Attached files
| file | filename |
|---|---|
| 8-K - 8-K - People's United Financial, Inc. | d555527d8k.htm |
| EX-99.1 - EX-99.1 - People's United Financial, Inc. | d555527dex991.htm |
 Supplemental Investor Presentation
June 2013
Investor Contact:
Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com
Exhibit 99.2
* * * * * * * * * * * * * * *
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 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," "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)
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 acquisitions; 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 |
 2
Corporate Overview
Snapshot as of March 31, 2013
People’s United Financial, Inc.
NASDAQ (PBCT)
Headquarters:
Bridgeport, CT
Chief Executive Officer:
Jack Barnes
Chief Financial Officer:
Kirk Walters
Market Capitalization (6/11/13):
$4.6 billion
Assets:
$30.6 billion
Loans:
$22.2 billion
Deposits:
$21.8 billion
Branches:
417
ATMs:
633
Standalone ATMs:*
106
Founded:
1842
* Includes 20 ATMs in Stop & Shop locations where a branch is not
present |
 3
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 9.6% vs. ~8.0% for peers |
 4
Retail & Business Banking Franchise
Distribution
400+ branches over 6 states
•
~33% of branches are in-store
600+ ATMs
Online & mobile banking
Call center operations located in Bridgeport,
CT and Burlington, VT
Scale
5th
in deposit market share in New England
Customer base
Approximately 800,000 commercial, business
banking and consumer relationships |
 5
Deepening Market Presence
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
Source: SNL Financial
Branches
$BN
%
1
B of A
155
24.5
24.0
2
Webster
124
12.1
11.8
3
People's United
165
10.9
10.7
4
Wells Fargo
76
7.3
7.2
5
TD Bank
81
5.9
5.8
6
First Niagara
86
4.6
4.5
7
JPM Chase
52
4.5
4.4
8
Citi
20
3.0
2.9
9
Liberty
48
2.9
2.8
10
RBS
50
2.6
2.5
Branches
$BN
%
1
B of A
262
54.6
25.0
2
RBS
254
30.9
14.1
3
Santander
229
18.9
8.6
4
TD Bank
157
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
28
2.4
1.1
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
Branches
$BN
%
1
JPM Chase
804
393.1
38.3
2
Citi
268
69.6
6.8
3
B of A
365
60.6
5.9
4
HSBC
164
57.3
5.6
5
Capital One
277
39.0
3.8
6
M&T
299
33.3
3.3
7
TD Bank
222
22.4
2.2
8
KeyCorp
269
18.3
1.8
9
Wells Fargo
87
18.0
1.8
10
First Niagara
212
16.1
1.6
35
People's United
97
2.5
0.2
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
TD Bank
55
3.7
16.4
2
KeyCorp
60
2.7
11.7
3
Bangor Bancorp
58
2.0
8.9
4
Camden National
50
1.8
8.1
5
B of A
19
1.4
6.0
6
First Bancorp
15
1.0
4.6
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
21
0.7
3.2 |
 6
Large and Attractive Markets
NYC-Northern NJ-LI
Population: 19.0MM
Median HH Income: $60,512
Businesses: 781,444
Population Density (#/sq miles): 2,847
Unemployment Rate (%): 8.1
$100K+ Households (%): 30.8
Boston, MA
Population: 4.6MM
Median HH Income: $67,700
Businesses: 203,770
Population Density (#/sq miles): 1,319
Unemployment Rate (%): 5.9
$100K+ Households (%): 33.8
Hartford, CT
Population: 1.2MM
Median HH Income: $63,997
Businesses: 52,315
Population Density (#/sq miles): 803
Unemployment Rate (%): 8.2
$100K+ Households (%): 30.4
Bridgeport-Stamford, CT
Population: 922,000
Median HH Income: $80,342
Businesses: 49,392
Population Density (#/sq miles): 1,476
Unemployment Rate (%): 7.7
$100K+ Households (%): 41.5
New Haven, CT
Population: 863,000
Median HH Income: $58,598
Businesses: 36,800
Population Density (#/sq miles): 1,427
Unemployment Rate (%): 8.5
$100K+ Households (%): 28.1
Burlington, VT
Population: 215,000
Median HH Income: $55,875
Businesses: 10,846
Population Density (#/sq miles): 171
Unemployment Rate (%): 3.6
$100K+ Households (%): 21.9
