Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - People's United Financial, Inc. | d230778d8k.htm |
 2011
Barclays Capital Global Financial Services Conference
September 12, 2011
Exhibit 99.1 |
 2
Corporate Overview
Snapshot, as of June 30, 2011
People’s United Financial, Inc.
NASDAQ (PBCT)
Market Capitalization (9/8/11)
$4.4 billion
Assets:
$25.3 billion
Loans:
$17.7 billion
Deposits:
$18.3 billion
Branches:
341
ATMs:
518
Founded:
1842 |
 3
Primary Objectives
Optimize the existing business
+
Deploy capital in high risk-adjusted return initiatives
Return the franchise to >1.25% Operating ROAA |
 4
The Northeast Region is Best Commercial Banking Market
in the United States
Population density
Limited amount of land available for development
Construction entitlements are difficult to win
Deep educational and healthcare sectors provide long-lasting infrastructure,
attract talented young people, consistently spawn new businesses
Significant
“quiet
wealth”
which
adds
credit
strength
to
the
region
Mega bank acquisitions of mid-size banks have left a void of
relationship- based, service focused banks |
 5
Deepening Presence in NYC Metro and Boston MSA
People’s United (PBCT)
Danvers Bancorp (DNBK) |
 6
Strong Pro Forma Deposit Market Position
Connecticut
Branches
$BN
%
1
B of A
166
20.7
21.7
2
Webster
136
11.5
12.1
3
People's United
162
9.7
10.1
4
Wells Fargo
76
8.3
8.6
5
TD Bank
80
5.2
5.5
6
First Niagara
74
4.9
5.1
7
JPM Chase
49
3.9
4.0
8
Liberty
42
2.7
2.8
9
RBS
51
2.6
2.8
10
Citi
20
2.2
2.3
Massachusetts
Vermont
New York
New Hampshire
Maine
Branches
$BN
%
1
B of A
280
44.2
24.2
2
RBS
257
24.5
13.4
3
Santander
230
13.6
7.4
4
TD Bank
159
8.7
4.8
5
Eastern
96
6.2
3.4
6
Independent
70
3.7
2.0
7
People's United
59
3.6
2.0
8
Middlesex
33
3.6
2.0
9
Boston Private
9
2.4
1.3
10
Berkshire Hills
37
2.0
1.2
Branches
$BN
%
1
People's United
46
2.6
24.3
2
TD Bank
37
2.0
18.5
3
Merchants
34
1.0
9.8
4
RBS
24
0.8
8.0
5
KeyCorp
13
0.8
7.7
6
Northfield
13
0.5
4.4
7
Community
14
0.4
3.6
8
Union
13
0.3
3.3
9
Passumpsic
7
0.3
3.1
10
Berkshire Hills
7
0.3
2.8
Branches
$BN
%
1
JPM Chase
811
287.4
34.3
2
Citi
261
66.6
7.9
3
HSBC
377
65.9
7.9
4
B of A
380
55.2
6.6
5
Capital One
290
32.6
3.9
6
M&T
278
23.5
2.8
7
Wells Fargo
87
20.4
2.4
8
TD Bank
203
18.9
2.3
9
KeyCorp
229
15.2
1.8
10
Astoria
85
11.2
1.3
37
People's United
38
2.2
0.3
Branches
$BN
%
1
RBS
82
6.9
26.3
2
TD Bank
74
4.8
18.2
3
B of A
35
4.6
17.5
4
People's United
33
1.4
5.2
5
LSB Financial
20
0.8
3.2
6
Santander
20
0.8
3.1
7
Northway
19
0.6
2.5
8
New Hamp. Thrift
19
0.6
2.3
9
Centrix
6
0.5
2.1
10
Meredith Village
11
0.5
1.8
Branches
$BN
%
1
TD Bank
57
3.2
15.0
2
KeyCorp
61
2.7
12.7
3
B of A
35
1.7
8.0
4
Bangor Bancorp
57
1.7
7.9
5
Camden National
38
1.6
7.3
6
First Bancorp
14
0.9
4.5
7
Machias
13
0.8
3.9
8
People's United
31
0.8
3.9
9
Norway
21
0.7
3.3
10
Bar Harbor
13
0.7
3.1
Deposits of $20.2BN
#1 in Fairfield County, CT, 64 branches, $5.4BN, 17.8% market share
#2 in Essex County, MA, 24 branches, $2.0BN, 12.3% market share
Source: SNL Financial |
 7
7
Low Cost of Deposits
Publicly Traded Northeast Banks, $5BN < Assets <$100BN
Source: SNL Financial
SNLTable
Total
Cost of
Assets ($BN)
Deposits (%)
Company
City
State
2Q 2011
2Q 2011
1
M&T Bank Corporation
Buffalo
NY
77.7
0.30
2
First Niagara Financial Group, Inc.
