PEOPLE'S UNITED FINANCIAL, INC. BRIDGEPORT, Conn., Jan. 21, 2016 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported net income of $70.8 million, or $0.23 per share, for the fourth quarter of 2015, compared to $64.7 million, or $0.22 per share, for the fourth quarter of 2014, and $68.4 million, or $0.23 per share, for the third quarter of 2015. Included in this quarter's results is a net after-tax gain of $6.1 million ($0.02 per share) resulting from the sale of the Company's payroll services business as well as non-operating expenses of $2.5 million after-tax ($0.01 per share).
Operating earnings were $67.2 million, or $0.22 per share, for the fourth quarter of 2015, compared to $65.1 million, or $0.22 per share, for the fourth quarter of 2014, and $68.4 million, or $0.23 per share, for the third quarter of 2015.
For the year ended December 31, 2015, net income totaled $260.1 million, or $0.86 per share, compared to $251.7 million, or $0.84 per share, for 2014. Operating earnings were $262.5 million, or $0.87 per share, for 2015, compared to $244.5 million, or $0.82 per share, for 2014.
The Company's Board of Directors declared a $0.1675 per share quarterly dividend, payable February 15, 2016 to shareholders of record on February 1, 2016. Based on the closing stock price on January 20, 2016, the dividend yield on People's United Financial common stock is 4.6 percent.
"We are pleased to report growth in full-year operating earnings per share for the sixth consecutive year, particularly given the prolonged low interest rate environment," commented Jack Barnes, President and Chief Executive Officer. "These results are driven by the strategic investments we have made in talent, products and services. Throughout 2015, we continued to move the Company forward by organically growing loans and deposits, strengthening fee businesses, implementing technology enhancements and furthering cross-sell efforts."
Barnes continued, "As we continually evaluate the best ways to serve customers and improve operating efficiency, we sold our payroll services business in the fourth quarter to the Company's current payroll software licensor and entered into a long-term referral agreement. The sale provides customers high-quality payroll solutions at comparable costs and minimal transition impact."
Barnes concluded, "Entering 2016, the franchise is well-positioned to achieve ongoing growth as we continue to execute on the significant opportunities that exist across our attractive footprint, especially within the Boston and New York markets. We remain focused on improving profitability, while continuing to build the business for long-term success."
"Our 2015 financial performance reflects ongoing revenue growth and proactive expense management," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Record full year operating earnings of $263 million increased over seven percent from the prior year and benefited from both higher net interest income and fee revenues. We achieved strong annual loan and deposit growth of seven percent and nine percent, respectively. At the same time we maintained excellent asset quality across each portfolio as evidenced by net charge-offs as a percentage of average loans of only eight basis points for the full year."
Rosato concluded, "Capital ratios continue to be strong, especially given the Company's diversified business mix and history of exceptional credit risk management. Our balance sheet remains asset sensitive which positions us well to benefit from a rising interest rate environment."
At December 31, 2015, People's United Financial's common equity tier 1 capital and total risk-based capital ratios were 9.8 percent and 11.7 percent, respectively, and the tangible equity ratio stood at 7.2 percent. For People's United Bank N.A., common equity tier 1 capital and total risk-based capital ratios were 10.2 percent and 12.6 percent, respectively, at December 31, 2015.
Net loan charge-offs as a percentage of average total loans on an annualized basis were 0.09 percent in the fourth quarter of 2015, a slight increase from 0.06 percent in the third quarter of 2015, but an improvement from 0.13 percent in the fourth quarter of 2014. For the originated loan portfolio, non-performing loans equaled 0.58 percent of loans at December 31, 2015, compared to 0.68 percent at September 30, 2015 and 0.77 percent at December 31, 2014.
Operating return on average assets of 0.71 percent for the fourth quarter of 2015 declined from 0.73 percent in the third quarter of 2015 and 0.75 percent in the fourth quarter of 2014. Operating return on average tangible stockholders' equity of 10.2 percent in the fourth quarter of 2015 declined from 10.5 percent in the third quarter of 2015, but increased from 10.1 percent in the fourth quarter of 2014.
People's United Financial, a diversified financial services company with $39 billion in assets, provides commercial and retail banking, as well as wealth management services through a network of approximately 400 branches 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 $15.4 billion at December 31, 2015 compared to $15.1 billion at September 30, 2015.
4Q 2015 Financial Highlights
Summary
-- Net income totaled $70.8 million, or $0.23 per share.
-- Operating earnings totaled $67.2 million, or $0.22 per share.
-- Net interest income totaled $238.8 million in 4Q15 compared to $234.8
million in 3Q15.
-- Interest income on acquired loans decreased $0.7 million to $12.6
million.
-- Net interest margin of 2.87% unchanged from 3Q15 reflecting:
-- Increase in average investment balances (increase of one basis
point).
-- New loan volume at rates lower than the existing portfolio (decrease
of one basis point).
-- Provision for loan losses totaled $9.7 million.
-- Net loan charge-offs totaled $6.2 million, of which $3.3 million
related to loans with previously-established specific reserves.
-- Net loan charge-off ratio of 0.09% in 4Q15.
-- Reflects an $8.1 million increase in the originated allowance for
loan losses due to loan growth and a $1.3 million allowance reversal
related to acquired loans.
-- Non-interest income was $93.3 million in 4Q15 compared to $87.1 million
in 3Q15.
-- Gain on sale of the payroll services business totaled $9.2 million
in 4Q15.
-- Insurance revenue decreased $1.6 million.
-- Bank service charges decreased $1.4 million.
-- Commercial banking lending fees decreased $1.1 million.
-- Assets under administration and those under full discretionary
management, neither of which are reported as assets of People's
United Financial, totaled $9.8 billion and $5.6 billion,
respectively, at December 31, 2015, compared to $9.7 billion and
$5.4 billion, respectively, at September 30, 2015.
-- Non-interest expense totaled $217.0 million in 4Q15 compared to $214.2
million in 3Q15.
-- Operating non-interest expense was $213.2 million in 4Q15 compared
to $214.1 million in 3Q15.
-- Compensation and benefits decreased $1.4 million, primarily
reflecting lower payroll and benefit-related costs in 4Q15.
-- Regulatory assessments expense decreased $2.4 million.
-- Professional and outside services expense increased $0.9 million.
-- The efficiency ratio was 61.0% in 4Q15 compared to 61.7% in 3Q15.
-- Non-operating expenses totaled $3.8 million in 4Q15 compared to $0.1
million in 3Q15.
-- The effective income tax rate was 32.8% for 4Q15 and 33.4% for the
full-year of 2015, compared to 33.9% for the full-year of 2014 (33.5%
for 4Q14).