Notes: The current national unemployment rate is 7.5%
The current national population density is 89 (#/sq miles)
The population densities of NYC, Boston, Bridgeport and New Haven MSAs are over
ten times the national average |
 7
Strong Market Demographic Profile
Source: SNL Financial, US Census data for 2012
Weighted Average Median Household Income |
 8
Total Deposits ($MM)
6,053
2,926
2,479
2,063
1,970
1,241
Market Total Deposits ($MM)
33,334
117,089
556,863
25,508
17,111
4,499
Branch Count
65
51
91
45
34
12
18.2
2.5
0.5
8.1
11.5
27.6
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
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 six of the acquired Citizens branches located outside
the NYC MSA **
**
Large New Markets |
 9
Connecticut
In-store
Versus
Traditional
Branch
Business
(Last
Twelve
Months
Through
3/31/13)
In-store Versus Traditional Branches
Connecticut
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
Partnership allows us to leverage our brand with the ~1.8 million shoppers who
visit Connecticut Stop & Shop stores every week
In-store locations operate under the same business model as traditional branches
and sell all the Bank’s products and services
Mortgages, Home Equity Loans, Business Loans and Investments*
Connecticut in-store branches accounted for a significant portion of the new
branch business booked in the market
* Sold by employees who are also licensed representatives of our
brokerage affiliate |
 10
1Q13 Total Loan Portfolio
$22.2 BN
Loans by Business Line
CRE
$7.2
32%
C&I
$5.4
24%
Residential
Mortgage
$4.0
18%
Home Equity &
Other
$2.1
10%
PCLC
$1.6
7%
Business Banking
$1.1
5%
PUEFC
$0.8
4% |
 11
Connecticut
$6.7
30%
Massachusetts
$4.0
18%
New York
$3.1
14%
Vermont
$1.8
8%
New Hampshire
$1.3
6%
Maine
$0.9
4%
New Jersey
$0.6
3%
Pennsylvania
$0.2
1%
Maryland
$0.2
1%
Other
$3.3
15%
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.
1Q13 Total Loan Portfolio
$22.2 BN
Excluding
equipment
finance loans,
~95% of our
1Q13 loan
portfolio is within
the Northeast |
 12
Revenue Opportunities
Continue to deepen our presence in heritage markets such as Connecticut and
Vermont
Substantial growth prospects in larger markets such as New York metro and
Boston Total New York 1Q 2013 loan originations run-rate ~$1.9BN
represents a +560% CAGR since 1Q 2010
•
Increased New York relationship managers to 13 from zero since 1Q 2010
•
Significant branch expansion in New York with 97 branches up from 5 in 1Q 2010;
~55% of branches are in- store locations
Total Massachusetts 1Q 2013 loan originations run-rate ~$660MM represents a
+40% CAGR since 1Q 2010
•
Increased Massachusetts relationship managers to 27 from 14 since 2010
•
Solid branch foundation in Massachusetts with 56 branches up from 19 in 1Q
2010 •
Currently 3 de novo branches over $40MM deposits: Prudential Center in Boston
(opened Nov. 2010); Milk Street in Boston (opened Dec. 2010); Lexington, MA
(opened Jul. 2011) |
 13
Revenue Opportunities
Under-represented asset classes ramping up
Asset-based lending: focused on in-footprint companies with sales of
$15MM-$250MM; credit needs range from $5MM-$35MM; $600BN market,
70% of which is located in the Northeast Mortgage Warehouse lending: $1.2BN
in commitments and $659MM 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
19.0MM, 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 other fee income businesses with a focus on
cross-sell Commercial
insurance:
revamped
systems
and
combined
all
agencies
into
a
single
entity;
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 |
 14
Expense Progress
Estimated Cost Savings Analysis
Source: SNL Financial
Note:
“Pro
Forma
/
Actual”
represents
PBCT
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
institutions.