Buffalo
NY
30.9
0.48
3
Boston Private Financial Holdings, Inc.
Boston
MA
6.0
0.55
4
NBT Bancorp Inc.
Norwich
NY
5.3
0.57
5
Community Bank System, Inc.
De Witt
NY
6.4
0.58
6
People's United Financial, Inc.
Bridgeport
CT
25.3
0.58
7
Webster Financial Corporation
Waterbury
CT
17.8
0.62
8
Fulton Financial Corporation
Lancaster
PA
16.0
0.70
9
Valley National Bancorp
Wayne
NJ
14.5
0.72
10
New York Community Bancorp, Inc.
Westbury
NY
40.6
0.72
11
National Penn Bancshares, Inc.
Boyertown
PA
8.6
0.73
12
F.N.B. Corporation
Hermitage
PA
9.9
0.75
13
Provident Financial Services, Inc.
Iselin
NJ
6.9
0.78
14
First Commonwealth Financial Corporation
Indiana
PA
5.7
0.79
15
Susquehanna Bancshares, Inc.
Lititz
PA
14.2
0.84
16
Signature Bank
New York
NY
13.1
0.87
17
Northwest Bancshares, Inc.
Warren
PA
8.1
1.06
18
CapitalSource Inc.
Chevy Chase
MD
9.3
1.13
19
Investors Bancorp, Inc. (MHC)
Short Hills
NJ
10.2
1.17
20
Astoria Financial Corporation
Lake Success
NY
17.1
1.25
21
Hudson City Bancorp, Inc.
Paramus
NJ
51.8
1.32 |
 8
88,538
35,052
20,811
0
30,000
60,000
90,000
120,000
150,000
NY Metro*
Boston
Central CT**
Bridgeport /
Stamford
< 20 Employees
Commercial Market Opportunity by MSA
Source: SBA firms and employment by MSA 2007
*
NY
Metro
area
includes
New
York,
Northern
New
Jersey,
and
Long
Island MSA
** Central Connecticut includes New Haven and Hartford MSAs
428,577
> 500 Employees
471,661
< 500 Employees
0.2%
2.4%
6.3%
17.8%
0.2%
2.4%
6.3%
17.8%
0.2%
2.4%
6.3%
17.8%
Pro Forma Deposit Market Share Overall within identified MSA
Number of firms by size
People’s United is growing in NYC Metro and Boston Metro,
areas rich with potential commercial, non-commodity relationships
101,633
40,880
23,630
0
30,000
60,000
90,000
120,000
150,000
NY Metro*
Boston
Central CT**
Bridgeport /
Stamford
4,184
2,605
2,118
1,027
0
900
1,800
2,700
3,600
4,500
NY Metro*
Boston
Central CT**
Bridgeport /
Stamford |
 9
Capital Deployment
Primary
focus
is
to
deploy
capital
via
organic
growth
–
“new
markets,
new
products, cross-sell”
Current
dividend
yield
is
~5.4%
(see
Appendix
for
Dividends
Per
Share
-
Last
20
Years)
Repurchased $191MM of stock in 2010 at a weighted average price of $13.35
Repurchased an additional $61MM of stock in 1Q11 at an average price of $13.09
Prohibited from repurchasing shares until the Danvers Bancorp deal closed
Acquisitions
Closed 4 deals in 2010: Financial Federal, Butler Bank, RiverBank, Smithtown
Danvers
Bancorp
closed
June
30 ,
effective
July
1
Building
relationships
with
banks
$1BN
-
$20BN
in
asset
size
Maintaining price discipline in light of challenging industry conditions
st
th |
 10
Loans
Deposits
Growing Future Earnings Per Share
Loans and Deposits per Share
* Pro forma for FIF acquisition
