”Commenting on asset quality, Burner stated, “Our non-performing loans declined on a sequential quarter basis for the first time since September 2009, an indication of what we believe is stabilization across the loan portfolio.  In addition, net loan charge-offs this quarter were the lowest since the first quarter of 2010.”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 loan portfolio, representing all loans other than those acquired, non-performing loans totaled $245.2 million at December 31, 2010, and the ratio of originated non-performing loans to originated loans was 1.68 percent, compared to $251.4 millionand 1.77 percent, respectively, at September 30, 2010.  Non-performing loans in the acquired loan portfolios, which represent those 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 $359.8 million at December 31, 2010.Non-performing assets totaled $303.1 million at December 31, 2010, down from $312.0 million atSeptember 30, 2010.  Non-performing assets equaled 2.07 percent of originated loans, REO and repossessed assets at December 31, 2010 compared to 2.18 percent at September 30, 2010.  AtDecember 31, 2010, the allowance for loan losses as a percentage of originated loans was 1.18 percent and as a percentage of originated non-performing loans was 70 percent, compared to 1.21 percent and 69 percent, respectively, at September 30, 2010.Fourth quarter net loan charge-offs totaled $10.9 million compared to $21.8 million in the third quarter of 2010.  Net loan charge-offs as a percent of average loans on an annualized basis were 0.28 percent in the fourth quarter of 2010 compared to 0.57 percent in this year’s third quarter.  The level of the allowance for loan losses is unchanged from September 30, 2010.In the fourth quarter of 2010, return on average tangible assets was 0.61 percent and return on average tangible stockholders’ equity was 3.7 percent, compared to 0.48 percent and 2.7 percent, respectively, for the third quarter of 2010.  At December 31, 2010, People’s United Financial’s tangible equity ratio stood at 14.1 percent.Conference CallOn January 21, 2011, at 11 a.m., Eastern Time, People’s United Financial will host a conference call to discuss this earnings announcement and our acquisition announcement.  The call may be heard throughwww.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.4Q 2010 Financial HighlightsSummaryNet income totaled $32.0 million, or $0.09 per share.Operating earnings were $36.7 million, or $0.10 per share.Net interest income totaled $189.8 million.Net interest margin increased 12 basis points from 3Q10 to 3.85%.The interest cost on deposits declined 6 basis points from 3Q10.Provision for loan losses totaled $10.9 million.Net loan charge-offs totaled $10.9 million in 4Q10.Non-interest income totaled $75.9 million in both 4Q10 and 3Q10.Non-interest expense totaled $206.9 million in 4Q10 compared to $194.2 million in 3Q10.4Q10 and 3Q10 include a total of $7.0 million and $5.3 million, respectively, of merger-related expenses and core system conversion costs.Effective income tax rate was 33.2% in 4Q10 and 32.5% in 2010.Excluding a $1.2 million non-taxable BOLI death benefit recorded in 2Q10, the income tax rate was 32.8% in 2010.Commercial BankingAverage commercial banking loans increased $580 million from 3Q10 to $11.1 billion.Excluding acquired loans, commercial banking loans increased $175 million fromSeptember 30, 2010.Non-performing commercial banking assets, excluding acquired non-performing loans, totaled$193.1 million at December 31, 2010, a $12.0 million decrease from September 30, 2010.The ratio of originated non-performing commercial banking loans to originated commercial banking loans was 1.57% at December 31, 2010 compared to 1.59% at September 30, 2010.Net loan charge-offs totaled $7.0 million, or 0.25% annualized, of average commercial banking loans in 4Q10, compared to $18.2 million, or 0.69% annualized, in 3Q10.Retail & Business BankingAverage residential mortgage loans totaled $2.6 billion, a $148 million increase from 3Q10.Excluding acquired loans, residential mortgage loans increased $98 million from September 30, 2010.Net loan charge-offs totaled $2.0 million, or 0.30% annualized, of average residential  mortgage loans.The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 3.17% at December 31, 2010 compared to 3.68% at September 30, 2010.Average home equity loans totaled $2.0 billion, unchanged from 3Q10.Net loan charge-offs totaled $1.1 million, or 0.23% annualized, of average home equity loans.Wealth ManagementWealth Management income decreased $1.0 million from 3Q10.Investment management fees and brokerage commissions increased $0.3 million and $0.1 million, respectively, while insurance revenue decreased $1.4 million (reflecting the seasonal nature of insurance renewals).Assets managed and administered, which are not reported as assets of People’s United Financial, totaled $17.1 billion at both December 31, 2010 and September 30, 2010.