PEOPLE'S UNITED FINANCIAL, INC. 
By 2008 Results Characterized by Solid Asset Quality and Strong Capital Position
For the year ended
People's United Financial completed its acquisition of Chittenden Corporation on
For the fourth quarter of 2008, return on average tangible assets was 0.76 percent and return on average tangible stockholders' equity was 3.8 percent, compared to 0.99 percent and 5.0 percent, respectively, for the third quarter of 2008.
The Board of Directors of People's United Financial declared a
President and Chief Executive Officer,
Sherringham continued, "While our strategic focus remains on growth through acquisitions, we continue to invest in our commercial, retail banking and wealth management businesses throughout New England. We remain steadfastly committed to our goal of enhancing our premier regional banking franchise. The strength of our capital and liquidity positions, asset quality and earnings, as well as the fact that our balance sheet continues to be funded almost entirely by deposits and stockholders' equity, set us apart from most in the industry, particularly given the many challenges of today's environment."
Commenting on acquisitions, Sherringham added, "We continue to weigh all of our options in determining the most attractive use of our capital to deliver long-term shareholder value. At the present time, we still feel it is best to exercise patience as we work toward identifying and executing a well-priced acquisition that will enhance the long-term profitability of the company. In addition, we remain firmly committed to our dividend and feel that it continues to be an appropriate avenue to enhance shareholder returns."
"Key drivers of the company's performance this quarter were continued strong asset quality, a relatively stable net interest margin and healthy loan growth across our core lending businesses," said
Commenting on asset quality, Burner stated, "We are very pleased that our disciplined underwriting standards have resulted in consistent asset quality results, most notably our low levels of loan charge-offs and stability in non-performing assets in this challenging economic environment. Remarkably, for the full year, net loan charge-offs as a percent of average loans were at the same low level of 0.10 percent in both 2008 and 2007."
Fourth quarter net loan charge-offs totaled
Non-performing loans decreased
Conference Call
On
First Quarter Earnings Release
People's United Financial expects to release its first quarter 2009 earnings on
Selected Financial Terms
In addition to evaluating People's United Financial's results of operations in accordance with generally accepted accounting principles ("GAAP"), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency ratio. Management believes this non-GAAP financial measure provides information useful to investors in understanding People's United Financial's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts. Further, the efficiency ratio is used by management in its assessment of financial performance specifically as it relates to non-interest expense control.
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 total non-interest expense (excluding goodwill impairment charges, amortization of acquisition-related intangibles and fair value adjustments, losses on real estate assets and nonrecurring expenses) to net interest income on a fully taxable equivalent basis (excluding fair value adjustments) plus total non-interest income (including the fully taxable equivalent adjustment on bank-owned life insurance income, and excluding gains and losses on sales of assets, other than residential mortgage loans, and nonrecurring income). People's United Financial generally considers an item of income or expense to be nonrecurring 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.
4Q 2008 Financial Highlights
Summary
-- Net income totaled $35.4 million, or $0.11 per share.
-- Net interest income on a fully taxable equivalent basis totaled $154.3
million.
-- Net interest margin decreased 16 basis points from 3Q08 to 3.55%.
-- Provision for loan losses totaled $8.7 million.
-- Net loan charge-offs totaled $5.7 million in 4Q08 compared to $4.0
million in 3Q08.
-- The allowance for loan losses was increased by $3.0 million in 4Q08
from 3Q08 levels.
-- Non-interest income totaled $73.7 million.
-- Other non-interest income includes gains totaling $4.0 million from
the sale of (i) mortgage servicing rights and (ii) two branches
located in northern New England.
-- Non-interest expense totaled $165.5 million.
-- Other non-interest expense includes one-time items netting to $2.9
million.
-- Effective income tax rate was 33.0%.
Commercial Banking
-- Average commercial banking loans, excluding shared national credits,
increased $155 million, or 8% annualized, from 3Q08 to $8.3 billion.
-- Commercial banking non-performing assets totaled $62.9 million, a $1.4
million decrease from September 30, 2008.
-- The ratio of commercial banking non-performing loans to total commercial
banking loans was 0.62% at December 31, 2008 compared to 0.68% at
September 30, 2008.