** Pro forma for SMTB & LSBX acquisitions
*** Pro forma for DNBK acquisition
$12.5
$14.0
$15.5
$17.0
$18.5
$20.0
2Q 2009
4Q 2009 *
2Q 2010 **
4Q 2010 ***
2Q 2011 ***
$35.00
$40.00
$45.00
$50.00
$55.00
Gross Loans ($Bn)
Loans per share
$12.0
$14.0
$16.0
$18.0
$20.0
$22.0
2Q 2009
4Q 2009 *
2Q 2010 **
4Q 2010 ***
2Q 2011 ***
$40.00
$42.50
$45.00
$47.50
$50.00
$52.50
$55.00
$57.50
Deposits ($Bn)
Deposits per share |
 11
Second Quarter 2011 Results
Overview
Operating income of $57.3 million or $0.17 per share
Net interest margin of 4.13%; down 3 bps from 1Q 2011
Total loan growth of $164MM, 3.7% annualized
Total deposit growth of $168MM, 3.7% annualized
Operating efficiency ratio improved to 65.7% from 66.2% in 1Q 2011
NPAs as a percentage of originated loans, REO and repossessed assets
increased to 2.05% up from 1.96% in 1Q 2011 as a result of a single credit
|
 12
0.02%
0.04%
0.03%
0.04%
(0.16%)
4.13%
4.16%
1Q 2011 Margin
1Q Accretable
Yield
Reassessment
2Q Accretable
Yield
Reassessment
Loan Yield &
Mix
Investment
Yield & Mix
Deposit/
Borrowing
Rates
2Q 2011 Margin
Total Impact of Decreased Loan Yields: (0.09%)
Net Interest Margin
Linked Quarter Change |
 13
Net Interest Margin* (%)
Last Five Quarters
13
3.69
3.74
3.87
4.00
4.09
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
* Excluding the impact of accretable yield reassessments
|
 14
Last Five Quarters
4.13
3.48
3.61
2.00
3.00
4.00
5.00
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
PBCT
Peer Group Median
Top 50 Banks
Net Interest Margin
Compared to Peers and Top 50 Banks
Source: SNL Financial and Company filings |
 15
Loans
Linked Quarter Change
(in $ millions)
15
Annualized
Linked Quarter Change:
18.7%
9.3%
(43.1%)
Originated Annualized
Linked Quarter Change:
12.2%
Total Annualized
Linked Quarter Change:
3.7%
17,687
(288)
239
213
17,523
Mar 31, 2011
Retail
Commercial
Banking
Acquired
Jun 30, 2011 |
 16
Deposits
Linked Quarter Change
(in $ millions)
16
Annualized
Linked Quarter Change:
50.3%
(4.9%)
Total Annualized
Linked Quarter Change:
3.7%
3.7%
(30)
56
142
18,278
18,110
Mar 31, 2011
Legacy
De Novo
Acquired
Jun 30, 2011 |
 17
Non-Interest Income
1.7
(1.3)
(2.0)
1.7
1.9
76.6
74.6
1Q 2011
Bank Service
Charges
Gain on
Smithtown Loan
Sales
Gain on
Residential Loan
Sales
Insurance
Other
2Q 2011 |
 18
Non-Interest Expense
Non-operating
increase from 1Q
202.8
3.3
2.8
(2.9)
(2.2)
1.5
1.7
207.0
1Q 2011
Merger
Related
Executive
Separation
Comp &
benefits
Occupancy &
Equipment
Professional &
Outside Svc
Other
2Q 2011 |
 19
Efficiency Ratio (%)
Last Five Quarters
19
72.2%
71.2%
71.1%
66.2%
65.7%
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011 |
 20
Efficiency Ratio Initiatives
How Do We Get There?
