Attached files
| file | filename |
|---|---|
| 8-K - 8-K - People's United Financial, Inc. | d810717d8k.htm |
 Investor Presentation
October/November 2014
Exhibit 99.1 |
 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)
changes in accounting and regulatory guidance applicable to banks; (7) price levels and
conditions in the public securities markets generally; (8) competition and its effect on
pricing, spending, third-party relationships and revenues; and (9) changes in regulation
resulting from or relating to financial reform legislation. People's United Financial does not
undertake any obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
Forward-Looking Statement |
 2
Table of Contents
1.
Strategic Position
2.
Financial Performance
3.
Summary
4.
Appendix |
 3
Strategic Position |
 4
Corporate Overview
Snapshot as of September 30, 2014
People’s United Financial, Inc.
NASDAQ (PBCT)
Headquarters:
Bridgeport, CT
Chief Executive Officer:
Jack Barnes
Chief Financial Officer:
(1)
Kirk Walters
Market Capitalization (10/27/14):
$4.4 billion
Assets:
$34.8 billion
Loans:
$26.0 billion
Deposits:
$25.3 billion
Branches:
407
In-store Branches:
(2)
144
ATMs:
615
Standalone ATMs:
(3)
112
Founded:
1842
Notes:
1.
On April 16, 2014 People’s United announced the transition of CFO Kirk Walters’ role with
the company. Walters will continue as CFO of People’s United Financial, Inc., the
bank’s holding company, and former Treasurer David Rosato was appointed CFO of
People’s United Bank. Walters will continue to serve as CFO of People’s United Financial,
Inc. through December 31, 2014, when Rosato is expected to assume that position
2.
Exclusive relationship with Stop & Shop, a subsidiary of Ahold (ENXTAM:AH)
3. Includes 19 ATMs in Stop & Shop locations where a branch is
not present |
 5
Compelling Investment Opportunity
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 ~4.5%
Ability
to
maintain
pristine
credit
quality
–
no
credit
“events”
Improving profitability
Strong liquidity
Continued capital deployment via organic growth and dividends
|
 Retail & Business
Banking Franchise Distribution
400+ branches over 6 states
•
~35% of branches are in-store
600+ ATMs
Online & mobile banking
Call center operations located in Bridgeport,
CT and Burlington, VT
Scale
5
th
in deposit market share in New England *
Customer base
Approximately 850,000 commercial, business
banking, consumer and wealth management
relationships
* Source: SNL Financial
6 |
 7
Strategic Focus of Deposit Franchise
Growth
Core customers and deposits
Multiple product households/relationships
Leverage employee expertise to drive sales
Brand execution
Employee expertise
Superior customer experience
In-store supermarket strategy
Leveraging the acquired Southern New York branches
Navigating a low rate environment
Balancing growth, retention and cost of funds
Constant evaluation of branch-level profitability
|
 8
Branches
$BN
%
1
TD Bank
50
3.2
13.3
2
KeyCorp
53
3.0
12.6
3
Bangor Bancorp
59
2.1
8.9
4
Camden National
44
1.9
7.9
5
B of A
18
1.6
6.8
6
First Bancorp
16
1.0
4.3
7
Machias
17
0.9
3.8
8
People's United
26
0.9
3.7
9
Bar Harbor
16
0.8
3.5
10
Norway
23
0.8
3.4
Branches
$BN
%
1
JPM Chase
796
461.4
37.8
2
Citi
271
79.8
6.5
3
HSBC
154
72.7
6.0
4
B of A
314
66.0
5.4
5
Capital One
268
42.8
3.5
6
M&T
290
39.1
3.2
7
TD Bank
247
27.0
2.2
8
Wells Fargo
87
22.1
1.8
9
Signature
28
19.8
1.6
10
KeyCorp
239
18.1
1.5
27
People's United
96
3.0
0.3
Branches
$BN
%
1
B of A
147
29.1
25.8
2
Webster
123
13.2
11.7
3
People's United
162
13.0
11.5
4
Wells Fargo
75
8.5
7.6
5
TD Bank
76
6.3
5.6
6
JPM Chase
54
5.1
4.5
7
First Niagara
84
4.1
3.6
8
Citi
17
3.2
2.9
9
Liberty
48
2.9
2.6
10
RBS
46
2.5
2.2
Branches
$BN
%
1
People's United
42
2.7
22.7
2
TD Bank
34
2.5
21.4
3
Merchants
32
1.3
11.2
4
RBS
20
0.8
6.7
5
KeyCorp
13
0.7
5.7
6
Northfield
13
0.5
4.5
7
Community
14
0.5
3.9
8
Union
12
0.4
3.6
9
Passumpsic
6
0.3
3.0
10
Berkshire Hills
6
0.3
2.7
Branches
$BN
%
1
B of A
241
61.0
25.3
2
RBS
248
27.5
11.4
3
Santander
226
20.1
8.4
4
TD Bank
152
11.5
4.8
5
Eastern Bank
95
7.2
3.0
6
Independent Bank
87
5.8
2.4
7
First Republic
4
4.7