-- Net loan charge-offs totaled $3.2 million, or 0.14% annualized, of
average commercial banking loans.
Retail & Small Business Banking
-- Average residential mortgage loans totaled $3.2 billion, a $171 million
decrease from 3Q08, reflecting People's United Financial's
strategy to sell essentially all newly-originated loans.
-- Average home equity loans increased $99 million, or 22% annualized, from
3Q08 to $1.9 billion.
-- Average indirect auto loans totaled $0.2 billion, unchanged from 3Q08.
-- Home equity net loan charge-offs totaled $0.3 million, or 0.07%
annualized, of average home equity loans.
-- Indirect auto net loan charge-offs totaled $0.8 million, or 1.47%
annualized, of average indirect auto loans.
Wealth Management
-- Wealth Management income declined $1.7 million from 3Q08, primarily
reflecting market weakness and the economic environment.
-- Assets under custody and management totaled $9 billion.
People's United Financial, a diversified financial services company with
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; and (10) the successful integration of Chittenden Corporation. 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 on the World Wide Web at www.peoples.com.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS
People's United Financial, Inc. acquired Chittenden Corporation on
January 1, 2008. The acquisition was accounted for using the purchase
method of accounting. Accordingly, financial data for periods prior to
the acquisition date do not include Chittenden Corporation.
Three Months Ended
(dollars in millions, Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
except per share data) 2008 2008 2008 2008 2007
Operating Data:
Net interest income $153.3 $159.8 $157.0 $166.3 $125.0
Provision for loan
losses (1) 8.7 6.8 2.4 8.3 2.9
Non-interest income 73.7 74.2 73.4 82.3 46.1
Non-interest expense (2) 165.5 158.7 162.9 219.2 100.0
Income from
continuing
operations 35.4 46.0 43.0 15.1 45.7
Income from
discontinued
operations - - - - 0.3
Net income 35.4 46.0 43.0 15.1 46.0
Selected Statistical Data:
Net interest margin(3) 3.55% 3.71% 3.56% 3.67% 4.01%
Return on average
assets (3) 0.71 0.92 0.84 0.29 1.37
Return on average
tangible assets (3) 0.76 0.99 0.91 0.31 1.38
Return on average
stockholders' equity(3) 2.7 3.5 3.3 1.2 4.1
Return on average
tangible
stockholders'
equity (3) 3.8 5.0 4.7 1.6 4.2
Efficiency ratio 69.0 64.9 66.3 65.0 57.4
Per Common Share Data:
Diluted earnings per
share $0.11 $0.14 $0.13 $0.05 $0.16
Dividends paid per
share 0.15 0.15 0.15 0.13 0.13
Dividend payout ratio 141.8% 108.7% 116.1% 293.0% 83.2%
Book value (end of
period) $15.45 $15.65 $15.63 $15.70 $15.43
Tangible book value
(end of period) 10.87 11.06 11.00 11.08 15.07
Stock price:
High 20.15 21.76 18.52 18.25 18.60
Low 14.75 13.92 15.52 14.29 15.83
Close (end of period) 17.83 19.25 15.60 17.31 17.80
Average diluted
common shares
outstanding
(in millions) 332.33 331.32 330.19 329.20 286.60
(1) Includes a $4.5 million provision for the three months ended
March 31, 2008 to align allowance for loan losses methodologies
across the combined organization following the acquisition of
Chittenden Corporation.
(2) Includes merger-related expenses of $36.5 million and other one-time
charges of $14.8 million for the three months ended March 31, 2008.
(3) Annualized.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS - Continued
Twelve Months Ended
(dollars in millions, except per share data) Dec. 31, Dec. 31,
2008 2007
Operating Data:
Net interest income $636.4 $486.6
Provision for loan losses 26.2 8.0
Non-interest income 303.6 185.4
Non-interest expense (1) 706.3 439.3
Income from continuing operations 139.5 149.2
Income from discontinued operations, net of tax - 1.5
Net income 139.5 150.7
Selected Statistical Data:
Net interest margin 3.62% 4.12%
Return on average assets 0.68 1.18
Return on average tangible assets 0.74 1.19
Return on average stockholders' equity 2.7 4.2
Return on average tangible stockholders' equity 3.8 4.3
Efficiency ratio 66.3 56.1
Per Common Share Data:
Diluted earnings per share $0.42 $0.52
Dividends paid per share 0.58 0.52
Dividend payout ratio (2) 139.4% 87.0%
Book value (end of period) $15.45 $15.43
Tangible book value (end of period) 10.87 15.07
Stock price:
High 21.76 22.81
Low 13.92 14.78
Close (end of period) 17.83 17.80
Average diluted shares outstanding (in millions) 330.75 292.27
(1) Includes $51.3 million of merger-related expenses and other one-time
charges in 2008 and the $60.0 million contribution to The People's
United Community Foundation in 2007.