Steady revenue growth, in-line with recent experience
Completion of Smithtown conversion in June produces annual run-rate
savings of ~$3MM
As announced on our 2Q11 earnings call, changes to our retirement programs
and other benefits (~$18MM) and headcount reductions, primarily in corporate
positions (~$2MM), will reduce 2012 run-rate expenses by ~$20MM
Danvers integration and system conversion produces 2012 run-rate savings
of ~$30MM
Additional opportunities:
Leveraging of upgraded technology following conversion to FIS in
mid-2010
Streamlining the organizational structure throughout the franchise
Target: 55% run-rate Efficiency Ratio in 2013 |
 21
Last Five Quarters
2.05
3.26
3.26
0.00
1.00
2.00
3.00
4.00
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
PBCT
Peer Group Median
Top 50 Banks by Assets
Asset Quality
NPAs / Loans & REO* (%)
Source: SNL Financial and Company filings
*
Non-performing assets (excluding acquired non-performing loans) as a percentage of
originated loans plus all REO and repossessed assets; acquired non-performing
loans excluded as risk of loss has been considered by virtue of our estimate of acquisition-date fair value and/or the
existence of an FDIC loss sharing agreement
|
 22
Last Five Quarters
0.35
0.72
1.09
0.00
0.50
1.00
1.50
2.00
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
PBCT
Peer Group Median
Top 50 Banks
Asset Quality
Net Charge-Offs / Avg. Loans (%)
Source: SNL Financial and Company filings |
 23
Acquired Smithtown Portfolio
Workout Progress
(in $ millions)
Non-Performing Loans at Closing (11/30/2010)
$268.7
New Non-Performing Loans
130.4
Sales, Settlements & Payoffs
(125.3)
Charge-Offs
(74.9)
Return to Accrual
(20.4)
Paydowns
(9.4)
Non-Performing Loans as of June 30, 2011
$169.1
Remaining
Non-Accretable
Difference
(credit mark)
$296.6 |
 24
Allowance for Loan Losses
Originated Portfolio Coverage Detail
(in $ millions)
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Commercial
Banking
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Retail Banking
Commercial ALLL -
$163.9 million
91% of Commercial NPLs
Retail ALLL -
$12.1 million
15% of Retail NPLs
Total ALLL -
$176.0 million
68% of Total NPLs
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Total |
 25
Acquired Loan Portfolio
Actual Credit Experience vs. Expectations
Acquired loans initially recorded at fair value (inclusive of related credit mark) without
carryover of historical ALLL
Accounting model is cash-flow based:
Expected cash flows are regularly reassessed and compared to actual cash collections
As of 6/30/2011
(in $ millions)
Carrying
Amount
Remaining
Accretable
Yield
Remaining
Non-Accretable
Difference
NPLs
a
Remaining
Non-Accretable
Difference/NPLs
Charge-offs
Incurred Since
Acquisition
FinFed (2/18/10)
$485.4
$53.7
$21.1
$55.5
38.0%
$9.8
Butler (4/16/10)
88.3
28.3
30.6
16.2
188.9%
3.3
RiverBank (11/30/10)
454.2
117.1
15.0
9.6
156.3%
1.8
Smithtown (11/30/10)
b
1,359.3
702.7
296.6
169.1
175.4%
81.1
Total
$2,387.2
$901.8
$363.3
$250.4
(a)
Represent contractual amounts; loans meet People’s United Financial’s definition of a
non-performing loan but are not subject to classification as non-accrual in the same
manner as originated loans. Rather, these loans are considered to be accruing loans
because
their
interest
income
relates
to
the
accretable
yield
recognized
at
the
pool
level
and
not
to
contractual
interest
payments at the loan level.