Commercial Banking
-- Commercial loans increased $652 million, or 13% annualized, from
September 30, 2015.
-- Excluding the mortgage warehouse portfolio, commercial loans
increased $528 million, or 11% annualized, in 4Q15.
-- Average commercial loans totaled $20.2 billion in 4Q15, an increase of
$196 million, or 4% annualized, from 3Q15.
-- The ratio of originated non-performing commercial loans to originated
commercial loans was 0.51% at December 31, 2015 compared to 0.64% at
September 30, 2015.
-- Non-performing commercial assets, excluding acquired non-performing
loans, totaled $117.6 million at December 31, 2015 compared to
$139.6 million at September 30, 2015.
-- Net loan charge-offs totaled $4.8 million, or 0.09% annualized, of
average commercial loans in 4Q15, compared to $2.9 million, or 0.06%
annualized, in 3Q15.
-- For the originated commercial portfolio, the allowance for loan losses
as a percentage of loans was 0.90% at December 31, 2015 compared to
0.91% at September 30, 2015.
-- The commercial originated allowance for loan losses represented 177% of
originated non-performing commercial loans at December 31, 2015 compared
to 143% at September 30, 2015.
-- Commercial deposits totaled $8.9 billion at December 31, 2015 compared
to $9.0 billion at September 30, 2015.
Retail Banking
-- Residential mortgage loans increased $76 million, or 6% annualized, from
September 30, 2015.
-- Average residential mortgage loans totaled $5.4 billion in 4Q15, an
increase of $153 million, or 12% annualized, from 3Q15.
-- The ratio of originated non-performing residential mortgage loans to
originated residential mortgage loans was 0.71% at December 31, 2015
compared to 0.74% at September 30, 2015.
-- Net loan charge-offs totaled $0.1 million, or less than 0.01%
annualized, of average residential mortgage loans in 4Q15, compared
to $0.4 million, or 0.03% annualized, in 3Q15.
-- Home equity loans increased $12 million, or 2% annualized, from
September 30, 2015.
-- Average home equity loans totaled $2.1 billion in 4Q15, unchanged
from 3Q15.
-- The ratio of originated non-performing home equity loans to
originated home equity loans was 0.92% at December 31, 2015 compared
to 1.00% at September 30, 2015.
-- Net loan charge-offs totaled $1.1 million, or 0.22% annualized, of
average home equity loans in 4Q15, compared to $0.6 million, or
0.11% annualized, in 3Q15.
-- Retail deposits (excluding brokered deposits) totaled $16.9 billion at
December 31, 2015 compared to $16.6 billion at September 30, 2015.
Conference Call
On January 21, 2016, 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) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; and (9) changes in regulation resulting from or relating to financial reform legislation. People's United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Access Information About People's United Financial at www.peoples.com.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions, except per share data) 2015 2015 2015 2015 2014
------------------------------------------- ---- ---- ---- ---- ----
Earnings Data:
Net interest income (fully taxable equivalent) $245.3 $241.1 $237.0 $233.9 $233.2
Net interest income 238.8 234.8 230.4 228.1 228.1
Provision for loan losses 9.7 6.2 7.7 9.8 9.9
Non-interest income (1) 93.3 87.1 83.0 89.0 86.8
Non-interest expense 217.0 214.2 211.8 217.6 207.7
Operating non-interest expense (2) 213.2 214.1 208.8 211.6 207.1
Income before income tax expense 105.4 101.5 93.9 89.7 97.3
Net income 70.8 68.4 61.7 59.2 64.7
Operating earnings (2) 67.2 68.4 63.7 63.2 65.1
--------------------- ---- ---- ---- ---- ----
Selected Statistical Data:
Net interest margin (3) 2.87% 2.87% 2.88% 2.91% 3.00%
Return on average assets (3) 0.75 0.73 0.67 0.66 0.74
Operating return on average assets (2), (3) 0.71 0.73 0.70 0.71 0.75
Return on average tangible assets (3) 0.79 0.78 0.71 0.70 0.79
Return on average stockholders' equity (3) 6.0 5.8 5.3 5.1 5.5
Return on average tangible stockholders' equity (3) 10.7 10.5 9.5 9.2 10.1
Operating return on average tangible
stockholders' equity (2), (3) 10.2 10.5 9.8 9.9 10.1
Efficiency ratio (2) 61.0 61.7 61.6 61.9 61.3
------------------- ---- ---- ---- ---- ----
Common Share Data:
Basic and diluted earnings per share $0.23 $0.23 $0.20 $0.20 $0.22
Operating earnings per share (2) 0.22 0.23 0.21 0.21 0.22
Dividends paid per share 0.1675 0.1675 0.1675 0.165 0.165
Dividend payout ratio 71.5% 73.9% 81.8% 83.7% 76.5%
Operating dividend payout ratio (2) 75.3 73.9 79.2 78.3 76.0
Book value per share (end of period) $15.62 $15.64 $15.51 $15.55 $15.44
Tangible book value per share (end of period) (2) 8.73 8.75 8.59 8.58 8.43
Stock price:
High 16.93 16.95 16.64 15.45 15.50
Low 15.00 14.69 14.92 13.97 13.61
Close (end of period) 16.15 15.73 16.21 15.20 15.18
Common shares (end of period) (in millions) 302.86 302.39 302.11 301.18 300.13
Weighted average diluted common shares (in millions) 301.38 301.00 300.09 299.15 298.65
--------------------------------------------------- ------ ------ ------ ------ ------
(1) Three months ended December 31, 2015
includes a $9.2 million net gain
resulting from the sale of People's
United Bank's payroll services
business.
(2) See Non-GAAP Financial Measures and
Reconciliation to GAAP.
(3) Annualized.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS
Twelve Months Ended
December 31,
------------
(dollars in millions, except per share data) 2015 2014
------------------------------------------- ---- ----
Earnings Data:
Net interest income (fully taxable equivalent) $957.3 $931.1
Net interest income 932.1 911.9
Provision for loan losses 33.4 40.6
Non-interest income (1) 352.4 350.8
Non-interest expense 860.6 841.5
Operating non-interest expense (2) 847.7 832.0
Income before income tax expense 390.5 380.6
Net income 260.1 251.7
Operating earnings (2) 262.5 244.5
--------------------- ----- -----
Selected Statistical Data:
Net interest margin 2.88% 3.09%
Return on average assets 0.71 0.75
Operating return on average assets (2) 0.71 0.72
Return on average tangible assets 0.75 0.80
Return on average stockholders' equity 5.5 5.4
Return on average tangible stockholders' equity 10.0 10.0
Operating return on average tangible stockholders' equity (2) 10.1 9.7
Efficiency ratio (2) 61.5 62.1
------------------- ---- ----
Common Share Data:
Basic and diluted earnings per share $0.86 $0.84
Operating earnings per share (2) 0.87 0.82
Dividends paid per share 0.6675 0.6575
Dividend payout ratio 77.3% 78.2%
Operating dividend payout ratio (2) 76.6 80.6
Book value per share (end of period) $15.62 $15.44
Tangible book value per share (end of period) (2) 8.73 8.43
Stock price:
High 16.95 15.70
Low 13.97 13.61
Close (end of period) 16.15 15.18
Common shares (end of period) (in millions) 302.86 300.13
Weighted average diluted common shares (in millions) 300.41 298.26
--------------------------------------------------- ------ ------
(1) Includes a $9.2 million net gain
resulting from the sale of People's
United Bank's payroll services business
and a $20.6 million net gain resulting
from the formation of a merchant
services joint venture for the twelve
months ended December 31, 2015 and
2014, respectively.