(2) Dividend payout ratio in 2007 reflects the waiver of dividends on the
substantial majority of the common shares owned by People's Mutual
Holdings prior to completing the second-step conversion in April
2007.
People's United Financial, Inc.
FINANCIAL HIGHLIGHTS - Continued
As of and for the Three Months Ended
(dollars in Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
millions) 2008 2008 2008 2008 2007
Financial
Condition Data:
General:
Total assets $20,168 $20,042 $20,392 $21,107 $13,555
Loans 14,566 14,331 14,366 14,492 8,950
Short-term
investments (1) 1,139 2,534 2,265 2,756 3,516
Securities 1,902 428 866 976 61
Allowance for
loan losses 158 155 152 152 73
Goodwill and
other
acquisition-
related
intangibles 1,536 1,537 1,541 1,536 104
Deposits 14,269 14,152 14,532 15,160 8,881
Borrowings 188 152 144 148 -
Subordinated
notes 181 180 180 180 65
Stockholders'
equity 5,176 5,239 5,211 5,219 4,445
Non-performing
assets 94 91 86 67 26
Net loan
charge-offs 5.7 4.0 2.4 2.8 3.7
Average Balances:
Loans $14,371 $14,310 $14,425 $14,537 $8,869
Short-term
investments (1) 1,610 2,325 2,433 2,666 3,551
Securities 1,393 715 907 1,020 64
Total earning
assets 17,374 17,350 17,765 18,223 12,484
Total assets 20,057 20,057 20,492 20,893 13,446
Deposits 14,117 14,193 14,613 14,952 8,753
Total funding
liabilities 14,479 14,520 14,939 15,296 8,818
Stockholders'
equity 5,230 5,204 5,202 5,214 4,439
Ratios:
Net loan
charge-offs
to average
loans
(annualized) 0.16% 0.11% 0.07% 0.08% 0.17%
Non-
performing
assets to
total loans,
REO and
repossessed
assets 0.64 0.64 0.60 0.46 0.29
Allowance for
loan losses
to non-
performing
loans 186.8 181.6 182.6 244.3 357.8
Allowance for
loan losses
to total
loans 1.08 1.08 1.06 1.05 0.81
Average
stockholders'
equity to
average total
assets 26.1 25.9 25.4 25.0 33.0
Stockholders'
equity to total
assets 25.7 26.1 25.6 24.7 32.8
Tangible
stockholders'
equity to
tangible assets 19.5 20.0 19.5 18.8 32.3
Total risk-
based
capital (2) 13.4 16.2 17.8 24.7 33.4
(1) Includes securities purchased under agreements to resell.
(2) Total risk-based capital ratios are for People's United Bank and, as
such, do not reflect the additional capital residing at People's
United Financial, Inc. People's United Bank's December 31, 2008
total risk-based capital ratio is preliminary.