(b)
Smithtown charge-offs include $8.2M and $17.7M incurred upon sale of acquired loans in Q211 and
Q111, respectively. Cash flows are both acquisition and pool specific Better than expected credit experience results in reclass of
non-accretable difference to accretable yield (prospective yield adjustment over the life of
the loans) Contractual
cash
flows
(principal
&
interest)
less
Expected
cash
flows
(principal
&
interest) = non-accretable difference (utilized to absorb actual portfolio losses)
Expected
cash
flows
(principal
&
interest)
less
fair
value
=
accretable
yield |
 26
Capital Ratios
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
2Q 2011
Pro Forma
PEOPLE’S UNITED FINANCIAL
Tang. Com. Equity/Tang. Assets
18.0%
17.8%
14.1%
13.9%
13.9%
13.0%
Leverage Ratio
1, 5
18.2%
18.0%
14.5%
14.6%
14.3%
13.1%
Tier 1 Common
22.1%
22.3%
17.0%
17.2%
17.0%
15.5%
Tier 1 Risk-Based Capital
3, 5
22.5%
22.7%
17.5%
17.7%
17.6%
16.2%
Total Risk-Based Capital
4, 5
23.4%
23.6%
19.3%
19.4%
19.1%
17.6%
PEOPLE’S UNITED BANK
Leverage Ratio
1, 5
12.8%
13.0%
11.4%
11.5%
11.6%
10.3%
Tier 1 Risk-Based Capital
3, 5
15.7%
15.4%
13.6%
13.9%
14.2%
12.8%
Total Risk-Based Capital
4, 5
16.6%
16.4%
14.5%
14.8%
15.0%
13.6%
2
Leverage (core) Capital represents Tier 1 Capital (total stockholder’s equity, excluding: (i)
after-tax net unrealized gains (losses) on certain securities classified as available for
sale; (ii) goodwill and other acquisition-related intangibles; and (iii) the amount recorded in accumulated other comprehensive income (loss) relating
to pension and other postretirement benefits), divided by Adjusted Total Assets (period end total
assets less goodwill and other acquisition-related intangibles)
Tier 1 Common represents total stockholder’s equity, excluding goodwill and other
acquisition-related intangibles, divided by Total Risk-Weighted Assets
Tier 1 Risk-Based Capital represents Tier 1 Capital divided by Total Risk-Weighted Assets Total Risk-Based Capital
represents Tier 1 Capital plus subordinated notes and debentures, up to certain limits, and the allowance for loan losses, up to 1.25% of
total risk weighted assets, divided by Total Risk-Weighted Assets Well capitalized limits for the
Bank are: Leverage Ratio, 5%; Tier 1 Risk-Based Capital, 6%; and Total Risk Based Capital, 10%.
1.
2.
3.
4.
5.
Notes: |
 27
Operating ROAA Progress
Last Five Quarters
0.58
0.50
0.64
0.87
0.92
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011 |
 Appendix |
 29
Dividends Per Share
Last 20 Years
Notes:
* Annualized
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2H
2011* |
 30
Peer Group
Company Name
Ticker
State
1
Associated Banc-Corp
ASBC
WI
2
Astoria Financial Corporation
AF
NY
3
BOK Financial Corporation
BOKF
OK
4
City National Corporation
CYN
CA
5
Comerica Incorporated
CMA
TX
6
Commerce Bancshares, Inc.
CBSH
MO
7
Cullen/Frost Bankers, Inc.
CFR
TX
8
First Horizon National Corporation
FHN
TN
9
Flagstar Bancorp, Inc.
FBC
MI
10
Fulton Financial Corporation
FULT
PA
11
Hudson City Bancorp, Inc.
HCBK
NJ
12
M&T Bank Corporation
MTB
NY
13
Marshall & Ilsley Corporation
MI
WI
14
New York Community Bancorp, Inc.
NYB
NY
15
Synovus Financial Corp.
SNV
GA
16
TCF Financial Corporation
TCB
MN
17
Valley National Bancorp
VLY
NJ
18
Webster Financial Corporation
WBS
CT
19
Zions Bancorporation
ZION
UT |
 For
more information, investors may contact: Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com |