(2) See Non-GAAP Financial Measures and
Reconciliation to GAAP.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS - Continued
As of and for the Three Months Ended
------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014
-------------------- ---- ---- ---- ---- ----
Financial Condition Data:
Total assets $38,877 $37,478 $37,183 $36,407 $35,997
Loans 28,411 27,672 27,562 26,929 26,592
Securities 6,449 5,921 5,756 5,577 5,012
Short-term investments (1) 380 245 196 250 769
Allowance for loan losses 211 208 205 201 198
Goodwill and other acquisition-related intangible assets 2,088 2,085 2,091 2,097 2,103
Deposits 28,417 28,280 27,435 27,150 26,138
Borrowings 4,307 2,997 3,563 3,143 3,692
Notes and debentures 1,039 1,045 1,030 1,042 1,034
Stockholders' equity 4,732 4,731 4,686 4,682 4,633
Total risk-weighted assets (2):
People's United Financial, Inc. 29,678 28,990 28,688 28,100 27,513
People's United Bank 29,653 28,953 28,648 28,084 27,454
Non-performing assets (3) 182 210 221 209 224
Net loan charge-offs 6.2 4.1 3.2 7.2 8.5
-------------------- --- --- --- --- ---
Average Balances:
Loans $27,853 $27,496 $27,125 $26,504 $26,136
Securities (4) 6,133 5,880 5,577 5,325 4,718
Short-term investments (1) 247 245 223 276 276
Total earning assets 34,233 33,621 32,925 32,105 31,130
Total assets 37,906 37,257 36,617 35,768 34,763
Deposits 28,481 27,810 27,236 26,579 25,781
Borrowings 3,187 3,304 3,215 3,018 2,854
Notes and debentures 1,043 1,034 1,040 1,041 1,027
Total funding liabilities 32,711 32,148 31,491 30,638 29,662
Stockholders' equity 4,736 4,700 4,689 4,663 4,679
-------------------- ----- ----- ----- ----- -----
Ratios:
Net loan charge-offs to average total loans (annualized) 0.09% 0.06% 0.05% 0.11% 0.13%
Non-performing assets to originated loans,
real estate owned and repossessed assets (3) 0.66 0.78 0.83 0.80 0.88
Originated allowance for loan losses to:
Originated loans (3) 0.73 0.74 0.73 0.74 0.74
Originated non-performing loans (3) 127.3 108.1 102.9 107.5 95.5
Average stockholders' equity to average total assets 12.5 12.6 12.8 13.0 13.5
Stockholders' equity to total assets 12.2 12.6 12.6 12.9 12.9
Tangible stockholders' equity to tangible assets (5) 7.2 7.5 7.4 7.5 7.5
Total risk-based capital (2):
People's United Financial, Inc. 11.7 11.8 11.8 11.9 12.2
People's United Bank 12.6 12.8 12.9 13.1 13.0
-------------------- ---- ---- ---- ---- ----
(1) Includes securities purchased under
agreements to resell.
(2) Effective January 1, 2015, calculated in
accordance with Basel III capital rules.
December 31, 2015 amounts are preliminary.
(3) Excludes acquired loans.
(4) Average balances for securities are based on
amortized cost.
(5) See Non-GAAP Financial Measures and
Reconciliation to GAAP.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF CONDITION
Dec. 31, Sept. 30, June 30, Dec. 31,
(in millions) 2015 2015 2015 2014
------------ ---- ---- ---- ----
Assets
Cash and due from banks $334.8 $300.3 $362.8 $345.1
Short-term investments 380.5 244.6 195.5 668.6
---------------------- ----- ----- ----- -----
Total cash and cash equivalents 715.3 544.9 558.3 1,013.7
------------------------------- ----- ----- ----- -------
Securities purchased under agreements to resell - - - 100.0
----------------------------------------------- --- --- --- -----
Securities:
Trading account securities, at fair value 6.7 8.3 8.3 8.3
Securities available for sale, at fair value 4,527.7 4,221.2 4,518.7 3,993.7
Securities held to maturity, at amortized cost 1,609.6 1,377.1 913.6 834.3
Federal Home Loan Bank and Federal Reserve Bank stock, at cost 305.4 314.7 315.1 175.7
--------------------------------------------------------------
Total securities 6,449.4 5,921.3 5,755.7 5,012.0
---------------- ------- ------- ------- -------
Loans held for sale 34.5 36.2 56.8 34.2
------------------- ---- ---- ---- ----
Loans:
Commercial 10,722.0 10,313.3 10,580.9 10,055.1
Commercial real estate 10,028.8 9,785.4 9,600.4 9,404.3
Residential mortgage 5,457.0 5,381.4 5,191.6 4,932.0
Consumer 2,203.1 2,192.1 2,189.4 2,200.6
-------- ------- ------- ------- -------
Total loans 28,410.9 27,672.2 27,562.3 26,592.0
Less allowance for loan losses (211.0) (207.5) (205.4) (198.3)
------------------------------ ------ ------ ------ ------
Total loans, net 28,199.9 27,464.7 27,356.9 26,393.7
---------------- -------- -------- -------- --------
Goodwill and other acquisition-related intangible assets 2,087.8 2,084.7 2,090.6 2,102.5
Bank-owned life insurance 346.5 345.6 345.9 343.3
Premises and equipment 257.8 258.7 262.9 277.8
Other assets 786.2 821.6 756.1 719.9
Total assets $38,877.4 $37,477.7 $37,183.2 $35,997.1
------------ --------- --------- --------- ---------
Liabilities
Deposits:
Non-interest-bearing $6,178.6 $5,877.2 $5,893.1 $5,655.1
Savings, interest-bearing checking and money market 17,420.7 17,236.6 16,084.2 15,252.4
Time 4,818.1 5,165.9 5,457.5 5,230.7
---- ------- ------- ------- -------
Total deposits 28,417.4 28,279.7 27,434.8 26,138.2
-------------- -------- -------- -------- --------
Borrowings:
Federal Home Loan Bank advances 3,463.8 2,164.5 2,615.2 2,291.7
Customer repurchase agreements 469.5 472.3 472.6 486.0
Federal funds purchased 374.0 360.0 474.0 913.0
Other borrowings - - 1.0 1.0
Total borrowings 4,307.3 2,996.8 3,562.8 3,691.7
---------------- ------- ------- ------- -------
Notes and debentures 1,038.7 1,044.9 1,029.8 1,033.5
Other liabilities 382.4 425.5 470.1 500.6
----------------- ----- ----- ----- -----
Total liabilities 34,145.8 32,746.9 32,497.5 31,364.0
----------------- -------- -------- -------- --------
Stockholders' Equity
Common stock 3.9 3.9 3.9 3.9
Additional paid-in capital 5,337.7 5,327.3 5,319.6 5,291.2
Retained earnings 880.8 861.0 843.8 826.7
Unallocated common stock of Employee Stock Ownership Plan, at cost (151.8) (153.6) (155.4) (159.0)
Accumulated other comprehensive loss (177.2) (146.1) (164.5) (168.2)
Treasury stock, at cost (1,161.8) (1,161.7) (1,161.7) (1,161.5)
----------------------- -------- -------- -------- --------
Total stockholders' equity 4,731.6 4,730.8 4,685.7 4,633.1
-------------------------- ------- ------- ------- -------
Total liabilities and stockholders' equity $38,877.4 $37,477.7 $37,183.2 $35,997.1
------------------------------------------ --------- --------- --------- ---------
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions, except per share data) 2015 2015 2015 2015 2014
----------------------------------- ---- ---- ---- ---- ----
Interest and dividend income:
Commercial $92.7 $92.5 $90.3 $88.9 $89.1
Commercial real estate 86.1 85.7 86.4 85.3 87.7
Residential mortgage 43.0 41.9 40.3 40.2 39.8
Consumer 18.1 18.1 18.0 18.1 18.7
-------- ---- ---- ---- ---- ----
Total interest on loans 239.9 238.2 235.0 232.5 235.3
Securities 33.8 31.2 29.0 27.5 24.0
Loans held for sale 0.3 0.4 0.4 0.2 0.2
Short-term investments 0.2 0.1 0.1 0.1 0.1
---------------------- --- --- --- --- ---
Total interest and dividend income 274.2 269.9 264.5 260.3 259.6
---------------------------------- ----- ----- ----- ----- -----
Interest expense:
Deposits 24.6 24.8 23.9 22.2 21.7
Borrowings 3.3 2.9 2.7 2.6 2.4
Notes and debentures 7.5 7.4 7.5 7.4 7.4
-------------------- --- --- --- --- ---
Total interest expense 35.4 35.1 34.1 32.2 31.5
---------------------- ---- ---- ---- ---- ----
Net interest income 238.8 234.8 230.4 228.1 228.1
Provision for loan losses 9.7 6.2 7.7 9.8 9.9
------------------------- --- --- --- --- ---
Net interest income after provision for loan losses 229.1 228.6 222.7 218.3 218.2
--------------------------------------------------- ----- ----- ----- ----- -----
Non-interest income:
Bank service charges 31.1 32.5 31.5 30.1 32.0
Investment management fees 10.8 10.8 11.3 10.8 10.5
Operating lease income 10.5 10.5 10.5 10.8 10.2
Commercial banking lending fees 9.2 10.3 9.8 13.3 9.5
Insurance revenue 7.5 9.1 6.5 7.6 6.6
Customer interest rate swap income, net 3.6 3.4 2.2 5.3 3.2
Brokerage commissions 3.1 3.1 3.2 3.2 3.4
Net gains on sale of residential mortgage loans 1.3 1.5 2.0 0.7 1.0
Net (losses) gains on sales of acquired loans - - (0.2) 1.9 (0.3)
Net security gains - - - - 2.7
Gain on sale of business, net of expenses 9.2 - - - -
Other non-interest income 7.0 5.9 6.2 5.3 8.0
------------------------- --- --- --- --- ---
Total non-interest income (1) 93.3 87.1 83.0 89.0 86.8
----------------------------- ---- ---- ---- ---- ----
Non-interest expense:
Compensation and benefits 112.0 113.4 109.3 114.8 108.2
Occupancy and equipment 37.0 37.0 36.8 38.7 36.3
Professional and outside services 17.9 17.0 17.3 15.8 14.7
Operating lease expense 9.4 9.2 9.2 9.3 8.9
Regulatory assessments 7.1 9.5 9.2 9.3 9.4
Amortization of other acquisition-related intangible assets 6.1 5.9 6.0 5.9 6.2
Other non-interest expense 27.5 22.2 24.0 23.8 24.0
-------------------------- ---- ---- ---- ---- ----
Total non-interest expense (1) 217.0 214.2 211.8 217.6 207.7
----------------------------- ----- ----- ----- ----- -----
Income before income tax expense 105.4 101.5 93.9 89.7 97.3
Income tax expense 34.6 33.1 32.2 30.5 32.6
------------------ ---- ---- ---- ---- ----
Net income $70.8 $68.4 $61.7 $59.2 $64.7
---------- ----- ----- ----- ----- -----
Basic and diluted earnings per common share $0.23 $0.23 $0.20 $0.20 $0.22
------------------------------------------- ----- ----- ----- ----- -----
(1) Total non-interest income
includes $9.2 million of non-
operating income for the three
months ended December 31, 2015.
