Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - People's United Financial, Inc. | d428677d8k.htm |
 Investor
Presentation October/November 2012
Investor Contact:
Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com
Exhibit 99.1
********************************************************
|
 Certain
statements contained in this release are forward-looking in nature. These include all statements
about People's United Financial's plans, objectives, expectations and other statements that
are not historical facts, and usually use words such as "expect,"
"anticipate," "believe" and similar expressions. Such statements
represent management's current beliefs, based upon information available at the time
the statements are made, with regard to the matters addressed. All forward-looking
statements are subject to risks and uncertainties that could cause People's United
Financial's actual results or financial condition to differ materially from those
expressed in or implied by such statements. Factors of particular importance to
People’s United Financial include, but are not limited to: (1) changes in general, national or regional
economic conditions; (2) changes in interest rates; (3) changes in loan default and
charge-off rates; (4) changes in deposit levels; (5) changes in levels of income
and expense in non-interest income and expense related activities; (6)
residential mortgage and secondary market activity; (7) changes in accounting and
regulatory guidance applicable to banks; (8) price levels and conditions in the public
securities markets generally; (9) competition and its effect on pricing, spending,
third-party relationships and revenues; (10) the successful integration of
acquired companies; and (11) 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.
Forward-Looking Statement
1 |
 2
Corporate Overview
Snapshot, as of September 30, 2012
People’s United Financial, Inc.
NASDAQ (PBCT)
Headquarters:
Bridgeport, CT
Chief Executive Officer:
Jack Barnes
Chief Financial Officer:
Kirk Walters
Market Capitalization (10/25/12):
$4.2 billion
Assets:
$28.6 billion
Loans:
$21.0 billion
Deposits:
$21.4 billion
Branches:
417
ATMs:
634
Standalone ATMs:*
83
Founded:
1842
* Includes 25 ATMs in Stop & Shop locations where a branch is not
present. 2 |
 Compelling
Investment Opportunity High quality Northeast footprint characterized by wealth and
population density Leading
market
position
in
the
best
commercial
banking
market
in
the
US
Significant
growth
runway
within
existing
markets
–
expanding
in
two
of
the
largest MSAs in the US (New York City, #1, Boston, #10)
Dividend yield of 5+%
Ability
to
maintain
pristine
credit
quality
–
no
credit
“events”
Improving profitability
High levels of liquidity
Capital deployment (organic growth, dividends, share repurchases, M&A) –
TCE/TA 11.2% vs. ~8.0% for peers
3 |
 Branch Map
LEGEND
State Capital
Headquarters -
Bridgeport, CT
People’s United Bank
4 |
 Strong Deposit
Market Positions Connecticut
Massachusetts
Vermont
New York
New Hampshire
Maine
Leading
market
position
in
the
best
commercial
banking
market
in
the
US
#1 in Fairfield County, CT, 65 branches, $6.1BN, 18.2% market share
#5 deposit market share in New England
Source: SNL Financial
5
Branches
$BN
%
1
RBS
80
6.8
24.3
2
TD Bank
72
5.4
19.3
3
B of A
29
4.9
17.5
4
People's United
29
1.4
4.9
5
Merrimack
18
1.0
3.6
6
BNH
23
0.9
3.2
7
Santander
20
0.8
2.9
8
NH Thrift
20
0.8
2.8
9
Northway
17
0.7
2.4
10
Centrix
6
0.7
2.3
Branches
$BN
%
1
B of A
263
54.6
25.0
2
RBS
254
30.9
14.1
3
Santander
229
18.9
8.6
4
TD Bank
154
10.8
5.0
5
Eastern Bank
99
6.8
3.1
6
Independent Bank
78
4.5
2.0
7
Middlesex
30
3.5
1.6
8
People's United
56
3.2
1.5
9
Boston Private
11
2.9
1.3
10
Century
25
2.4
1.1
Branches
$BN
%
1
B of A
156
24.5
24.0
2
Webster
121
12.1
11.8
3
People's United
166
11.0
10.8
4
Wells Fargo
76
7.3
7.2
5
TD Bank
80
5.9
5.8
6
First Niagara
84
4.6
4.5
7
JPM Chase
53
4.5
4.4
8
Citi
20
3.0
2.9
9
Liberty
44
2.8
2.7
10
RBS
50
2.6
2.5
Branches
$BN
%
1
JPM Chase
805
392.5
38.2
2
Citi
269
69.6
6.8
3
B of A
369
60.6
5.9
4
HSBC
169
57.3
5.6
5
Capital One
287
39.7
3.9
6
M&T
301
33.3
3.3
7
TD Bank
217
22.4
2.2
8