1.9
8
Middlesex
54
3.5
1.5
9
Boston Private
11
3.4
1.4
10
People's United
53
3.2
1.3
Branches
$BN
%
1
RBS
74
7.0
24.1
2
TD Bank
73
5.8
20.1
3
B of A
27
4.4
15.4
4
People's United
28
1.4
4.8
5
NH Mutual
18
1.1
3.8
6
BNH
22
1.0
3.4
7
Santander
20
0.8
2.9
8
NH Thrift
21
0.8
2.9
9
Eastern Bank
6
0.8
2.7
10
Mascoma
19
0.7
2.6
Strong Deposit Market Positions
Connecticut
Massachusetts
Vermont
New York
New Hampshire
Maine
#1 in Fairfield County, CT, 65 branches, $7.7BN deposits, 20.9% market share
Source: SNL Financial; FDIC data as of June 30, 2014; excludes trust institutions; excludes
non-retail branches Notes: PBCT branch count updated as of September 30, 2014
|
 9
Large and Attractive Markets
NYC-Northern NJ-PA
Population: 20.0MM
Median HH Income: $64,538
Businesses: 810,883
Population Density (#/sq miles): 2,411
Unemployment Rate (%): 6.3
$100K+ Households (%): 31.5
Boston, MA
Population: 4.7MM
Median HH Income: $71,190
Businesses: 203,770
Population Density (#/sq miles): 1,347
Unemployment Rate (%): 5.5
$100K+ Households (%): 34.8
Hartford, CT
Population: 1.2MM
Median HH Income: $67,457
Businesses: 52,315
Population Density (#/sq miles): 802
Unemployment Rate (%): 6.9
$100K+ Households (%): 31.0
Bridgeport-Stamford, CT
Population: 944,000
Median HH Income: $78,095
Businesses: 49,392
Population Density (#/sq miles): 1,511
Unemployment Rate (%): 6.3
$100K+ Households (%): 39.6
New Haven, CT
Population: 862,000
Median HH Income: $61,762
Businesses: 36,800
Population Density (#/sq miles): 1,428
Unemployment Rate (%): 7.6
$100K+ Households (%): 28.0
Burlington, VT
Population: 215,000
Median HH Income: $65,440
Businesses: 10,846
Population Density (#/sq miles): 172
Unemployment Rate (%): 3.6
$100K+ Households (%): 27.4
Notes: The current national unemployment rate is 5.9%
The current national population density is 90 (#/sq miles)
Source: SNL Financial, US Census data
The population densities of NYC, Boston, Bridgeport and New Haven MSAs are each
over ten times the national average |
 Strong Market Demographic
Profile Source: SNL Financial, US Census data
Weighted Average Median Household Income
$70,277
$57,178
$51,579
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
PBCT
Peer Median
US
10 |
 11
Attractive Market Demographics
Source: SNL Financial; Nielsen; FDIC data as of June 30, 2014
1.
Excludes
deposits
from
trust
institutions
and
branches with
over
$750MM
deposits;
excludes branches and deposits located outside each MSA
2.
Rank weighted by percentage of franchise deposits
75% of People’s United’s franchise deposits are in its top 5 MSAs, which are some of the
most densely populated and wealthy markets in the US
People's
United's
Franchise
Metrics
1
MSA Rank out of 917 Nationwide MSAs
Market Size
Population
Median
% Households
Total Deposits
Market
% Deposit
Number of
Deposits
% of
Density
Household
with $200k+
People's United Top 5 MSAs
($MM)
Rank
Market Share
Branches
($MM)
Franchise
(# / sq. mile)
Income
Income
Bridgeport-Stamford-Norwalk, CT
$35,587
1
17.8%
65
$6,347
28.8
6
7
2
New York-Newark-Jersey City, NY-NJ-PA
618,311
20
0.5
93
3,041
13.8
2
34
12
Boston-Cambridge-Newton, MA-NH
131,316
8
2.1
52
2,784
12.6
8
18
9
Hartford-West Hartford-East Hartford, CT
26,857
4
8.7
45
2,324
10.6
20
26
21
New Haven-Milford, CT
18,087
4
11.6
32
2,104
9.6
7
49
34
Top 5 MSAs
$830,159
–
2.0%
287
$16,599
75.4
–
–
–
Weighted
Average
Rank
2
–
–
–
–
–
8
22
12
Rank / Nationwide MSAs (917 MSAs)
–
–
–
–
–
0.8%
2.4%
1.3% |
 12
Connecticut In-store Versus Traditional Branch Business (Last Twelve Months
Through 9/30/14) 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
58%
56%
42%
27%
27%
27%
27%
42%
44%
58%
73%
73%
73%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Consumer
Checking Accounts
Opened
Savings Accounts
Opened
Business Checking
Accounts Opened
Home Equity Loan
Originations
Mortgage Loan
Originations
Business Banking
Loan Originations
Investment Sales
In-store Branches
* Sold by employees who are also licensed representatives of our brokerage affiliate
Traditional Branches |
 Financial Performance |
 14
Consistent Loan Growth