Total non-interest expense
includes $3.8 million, $0.1
million, $3.0 million, $6.0
million and $0.6 million of non-
operating expenses for the three
months ended December 31, 2015,
September 30, 2015, June 30,
2015, March 31, 2015 and December
31, 2014, respectively. See Non-
GAAP Financial Measures and
Reconciliation to GAAP.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Twelve Months Ended
December 31,
------------
(in millions, except per share data) 2015 2014
----------------------------------- ---- ----
Interest and dividend income:
Commercial $364.4 $351.0
Commercial real estate 343.5 354.2
Residential mortgage 165.4 153.5
Consumer 72.3 73.9
-------- ---- ----
Total interest on loans 945.6 932.6
Securities 121.5 96.8
Loans held for sale 1.3 0.8
Short-term investments 0.5 0.4
---------------------- --- ---
Total interest and dividend income 1,068.9 1,030.6
---------------------------------- ------- -------
Interest expense:
Deposits 95.5 80.9
Borrowings 11.5 11.1
Notes and debentures 29.8 26.7
-------------------- ---- ----
Total interest expense 136.8 118.7
---------------------- ----- -----
Net interest income 932.1 911.9
Provision for loan losses 33.4 40.6
------------------------- ---- ----
Net interest income after provision for loan losses 898.7 871.3
--------------------------------------------------- ----- -----
Non-interest income:
Bank service charges 125.2 128.6
Investment management fees 43.7 41.6
Commercial banking lending fees 42.6 36.4
Operating lease income 42.3 41.6
Insurance revenue 30.7 29.9
Customer interest rate swap income, net 14.5 8.6
Brokerage commissions 12.6 13.6
Net gains on sale of residential mortgage loans 5.5 2.9
Net gains (losses) on sales of acquired loans 1.7 (0.9)
Net security gains - 3.0
Gain on sale of business, net of expenses 9.2 20.6
Other non-interest income 24.4 24.9
------------------------- ---- ----
Total non-interest income (1) 352.4 350.8
---------------------------- ----- -----
Non-interest expense:
Compensation and benefits 449.5 436.0
Occupancy and equipment 149.5 147.3
Professional and outside services 68.0 59.2
Operating lease expense 37.1 37.4
Regulatory assessments 35.1 35.6
Amortization of other acquisition-related intangible assets 23.9 24.8
Other non-interest expense 97.5 101.2
-------------------------- ---- -----
Total non-interest expense (1) 860.6 841.5
----------------------------- ----- -----
Income before income tax expense 390.5 380.6
Income tax expense 130.4 128.9
------------------ ----- -----
Net income $260.1 $251.7
---------- ------ ------
Basic and diluted earnings per common share $0.86 $0.84
------------------------------------------- ----- -----
(1) Total non-interest income
includes $9.2 million and $20.6
million of non-operating income
for the twelve months ended
December 31, 2015 and 2014,
respectively. Total non-interest
expense includes $12.9 million
and $9.5 million of non-
operating expenses for the twelve
months ended December 31, 2015
and 2014, respectively. See Non-
GAAP Financial Measures and
Reconciliation to GAAP.
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2015 September 30, 2015 December 31, 2014
----------------- ------------------ -----------------
Three months ended Average Yield/ Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate
-------------------- ------- -------- ---- ------- -------- ---- ------- -------- ----
Assets:
Short-term investments (2) $247.1 $0.2 0.21% $245.3 $0.1 0.19% $276.1 $0.1 0.20%
Securities (3) 6,133.1 37.7 2.46 5,879.9 34.8 2.37 4,718.4 26.7 2.26
Loans:
Commercial (4) 10,300.8 95.3 3.70 10,327.7 95.2 3.69 9,694.2 91.5 3.78
Commercial real estate 9,911.1 86.1 3.48 9,688.4 85.7 3.54 9,368.8 87.7 3.75
Residential mortgage 5,440.6 43.3 3.17 5,293.2 42.3 3.20 4,877.8 40.0 3.28
Consumer 2,200.7 18.1 3.31 2,186.9 18.1 3.30 2,195.0 18.7 3.40
--------
Total loans 27,853.2 242.8 3.49 27,496.2 241.3 3.51 26,135.8 237.9 3.64
----------- -------- ----- ---- -------- ----- ---- -------- ----- ----
Total earning assets 34,233.4 $280.7 3.28% 33,621.4 $276.2 3.29% 31,130.3 $264.7 3.40%
------ ---- ------ ---- ------ ----
Other assets 3,672.4 3,635.6 3,633.1
------------ ------- ------- -------
Total assets $37,905.8 $37,257.0 $34,763.4
--------- --------- ---------
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $6,049.3 $ - - % $5,853.7 $ - - % $5,575.7 $ - - %
Savings, interest-bearing checking
and money market 17,453.7 11.6 0.27 16,634.9 11.1 0.27 15,035.6 9.8 0.26
Time 4,977.6 13.0 1.05 5,321.6 13.7 1.03 5,169.5 11.9 0.92
---- ------- ---- ------- ---- ------- ----
Total deposits 28,480.6 24.6 0.35 27,810.2 24.8 0.36 25,780.8 21.7 0.34
-------------- -------- ---- ---- -------- ---- ---- -------- ---- ----
Borrowings:
Federal Home Loan Bank advances 2,353.8 2.8 0.47 2,444.2 2.5 0.41 1,943.4 2.0 0.42
Customer repurchase agreements 434.9 0.2 0.20 481.1 0.2 0.19 461.1 0.2 0.19
Federal funds purchased 398.5 0.3 0.23 378.4 0.2 0.19 447.8 0.2 0.16
Repurchase agreements - - - 0.5 - 1.75 1.0 - 1.75
Other borrowings - - - - - - 0.3 - -
Total borrowings 3,187.2 3.3 0.40 3,304.2 2.9 0.35 2,853.6 2.4 0.34
---------------- ------- --- ---- ------- --- ---- ------- --- ----
Notes and debentures 1,043.3 7.5 2.89 1,034.1 7.4 2.88 1,027.5 7.4 2.90
--------------------
Total funding liabilities 32,711.1 $35.4 0.43% 32,148.5 $35.1 0.44% 29,661.9 $31.5 0.43%
----- ---- ----- ---- ----- ----
Other liabilities 458.7 408.0 422.3
----------------- ----- ----- -----
Total liabilities 33,169.8 32,556.5 30,084.2
Stockholders' equity 4,736.0 4,700.5 4,679.2
-------------------- ------- ------- -------
Total liabilities and
stockholders' equity $37,905.8 $37,257.0 $34,763.4
--------- --------- ---------
Net interest income/spread (5) $245.3 2.85% $241.1 2.85% $233.2 2.97%
------ ---- ------ ---- ------ ----
Net interest margin 2.87% 2.87% 3.00%
------------------- ---- ---- ----
(1) Average yields earned and rates paid are
annualized.
(2) Includes securities purchased under
agreements to resell.
(3) Average balances and yields for securities
are based on amortized cost.
(4) Includes commercial and industrial loans
and equipment financing loans.
(5) The fully taxable equivalent adjustment was
$6.5 million, $6.3 million and $5.1
million for the three months ended
December 31, 2015, September 30, 2015 and
December 31, 2014, respectively.