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF CONDITION
Dec. 31, Sept. 30,
(in millions) 2008 2008
Assets
Cash and due from banks $345.1 $437.5
Short-term investments 1,138.8 2,533.5
Total cash and cash equivalents 1,483.9 2,971.0
Securities:
Trading account securities, at fair value 21.4 33.3
Securities available for sale, at fair value 1,879.4 393.5
Securities held to maturity, at amortized cost 0.9 1.4
Total securities 1,901.7 428.2
Loans:
Commercial real estate 4,967.3 4,871.9
Commercial 4,226.4 4,074.3
Residential mortgage 3,144.6 3,262.3
Consumer 2,227.4 2,122.1
Total loans 14,565.7 14,330.6
Less allowance for loan losses (157.5) (154.5)
Total loans, net 14,408.2 14,176.1
Bank-owned life insurance 228.6 227.1
Premises and equipment, net 262.4 265.6
Goodwill and other acquisition-related
intangibles 1,535.8 1,536.9
Other assets 347.1 437.1
Total assets $20,167.7 $20,042.0
Liabilities
Deposits:
Non-interest-bearing $3,173.4 $3,176.1
Savings, interest-bearing checking and
money market 6,214.7 6,115.3
Time 4,881.3 4,860.4
Total deposits 14,269.4 14,151.8
Borrowings:
Federal Home Loan Bank advances 15.1 15.3
Repurchase agreements 156.7 117.6
Other 16.1 19.0
Total borrowings 187.9 151.9
Subordinated notes 180.5 180.2
Other liabilities 354.4 319.5
Total liabilities 14,992.2 14,803.4
Stockholders' Equity
Common stock ($0.01 par value; 1.95 billion
shares authorized;
347.9 million shares and 347.8 million
shares issued) 3.5 3.5
Additional paid-in capital 4,485.1 4,475.6
Retained earnings 1,022.6 1,037.6
Treasury stock, at cost (3.2 million shares and
3.2 million shares) (57.9) (58.0)
Accumulated other comprehensive loss (75.4) (15.9)
Unallocated common stock of Employee Stock
Ownership Plan (202.4) (204.2)
Total stockholders' equity 5,175.5 5,238.6
Total liabilities and stockholders' equity $20,167.7 $20,042.0
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(in millions, except Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
per share data) 2008 2008 2008 2008 2007
Interest and dividend
income:
Commercial real estate $73.7 $75.2 $74.5 $78.0 $31.8
Commercial 55.1 56.8 57.1 60.8 42.3
Residential mortgage 43.2 45.4 48.4 52.9 43.2
Consumer 25.8 27.2 26.8 31.1 21.0
Total interest on
loans 197.8 204.6 206.8 222.8 138.3
Short-term investments 6.1 12.5 9.4 18.9 26.0
Securities 8.5 4.8 7.4 10.1 0.9
Securities purchased
under agreements to
resell - 0.5 3.9 3.1 15.5
Total interest
and dividend
income 212.4 222.4 227.5 254.9 180.7
Interest expense:
Deposits 54.6 58.0 65.8 83.7 54.0
Borrowings 0.7 0.8 0.9 1.1 -
Subordinated notes 3.8 3.8 3.8 3.8 1.7
Total interest
expense 59.1 62.6 70.5 88.6 55.7
Net interest income 153.3 159.8 157.0 166.3 125.0
Provision for loan
losses 8.7 6.8 2.4 8.3 2.9
Net interest income
after provision
for loan losses 144.6 153.0 154.6 158.0 122.1
Non-interest income:
Investment
management fees 9.6 8.9 9.5 8.8 3.1
Insurance revenue 7.3 8.8 8.1 9.1 6.2
Brokerage commissions 3.2 4.1 4.2 4.5 3.4
Total wealth
management
income 20.1 21.8 21.8 22.4 12.7
Bank service charges 31.5 33.1 32.4 30.7 23.7
Merchant services
income 6.6 7.5 7.1 6.4 -
Bank-owned life
insurance 1.5 2.1 1.7 3.0 3.1
Net security gains
(losses) 0.2 (0.2) (0.2) 8.5 -
Net gains on sales of
residential mortgage
loans 0.8 1.5 2.2 2.0 0.6
Other non-interest
income 13.0 8.4 8.4 9.3 6.0
Total non-interest
income 73.7 74.2 73.4 82.3 46.1
Non-interest expense:
Compensation and
benefits 83.2 85.6 86.7 89.1 56.3
Occupancy and
equipment 26.5 26.1 26.1 31.6 17.1
Professional and
outside service fees 12.8 11.9 11.8 11.5 8.5
Amortization of other
acquisition-related
intangibles 5.5 5.3 5.3 5.2 0.2
Merger-related
expenses - - - 36.5 -
Other non-interest
expense 37.5 29.8 33.0 45.3 17.9
Total non-interest
expense 165.5 158.7 162.9 219.2 100.0
Income from
continuing
operations before
income tax expense 52.8 68.5 65.1 21.1 68.2
Income tax expense 17.4 22.5 22.1 6.0 22.5
Income from
continuing
operations 35.4 46.0 43.0 15.1 45.7
Income from discontinued
operations, net of tax - - - - 0.3
Net income $35.4 $46.0 $43.0 $15.1 $46.0
Diluted earnings
per common share:
Income from
continuing
operations $0.11 $0.14 $0.13 $0.05 $0.16
Income from
discontinued
operations - - - - -
Net income 0.11 0.14 0.13 0.05 0.16
People's United Financial, Inc.