Since the end of 2010, People’s United is one of only six banks within the top 50 by
assets that have grown loans in each quarter
1
Notes:
1
Top 50 banks by assets as of most recent year end; includes People’s United, First Niagara, First
Republic, Signature, UMB and Investors
2
Reflects completion of Danvers Bancorp acquisition in 2Q 2011
3
Based on 37 of the top 50 banks reporting
Quarterly Loan Growth Since 1Q 2011
PBCT Median = 1.82%
Top 50 Median = 1.27%
1.23%
0.64%
1.04%
1.97%
0.78%
1.86%
1.38%
1.97%
-0.35%
1.28%
0.90%
1.51%
1.27%
2.43%
1.03%
0.75%
1.04%
1.52%
0.21%
0.57%
2.20%
3.38%
1.82%
3.25%
1.40%
4.98%
0.95%
3.42%
1.95%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Top 50 Median
PBCT
13.86%
2
3
Source:
SNL Financial. Excludes trust banks. Statements based on Total Gross Loans and Finance Leases, as
reported, net of unearned discounts and gross of
loss reserves. Does not include accrued interest on loans |
 15
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
greater Boston
New York:
1
•
20 commercial relationship managers up from zero in 1Q 2010
•
96 branches up from 5 in 1Q 2010; 60 branches, or ~60%, are in-store locations
•
Total deposit growth of $2.8BN, or 67% compound annual growth, since 1Q 2010
Massachusetts:
1
•
34 commercial relationship managers up from 14 since 2010
•
53 branches up from 19 in 1Q 2010
•
Total deposit growth of $2.2BN, or 32% compound annual growth, since 1Q 2010
Notes:
1
Data as of September 30, 2014 |
 16
Under-represented asset classes ramping up
Bolstered
commercial
banking
presence
in
greater
Boston
and
Long
Island
Building mid-corporate and government banking productivity
Filling in New York metro Commercial Real Estate presence
Increased Private Banking activity with initial focus on CT, metro New York and
greater Boston Steady asset-based lending and mortgage warehouse lending
progress Enhancing wealth management offering
Added seasoned wealth management team in Hartford area
Proprietary asset allocation and risk management strategies are implemented both
internally and with a suite of external managers who represent our "best
in class" recommendations •
Unified
Managed
Account
technology
allows
us
to
“rent”
intellectual
capital
–
no
customer
funds
leave
the
bank
Increasing momentum in other fee income businesses with a focus on
cross-sell Delivering interest rate swaps and foreign exchange products
to corporate customers Expanding international trade finance with the recent
hire of a senior executive Merchant services joint venture highlights
commitment to better serve customers and drive growth Growing commercial
banking lending fees Revenue Opportunities
Product Capabilities |
 17
Growing Future Earnings Per Share
Loans and Deposits per Share
We have made substantial progress over the past year, growing loans and deposits
per share at compound annual growth rates of 15% and 17%, respectively
$84.64
$40
$45
$50
$55
$60
$65
$70
$75
$80
$85
$90
$16
$17
$18
$19
$20
$21
$22
$23
$24
$25
$26
3Q13
4Q13
1Q14
2Q14
3Q14
Deposits ($BN)
Deposits per Share
$40
$45
$50
$55
$60
$65
$70
$75
$80
$85
$90
$16
$17
$18
$19
$20
$21
$22
$23
$24
$25
$26
3Q13
4Q13
1Q14
2Q14
3Q14
Loans ($BN)
Loans per Share
$86.97 |
 18
Expense Management Oversight Committee (EMOC) has been fully operational since
November 2011
Committee comprised of the CEO, CFO of the Bank, Chief Administrative Officer and
Chief HR Officer
EMOC oversees:
Non-interest expense management and implements strategies to attain targeted
goals Revenue initiatives that require expenditures and conducts periodic
progress reviews Provides a horizontal view of the organization
Expense Management Units (EMUs) established to facilitate EMOC functions
Defined EMUs include:
Expense Management
•
Intangible Amortization
•
Decentralized
•
Depreciation/Equipment
•
Regulatory/Institutional
•
Marketing
•
Employment/Benefits
•
Real Estate Services
•
Operations
•
Technology
Spending requests above $25,000 are submitted by EMU owners for approval
Staffing models, staffing replacements and additions for mid-level positions and
above require approval by the Committee |
 19
Expense Management (cont.)