KeyCorp
266
18.4
1.8
9
Wells Fargo
86
18.0
1.8
10
First Niagara
212
16.1
1.6
35
People's United
96
2.5
0.2
Branches
$BN
%
1
TD Bank
55
3.7
16.2
2
KeyCorp
60
2.7
11.6
3
Bangor Bancorp
58
2.0
8.8
4
Camden National
51
2.0
8.7
5
B of A
19
1.4
5.9
6
First Bancorp
15
1.0
4.5
7
Machias
14
0.8
3.6
8
People's United
28
0.8
3.5
9
Bar Harbor
16
0.8
3.4
10
Norway
20
0.7
3.2
Branches
$BN
%
1
People's United
42
2.6
22.4
2
TD Bank
34
2.6
22.0
3
Merchants
33
1.2
10.6
4
RBS
21
0.9
7.3
5
KeyCorp
13
0.8
6.7
6
Northfield
13
0.5
4.3
7
Community
14
0.4
3.7
8
Union
13
0.4
3.4
9
Passumpsic
7
0.3
2.9
10
Berkshire Hills
7
0.3
2.8 |
 Large and
Attractive Markets NYC-Northern NJ-LI
Population: 19.0MM
Median HH Income: $60,595
Businesses: 749,000
Population Density (#/sq miles): 2,058
Unemployment Rate (%): 9.3
$100K+ Households (%): 30.2
Boston, MA
Population: 4.6MM
Median HH Income: $67,887
Businesses: 186,000
Population Density (#/sq miles): 1,013
Unemployment Rate (%): 6.6
$100K+ Households (%): 33.2
Hartford, CT
Population: 1.2MM
Median HH Income: $64,098
Businesses: 50,000
Population Density (#/sq miles): 755
Unemployment Rate (%): 8.1
$100K+ Households (%): 30.0
Bridgeport-Stamford, CT
Population: 919,000
Median HH Income: $80,531
Businesses: 45,000
Population Density (#/sq miles): 1,097
Unemployment Rate (%): 7.7
$100K+ Households (%): 41.5
New Haven, CT
Population: 862,000
Median HH Income: $58,775
Businesses: 34,000
Population Density (#/sq miles): 1,000
Unemployment Rate (%): 8.4
$100K+ Households (%): 27.0
Burlington, VT
Population: 212,000
Median HH Income: $56,090
Businesses: 10,000
Population Density (#/sq miles): 141
Unemployment Rate (%): 4.3
$100K+ Households (%): 21.3
Notes: The current national unemployment rate is 8.3%
The current national population density is 88 (#/sq miles)
The population densities of NYC, Boston, Bridgeport and New Haven MSAs
are over ten times the national average
6 |
 Strong Market
Demographic Profile Source: SNL Financial
2011 Weighted Average Median Household Income
$60,603
$53,648
$50,227
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
PBCT
Peer Median
US
7 |
 8
Deposit Market Share by MSA (%) *
We hold significant market share in several key northeast MSAs and are
building our presence in areas with substantial growth potential, such as
the Boston and New York City MSAs
Source: SNL Financial
* Excludes deposits from trust institutions and branches with over $750MM
deposits ** Excludes five of the acquired Citizens branches located outside
the NYC MSA **
**
Large New Markets
Total Deposits ($MM)
6,091
2,926
2,479
2,063
1,970
1,241
Market Total Deposits ($MM)
33,457
116,858
555,686
25,392
17,119
4,499
Branch Count
65
51
91
45
34
12
18.2
2.5
8.1
11.5
27.6
0.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Bridgeport-
Stamford, CT
Boston, MA
NYC-Northern
NJ-LI
Hartford, CT
New Haven, CT
Burlington, VT |
 9
Unique opportunity based on People’s United’s excellent in-store
branch banking track record, longstanding relationship with Stop & Shop
and strong traditional branch network in the market
–
In
each
of
the
past
14
years,
People’s
United
has
ranked
as
the
#1
in-store
branch
operator
in
the
US
*
–
Exclusive provider of banking services to Stop & Shop on Long Island, Southern
New York and Connecticut; 140 in-store branches
Strong traditional branch network is crucial for successful in-store branch
banking –
37 traditional branches on Long Island and Westchester County
–
Our traditional branches offer the full suite of services
–
Provides a lift to traffic in both in-store and traditional branches
–
Opportunity to bring average acquired in-store deposit balances up from $4MM to
our average in-store deposit balances of $29MM
Adds additional source of core deposit funding
–
Expected core deposit growth within acquired in-store branches and surrounding
traditional branches will help fund continued New York metro loan
growth Transaction deepens People’s United’s presence on Long Island
and in Westchester County
Acquisition of Select Citizens Bank Branches
Transaction Rationale
* Source: SNL Financial. As measured by average deposits per in-store branch