CONSOLIDATED STATEMENTS OF INCOME
Twelve Months Ended
Dec. 31, Dec. 31,
(in millions, except per share data) 2008 2007
Interest and dividend income:
Commercial real estate $301.4 $127.7
Commercial 229.8 167.6
Residential mortgage 189.9 183.9
Consumer 110.9 88.9
Total interest on loans 832.0 568.1
Short-term investments 46.9 86.7
Securities 30.8 3.9
Securities purchased under agreements to resell 7.5 48.3
Total interest and dividend income 917.2 707.0
Interest expense:
Deposits 262.1 213.6
Borrowings 3.5 0.2
Subordinated notes 15.2 6.6
Total interest expense 280.8 220.4
Net interest income 636.4 486.6
Provision for loan losses 26.2 8.0
Net interest income after provision for
loan losses 610.2 478.6
Non-interest income:
Investment management fees 36.8 12.0
Insurance revenue 33.3 26.8
Brokerage commissions 16.0 13.6
Total wealth management income 86.1 52.4
Bank service charges 127.7 93.1
Merchant services income 27.6 -
Bank-owned life insurance 8.3 10.5
Net security gains 8.3 5.5
Net gains on sales of residential
mortgage loans 6.5 3.0
Other non-interest income 39.1 20.9
Total non-interest income 303.6 185.4
Non-interest expense:
Compensation and benefits 344.6 215.6
Occupancy and equipment 110.3 67.1
Contribution to The People's United
Community Foundation - 60.0
Professional and outside service fees 48.0 28.8
Amortization of other acquisition-related
intangibles 21.3 1.0
Merger-related expenses 36.5 -
Other non-interest expense 145.6 66.8
Total non-interest expense 706.3 439.3
Income from continuing operations
before income tax expense 207.5 224.7
Income tax expense 68.0 75.5
Income from continuing operations 139.5 149.2
Income from discontinued operations, net of tax - 1.5
Net income $139.5 $150.7
Diluted earnings per common share:
Income from continuing operations $0.42 $0.52
Income from discontinued operations - -
Net income 0.42 0.52
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)
Three months ended December 31, 2008 September 30, 2008
(dollars in Average Yield/ Average Yield/
millions) Balance Interest Rate Balance Interest Rate
Assets:
Short-term
investments $1,610.0 $6.1 1.52% $2,235.3 $12.5 2.24%
Securities
purchased
under
agreements to
resell - - - 89.6 0.5 2.05
Securities (2) 1,393.1 8.5 2.43 714.9 4.8 2.72
Loans:
Commercial
real estate 4,897.3 74.7 6.11 4,837.1 76.2 6.29
Commercial 4,105.9 55.1 5.37 4,035.3 56.8 5.63
Residential
mortgage 3,189.7 43.2 5.42 3,360.5 45.4 5.40
Consumer 2,177.6 25.8 4.73 2,076.9 27.2 5.25
Total
loans 14,370.5 198.8 5.53 14,309.8 205.6 5.75
Total
earning
assets 17,373.6 $213.4 4.91% 17,349.6 $223.4 5.15%
Other
assets 2,682.9 2,707.4
Total
assets $20,056.5 $20,057.0
Liabilities and
stockholders'
equity:
Deposits:
Non-
interest-
bearing $3,096.1 $- -% $3,137.6 $- -%
Savings,
interest-
bearing
checking
and
money
market 6,143.6 16.6 1.08 6,170.7 18.2 1.18
Time 4,877.1 38.0 3.11 4,884.6 39.8 3.26
Total
deposits 14,116.8 54.6 1.55 14,192.9 58.0 1.63
Borrowings:
Federal Home
Loan Bank
advances 15.1 0.2 5.32 15.3 0.2 5.31
Repurchase
agreements 151.1 0.4 1.11 113.5 0.4 1.65
Federal funds
purchased/
Other 15.8 0.1 2.93 18.0 0.2 3.79
Total
borrowings 182.0 0.7 1.62 146.8 0.8 2.29
Subordinated
notes 180.3 3.8 8.39 180.0 3.8 8.41
Total
funding
liabilities 14,479.1 $59.1 1.63% 14,519.7 $62.6 1.73%
Other liabilities 347.5 333.1
Total
liabilities 14,826.6 14,852.8
Stockholders'
equity 5,229.9 5,204.2
Total
liabilities
and
stockholders'
equity $20,056.5 $20,057.0
Excess of
earning
assets
over funding
liabilities $2,894.5 $2,829.9
Net interest
income/spread (3) $154.3 3.28% $160.8 3.42%
Net
interest
margin 3.55% 3.71%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
(3) The FTE adjustment was $1.0 million for both the three months ended
December 31, 2008 and September 30, 2008 (none for the three months
ended December 31, 2007).