Operating expenses have remained relatively flat over the last two years
People’s United has managed expenses while also making significant investments
in: People
and
systems
amidst
a
regulatory
environment
of
heightened
expectations
Revenue and deposit gathering initiatives
Improving
customer
experiences
via
enhanced
delivery
of
products
and
services
Operating Non-interest Expense ($MM)
$204.5
$204.0
$205.4
$209.2
$207.7
$211.5
$206.7
$206.7
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014 |
 20
Expense Progress
Estimated Cost Savings Analysis
Source:
SNL Financial
Notes:
“Pro Forma / Actual”
represents PBCT operating non-interest 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 non-interest expense and the actual expenses at the acquired
institutions in 4Q09, and then applies the peer median expense growth rate in each subsequent
quarter Includes 18 of 20 peers reporting in 3Q 2014
Our 3Q 2014 operating expense base of $207MM reflects $33MM (~$132MM annualized)
savings from successfully-executed expense initiatives
207
240
200
210
220
230
240
250
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Operating Noninterest Expense ($MM)
Pro Forma / Actual
Without Expense Initiatives
$33MM
Cost
Savings |
 21
Expense Progress
Estimated Cost Savings Analysis
The $33MM in quarterly cost reductions is attributable to efforts related to
acquisition cost savings and other initiatives
Source:
SNL Financial
Notes:
“Pro Forma / Actual”
represents PBCT operating non-interest 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 non-interest expense and the actual expenses at the acquired
institutions in 4Q09, and then applies the peer median expense growth rate in each subsequent
quarter Includes 18 of 20 peers reporting in 3Q 2014
240
207
7
26
$0
$50
$100
$150
$200
$250
Without Expense
Initiatives
Announced Acquisition
Savings
Other Initiatives
Pro Forma / Actual
Operating Noninterest Expense ($MM) |
 22
Average Annual Net Charge Offs / Average Loans (%)
Peer Group Comparison, 2009-2013
Conservative underwriting is a hallmark of this institution
Median, excluding PBCT = 0.95%
Source: SNL Financial
0.28
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
PBCT |
 Summary |
 24
Summary
Sustainable Competitive Advantage
Premium brand built over 170 years
High quality Northeast footprint characterized by wealth, density and
commercial activity
Strong leadership team
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
Strong capital base |
 Appendix |
 26
Net
Interest
Income
(Fully
Taxable
Equivalent)
Linked Change
(in $ millions)
vs. Prior
Quarter
vs. Prior
Year
232.8
233.3
3.5
1.8
(2.8)
(0.4)
(0.3)
(1.3)
2Q 2014
Originated
Loans
Calendar
Day
Acquired
Loans
Borrowings
Investments
Deposits
3Q 2014
227.8
233.3
15.8
2.0
(1.6)
(0.2)
(10.5)
3Q 2013
Originated
Loans
Investments
Acquired
Loans
Borrowings
Deposits
3Q 2014 |
 27
Net Interest Margin (%)
Linked Change
vs. Prior
Quarter
vs. Prior
Year
3.13%
(0.06%)
(0.02%)
(0.01%)
(0.01%)
0.02%
3.05%
2Q 2014
New Loan
Volume &
Mix
Borrowings
Investments
Deposits
Calendar
Day
3Q 2014
3.30%
(0.24%)
(0.02%)
(0.02%)
0.03%
3.05%
3Q 2013
New Loan
Volume
Loan Mix
Borrowings
Investments
3Q 2014 |
 28
Agency MBS and Agency CMOs comprised of 10 year and 15 year collateral
constitute ~80% of the portfolio. Municipal bond portfolio has an underlying
weighted average credit rating above AA
Securities Portfolio Detail
3Q14 Total Securities Portfolio
$4.7 BN
($ in billions)
Note:
Duration of the securities portfolio is ~4 years
Agency CMO's, $2.0,
43%
Agency MBS, $1.7, 36%
Municipal
-
HTM, $0.6,
13%
FHLB Stock, $0.2, 4%
Bonds, Notes and
Debentures, $0.2, 4%
Securities portfolio does not contain CLOs, CDOs, trust preferred, or private-label
mortgage-backed securities Held to maturity (HTM) securities reported on an amortized cost
basis (book value). Available for sale (AFS) securities reported at fair value
|