among active banks with at least $500MM of in-store deposits |
 10
People’s United Bank branches (includes 39 traditional branches in NY)
Recently acquired, in-store branches (53)
Source: SNL Financial
Recently acquired, traditional branches (4)
Expanding Long Island, NY and Hudson Valley Footprint
Branch Map
Suffolk
Putnam
Dutchess
Ulster
Orange
Rockland
Westchester
Kings
Queens
Richmond
Nassau
Bronx
New York |
 11
On average, in-store locations are open 37% more hours per week than traditional
branches (56 hours vs. 41 hours) but are 30% less expensive to operate
Employees at in-store locations are extensively trained and certified to sell
and support all the Bank’s products and services
–
Mortgages, Home Equity Loans, Business Loans and Investments
In 2011, CT in-store branches accounted for a significant portion of the new
branch business booked in the market
In-store Versus Traditional Branch Business
In-store Versus Traditional Branches
Connecticut
56%
52%
45%
31%
30%
28%
28%
44%
48%
55%
69%
70%
72%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Consumer
Checking Accounts
Opened
Savings Accounts
Opened
Business Checking
Accounts Opened
Home Equity
Loans
Mortgage Loans
Business Banking
Loans
Investment Sales
In-store Branches
Traditional Branches |
 Deposits Acquired
Source: Company financials; financial data as of 12/31/2011
Cost of Deposits: 0.59%
Total Deposits: $324MM
Acquisition of Select Citizens Bank Branches
Attractive Deposit Base
Demand
$52
16%
NOW
$71
22%
Savings
$78
25%
Money
Market
$70
21%
CD
$53
16%
12 |
 13
3Q12 Total Loan Portfolio
$21.0 BN
Loans by Business Line
CRE
$6.6
32%
C&I
$5.1
24%
Residential
Mortgage
$3.9
18%
Home Equity &
Other
$2.2
10%
PCLC
$1.4
7%
PUEFC
$0.8
4%
Business Banking
$1.1
5% |
 14
Loans by Geography
Notes: Reporting is based on the collateral property address for the
following: SNE Residential Mortgage, Consumer
Home
equity,
Consumer
Other
and
CRE.
Reporting
is
based
on
borrower
address
for
the
following: C&I, Residential construction and NNE loans.
3Q12 Total Loan Portfolio
$21.0 BN
Excluding
equipment
finance loans,
~95% of our
3Q12 loan
portfolio is within
the Northeast
Connecticut
6.61
32%
Massachusetts
3.78
18%
New York
2.62
12%
Vermont
1.83
9%
New Hampshire
1.35
6%
New Jersey
0.57
3%
Other
3.03
14%
Pennsylvania
0.22
1%
Maine
0.90
4%
Maryland
0.14
1%
14 |
 15
Revenue Opportunities
Large new markets –
NYC and Boston MSAs
Under-represented asset classes ramping up
–
Asset-based lending: focused on in-footprint companies with sales of
$15MM-$250MM; credit needs range from $5MM-$25MM; $600BN market, 70%
of which is located in the Northeast –
Mortgage Warehouse lending: ~$700MM in commitments, and $447MM in outstandings;
estimated market size is over $28BN in outstandings
–
New York Commercial Real Estate: hiring talent in the New York metro area, which is
a $30BN annual market with a population of 18.9MM, 6.9MM housing units, and
3.4MM rental units –
Private Banking: hired senior executive from mega-cap bank with ~20 years
managing private banking in the Northeast with initial focus on CT, metro New
York and metro Boston Enhancing wealth management offering
–
Proprietary asset allocation and risk management strategies are implemented with a
suite of external managers who represent our "best in class"
recommendations •
Proprietary asset allocation allows us to “rent”
intellectual capital –
no customer funds leave the bank
–
Hired executive from PNC as Senior Vice President and Chief Investment Officer
Increasing momentum in fee income penetration
–
Commercial
insurance:
focused on our deep commercial customer base as well as the education sector
–
Hired executive from TD to lead cash management business
–
Growing merchant and payroll services
revamped
systems
and
combined
all
agencies
into
a
single
entity; |
 16
Expense Opportunities
Estimated Cost Savings Analysis
Our Q3 2012 operating expense base of $205.7MM reflects $38MM (~$150MM
annualized) savings from successfully-executed expense initiatives
Source: SNL Financial
Note:
“Pro
Forma
/
Actual”
represents
PBCT
Acquisition target costs fall away as the acquisitions are completed.