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
December 31, 2015 December 31, 2014
----------------- -----------------
Twelve months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
-------------------- ------- -------- ---- ------- -------- ----
Assets:
Short-term investments (1) $247.8 $0.5 0.20% $214.9 $0.4 0.20%
Securities (2) 5,731.5 135.7 2.37 4,746.9 106.3 2.24
Loans:
Commercial (3) 10,189.5 375.4 3.68 9,266.2 360.7 3.89
Commercial real estate 9,643.9 343.5 3.56 9,145.0 354.2 3.87
Residential mortgage 5,222.4 166.7 3.19 4,635.1 154.3 3.33
Consumer 2,193.1 72.3 3.30 2,172.7 73.9 3.40
--------
Total loans 27,248.9 957.9 3.52 25,219.0 943.1 3.74
----------- -------- ----- ---- -------- ----- ----
Total earning assets 33,228.2 $1,094.1 3.29% 30,180.8 $1,049.8 3.48%
-------- ---- -------- ----
Other assets 3,665.8 3,572.0
------------ ------- -------
Total assets $36,894.0 $33,752.8
--------- ---------
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $5,801.9 $ - - % $5,390.1 $ - - %
Savings, interest-bearing checking
and money market 16,489.3 43.5 0.26 14,238.9 36.7 0.26
Time 5,241.4 52.0 0.99 4,668.7 44.2 0.95
---- ------- ---- ------- ----
Total deposits 27,532.6 95.5 0.35 24,297.7 80.9 0.33
-------------- -------- ---- ---- -------- ---- ----
Borrowings:
Federal Home Loan Bank advances 2,306.6 9.8 0.42 2,593.7 9.2 0.36
Customer repurchase agreements 463.6 0.9 0.19 482.0 1.0 0.20
Federal funds purchased 411.0 0.8 0.19 471.8 0.8 0.17
Repurchase agreements 0.6 - 1.76 53.5 0.1 0.26
Other borrowings - - - 3.6 - 0.08
Total borrowings 3,181.8 11.5 0.36 3,604.6 11.1 0.31
---------------- ------- ---- ---- ------- ---- ----
Notes and debentures 1,039.4 29.8 2.87 839.1 26.7 3.19
--------------------
Total funding liabilities 31,753.8 $136.8 0.43% 28,741.4 $118.7 0.41%
------ ---- ------ ----
Other liabilities 443.2 386.0
----------------- ----- -----
Total liabilities 32,197.0 29,127.4
Stockholders' equity 4,697.0 4,625.4
-------------------- ------- -------
Total liabilities and
stockholders' equity $36,894.0 $33,752.8
--------- ---------
Net interest income/spread (4) $957.3 2.86% $931.1 3.07%
------ ---- ------ ----
Net interest margin 2.88% 3.09%
------------------- ---- ----
(1) Includes securities purchased under
agreements to resell.
(2) Average balances and yields for
securities are based on amortized cost.
(3) Includes commercial and industrial loans
and equipment financing loans.
(4) The fully taxable equivalent adjustment
was $25.2 million and $19.2 million for
the twelve months ended December 31,
2015 and 2014, respectively.
People's United Financial, Inc.
Loans acquired in connection with business combinations are initially recorded at fair value, determined based upon an estimate of expected cash flows, including a reduction for estimated credit losses, and without carryover of the respective portfolio's historical allowance for loan
losses. A decrease in expected cash flows in subsequent periods may indicate that a loan is impaired, which would require the establishment of an allowance for loan losses. As such, selected asset quality metrics have been highlighted to distinguish between the 'originated' portfolio and
the 'acquired' portfolio.
NON-PERFORMING ASSETS
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014
-------------------- ---- ---- ---- ---- ----
Originated non-performing loans:
Commercial:
Commercial and industrial $44.9 $62.9 $52.4 $42.6 $55.8
Commercial real estate 30.2 31.8 36.5 43.3 60.2
Equipment financing 27.5 29.4 38.3 34.9 25.4
Total 102.6 124.1 127.2 120.8 141.4
----- ----- ----- ----- ----- -----
Retail:
Residential mortgage 37.2 38.2 40.9 37.5 37.6
Home equity 19.5 21.0 21.4 19.4 17.9
Other consumer 0.1 - 0.1 0.1 0.1
Total 56.8 59.2 62.4 57.0 55.6
----- ---- ---- ---- ---- ----
Total originated non-performing loans (1) 159.4 183.3 189.6 177.8 197.0
---------------------------------------- ----- ----- ----- ----- -----
REO:
Residential 7.1 10.8 14.8 16.5 13.6
Commercial 5.5 8.2 10.6 10.2 11.0
---------- --- --- ---- ---- ----
Total REO 12.6 19.0 25.4 26.7 24.6
--------- ---- ---- ---- ---- ----
Repossessed assets 9.5 7.3 5.5 4.3 2.5
Total non-performing assets $181.5 $209.6 $220.5 $208.8 $224.1
--------------------------- ------ ------ ------ ------ ------
Acquired non-performing loans (contractual amount) (2) $30.0 $38.4 $41.5 $74.8 $103.6
----------------------------------------------------- ----- ----- ----- ----- ------
Originated non-performing loans as a percentage
of originated loans 0.58% 0.68% 0.71% 0.68% 0.77%
Non-performing assets as a percentage of:
Originated loans, REO and repossessed assets 0.66 0.78 0.83 0.80 0.88
Tangible stockholders' equity and originated
allowance for loan losses 6.38 7.37 7.91 7.52 8.24
(1) Reported net of government guarantees
totaling $16.9 million at December 31,
2015, $17.3 million at September 30,
2015, $16.6 million at June 30, 2015,
$17.5 million at March 31, 2015 and $17.6
million at December 31, 2014.
(2) Represents acquired loans that meet
People's United Financial's definition of
a non-performing loan but are not, under
the accounting model for acquired loans,
subject to classification as non-accrual
in the same manner as originated loans.
Because acquired loans are initially
recorded at an amount estimated to be
collectible, losses on such loans, when
incurred, are first applied against the
non-accretable difference established in
purchase accounting and then to any
allowance for loan losses recognized
subsequent to acquisition.