 29
Loans
Linked Change
(in $ millions)
vs. Prior
Quarter
vs. Prior
Year
Annualized linked quarter change
7.8%
25,455
369
228
(98)
25,954
June 30, 2014
Commercial
Retail
Acquired
September 30, 2014
Year over year change
11.7%
23,227
2,590
619
(482)
25,954
September 30, 2013
Commercial
Retail
Acquired
September 30, 2014 |
 Loans by Business
Line Note:
Commercial represents Commercial & Industrial and Equipment Finance
3Q14 Total Loan Portfolio
$26.0 BN
Commercial
$9.7
37%
CRE
$9.3
36%
Residential
Mortgage
$4.8
18%
Consumer
$2.2
9%
30 |
 3Q14
Total Loan Portfolio $26.0 BN
Loans by Geography
Excluding equipment
finance loans, ~95%
of our 3Q14 loan
portfolio is within the
Northeast
31
Connecticut
$7.1
27%
New York
$4.9
19%
Massachusetts
$4.5
18%
Vermont
$1.8
7%
New Hampshire
$1.4
5%
Maine
$0.9
4%
New Jersey
$0.9
3%
Other
$4.5
17% |
 Commercial Real Estate,
$9.3BN, 36% of Total
Equipment Financing,
$2.8BN, 10% of Total
Commercial & Industrial,
$6.9BN, 27% of Total
($ in billions)
($ in billions)
($ in billions)
Commercial Loan Portfolio Detail
3Q 2014
73% of total loan portfolio
Office Buildings,
$2.2, 24%
Industrial/Manufact.,
$0.5, 5%
Hosp. &
Entertainment, $0.4,
4%
Mixed/Special
Use, $0.2, 2%
Self Storage, $0.2, 2%
Land, $0.1, 1%
Other Properties, $0.1,
1%
Retail, $2.4, 26%
Residential, $3.2, 35%
Manufacturing,
$1.0, 15%
Health, $0.7,
10%
Retail
Sales,
$0.6, 9%
Construction, $0.2, 3%
Transp/Utility, $0.2,
3%
Arts/Ent./Recr., $0.1,
1%
Information, $0.1, 1%
Public Admin, $0.1,
1%
Wholesale Dist.,
$0.7, 10%
Finance, Ins. & RE,
$1.9, 28%
Service, $1.3, 19%
Transp/Utility, $1.0,
35%
Construction,
$0.4, 13%
Finance,
RE, $0.3,
11%
Printing, $0.2, 7%
Waste, $0.2, 7%
Manufacturing, $0.2,
7%
Wholesale Dist., $0.1,
4%
Packaging, $0.1, 4%
Mining, Oil &
Gas, $0.1, 4%
Service, $0.1, 4%
Other, $0.1, 4%
Ins. &
32 |
 33
Residential Mortgage,
$4.8BN, 18% of Total
3Q 2014 originated weighted average LTV of 71%
3Q 2014 originated weighted average FICO score of 755
Hybrid ARMs represent ~90% of the portfolio
($ in billions)
Retail Loan Portfolio Detail
3Q 2014
Consumer,
$2.2BN, 9% of Total
3Q 2014 originated weighted average CLTV of 59%
3Q 2014 originated weighted average FICO score of 768
~60% of originations during last 3 years are in a first lien position
($ in billions)
27% of total loan portfolio
CT, $2.4, 48%
MA, $1.3, 27%
NY, $0.4, 9%
VT,
$0.3,
6%
NH, $0.2, 4%
ME, $0.1, 3%
Other, $0.1, 3%
CT, $1.3, 60%
VT, $0.3, 11%
NY, $0.2, 9%
MA, $0.2,
8%
NH, $0.1, 6%
ME, $0.1, 6% |
 Net
Interest Income (NII) Sensitivity Interest Rate Risk Profile
(1)
-0.5%
2.8%
6.4%
-3.1%
2.1%
4.0%
-0.4%
1.8%
4.5%
-3.8%
2.7%
5.1%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Short End -25
Short End +100
Short End +200
Long End -100
Long End +100
Long End +200
Yield Curve Twist
9/30/14
6/30/14
-1.2%
4.7%
10.0%
14.5%
19.0%
-1.4%
4.3%
9.2%
13.2%
17.2%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Dn25
Up100
Up200
Up300
Up400
Immediate Parallel Shock
9/30/14
6/30/14
34
Notes:
(1)
Yield curve twist pivot point is 18 month point on yield curve. Short End defined as overnight to 18
months. Long End defined as terms greater than 18 months |
 35
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 9/30/14
(in $ millions)
Carrying
Amount
a, b
Carrying Amount Component
b
NPLs
c
Non-Accretable
Difference/NPLs
Charge-offs
Incurred Since
Acquisition
d
Accretable
Yield
Non-Accretable
Difference
Danvers (7/1/11)
$602.3
$175.4
$9.9
$42.8
23%
$27.1
Smithtown (11/30/10)
377.3
188.1
93.8
59.4
158%
129.3
Others (various dates)
200.4
49.9
16.0
14.1
113%
33.4
Total
$1,180.0
$413.4
$119.7
$116.3
(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 $9.5MM of charge-offs applied against reserves
established subsequent to acquisition. |
 36
Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
Notes:
1.
Excluding FinFed, the weighted average coupon on the acquired loan portfolio is
4.26% 2.