“Without
Expense
Initiatives”
represents
PBCT
institutions in 4Q09, and then applies the peer median expense growth rate in each
subsequent quarter. Operating Noninterest Expense ($MM)
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
Pro Forma / Actual
Without Expense Initiatives
$38MM
Cost
Savings
200
210
220
230
240
250
260
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
institutions.
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired |
 Expense
Opportunities Estimated Cost Savings Analysis
17
Source: SNL Financial
Note:
“Pro
Forma
/
Actual”
represents
PBCT
Acquisition target costs fall away as the acquisitions are completed.
“Without
Expense
Initiatives”
represents
PBCT
institutions in 4Q09, and then applies the peer median expense growth rate in each
subsequent quarter. operating
noninterest
expense
and
the
actual
expenses at
the
acquired
institutions.
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
Operating Noninterest Expense ($MM)
206
7
31
$0
$50
$100
$150
$200
$250
Without Expense
Initiatives
Announced Acquisition
Savings
Other Initiatives
Pro Forma / Actual
The $38MM in quarterly cost reductions is attributable to efforts related to
acquisition cost savings and other initiatives
243 |
 Non-Interest Expense
Linked Quarter Change
(in $ millions)
18
Non-Operating
Operating
Total
205.7
208.9
(0.4)
202.1
(1.7)
(1.3)
(0.3)
6.9
205.7
3.6
3.2
2Q 2012
Non-
Operating
Professional
& Outside
Svc
Comp &
Benefits
Other
Op Exp-
Acqd
Citizens
3Q 2012 |
 Efficiency
Ratio Since 1Q 2010
76.1%
73.1%
72.4%
71.9%
66.0%
65.5%
62.4%
62.3%
63.6%
61.5%
61.4%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
19 |
 20
EMOC has been fully operational since November 2011
–
Three person committee comprised of the CFO, Chief Administrative Officer and
Chief HR Officer EMOC oversees PBCT’s noninterest expense management,
implements strategies to ensure attainment of expense management targets and
oversees revenue initiatives that require expenditures
Provides a horizontal view of the organization
Expense Management Units (EMUs) established to facilitate EMOC functions
–
Defined EMUs include:
•
Technology
•
Operations
•
Real Estate Services
Spending requests above $25,000 are submitted by EMU owners for approval
Staffing models, staffing replacements and additions for mid-level positions and
above require approval by the Committee
Introduction to EMOC
Expense Management Oversight Committee (EMOC)
•
Employment/Benefits
•
Marketing
•
Regulatory/Institutional
•
Depreciation/Equipment
•
Decentralized
•
Intangible Amortization |
 Net Interest
Margin- Decrease from 2Q 2012
3.89%
3.96%
(0.09%)
(0.01%)
0.03%
2Q 2012 Margin
Lower Loan Yields
Lower Cost
Recovery Income
Lower Funding
Rates/ Mix
3Q 2012 Margin
21 |
 4.07
4.03
3.97
3.88
3.82
4.07
4.12
3.97
3.96
3.89
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
Margin-
Operating
Margin-
Reported
Net Interest Margin
22 |
 Acquired Loan
Portfolio As of 9/30/2012
(in $ millions)
Carrying
Amount
a, b
Carrying Amount Component
b
NPLs c
Non-Accretable
Difference/NPLs
Charge-offs
Incurred Since
Acquisition
Accretable
Yield
Non-Accretable
Difference
FinFed (2/18/10)
$178.1
$4.6
$7.9
$33.8
23%
$11.4
Butler (4/16/10)
65.1
24.9
15.7
11.2
140%
5.9
RiverBank (11/30/10)
264.8
101.4
10.9
23.2
47%
4.1
Smithtown (11/30/10)
848.3
444.5
122.3
91.9
133%
121.1
Danvers (7/1/11)
1, 277.3
341.6
19.5
41.9
47%
16.6
Total
$2,633.6
$917.0
$176.3
$202.0
(a)
Initial carrying amounts of acquired portfolios are as follows: FinFed, $1.2BN;
Butler, $141MM; RiverBank, $518MM; Smithtown, $1.6BN; and Danvers,
$1.9BN. (b)
Carrying amount and related components reflect loan sale, settlement and payoff
activity which have occurred since acquisition. (c)
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
c
23
Acquired loans initially recorded at fair value (inclusive of related credit mark)
without carryover of historical ALLL
Accounting model is cash-flow based:
Contractual
cash
flows
(principal
&
interest)
less
Expected
cash
flows
(principal
&
interest)
=
non-accretable
difference (effectively utilized to absorb actual portfolio losses)
Expected cash flows (principal & interest) less fair value = accretable
yield Expected cash flows are regularly reassessed and compared to actual cash
collections |
 Acquired Loan
Portfolio Amortization of Original Discount on Acquired Loan Portfolio