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2007
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Assets:
Short-term investments $2,227.5 $26.0 4.67%
Securities purchased under
agreements to resell 1,323.4 15.5 4.66
Securities (2) 63.9 0.9 5.64
Loans:
Commercial real estate 1,837.8 31.8 6.93
Commercial 2,504.2 42.3 6.76
Residential mortgage 3,279.0 43.2 5.27
Consumer 1,248.3 21.0 6.74
Total loans 8,869.3 138.3 6.24
Total earning assets 12,484.1 $180.7 5.79%
Other assets 961.8
Total assets $13,445.9
Liabilities and stockholders' equity:
Deposits:
Non-interest-bearing $2,051.4 $- -%
Savings, interest-bearing checking
and money market 2,998.3 11.1 1.48
Time 3,703.3 42.9 4.63
Total deposits 8,753.0 54.0 2.47
Borrowings:
Federal Home Loan Bank advances - - -
Repurchase agreements - - -
Federal funds purchased/Other - - -
Total borrowings - - -
Subordinated notes 65.4 1.7 10.15
Total funding liabilities 8,818.4 $55.7 2.53%
Other liabilities 188.0
Total liabilities 9,006.4
Stockholders' equity 4,439.5
Total liabilities and
stockholders' equity $13,445.9
Excess of earning assets
over funding liabilities $3,665.7
Net interest income/spread (3) $125.0 3.26%
Net interest margin 4.01%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
(3) The FTE adjustment was $1.0 million for both the three months ended
December 31, 2008 and September 30, 2008 (none for the three months
ended December 31, 2007).
People's United Financial, Inc.
AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS
Twelve months ended December 31, 2008 December 31, 2007
(dollars in Average Yield/ Average Yield/
millions) Balance Interest Rate Balance Interest Rate
Assets:
Short-term
investments $1,946.7 $46.9 2.41% $1,709.4 $86.7 5.07%
Securities
purchased
under
agreements to
resell 310.2 7.5 2.43 959.1 48.3 5.03
Securities (1) 1,009.1 30.8 3.05 69.2 3.9 5.62
Loans:
Commercial
real estate 4,820.8 305.3 6.33 1,807.3 127.7 7.07
Commercial 4,011.1 229.8 5.73 2,441.5 167.6 6.86
Residential
mortgage 3,519.9 189.9 5.40 3,550.3 183.9 5.18
Consumer 2,058.4 110.9 5.39 1,268.9 88.9 7.01
Total
loans 14,410.2 835.9 5.80 9,068.0 568.1 6.27
Total
earning
assets 17,676.2 $921.1 5.21% 11,805.7 $707.0 5.99%
Other assets 2,696.8 945.6
Total
assets $20,373.0 $12,751.3
Liabilities and
stockholders'
equity:
Deposits:
Non-
interest-
bearing $3,137.9 $- -% $2,111.4 $- -%
Savings,
interest-
bearing
checking
and money
market 6,203.9 78.5 1.27 3,186.3 47.5 1.49
Time 5,125.0 183.6 3.58 3,639.0 166.1 4.56
Total
deposits 14,466.8 262.1 1.81 8,936.7 213.6 2.39
Borrowings:
Federal Home
Loan Bank
advances 16.2 0.8 5.16 0.1 - 5.04
Repurchase
agreements 123.0 2.1 1.72 - - -
Federal funds
purchased/
Other 19.1 0.6 3.01 3.3 0.2 5.23
Total
borrowings 158.3 3.5 2.23 3.4 0.2 5.23
Subordinated
notes 181.4 15.2 8.34 65.3 6.6 10.15
Total
funding
liabilities 14,806.5 $280.8 1.90% 9,005.4 $220.4 2.45%
Other
liabilities 353.9 168.9
Total
liabilities 15,160.4 9,174.3
Stockholders'
equity 5,212.6 3,577.0
Total
liabilities
and
stockholders'
equity $20,373.0 $12,751.3
Excess of
earning
assets over
funding
liabilities $2,869.7 $2,800.3
Net interest
income/spread
(2) $640.3 3.31% $486.6 3.54%
Net
interest
margin 3.62% 4.12%
(1) Average balances and yields for securities available for sale are
based on amortized cost.