People's United Financial, Inc.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014
-------------------- ---- ---- ---- ---- ----
Allowance for loan losses on originated loans:
Balance at beginning of period $198.1 $195.1 $191.1 $188.1 $185.0
Charge-offs (7.8) (6.1) (6.0) (8.1) (9.7)
Recoveries 1.6 2.0 2.8 0.9 1.2
---------- --- --- --- --- ---
Net loan charge-offs (6.2) (4.1) (3.2) (7.2) (8.5)
Provision for loan losses 11.0 7.1 7.2 10.2 11.6
Balance at end of period 202.9 198.1 195.1 191.1 188.1
------------------------ ----- ----- ----- ----- -----
Allowance for loan losses on acquired loans:
Balance at beginning of period 9.4 10.3 9.8 10.2 11.9
Provision for loan losses (1.3) (0.9) 0.5 (0.4) (1.7)
Balance at end of period 8.1 9.4 10.3 9.8 10.2
------------------------ --- --- ---- --- ----
Total allowance for loan losses $211.0 $207.5 $205.4 $200.9 $198.3
Commercial originated allowance for loan loss
as a percentage of originated commercial loans 0.90% 0.91% 0.90% 0.91% 0.91%
Retail originated allowance for loan losses
as a percentage of originated retail loans 0.28 0.28 0.26 0.26 0.27
Total originated allowance for loan losses
as a percentage of:
Originated loans 0.73 0.74 0.73 0.74 0.74
Originated non-performing loans 127.3 108.1 102.9 107.5 95.5
------------------------------- ----- ----- ----- ----- ----
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014
-------------------- ---- ---- ---- ---- ----
Commercial:
Commercial and industrial $3.5 $1.4 $1.4 $2.1 $3.2
Commercial real estate (0.1) 0.5 (0.4) 2.8 3.3
Equipment financing 1.4 1.0 0.5 1.1 -
Total 4.8 2.9 1.5 6.0 6.5
----- --- --- --- --- ---
Retail:
Residential mortgage 0.1 0.4 0.5 0.4 0.2
Home equity 1.1 0.6 1.1 0.5 1.3
Other consumer 0.2 0.2 0.1 0.3 0.5
Total 1.4 1.2 1.7 1.2 2.0
----- --- --- --- --- ---
Total net loan charge-offs $6.2 $4.1 $3.2 $7.2 $8.5
-------------------------- ---- ---- ---- ---- ----
Net loan charge-offs to
average total loans (annualized) 0.09% 0.06% 0.05% 0.11% 0.13%
------------------------------- ---- ---- ---- ---- ----
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP
In addition to evaluating People's United Financial's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible book value per share and operating earnings metrics. Management believes these non-GAAP financial measures provide information useful to investors in understanding People's United Financial's underlying operating performance and trends, and facilitates comparisons with the performance of other financial institutions. Further, the efficiency ratio and operating earnings metrics are used by management in its assessment of financial performance, including non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of People's United Financial's capital position.
The efficiency ratio, which represents an approximate measure of the cost required by People's United Financial to generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding goodwill impairment charges, amortization of other acquisition-related intangible assets, losses on real estate assets and non-recurring expenses, which are also excluded in arriving at operating non-interest expense) (the numerator) to (ii) net interest income on a fully taxable equivalent ("FTE") basis plus total non-interest income (including the FTE adjustment on bank-owned life insurance ("BOLI") income, and excluding gains and losses on sales of assets other than residential mortgage loans and acquired loans, and non-recurring income) (the denominator). In addition, operating lease expense is excluded from total non-interest expense and netted against operating lease income within non-interest income to conform with the reporting approach applied to fee-based businesses already presented on a net basis. People's United Financial generally considers an item of income or expense to be non-recurring if it is not similar to an item of income or expense of a type incurred within the last two years and is not similar to an item of income or expense of a type reasonably expected to be incurred within the following two years.
Operating earnings exclude from net income those items that management considers to be of such a non-recurring or infrequent nature that, by excluding such items (net of income taxes), People's United Financial's results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating earnings, which include, but are not limited to: (i) non-recurring gains/losses; (ii) writedowns of banking house assets and related lease termination costs; (iii) severance-related costs; (iv) merger-related expenses, including acquisition integration and other costs; and (v) charges related to executive-level management separation costs, are generally also excluded when calculating the efficiency ratio. Operating earnings per share is derived by determining the per share impact of the respective adjustments to arrive at operating earnings and adding (subtracting) such amounts to (from) GAAP earnings per share. Operating return on average assets is calculated by dividing operating earnings (annualized) by average total assets. Operating return on average tangible stockholders' equity is calculated by dividing operating earnings (annualized) by average tangible stockholders' equity. The operating dividend payout ratio is calculated by dividing dividends paid by operating earnings for the respective period.
The tangible equity ratio is the ratio of (i) tangible stockholders' equity (total stockholders' equity less goodwill and other acquisition-related intangible assets) (the numerator) to (ii) tangible assets (total assets less goodwill and other acquisition-related intangible assets) (the denominator). Tangible book value per share is calculated by dividing tangible stockholders' equity by common shares (total common shares issued, less common shares classified as treasury shares and unallocated Employee Stock Ownership Plan ("ESOP") common shares).
In light of diversity in presentation among financial institutions, the methodologies used by People's United Financial for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions.
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued
OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014 2015 2014
-------------------- ---- ---- ---- ---- ---- ---- ----
Total non-interest expense $217.0 $214.2 $211.8 $217.6 $207.7 $860.6 $841.5
-------------------------- ------ ------ ------ ------ ------ ------ ------
Adjustments to arrive at operating
non-interest expense:
Writedowns of banking house assets (2.5) - (2.7) (5.3) - (10.5) (6.2)
Severance-related costs (1.3) (0.1) (0.3) (0.7) (0.6) (2.4) (3.3)
----
Total (3.8) (0.1) (3.0) (6.0) (0.6) (12.9) (9.5)
----- ---- ---- ---- ---- ---- ----- ----
Operating non-interest expense 213.2 214.1 208.8 211.6 207.1 847.7 832.0
------------------------------ ----- ----- ----- ----- ----- ----- -----
Operating lease expense (1) (9.4) (9.2) (9.2) (9.3) (8.9) (37.1) (37.4)
Amortization of other acquisition-related
intangible assets (6.1) (5.9) (6.0) (5.9) (6.2) (23.9) (24.8)
Other (2) (2.2) (1.8) (1.8) (2.0) (2.4) (7.8) (10.3)
-------- ---- ---- ---- ---- ---- ---- -----
Total non-interest expense for
efficiency ratio $195.5 $197.2 $191.8 $194.4 $189.6 $778.9 $759.5
---------------- ------ ------ ------ ------ ------ ------ ------
Net interest income (FTE basis) $245.3 $241.1 $237.0 $233.9 $233.2 $957.3 $931.1
Total non-interest income 93.3 87.1 83.0 89.0 86.8 352.4 350.8
------------------------- ---- ---- ---- ---- ---- ----- -----
Total revenues 338.6 328.2 320.0 322.9 320.0 1,309.7 1,281.9
Adjustments:
Operating lease expense (1) (9.4) (9.2) (9.2) (9.3) (8.9) (37.1) (37.4)
BOLI FTE adjustment 0.5 0.6 0.7 0.6 0.9 2.4 2.8
Net security gains - - - - (2.7) - (3.0)
Gain on sale of business, net of expenses (9.2) - - - - (9.2) (20.6)
Other (3) - (0.1) - - 0.1 (0.1) (0.5)
----
Total revenues for efficiency ratio $320.5 $319.5 $311.5 $314.2 $309.4 $1,265.7 $1,223.2
----------------------------------- ------ ------ ------ ------ ------ -------- --------
Efficiency ratio 61.0% 61.7% 61.6% 61.9% 61.3% 61.5% 62.1%
---------------- ---- ---- ---- ---- ---- ---- ----
(1) Operating lease expense is excluded from total
non-interest expense and netted against
operating lease income within non-interest
income to conform with the reporting approach
applied to fee-based businesses already
presented on a net basis.