$ in millions, except per share data
Impact on Net Interest Margin
Impact on Earnings Per Share
3Q12 Total Accretion (All interest income on acquired loans)
49
Interest Income from Amortization of Original Discount on Acq. Loan
Portfolio 10.6
2Q12 Acquired Loan Portfolio Carrying Amount
3,017
3Q12 Effective Tax Rate
32.5%
3Q12 Acquired Loan Portfolio Carrying Amount
2,634
3Q12 Average Acquired Loan Portfolio
2,825
3Q12 Earnings from Amortiz. of Original Discount on Acq. Loan Portfolio
7.2
Effective Yield on Acquired Loan Portfolio
6.90%
3Q12 Weighted Average Shares Outstanding
336.5
Weighted Average Coupon on Acquired Loan Portfolio
1
5.39%
3Q12 EPS Impact from Amortiz. of Discount on Acq. Loan Portfolio
$0.02
Incremental Yield Attributable to Amortiz. of Discount on Acq. Loan Portfolio
1.51%
Incremental Interest Income from Amortiz. of Discount on Acq. Loan Portfolio
10.6
3Q12 Average Earning Assets
24,474
Add: Average unamortized loan discount
2
88
Adjusted 3Q12 Average Earning Assets
24,562
Impact on Overall Net Interest Margin (bps)
17
Operating Net Interest Margin
3.82%
Adjusted Net Interest Margin
3.65%
Amortization of Original Discount on Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
24
Note:
1.
Excluding FinFed, the weighted average coupon on the acquired loan portfolio is
5.07% 2.
Represents
the
difference
between
the
outstanding
balance
of
the
acquired
loan
portfolio
and
the
carrying
amount
of
the
acquired loan portfolio |
 25
Summary of Acquired Loan Accounting Events
(in $ millions)
Period
Cost Recovery
Income
Gain (Loss) on Sale
of Acquired Loans
Acquired Loan
Impairment
Net Impact
2011
Q1
0.0
5.5
0.0
5.5
Q2
0.0
7.2
0.0
7.2
Q3
0.0
(4.8)
0.0
(4.8)
Q4
5.0
(0.4)
(7.4)
(2.8)
2012
Q1
0.0
0.0
(0.3)
(0.3)
Q2
4.7
0.7
0.2
5.6
Q3
4.1
0.0
(5.7)
(1.6)
Total
$13.8
$8.2
($13.2)
$8.8
Since 2010, we have acquired $5.4BN of loans, nearly half of which
remain in our portfolio. We did not recognize cost recovery income,
gains (losses) on sale or impairment in 2010. Since 1Q 2011, the
net
impact of such activity is +$8.8MM
25 |
 Loans
Linked Quarter Change
722
113
(383)
Jun 30, 2012
Commercial
Banking
Retail
Acquired
Sep 30, 2012
Annualized
Linked
QTD
change
-
8.8%
20,588
21,040
26
(in $ millions)
Total |
 Deposits
Linked Quarter Change
(in $ millions)
27
Total
Commercial
Retail
21,458
(363)
268
21,363
5,353
5,621
16,105
15,742
Jun 30, 2012
Retail
Commercial
Sep 30, 2012
-1.8%
Annualized
Linked
QTD
change
-
Total |
 Non-Interest Income
Linked Quarter Change
(in $
millions)
28
2.5
2.3
0.8
0.7
0.5
(0.6)
75.7
81.4
2Q 2012
Loan
Prepayment
Fees
Insurance
Gain on
Sale,
Residential
Loans
Operating
Lease
Income
Bank
Service
Charges
Brokerage
Other
3Q 2012
(0.5) |
 Asset
Quality NPAs / Loans & REO* (%)
*
Non-performing
assets
(excluding
acquired
non-performing
loans)
as
a
percentage
of
originated
loans
plus
REO
and
repossessed
assets;
acquired
non-performing
loans
excluded
as
risk
of
loss
has
been
considered
by
virtue
of
(i)
our
estimate
of acquisition-date fair value, (ii) the existence of an FDIC loss sharing agreement, and/or
(iii) allowance for loan losses established subsequent to acquisition
Source: SNL Financial and Company filings
29
Since 1Q 2010
4.00
3.00
2.00
1.00
2.82
2.07
1.67
1.59
1Q 2010
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
PBCT
Peer Group Median
Top 50 Banks by Assets
all |
 Since 1Q 2010
Asset Quality
Net Charge-Offs / Avg. Loans (%)
Source: SNL Financial and Company filings
2.00
1.50
1.00
0.50
0.00
2012
2010
1Q
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
3Q
2012
0.18
0.26
0.44
0.62
Top 50 Banks
Peer Group Median
PBCT
30 |
 31
Historical Charge-off Experience
2007 –
2012
31
2007
2008
2009
2010
2011
2012
YTD
0.0%
0.5%
1.0%
1.5%
2.0%
0.10%
0.10%
0.29%
0.40%
0.29%
0.22% |
 Return on
Assets Operating ROAA (%)
Return on assets has continued to improve relative to peers,
supported by organic loan and deposit growth and the integration
of recent acquisitions
1.20
1.00
0.80
0.60
0.40
0.20
0.00
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
Peers
PBCT
0.88
0.91
32 |
 High
levels of equity produce below industry ROATE. Normalizing our
equity base shows that the core bank is performing in-line with peers. As
we continue to efficiently deploy capital actual ROATE will improve
further Return on Tangible Equity
1
Operating ROATE (%)
Notes:
1.