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 nearly 340 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.Additional Information About the TransactionThe proposed transaction will be submitted to the stockholders of Danvers Bancorp for their consideration.  In connection with the proposed merger with Danvers Bancorp, Inc., People’s United Financial will file with the Securities and Exchange Commission (the ‘SEC’) a Registration Statement on Form S-4 that will include a proxy statement of Danvers Bancorp that also constitutes a prospectus of People’s United Financial. Danvers Bancorp will mail the proxy statement/prospectus to its stockholders.  Investors and security holders are urged to read the proxy statement/prospectus regarding the proposed merger when it becomes available, as well as other documents filed with the SEC, because they will contain important information.  You may obtain a free copy of the proxy statement/prospectus (when available) and other related documents filed by People’s United Financial and Danvers Bancorp with the SEC at the SEC’s website at www.sec.gov(link is external).  The proxy statement/prospectus (when it is available) and the other documents may also be obtained for free by accessing People’s United Financial’s web site at www.peoples.comunder(link is external) the tab ‘Investor Relations’ and then under the heading ‘Financial Information’ or by accessing Danvers Bancorp’s web site at www.danversbank.com(link is external) under the tab ‘Investor Relations’ and then under the heading ‘SEC Filings.’Participants in the TransactionsPeople’s United Financial, Danvers Bancorp and their respective directors, executive officers and certain other members of management and employees may be deemed ‘participants’ in the solicitation of proxies from Danvers Bancorp’s stockholders in favor of the merger with Danvers Bancorp. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Danvers Bancorp stockholders in connection with the proposed merger will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about the executive officers and directors of People’s United Financial in its Annual Report on Form 10-K for the year ended December 31, 2009 and in its definitive proxy statement filed with the SEC on March 23, 2010.  You can find information about Danvers Bancorp’s executive officers and directors in its Annual Report on Form 10-K for the year ended December 31, 2009 and in its definitive proxy statement filed with the SEC on April 16, 2010.This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities.For additional factors that may affect future results, please see filings made by People’s United Financial and Danvers Bancorp with the SEC, including People’s United Financial’s Annual Report on Form 10-K for the year ended December 31, 2009 and Danvers Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2009.  People’s United Financial and Danvers Bancorp undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or other changes.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.BRIDGEPORT, Conn., Jan. 20, 2011 /PRNewswire/ — Access Information About People’s United Financial at www.peoples.com(link is external) .   Amortization of other acquisition-related intangibles21.720.6  Repurchase agreements211.71.00.49151.20.70.46 impairment charges, amortization of other acquisition-related intangibles and fair value adjustments, losses on  Investment management fees7.97.68.67.97.9 Income tax expense41.343.1 Liabilities    Non-performing assets (2)303312285248206    Operating earnings exclude from net income those items that management considers to be of such a  Dividends paid per share0.15500.15500.15500.15250.1525    Total borrowings1,010.6253.9158.9    Total deposits16,530.926.50.6415,801.127.60.70 Dec. 31,Sept. 30,June 30,March 31,Dec. 31,    Total loans15,285.6783.15.1214,469.7730.55.05  Residential mortgage2,838.02,474.52,546.9        BOLI FTE adjustment (1)3.64.5 Commercial real estate2.613.54.85.81.5    Common shares350.07356.73358.51362.25335.63 $ 20,757.5  Deposits26.527.629.029.735.9 Deposits: Cash and due from banks$      354.7$      320.3$      326.0  Provision for loan losses60.057.0 Stockholders’ equity5,105.9 (2)  Average balances and yields for securities available for sale are based on amortized cost. Borrowings:  Savings, interest-bearing checking $ 148.33.02% Additional paid-in capital4,978.84,946.04,511.3     assets were 3.77%, 2.43%, 2.26% and 1.95% of total loans, REO and repossessed assets, respectively. 2,998.3  agreements to resell641.20.20.17 expense of a type reasonably expected to be incurred within the following two years.        