(2) Items classified as "other" and deducted from
non-interest expense for purposes of
calculating the efficiency ratio include, as
applicable, certain franchise taxes, real
estate owned expenses, contract termination
costs and non-recurring expenses.
(3) Items classified as "other" and added to
(deducted from) total revenues for purposes of
calculating the efficiency ratio include, as
applicable, asset write-offs and gains
associated with the sale of branch locations.
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued
OPERATING EARNINGS
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions, except per share data) 2015 2015 2015 2015 2014 2015 2014
Net income, as reported $70.8 $68.4 $61.7 $59.2 $64.7 $260.1 $251.7
----------------------- ----- ----- ----- ----- ----- ------ ------
Adjustments to arrive at operating earnings:
Writedowns of banking house assets 2.5 - 2.7 5.3 - 10.5 6.2
Severance-related costs 1.3 0.1 0.3 0.7 0.6 2.4 3.3
Gain on sale of business, net of expenses (9.2) - - - - (9.2) (20.6)
Total pre-tax adjustments (5.4) 0.1 3.0 6.0 0.6 3.7 (11.1)
Tax effect 1.8 (0.1) (1.0) (2.0) (0.2) (1.3) 3.9
---------- --- ---- ---- ---- ---- ---- ---
Total adjustments, net of tax (3.6) - 2.0 4.0 0.4 2.4 (7.2)
----------------------------- ---- --- --- --- --- --- ----
Operating earnings $67.2 $68.4 $63.7 $63.2 $65.1 $262.5 $244.5
------------------ ----- ----- ----- ----- ----- ------ ------
Earnings per share, as reported $0.23 $0.23 $0.20 $0.20 $0.22 $0.86 $0.84
------------------------------- ----- ----- ----- ----- ----- ----- -----
Adjustments to arrive at operating
earnings per share:
Writedowns of banking house assets 0.01 - 0.01 0.01 - 0.03 0.01
Severance-related costs - - - - - - 0.01
Gain on sale of business, net of expenses (0.02) - - - - (0.02) (0.04)
----------------------------------------- ----- --- --- --- --- ----- -----
Total adjustments per share (0.01) - 0.01 0.01 - 0.01 (0.02)
--------------------------- ----- --- ---- ---- --- ---- -----
Operating earnings per share $0.22 $0.23 $0.21 $0.21 $0.22 $0.87 $0.82
---------------------------- ----- ----- ----- ----- ----- ----- -----
Average total assets $37,906 $37,257 $36,617 $35,768 $34,763 $36,894 $33,753
-------------------- ------- ------- ------- ------- ------- ------- -------
Operating return on
average assets (annualized) 0.71% 0.73% 0.70% 0.71% 0.75% 0.71% 0.72%
-------------------------- ---- ---- ---- ---- ---- ---- ----
OPERATING RETURN ON AVERAGE TANGIBLE STOCKHOLDERS' EQUITY
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014 2015 2014
-------------------- ---- ---- ---- ---- ----
Operating earnings $67.2 $68.4 $63.7 $63.2 $65.1 $262.5 $244.5
------------------ ----- ----- ----- ----- ----- ------ ------
Average stockholders' equity $4,736 $4,700 $4,689 $4,663 $4,679 $4,697 $4,625
Less: Average goodwill and average other
acquisition-related intangible assets 2,092 2,088 2,094 2,100 2,106 2,094 2,115
-------------------------------------
Average tangible stockholders' equity $2,644 $2,612 $2,595 $2,563 $2,573 $2,603 $2,510
------------------------------------- ------ ------ ------ ------ ------ ------ ------
Operating return on average tangible
stockholders' equity (annualized) 10.2% 10.5% 9.8% 9.9% 10.1% 10.1% 9.7%
-------------------------------- ---- ---- --- --- ---- ---- ---
People's United Financial, Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - continued
OPERATING DIVIDEND PAYOUT RATIO
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014 2015 2014
-------------------- ---- ---- ---- ---- ----
Dividends paid $50.6 $50.6 $50.5 $49.5 $49.5 $201.2 $196.9
-------------- ----- ----- ----- ----- ----- ------ ------
Operating earnings $67.2 $68.4 $63.7 $63.2 $65.1 $262.5 $244.5
------------------ ----- ----- ----- ----- ----- ------ ------
Operating dividend payout ratio 75.3% 73.9% 79.2% 78.3% 76.0% 76.6% 80.6%
------------------------------- ---- ---- ---- ---- ---- ---- ----
TANGIBLE EQUITY RATIO
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2015 2015 2015 2015 2014
-------------------- ---- ---- ---- ---- ----
Total stockholders' equity $4,732 $4,731 $4,686 $4,682 $4,633
Less: Goodwill and other
acquisition-related intangible assets 2,088 2,085 2,091 2,097 2,103
-------------------------------------
Tangible stockholders' equity $2,644 $2,646 $2,595 $2,585 $2,530
----------------------------- ------ ------ ------ ------ ------
Total assets $38,877 $37,478 $37,183 $36,407 $35,997
Less: Goodwill and other
acquisition-related intangible assets 2,088 2,085 2,091 2,097 2,103
------------------------------------- ----- ----- ----- ----- -----
Tangible assets $36,789 $35,393 $35,092 $34,310 $33,894
--------------- ------- ------- ------- ------- -------
Tangible equity ratio 7.2% 7.5% 7.4% 7.5% 7.5%
--------------------- --- --- --- --- ---
TANGIBLE BOOK VALUE PER SHARE
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions, except per share data) 2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Tangible stockholders' equity $2,644 $2,646 $2,595 $2,585 $2,530
----------------------------- ------ ------ ------ ------ ------
Common shares issued 399.24 398.84 398.66 397.81 396.85
Less: Shares classified as treasury shares 89.06 89.05 89.06 89.05 89.05
Unallocated ESOP shares 7.32 7.40 7.49 7.58 7.67
----------------------- ---- ---- ---- ---- ----
Common shares 302.86 302.39 302.11 301.18 300.13
------------- ------ ------ ------ ------ ------
Tangible book value per share $8.73 $8.75 $8.59 $8.58 $8.43
----------------------------- ----- ----- ----- ----- -----
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/peoples-united-financial-reports-fourth-quarter-net-income-of-023-per-share-and-operating-earnings-of-022-per-share-300208110.html
SOURCE People's United Financial, Inc.