PBCT –
Normalized Equity shows Operating ROATE pro forma for normalized Tangible
Common Equity of 8.0%, in line with peers (see Appendix) and excludes the income related
to cash & securities above the normalized 8.0% TCE/TA level
15
12
9
6
3
0
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
8.6
12.2
11.8
PBCT
-
Normalized
Equity
PBCT
33
Peers |
 34
Operating Dividend Payout Ratio
Since 1Q 2010
175%
180%
209%
157%
104%
98%
87%
96%
93%
82%
84%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
34 |
 Substantial
Progress in the Midst of a Financial Crisis Total Shareholder Return -
Past 5 Years
Source: SNL Financial
April 2007 we raised $3.4BN in our second step conversion
Our conservative credit culture and funding structure coupled with industry
leading capital levels provided significant strength throughout the crisis
(18.7)
(53.6)
3.8
(80.0)
(60.0)
(40.0)
(20.0)
0.0
20.0
40.0
Oct-07
Oct-08
Oct-09
Oct-10
Oct-11
Oct-12
PBCT
SNL Mid Cap U.S. Bank & Thrift
S&P 500
35 |
 3.82
3.52
2.50
3.00
3.50
4.00
4.50
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
PBCT
Peers
Substantial Progress in the Midst of a Financial Crisis
Key Performance Metrics Since 1Q 2010
Our margin remains well above peers as we thoughtfully deployed capital in
acquisitions and deepened our presence in the Boston and New York metro areas
Under new management we have made considerable progress on our efficiency ratio
Our exceptional credit quality throughout the financial crisis has allowed us to
manage our business with a long-term view
Efficiency Ratio (%)
Operating NIM (%)
Net Charge-offs/Avg. Loans (%)
61.4
61.6
50
60
70
80
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
PBCT
Peers
0.18
0.44
0.0
0.5
1.0
1.5
2.0
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
PBCT
Peers
36 |
 37
Substantial Progress in the Midst of a Financial Crisis
Growing Loans, Deposits and Returning Capital to Shareholders
Growth has far outstripped peers on the key metrics of loans per
share
and deposits per share
This has occurred while we have returned $1.8BN to shareholders
during this period. Returns of capital were in the form of both
dividends ($1.1BN) and share repurchases ($0.7BN) which represents
nearly 45% of our current market capitalization
Line Item
PBCT
Peer
Median
PBCT Vs.