Acquisition target costs fall away as the acquisitions are completed.
“Without
Expense
Initiatives”
represents
PBCT
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
institutions in 4Q09, and then applies the peer median expense growth rate in each
subsequent quarter. Our 1Q 2013 operating expense base of $204MM reflects $29MM
(~$114MM annualized) savings from successfully-executed expense
initiatives |
 15
233
204
7
22
$0
$50
$100
$150
$200
$250
Without Expense
Initiatives
Announced Acquisition
Savings
Other Initiatives
Pro Forma / Actual
Operating Noninterest Expense ($MM)
Expense Progress
Estimated Cost Savings Analysis
Source: SNL Financial
Note:
“Pro
Forma
/
Actual”
represents
PBCT
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
institutions.
Acquisition target costs fall away as the acquisitions are completed
“Without
Expense
Initiatives”
represents
PBCT
operating
noninterest
expense
and
the
actual
expenses
at
the
acquired
institutions in 4Q09, and then applies the peer median expense growth rate in each
subsequent quarter The $29MM in quarterly cost reductions is attributable to
efforts related to acquisition cost savings and other initiatives
|
   16
Total
Non-Operating
Operating
Non-Interest Expense
Linked Quarter Change
(in $ millions)
207.4
212.0
204.5
5.1
2.7
1.1
(3.2)
(1.1)
204.0
2.9
8.0
4Q 2012
Non-
Operating
Payroll
Related Costs
REO Expense
Prof &
Outside Svc
Other
1Q 2013 |
 17
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%
63.1%
64.1%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013 |
 18
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 |
 19
3.63%
3.38%
0.01%
(0.07%)
(0.05%)
(0.05%)
(0.04%)
(0.03%)
(0.02%)
4Q 2012
Investments
Senior
Notes
Calendar
Days
New loan
volume
Acquired
loan
accretion
Loan
repricing/
amort
Deposit
Rates/ Mix
1Q 2013
Operating Net Interest Margin
Linked Quarter Change
(%) |
 20
Net Interest Margin (%)
3.97
3.88
3.82
3.63
3.38
3.97
3.96
3.89
3.63
3.38
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
Margin- Operating
Margin- GAAP
Note: GAAP margin includes cost recovery income
|
 21
Acquired Loan Portfolio
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 As of 3/31/13
(in $ millions)
Carrying
Amount
a, b
Carrying Amount Component
b
NPLs
Non-Accretable
Difference/NPLs
Charge-offs
Incurred Since
Acquisition
d
Accretable
Yield
Non-Accretable
Difference
Danvers (7/1/11)
$ 971.6
$316.1
$ 17.8
$ 49.1
36%
$ 19.6
Smithtown (11/30/10)
711.3
338.6
110.1
77.9
141%
127.0
Others (various dates)
400.2
92.3
29.1
53.7
54%
28.4
Total
$2,083.1
$747.0
$157.0
$180.7
(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.
(d)
Includes approximately $6.0MM of charge-offs applied against reserves
established subsequent to acquisition. c |
 22
Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
Note:
1.
Excluding FinFed, the weighted average coupon on the acquired loan portfolio is
4.91% 2.