Adjusted to include the discount on acquired loans (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
3Q14 Total Accretion (All interest income on acquired loans)
19
Interest Income from Amortization of Original Discount on Acq. Loan
Portfolio 5.5
3Q14 Average Acquired Loan Portfolio
1,225
3Q14 Effective Tax Rate
32.5%
Effective Yield on Acquired Loan Portfolio
6.17%
3Q14 Earnings from Amortiz. of Original Discount on Acq. Loan Portfolio
3.7
Weighted Average Coupon on Acquired Loan Portfolio
1
4.37%
3Q14 Weighted Average Shares Outstanding
298.4
Incremental Yield Attributable to Amortiz. of Discount on Acq. Loan Portfolio
1.80%
3Q14 EPS Impact from Amortiz. of Discount on Acq. Loan Portfolio
$0.01
Incremental Interest Income from Amortiz. of Discount on Acq. Loan Portfolio
5.5
3Q14 Average Earning Assets
30,556
Add: Average unamortized loan discount
2
143
Adjusted 3Q14 Average Earning Assets
2
30,699
Impact on Overall Net Interest Margin (bps)
7
Operating Net Interest Margin
3.05%
Adjusted Net Interest Margin
2.98%
Amortization of Original Discount on Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
|
 37
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)
Q2
0.0
5.8
0.9
6.7
Q3
3.0
0.0
(2.6)
0.4
Q4
0.2
(0.1)
0.1
0.2
2014
Q1
0.0
0.0
(1.5)
(1.5)
Q2
0.1
(0.4)
(0.8)
(1.1)
Q3
0.8
(0.2)
(2.0)
(1.4)
Total
$17.9
$13.6
($21.7)
$9.8
Since 2010, we have acquired $5.4BN of loans, approximately 22% 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 +$9.8MM |
 Balance Sheet Funding Detail
3Q14 Balance Sheet Funding
$34.8 BN
($ in billions)
81% funded by organic deposits, customer repurchase agreements and
common equity
Retail Deposits, $16.0, 46%
Commercial Deposits,
$7.0, 20%
Stockholders' Equity, $4.7,
14%
Fed Funds & FHLB
Borrowings, $2.9, 9%
Brokered Deposits, $2.2,
6%
Subordinated Borrowings
& Sr Notes, $1.0, 3%
Customer Repurchase
Agreements, $0.5, 1%
Other Liabilities, $0.5, 1%
38 |
 Deposits
Linked Change
(in $ millions)
Notes:
(1) Commercial includes Municipal deposits of
$1,182MM at 09/2013 and $1,397MM at 09/2014
(2) Retail includes brokered deposits of $2,228MM
at 09/2014 (none at 09/2013)
vs. Prior
Quarter
vs. Prior
Year
Notes:
(1) Commercial includes Municipal deposits of
$1,150MM at 06/2014 and $1,397MM at 09/2014
(2) Retail includes brokered deposits of $1,328MM
at 06/2014 and $2,228MM at 09/2014
Total
25,261
Commercial
(1)
Retail
(2)
Annualized linked quarter change
19.5%
24,089
17,526
18,217
6,563
7,044
481
691
June 30, 2014
Retail
Commercial
September 30,
2014
Total
Commercial
(1)
Retail
(2)
Year over year change
13.8%
22,190
25,261
15,897
18,217
6,293
7,044
751
2,320
September 30,
2013
Retail
Commercial
September 30,
2014
39 |
 Non-Interest Income
Linked Change
(in $ millions)
Note:
(1)
Non-operating income represents the 2Q 2014 gain on the merchant services joint
venture, net of related expenses Total
Non-Operating
Operating
100.1
84.0
vs. Prior
Quarter
vs. Prior
Year
79.5
(20.6)
2.0
1.2
1.1
0.5
(0.4)
0.1
84.0
20.6
-
2Q 2014
Non-
Operating
Insurance
Commercial
Banking
Lending
Fees
Gain on
Resi. Mtg
Sales
Bank
Service
Charges
Customer Int.
Rate Swap
Income
Other
3Q 2014
(1)
86.1
84.0
1.5
1.5
(2.8)
(0.6)
(0.3)
(1.4)
3Q 2013
Investment
Mgmt.
Fees
Operating
Leases
Gain on
Resi. Mtg Loan
Sales
Customer
Int. Rate
Swap
Income
Commercial
Banking
Lending
Fees
Insurance
3Q 2014
40
Loan |
 Non-Interest Income by Category
(in $ millions)
3Q14 Non-Interest Income
$84.0MM
Bank Service
Charges
$33.3
40%
Investment
Management Fees
$10.7
13%
Operating Lease
Income
12%
Insurance
Revenue
$8.8
10%
Commercial
Banking Lending
Fees
$8.6
10%
Brokerage
Commissions
$3.4
4%
Customer Interest
Rate Swap
Income, Net
$1.8
2%
Other
$7.2
9%
$10.2
41 |
 Total
Non-Operating
Operating
Non-Interest Expense
Linked Change
(in $ millions)
208.3
208.8
Total
Non-Operating
Operating
212.5
208.8
vs. Prior
Quarter
vs. Prior
Year
206.7
0.5
(0.6)
0.4
0.1
0.1
206.7
1.6
2.1
2Q 2014
Non-
Operating
Prof. & Outside
Svcs.