Peers
5-Year Loans Per Share CAGR
15.9%
-1.4%
+17.3%
5-Year Deposits Per Share CAGR
16.6%
1.2%
+15.3%
Notes: 5-Year CAGR figures based on 3Q 2007 and 3Q 2012 data
37 |
 Growing Future
Earnings Per Share Loans and Deposits per Share
Loans
Deposits
38
Over the past two years, loans per share and deposits per share have grown at
compound annual rates, of 21% and 20%
$22
$21
$20
$19
$18
$17
$16
$15
$14
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
$62.53
$65
$60
$55
$50
$45
$40
Loans per Share
Gross Loans ($BN)
$14
$22
$21
$20
$19
$18
$17
$16
$15
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
$65
$60
$55
$50
$45
$40
Deposits ($BN)
Deposits per share
$63.49 |
 39
Strong Sources of Liquidity
PBCT maintains high levels of liquidity and is 94% funded by deposits,
retail repurchase agreements and common equity
–
Strong branch franchise and commercial customer base predominantly funds
loan base without use of brokered borrowings
Citizens transaction added $324MM in deposits and provides a significant
long-term opportunity to grow customer relationships in southern New
York, specifically on Long Island and in Westchester County
Additional liquidity of $2.2BN exists in the form of unpledged securities
Federal Home Loan Bank (FHLB) relationship enables up to $3.2BN of
additional borrowings
Strong credit ratings imply we have ready access to funding at the holding
company and the bank if desired
39 |
 1Q
2010 1Q 2011
1Q 2012
2Q 2012
3Q 2012
People’s United Financial
Tang. Com. Equity/Tang. Assets
18.7%
13.9%
11.7%
11.4%
11.2%
Leverage Ratio
1, 5
19.2%
14.5%
12.1%
11.8%
11.5%
Tier 1 Common
23.1%
17.1%
13.9%
13.6%
13.6%
Tier 1 Risk-Based Capital
3, 5
23.9%
17.9%
14.4%
14.1%
14.1%
Total Risk-Based Capital
4, 5
25.6%
19.4%
16.0%
15.6%
15.6%
People’s United Bank
Leverage Ratio
1, 5
12.3%
11.4%
11.0%
10.9%
10.8%
Tier 1 Risk-Based Capital
3, 5
15.4%
13.9%
13.1%
13.0%
13.2%
Total Risk-Based Capital
4,5
16.3%
14.8%
14.0%
14.0%
14.1%
Capital Ratios
Since 1Q 2010
Notes:
1.
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) 2.
Tier 1 Common represents total stockholder’s equity, excluding goodwill
and other acquisition-related intangibles, divided by Total Risk-Weighted Assets
3.
Tier 1 Risk-Based Capital represents Tier 1 Capital divided by Total Risk-Weighted
Assets 4.
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
5.
Well capitalized limits for the Bank are: Leverage Ratio, 5%; Tier 1 Risk-Based Capital,
6%; and Total Risk-Based Capital, 10% 40
2 |
 Summary
Premium brand built over 170 years
High quality Northeast footprint characterized by wealth, density and
commercial activity
Strong leadership team
Solid net interest margin
Superior asset quality
Focus on relationship-based banking
Growing
loans
and
deposits
within
footprint
-
in
two
of
the
largest
MSAs
in
the country (New York City, #1 and Boston, #10)
Improving profitability
Returning capital to shareholders
Strong capital base as evidenced by robust Tier 1 Risk-Based and Tier 1
Common ratios
Sustainable Competitive Advantage
41 |
 Appendix
*************************************************************************************
|
 43
Allowance for Loan Losses
Originated Portfolio Coverage Detail
(in $ millions)
Total
ALLL
-
$175.5
million
66% of Total NPLs
Total
0.95%
1.45%
2.00%
1.50%
1.00%
0.50%
0.00%
NPLs:Loans
ALLL:Loans
Retail
ALLL
-
$19.5
million
26% of Retail NPLs
Retail Banking
NPLs:Loans
ALLL:Loans
0.35%
1.35%
2.00%
1.50%
1.00%
0.50%
0.00%
Commercial
Banking
Commercial
ALLL
-
$156.0
million
82% of Commercial NPLs
2.00%
1.50%
1.00%
0.50%
0.00%
1.49%
1.22%
NPLs:Loans
ALLL:Loans |
 44
For 2Q 2012 we were more than twice as asset sensitive as the estimated median of our
peer group
For an immediate parallel increase of 100bps, our net interest income is projected to
increase by ~$60MM on an annualized basis
Yield curve twist scenarios confirm that we are reasonably well protected from bull
flattener (short rates are unchanged, long rates fall) and benefit
considerably from bear flattener environments (short rates rise, long rates
are unchanged) Notes:
1.
Analysis is as of 6/30/12 filings
2.
Data as of 6/30/12 SEC filings, where exact +100bps shock up scenario data was not provided
PBCT interpolated based on data disclosed 3.