Represents
the
difference
between
the
outstanding
balance
of
the
acquired
loan
portfolio
and
the
carrying
amount
of
the
acquired loan portfolio
$ in millions, except per share data
Impact on Net Interest Margin
Impact on Earnings Per Share
1Q13 Total Accretion (All interest income on acquired loans)
37
Interest Income from Amortization of Original Discount on Acq. Loan
Portfolio 9.1
4Q12 Acquired Loan Portfolio Carrying Amount
2,238
1Q13 Effective Tax Rate
32.5%
1Q13 Acquired Loan Portfolio Carrying Amount
2,083
1Q13 Average Acquired Loan Portfolio
2,161
1Q13 Earnings from Amortiz. of Original Discount on Acq. Loan Portfolio
6.2
Effective Yield on Acquired Loan Portfolio
6.85%
1Q13 Weighted Average Shares Outstanding
325.2
Weighted Average Coupon on Acquired Loan Portfolio
1
5.16%
1Q13 EPS Impact from Amortiz. of Discount on Acq. Loan Portfolio
$0.02
Incremental Yield Attributable to Amortiz. of Discount on Acq. Loan Portfolio
1.69%
Incremental Interest Income from Amortiz. of Discount on Acq. Loan Portfolio
9.1
1Q13 Average Earning Assets
26,421
Add: Average unamortized loan discount
2
56
Adjusted 1Q13 Average Earning Assets
26,477
Impact on Overall Net Interest Margin (bps)
14
Operating Net Interest Margin
3.38%
Adjusted Net Interest Margin
3.24%
Amortization of Original Discount on Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
|
 23
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)
Q4
0.0
0.3
0.0
0.3
2013
Q1
0.0
0.0
(2.6)
(2.6)
Total
$13.8
$8.5
($15.8)
$6.5
Since 2010, we have acquired $5.4BN of loans, approximately 40% 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 +$6.5MM |
 24
Loans
Linked Quarter Change
(in $ millions)
Annualized Linked QTD change
7.8%
21,737
498
81
(155)
22,161
Dec 31, 2012
Commercial
Banking
Retail
Acquired
Mar 31, 2013 |
 25
Deposits
Linked Quarter Change
(in $ millions) |
 26
84.3
82.9
(1.3)
(0.8)
(0.4)
1.6
0.4
(0.6)
(0.3)
4Q 2012
Bank Service
Charges
Loan Prepay
Fees
Gain on Resi
Mtg loan sales
Gain on Acq
loan sales
Insurance
Brokerage
Commission
Other
1Q 2013
Non-Interest Income
Linked Quarter Change
(in $ millions) |
 27
1.42
1.89
2.42
1.00
2.00
3.00
4.00
1Q 2010
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
PBCT
Peer Group Median
Top 50 Banks by Assets
Since 1Q 2010
Asset Quality
NPAs / Loans & REO* (%)
*
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
(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 |
 28
Since 1Q 2010
Asset Quality
Net Charge-Offs / Avg. Loans (%)
Source: SNL Financial and Company filings
*
Excluding acquired loan charge-offs, PBCT’s 1Q 2013 charge-off ratio
was 0.18% |
 29
Historical Charge-off Experience
2007 –
2012
0.10%
0.10%
0.29%
0.40%
0.28%
0.21%
0.0%
0.5%
1.0%
1.5%
2.0%
2007
2008
2009
2010
2011
2012 |
 30
Operating ROAA Progress
Since 1Q 2010
0.60%
0.57%
0.48%
0.61%
0.85%
0.90%
0.96%
0.84%
0.86%
0.97%
0.91%
0.87%
0.77%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013 |
 31
Operating ROATE Progress
Since 1Q 2010
3.5%
3.4%
2.9%
4.0%
6.4%
6.9%
7.8%
7.2%
7.8%
8.9%
8.6%
8.6%
8.1%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013 |
 32
Operating Dividend Payout Ratio
Since 1Q 2010
175%
180%
209%
157%
104%
98%
87%
96%
93%
82%
84%
85%
91%
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013 |
 33
Growing Future Earnings Per Share
Loans and Deposits per Share
Loans
Deposits
Over the past two years, loans per share and deposits per share have grown at
compound annual rates of 16% and 13%
$68.14
$40
$45
$50
$55
$60
$65
$70
$14
$15
$16
$17
$18
$19
$20
$21
$22
$23
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
Gross Loans ($BN)
Loans per Share
$67.01
$40
$45
$50
$55
$60
$65
$70
$14
$15
$16
$17
$18
$19
$20
$21
$22
$23
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
Deposits ($BN)
Deposits per Share |
 34
Substantial Progress in the Midst of a Financial Crisis
Growing Loans, Deposits and Returning Capital to Shareholders
Growth has outpaced peers on the key metrics of loans per share and
deposits per share
This has occurred while we have returned $1.9BN to shareholders
during this period. Returns of capital were in the form of both
dividends ($1.1BN) and share repurchases ($0.8BN) which represents
over 40% of our current market capitalization
Line Item
PBCT
Peer
Median
PBCT Vs.