Adv. &
Promotion
Comp. &
Benefits
Other
3Q 2014
209.2
(1.2)
(2.7)
(1.8)
(1.0)
1.5
0.9
0.6
206.7
3.3
2.1
3Q 2013
Non-
Operating
REO
Prof. &
Outside
Svcs.
Adv. &
Promotion
Comp. &
Benefits
Operating
Leases
Other
3Q 2014
42 |
 Non-Interest Expense by Category
(in $ millions)
3Q14 Non-Interest Expense
Total: $208.8MM; Operating: $206.7MM
Comp. & Benefits
$108.1
52%
Occupancy &
Equipment
$36.4
17%
Professional &
Outside Services
$14.3
7%
Operating Lease
Expense
$8.7
4%
Regulatory
Assessments
$8.5
4%
Amort. Of Acq.-
Assets
$6.2
3%
Other
$26.6
13%
related Intangible
43 |
 Efficiency Ratio (%)
Last Five Quarters
62.2%
62.8%
63.9%
61.8%
61.4%
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
44 |
 Operating ROAA (%)
Last Five Quarters
0.78%
0.75%
0.69%
0.72%
0.74%
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
45 |
 46
Operating ROATE (%)
Last Five Quarters
9.8%
9.8%
9.3%
9.6%
9.9%
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014 |
 47
Operating Dividend Payout Ratio (%)
Last Five Quarters
83%
83%
86%
82%
78%
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014 |
 48
Substantial Progress Over the Last Five Years
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 $2.2BN to shareholders
during this period. Returns of capital were in the form of both
dividends
($1.1BN) and share repurchases ($1.1BN) which represents
approximately 50% of our current market capitalization
Line Item
PBCT
Peer
Median
PBCT Vs.
Peers
5-Year Loans Per Share CAGR
15.3%
1.3%
+14.0%
5-Year Deposits Per Share CAGR
13.4%
3.0%
+10.4%
Notes:
5-Year CAGR figures based on 3Q 2009 to 3Q 2014 data
Includes 18 of 20 peers reporting in 3Q 2014 |
 49
Attractive Risk Profile
Ability to maintain strong credit quality
Conservative credit culture marked by absence of credit “events”
Median net charge-offs / average loans since 2007 have been 18 bps
Well-diversified commercial and retail banking portfolios
Low operating risk profile
Consistently profitable throughout the credit cycle
Straightforward
portfolio
of
products
–
no
complex
financial
exposures
Credit
ratings
of
Baa1
/
BBB+
/
A-
as
rated
by
Moody’s,
S&P
and
Fitch,
respectively
Robust liquidity
Strong deposit market share in most core markets
Unused FHLB of Boston borrowing capacity of $4.9BN at 3Q 2014
3Q 2014 net loan-to-deposit ratio of 102.0% |
 50
Commercial Credit Culture and Approval Process
Well-defined credit culture and underwriting standards
Cash flow –
deal specific and global
Collateral / limited unsecured exposure with equity investment requirements and
guarantees No speculative real estate projects
Industry knowledge and expertise (i.e. basic industries and property types)
Seasoned relationship managers with considerable local market knowledge
Experienced senior credit officers (SCO) average 25+ years of commercial banking
experience Approval authority
Local, regional and corporate credit committee structure
>$25MM also requires Executive Risk Oversight Committee approval
Credit analyst / relationship manager complete detailed loan submission
Stress test cash flow for interest rate sensitivities, vacancy and rental rates
Independent field exams and appraisal review
Credit structure includes meaningful covenants, appropriate LTVs and monitored advance rates Due diligence
begins prior to the issuance of a proposal (market manager & SCO) and independent credit
associates in Risk Management are utilized |
 51
Last Five Quarters
Asset Quality
NPAs / Loans & REO (%)
(1)
Source: SNL Financial and Company filings
Notes: Top 50 Banks represents the largest 50 banks by total assets in each respective quarter
0.92
0.50
1.00
1.50
2.00
2.50
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
PBCT
Peer Group
-
Median
Top 50 Banks -
Median
(1)
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
|
 52
Asset Quality
Net Charge-Offs / Avg. Loans (%)
(1)
(1)
Excluding acquired loan charge-offs, PBCT’s charge-off ratio was 0.12%, 0.09%, 0.09%,
0.17% and 0.16% in 3Q 2014, 2Q 2014, 1Q 2014, 4Q 2013 and 3Q 2013, respectively
Last Five Quarters
Source: SNL Financial and Company filings
Notes: Top 50 Banks represents the largest 50 banks by total assets in each respective quarter
0.13
0.00
0.10
0.20
0.30
0.40
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
PBCT
Peer Group -
Median
Top 50 Banks -
Median |
 53
Allowance for Loan Losses
Originated Portfolio Coverage Detail as of September 30, 2014
(in $ millions)
0.76%
0.92%
0.00%
0.50%
1.00%
1.50%
NPLs:Loans
ALLL:Loans
Commercial
Banking
0.88%