(2) The FTE adjustment was $3.9 million for the twelve months ended
December 31, 2008 (none for the twelve months ended
December 31, 2007).
People's United Financial, Inc.
NON-PERFORMING ASSETS
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(dollars in millions) 2008 2008 2008 2008 2007
Non-accrual loans:
Commercial real
estate $29.8 $29.9 $31.9 $27.8 $3.7
Residential mortgage 24.2 21.1 18.3 15.0 8.9
Commercial 21.1 23.9 23.4 12.8 1.3
PCLC 5.8 6.9 6.4 2.7 3.1
Consumer 3.3 3.2 3.1 3.8 3.3
Indirect auto 0.1 0.1 - - -
Total non-
accrual loans (1) 84.3 85.1 83.1 62.1 20.3
Real estate owned
("REO") and
repossessed assets, net 9.4 6.3 3.3 4.9 5.8
Total non-
performing
assets $93.7 $91.4 $86.4 $67.0 $26.1
Non-performing loans
as a percentage of
total loans 0.58% 0.59% 0.58% 0.43% 0.23%
Non-performing
assets as a
percentage of:
Total loans, REO and
repossessed assets 0.64 0.64 0.60 0.46 0.29
Stockholders' equity
and allowance for
loan losses 1.76 1.70 1.61 1.25 0.58
(1) Reported net of government guarantees totaling $6.5 million at
December 31, 2008, $6.4 million at September 30, 2008, $6.6 million
at June 30, 2008 and $5.0 million at March 31, 2008 (none at
December 31, 2007).
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions) 2008 2008 2008 2008 2007
Balance at beginning
of period $154.5 $151.7 $151.7 $72.7 $73.5
Charge-offs (6.9) (5.0) (3.6) (3.7) (4.1)
Recoveries 1.2 1.0 1.2 0.9 0.4
Net loan
charge-offs (5.7) (4.0) (2.4) (2.8) (3.7)
Provision for loan
losses 8.7 6.8 2.4 8.3 2.9
Allowance recorded in
the Chittenden
acquisition - - - 73.5 -
Balance at
end of period $157.5 $154.5 $151.7 $151.7 $72.7
Allowance for loan
losses as a
percentage of:
Total loans 1.08% 1.08% 1.06% 1.05% 0.81%
Non-performing loans 186.8 181.6 182.6 244.3 357.8
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(in millions) 2008 2008 2008 2008 2007
Commercial real
estate $1.5 $1.2 $0.5 $- $-
Commercial 1.2 1.1 0.8 1.2 2.5
Consumer 0.9 0.6 0.7 0.6 0.6
Residential mortgage 0.8 0.1 - 0.2 -
Indirect auto 0.8 0.8 0.3 0.4 -
PCLC 0.5 0.2 0.1 0.4 0.6
Total $5.7 $4.0 $2.4 $2.8 $3.7
Net loan charge-offs
to average loans
(annualized) 0.16% 0.11% 0.07% 0.08% 0.17%
SOURCE People's United Financial, Inc.