Peers
5-Year Loans Per Share CAGR
9.2%
-1.2%
+10.4%
5-Year Deposits Per Share CAGR
7.8%
2.5%
+5.3%
Notes:
5-Year CAGR figures based on 1Q 2008 to 1Q 2013 data
|
 35
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% Capital Ratios
Since 1Q 2010
1Q 2010
1Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
People’s United Financial
Tang. Com. Equity/Tang.
Assets
18.7%
13.9%
11.7%
11.4%
11.2%
10.2%
9.6%
Leverage Ratio
1, 5
19.2%
14.5%
12.1%
11.8%
11.5%
10.6%
10.0%
Tier 1 Common ²
23.1%
17.1%
13.9%
13.6%
13.6%
12.7%
12.0%
Tier 1 Risk-Based Capital
3, 5
23.9%
17.9%
14.4%
14.1%
14.1%
13.2%
12.5%
Total Risk-Based Capital
4, 5
25.6%
19.4%
16.0%
15.6%
15.6%
14.7%
13.7%
People’s United Bank
Leverage Ratio
1, 5
12.3%
11.4%
11.0%
10.9%
10.8%
9.8%
9.7%
Tier 1 Risk-Based Capital
3, 5
15.4%
13.9%
13.1%
13.0%
13.2%
12.2%
12.1%
Total Risk-Based Capital
4,5
16.3%
14.8%
14.0%
14.0%
14.1%
13.1%
13.5% |
 36
Strong Sources of Liquidity
PBCT maintains high levels of liquidity and is over 90% funded by deposits, retail
repurchase agreements, senior debt and common equity
Strong branch franchise and commercial customer base predominantly funds loan
base Citizens transaction provides a significant long-term opportunity to
grow deposits and customer relationships in southern New York, specifically on
Long Island and in Westchester County
Additional liquidity of $2.5BN exists in the form of unpledged U.S. Agency MBS &
CMO’s
Federal Home Loan Bank (FHLB) relationship enables up to $2.4BN of additional
borrowings |
 37
For 1Q 2013 we were twice as asset sensitive as the estimated median of our peer
group Currently for an immediate parallel increase of 100bps, our net interest
income is projected to increase by ~$47MM 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 03/31/13 filings
2.
Data as of 03/31/13 SEC filings; where exact +100bps shock up scenario data was
not provided, PBCT interpolated based on data disclosed 3.
Data as of 03/31/13 SEC 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 ¹
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 ²
-2.5%
7.9%
2.7%
1.8x
Shock Up
200bps ³
-4.0%
15.8%
5.2%
2.1x |
 38
Summary
Sustainable Competitive Advantage
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 |
 Appendix
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 40
Allowance for Loan Losses
Originated Portfolio Coverage Detail as of 3/31/13
(in $ millions)
1.13%
1.11%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Commercial
Banking
1.57%
0.32%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Retail Banking
Commercial ALLL -
$159.5 million
98% of Commercial NPLs
Retail ALLL -
$18.0 million
20% of Retail NPLs
Total ALLL -
$177.5 million
71% of Total NPLs
1.25%
0.88%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Total |
 41
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
3+
People’s United Bank, New York Times,
Starwood, PepsiCo
Bob Trautmann
SEVP & General Counsel
20+
People’s United Bank, Tyler Cooper & Alcorn
Management Committee |
 42
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
NYCB
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 |
 43
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 intangible assets, 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
|
 44
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
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
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
|
 45
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. Please refer to People’s
United Financial’s latest Form 10-Q regulatory filing for detailed reconciliations to
GAAP figures. Non-GAAP Financial Measures and Reconciliation to GAAP
|
 For
more information, investors may contact: Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com
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