0.29%
0.00%
0.50%
1.00%
1.50%
NPLs:Loans
ALLL:Loans
Retail Banking
Commercial ALLL -
$166.0 million
120% of Commercial NPLs
Retail ALLL -
$19.0 million
32% of Retail NPLs
Total ALLL -
$185.0 million
94% of Total NPLs
0.79%
0.75%
0.00%
0.50%
1.00%
1.50%
NPLs:Loans
ALLL:Loans
Total |
 54
Capital Ratios
Last Five Quarters
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
People’s United Financial
Tang. Com. Equity/Tang. Assets
8.5%
7.9%
8.0%
7.9%
7.8%
Leverage Ratio
1, 5
9.2%
8.3%
8.4%
8.3%
8.1%
Tier 1 Common
11.4%
10.2%
10.1%
10.0%
9.9%
Tier 1 Risk-Based Capital
3, 5
11.4%
10.2%
10.1%
10.0%
9.9%
Total Risk-Based Capital
4, 5
12.6%
11.3%
11.2%
12.5%
12.3%
People’s United Bank
Leverage Ratio
1, 5
9.5%
9.1%
9.1%
9.0%
8.8%
Tier 1 Risk-Based Capital
3, 5
11.8%
11.1%
11.0%
10.8%
10.7%
Total Risk-Based Capital
4, 5
13.2%
12.4%
12.2%
13.5%
13.3%
2
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 Common Equity Tier 1 Capital (calculated in accordance with the Basel III
Final Rule issued in July 2013) 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 under current capital rules for the Bank are: Leverage Ratio, 5%; Tier 1
Risk-Based Capital, 6%; and Total Risk-Based Capital, 10%
|
 55
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 (People’s United
Financial, Inc.), Director
25+
People’s United Bank, Santander, Sovereign,
Chittenden, Northeast Financial
Galan Daukas
SEVP Wealth Management
25+
People’s United Bank, Washington Trust, The
Managers Funds, Harbor Capital Mgmt
Sara Longobardi
SEVP Retail Banking
20+
People’s United Bank
Dave Norton
SEVP & Chief HR Officer
5+
People’s United Bank, New York Times,
Starwood, PepsiCo
Lee Powlus
SEVP & Chief Administrative Officer
25+
People’s United Bank, Chittenden, Alltel
David Rosato
SEVP & CFO (People’s United Bank)
25+
People’s United Bank, Webster, Allfirst
Chantal Simon
SEVP & Chief Risk Officer
25+
People’s United Bank, Merrill Lynch US Bank,
Lazard Freres & Co.
Jeff Tengel
SEVP Commercial Banking
30+
People’s United Bank, PNC, National City
Bob Trautmann
SEVP & General Counsel
20+
People’s United Bank, Tyler Cooper & Alcorn
Management Committee |
 56
Solid Governance Structure
Board of Directors
People’s United
Financial, Inc.
Board of Directors
People’s United Bank
The Management
Committee
Management
Committees
Enterprise
Risk
Committee
Compensation,
Nominating &
Governance Committee
Audit
Committee
Treasury &
Finance
Committee
Regulatory
Steering
Committee
Executive Risk
Oversight Committee
Asset and Liability
Committee
Capital Management
Committee
Credit Policy
Committee
Asset
Quality
Committee
Expense Management
Oversight
Committee
Model Risk
Management
Committee
Disclosure
Committee
New Product
Approval
Committee
Senior Trust
Management
Committee
Transactions with
Affiliates Committee
HR
Administrative
Committee
CRA and Community
Development
Committee
Executive Technology
Committee
Real Estate
Committee
Marketing
Committee
Loan Review
Committee
Trust
Committee
Fraud Risk
Management
Committee |
 57
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 |
 58
Non-GAAP Financial Measures and Reconciliation to GAAP
In addition to evaluating People’s United Financial’s results of operations in accordance
with U.S. generally accepted accounting principles (“GAAP”), management routinely
supplements 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 acquired loans, and non-recurring income) (the denominator). In addition, operating
lease expense is excluded from total non-interest expense and netted against operating
lease income within non-interest income to conform with the reporting approach applied to our
other fee-based businesses that are already presented on a net basis. People’s United
Financial generally considers an item of income or expense to be non-recurring if it is not
similar to an item of income or expense of a type incurred within the last two years and is not
similar to an item of income or expense of a type reasonably expected to be incurred within the
following two years. |
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Non-GAAP Financial Measures and Reconciliation to GAAP
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, non-recurring gains/losses, merger-related expenses (including acquisition
integration and other costs), 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.
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. |
 For
more information, investors may contact: Andrew Hersom
203-338-4581
andrew.hersom@peoples.com |