Net security losses1.0-         Other47.816.9 Net income, as reported$              85.7$            101.2    Total interest and dividend income828.8766.8 Non-interest income:    Total non-interest expense206.9194.2209.8200.3172.2  Subordinated notes14.715.1  Common shares (end of period) (in millions) (4)350.07335.63 Liabilities and stockholders’ equity: provide information useful to investors in understanding People’s United Financial’s underlying operating Stockholders’ Equity Securities purchased under agreements to resell520.0740.0400.0    Income before income tax expense127.0144.3 Per Common Share Data: People’s United Financial, Inc. Twelve Months Ended    Net loan charge-offs10.921.817.89.513.6 (2) Includes a total of $58.9 million and $4.5 million of merger-related expenses, core system conversion Common shares issued376.62374.63374.64374.76348.25  Deposits112.8173.4 (1)  Average yields earned and rates paid are annualized. Dec. 31,Sept. 30,June 30,March 31,Dec. 31,    Total cash and cash equivalents954.5798.43,418.0  Common shares (end of period) (in millions) (4)350.07356.73358.51362.25335.63  Consumer9.710.09.47.85.7  Commercial5,196.05,070.74,042.5    Allowance for loan losses173173173173173  Net interest margin (3)3.85%3.73%3.68%3.47%3.19%    Total non-performing assets$ 303.1$  312.0$ 284.5$   247.5$ 205.6  Consumer2,169.522.14.072,184.122.24.06 Dec. 31,Sept. 30,June 30,March 31,Dec. 31, performance and trends, and facilitates comparisons with the performance of other banks and thrifts. equivalent basis (excluding fair value adjustments) plus total non-interest income (including the fully taxable  Total$   10.9$    21.8$   17.8$       9.5$   13.6 PROVISION AND ALLOWANCE FOR LOAN LOSSE S    Total borrowings161.20.40.93 (2) Represents acquired loans that meet People’s United’s definition of a non-performing loan but for which the risk of credit loss has  Efficiency ratio (4)72.572.173.075.973.7    Total stockholders’ equity5,219.35,364.55,100.7     June 30, 2010 and March 31, 2010, non-performing loans were 3.45%, 2.04%, 1.84% and 1.59% of total loans, and non-performing Loans: (dollars in millions, except per share data)20102010201020102009 Three Months Ended Repossessed assets18.125.727.631.812.9 3.19%  Return on average assets0.390.49    Net interest income189.8175.8173.8159.6147.5  Commercial real estate5,594.8312.15.585,208.5287.85.52 Total non-interest expense$            811.2$            684.6 $ 20,757.5 Balance at end of period$ 172.5$  172.5$ 172.5$   172.5$ 172.5    Total wealth management income17.718.717.718.017.8  Originated loans1.18%1.21%1.23%1.22%1.21% Interest and dividend income: Dec. 31,Sept. 30,June 30,March 31,Dec. 31,    Total securities3,033.32,477.5901.8 Non-interest expense: (1) Fully taxable equivalent  Commercial70.568.169.758.048.1         acquisition-related intangibles1,9621,7721,7781,7671,515  Diluted earnings per share$     0.24$     0.30 Tangible equity ratio14.1%17.8%18.0%18.7%18.2% Three months endedAverage Subordinated notes182.2182.9181.8    Total assets$ 22,960.5 $ 176.63.62%    Total interest expense129.8190.0 (1) Reported net of government guarantees totaling $9.4 million at Dec. 31, 2010, $8.8 million at Sept. 30, 2010, $6.8 million    Total borrowings270.52.30.88168.11.50.90    Total loans, net17,345.715,042.314,061.3 375.6         Unallocated ESOP common shares9.069.159.239.329.41  Savings, interest-bearing checking and money market7,853.647.40.606,710.648.20.72 Other assets2,550.3 Subordinated notes171.33.37.75182.73.88.28 (2) Operating earnings were $36.7 million, $27.7 million, $31.8 million, $29.2 million and $28.0 million for the three    The efficiency ratio, which represents an approximate measure of the cost required by People’s United NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued Add: Fair value adjustments1.16.5 Borrowings: Commercial1.43.18.00.84.3  Time4,807.224.02.00 acquisition date, and prior period results have not been restated to include Smithtown and LSB. Unallocated common stock of Employee Stock Ownership Plan, at cost  Federal Home Loan Bank advances509.39.714.8 People’s United Financial, Inc. is calculated by dividing operating earnings by the weighted average number of dilutive common shares    Short-term investments (1)1,1201,2181,9442,5273,492    Tangible stockholders’ equity$            3,257$            3,593$            3,635$            3,712$            3,586      costs and one-time charges for the twelve months ended Dec. 31, 2010 and 2009, respectively.  Also (dollars in millions)20102010201020102009 (1) Represents pre-tax merger-related expenses, core system conversion costs and non-recurring or infrequent nature that, by excluding such items (net of income taxes), People’s United outstanding for the respective period. Deposits:    Tangible stockholders’ equity to tangible assets14.117.818.018.718.2  Residential mortgage2,609.431.44.81 Dec. 31,Sept. 30,June 30,March 31,Dec. 31, (2) Excludes acquired loans.  