Data as of 6/30/12 filings, where exact +200bps shock up scenario data was not provided PBCT
interpolated based on data disclosed Current Asset Sensitivity
Net Interest Income at Risk
Analysis involves PBCT estimates, see notes below
Change in Net Interest Income
Scenario
Lowest
Amongst Peers
Highest
Amongst Peers
Peer Median
PBCT Multiple to
Peer Median
Shock Up
100bps
-4.0%
6.1%
2.7%
2.2x
Shock Up
200bps
-7.1%
12.2%
5.2%
2.5x
1
2
3 |
 45
Name
Position
Years in
Banking
Professional
Experience
Jack Barnes
President & CEO, Director
30+
People’s United Bank (SEVP, CAO),
Chittenden, FDIC
Kirk Walters
SEVP & CFO, Director
25+
People’s United Bank, Santander, Sovereign,
Chittenden, Northeast Financial
Jeff Tengel
SEVP Commercial Banking
30+
People’s United Bank, PNC, National City
Bob D’Amore
SEVP Retail & Business Banking
30+
People’s United Bank
Louise Sandberg
SEVP Wealth Management
30+
People’s United Bank, Chittenden
Lee Powlus
SEVP & Chief Administrative Officer
25+
People’s United Bank, Chittenden, Alltel
Chantal Simon
SEVP & Chief Risk Officer
20+
People’s United Bank, Merrill Lynch US Bank,
Lazard Freres & Co.
Dave Norton
SEVP & Chief HR Officer
2+
People’s United Bank, New York Times,
Starwood, PepsiCo
Bob Trautmann
SEVP & General Counsel
20+
People’s United Bank, Tyler Cooper & Alcorn
Management Committee |
 46
Peer Group
Firm
Ticker
City
State
1
Associated
ASBC
Green Bay
WI
2
BancorpSouth
BXS
Tupelo
MS
3
City National
CYN
Los Angeles
CA
4
Comerica
CMA
Dallas
TX
5
Commerce
CBSH
Kansas City
MO
6
Cullen/Frost
CFR
San Antonio
TX
7
East West
EWBC
Pasadena
CA
8
First Niagara
FNFG
Buffalo
NY
9
FirstMerit
FMER
Akron
OH
10
Fulton
FULT
Lancaster
PA
11
Huntington
HBAN
Columbus
OH
12
M&T
MTB
Buffalo
NY
13
New York Community
NYB
Westbury
NY
14
Signature
SBNY
New York
NY
15
Susquehanna
SUSQ
Lititz
PA
16
Synovus
SNV
Columbus
GA
17
Valley National
VLY
Wayne
NJ
18
Webster
WBS
Waterbury
CT
19
Wintrust
WTFC
Lake Forest
IL
20
Zions
ZION
Salt Lake City
UT |
 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 this evaluation
with an analysis of certain non-GAAP financial measures, such as the efficiency and
tangible equity ratios, tangible book value per share and operating earnings 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 banks and thrifts. 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 intangibles, losses on real estate
assets and non-recurring
expenses)
(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 non-recurring income) (the denominator). People’s
United Financial generally considers an item of income or expense to be non-recurring if it
is not similar to an item of income or expense of a type incurred within the last two years and
is not similar to an item of income or expense of a type reasonably expected to be incurred within the
following two years.
Non-GAAP Financial Measures and Reconciliation to GAAP
47 |
 Operating earnings
exclude from net income those items that management considers to be of such a non- recurring
or infrequent nature that, by excluding such items (net of income taxes), People’s United Financial’s
results can be measured and assessed on a more consistent basis from period to period. Items excluded
from operating earnings, which include, but are not limited to, merger-related expenses,
charges related to executive-level management separation costs, severance-related costs
and writedowns of banking house assets, are generally also excluded when calculating the
efficiency ratio. Operating earnings per share is calculated by dividing operating
earnings by the weighted average number of dilutive common shares outstanding for the
respective period. Operating return on average assets is calculated by dividing operating
earnings (annualized) by average 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. Operating net interest margin excludes from the
net interest margin those items that management considers to be of such a discrete nature that,
by excluding such items, People’s United Financial’s net interest margin can be
measured and assessed on a more consistent basis from period to period. Items excluded from operating
net interest margin include cost recovery income on acquired loans and changes in the accretable yield
on acquired loans stemming from periodic cash flow reassessments. Operating net interest margin
is calculated by dividing operating net interest income (annualized) by average earning
assets. Non-GAAP Financial Measures and Reconciliation to GAAP
48 |
 The
tangible
equity
ratio
is
the
ratio
of
(i)
tangible
stockholders’
equity
(total
stockholders’
equity
less
goodwill
and
other
acquisition-related
intangibles)
(the
numerator)
to
(ii)
tangible
assets
(total
assets
less
goodwill
and
other acquisition-related intangibles) (the denominator). Tangible book value per share is
calculated by dividing tangible stockholders’
equity by common shares (total common shares issued, less common shares
classified as treasury shares and unallocated 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.
Non-GAAP Financial Measures and Reconciliation to GAAP
49 |
 For
more information, investors may contact: Peter Goulding, CFA
203-338-6799
peter.goulding@
peoples.com
************************** |