Borrowings2.31.5 Loans: People’s United Financial, Inc. People’s United Financial, Inc. (3) Calculations exclude acquired loans.  Including acquired loans and acquired non-performing loans at Dec. 31, 2010, Sept. 30, 2010, Retained earnings772.6798.5914.5 Twelve Months Ended    Total$         1,007.2$            876.4 People’s United Financial, Inc. Total non-interest expense$            206.9$            194.2$            209.8$            200.3$            172.2  Consumer2,199.289.64.072,264.495.44.21         acquisition-related intangibles6.16.14.84.75.0    Total originated non-performing loans (1)245.2251.4219.7192.3168.8  Merchant services income25.524.9    Total$            192.6$            183.4$            185.3$            177.2$            163.9  Insurance revenue28.830.0 Equipment financing$     3.0$      1.6$     3.7$       0.9$     4.0         acquisition-related intangibles21.720.6 5,141.4  Ratios: Less: Net security gains—– OPERATING EARNINGS  Brokerage commissions2.92.82.82.82.9 Provision for loan losses10.921.817.89.513.6  Book value (end of period)$   14.91$   15.20  Commercial4,961.9269.65.434,116.7202.34.91 Three Months Ended Dec. 31,Dec. 31,    Net interest income after provision for loan losses639.0519.8  Amortization of other acquisition-related intangibles6.16.14.84.75.0 Add: Adjustments, net of tax (1)4.73.615.815.63.1 Twelve Months Ended  Short-term investments4.66.5    Deposits16,53115,80115,70415,20215,273  Federal Home Loan Bank advances52.31.12.2214.80.85.28    Total assets$ 22,016.2    Total liabilities16,026.2      at June 30, 2010, $7.3 million at March 31, 2010 and $8.3 million at Dec. 31, 2009.        Originated non-performing loans (2)70.468.678.589.7102.2 (dollars in millions)20102010201020102009 Non-performing assets as a percentage of: Dec. 31,Dec. 31,    Non-performing assets to originated loans,  Income before income tax expense47.935.723.020.433.4  Occupancy and equipment28.128.028.529.828.0  Income before income tax expense127.0144.3 Securities purchased under    Total liabilities16,647.9  Diluted earnings per share$     0.09$     0.07$     0.04$     0.04$     0.07 assets, other than residential mortgage loans, and non-recurring income) (the denominator). People’s United  agreements to resell603.90.30.21715.80.40.21  Non-interest-bearing$   3,633.5$        —   %$   3,432.4$        —   %  Book value (end of period)$   14.91$   15.04$   15.10$   15.12$   15.20 People’s United Financial, Inc. TANGIBLE STOCKHOLDERS’ EQUITY Basic and diluted earnings per common share$        0.09$        0.07$        0.04$     0.04$   0.07    Total liabilities and stockholders’ equity$ 22,960.5 Assets    High14.1714.3516.7917.0817.16 OPERATING EARNINGS (dollars in millions)20102010201020102009 (1) Includes net security gains of $22.0 million for the twelve months ended Dec. 31, 2009.    Total assets$ 25,037.1$ 21,897.3$ 21,257.2  Other5.2-0.392.7– People’s United Financial completed its acquisitions of Smithtown Bancorp, Inc. and LSB Corporation on (in millions, except per share data)20102010201020102009    Operating earnings per share$              0.35$              0.31         Other7.43.918.917.62.5  Savings, interest-bearing checking     and 2009, respectively, less related income taxes. People’s United Financial, Inc. goodwill and other acquisition-related intangibles) (the numerator) to (ii) tangible assets (total assets less      core system conversion costs and one-time charges for the three months ended Dec. 31, 2010, Sept. 30, 2010,         acquisition-related intangibles1,9621,7721,7781,7671,515  Time4,648.415.01.294,439.115.61.40 Total stockholders’ equity$            5,219$            5,365$            5,413$            5,479$            5,101  Non-interest income (1)299.2309.1  Residential mortgage78.887.080.966.752.7 Financial’s results can be measured and assessed on a more consistent basis from period to period. Items (2)  Average balances and yields for securities available for sale are based on amortized cost.  Other— Total assets$          25,037$          21,897$          21,950$          21,588$          21,257  Return on average assets (3)0.560.440.290.260.47    Total funding liabilities15,615.9$   40.01.03% Interest expense:    Total funding liabilities17,235.6$   31.00.72%16,174.8$   31.70.78%        BOLI FTE adjustment (1)0.50.71.41.01.0  Other  6.50.22.702.1-1.92 (in millions)201020102009    Total earning assets19,046.3$ 832.14.37%18,211.5$ 770.24.23%  Federal Home Loan Bank advances14.90.25.25 FINANCIAL HIGHLIGHTS Efficiency ratio72.5%72.1%73.0%75.9%73.7%last_img


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