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| 8-K - 8-K - People's United Financial, Inc. | d580916d8k.htm |
 A Premium Brand Built Over 175 Years
Investor Presentation
May 2018 Exhibit 99.1 |
 1 Forward-Looking Statement Certain statements contained in this presentation are forward-looking in nature. These include all statements about
People's United Financial, Inc. (“People’s United”) 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’ 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 include, but are not limited to: (1) changes in general,
international, 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;
(9) the successful integration of acquisitions; and (10) changes in regulation resulting from or relating to financial reform legislation. People's United does not undertake any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. |
 2 A Premium Brand Built Over 175 years • Leading market position in one of the best commercial banking markets in the U.S. • Customer centric approach to banking • Diversified portfolio of products & services • Relationship profitability focus • Consistent and sustainable earnings growth • Exceptional risk management & asset quality • Consistent cash return of capital to shareholders Unwavering commitment to building a strong banking franchise for the long-term |
 Founded in 1842, People’s United is a premier, community-based regional
bank with leading positions across the large and attractive
banking markets of the northeastern United States 3
Expertise in Consumer, Business, Commercial Banking, Wealth Management, and
Insurance Solutions Assets
Loans Deposits Branches Market Capitalization $44.1 Billion $32.1 Billion Dividend Yield $32.9 Billion Approx. 400 $6.3 Billion 3.7% *Financial / branch data as of March 31, 2018. Market capitalization and dividend yield as of April 26, 2018
Corporate Overview |
 4 Jack Barnes President & CEO, Director Years in Banking: 30+ Professional Experience: People’s United Bank (SEVP, CAO), Chittenden, FDIC Galan Daukus SEVP Wealth Management Years in Banking: 30+ Professional Experience: People’s United Bank, Washington Trust, The Managers
Fund,
Harbor Capital
Management Sara Longobardi
SEVP Retail Banking
Years in Banking: 30+
Professional Experience:
People’s United Bank
Dave Norton SEVP, Chief Human Resources Officer Years in Banking: 5+ Professional Experience: People’s United Bank, New York Times, Starwood, PepsiCo Lee Powlus SEVP, Chief Administrative Officer Years in Banking: 25+ Professional Experience: People’s United Bank, Chittenden, Alltel David Rosato SEVP & CFO Years in Banking: 30+ Professional Experience: People’s United Bank, Webster, M&T Chantal Simon SEVP & Chief Risk Officer Years in Banking: 25+ Professional Experience: People’s United Bank, Merrill Lynch US Bank, Lazard Freres & Co.
Jeff Tengel SEVP Commercial Banking Years in Banking: 30+ Professional Experience: People’s United Bank, PNC, National City Bob Trautmann SEVP, General Counsel Years in Banking: 20+ Professional Experience: People’s United Bank, Tyler Cooper & Alcorn Kirk Walters SEVP Corporate Development & Strategic Planning, Director Years in Banking: 30+ Professional Experience: People’s United Bank, Santander, Sovereign, Chittenden, Northeast Financial
Seasoned Leadership Team
Collectively over 250 years of banking experience
|
 c 5 which comprised: Chittenden Bank Burlington, VT Ocean Bank Portsmouth, NH Maine Bank & Trust Portland, ME Merrill Bank Bangor, ME Flagship Bank Worcester, MA Bank of West. Mass. Springfield, MA 57 branches from Citizens in the New York Metro area Including 53 branches in Stop & Shop supermarkets Since 1995, People’s United has had an exclusive relationship with Stop & Shop to operate branches in Connecticut stores Danvers, MA Financial Federal New York, NY Lowell, MA North Andover, MA Smithtown, NY Suffolk Bancorp Riverhead, NY Thoughtful Geographic Expansion Acquisitions expanded and then further deepened People’s United presence beyond Connecticut into the
New York Metro area and New England, particularly Greater Boston
2008 2010 2011 2012 2017 LEAF Commercial Capital Philadelphia, PA (Equipment Finance) Acquisitions (Equipment Finance) |
 In-Store Branches
Traditional Branches
Successful In-Store Branch Strategy
In-store locations are open 37% more hours per week, but are approximately
30% less expensive to operate •
Operate 148 in-store branches at Stop & Shop grocery stores in CT &
NY •
Leverage People’s United brand with the ~3.3 million shoppers who visit
CT & NY Stop & Shop locations each week
• Offer same products and services as a traditional branch • Utilize hub and spoke strategy – In-store locations situated near a traditional branch – Customers often use both in-store and traditional locations • Open 56 hours per week versus 41 hours for a traditional branch 55% 50% 39% 33% 32% 24% 16% 45% 50% 61% 67% 68% 76% 84% Consumer Checking Accounts Opened Savings Accounts Opened Business Checking Accounts Opened Home Equity Loans Originations Investment Sales Mortgage Loan Originations Business Banking Loan Originations (Last 12 months through March 31, 2018 ) Note: statistics represent Connecticut and New York branches only Inwood, New York – (Long Island) 6 |
 7 • Long-term relationships with customers; average tenure of our top 25 relationships is ~16 years
• Local decision making; customers relationships are with local management
• Single point of contact with customers; break down silos to present a full range of solutions comparable to
that of larger banks
• Senior management frequently interacts with customers • Reputation and word-of-mouth referrals often drive new business • Broad distribution: ~400 branches across six states, ~600 ATMs, online and mobile banking
• Call center operations locally located in Bridgeport, CT and Burlington, VT
Long History of Relationship Management
Since 2009 Greenwich Associates* has granted People’s United 42 awards
for Excellence in Middle Market and Small Business
Banking *Greenwich Associates is the leading provider of local
market intelligence and advisory services for the banking industry.
Our ability to build deep, multi-product relationships not only satisfies
the needs of customers, but also improves the Company’s
profitability |
 8 Diversified Loan Portfolio by Product Commercial Real Estate $10.8 / 34% Equipment Financing $3.9 / 12% Residential Mortgage $6.8 / 21% Commercial & Industrial $8.6 / 27% Home Equity & Other Consumer $2.0 / 6% Successful geographic expansion, organic growth, opportunistic acquisitions, investment in talent and new
business initiatives have driven continued growth
Note: Acquisitions of Suffolk Bancorp & LEAF Commercial Capital &
closed in 2017 Commercial: $23.3 / 73%
Retail: $ 8.8 / 27%
$21.7 $24.4 $26.6 $28.4 $29.7 $32.6 $32.1 2012 2013 2014 2015 2016 2017 Mar. 31, 2018 CAGR: 8% ($ in billions, end of period loan balances) |
 Home Equity Loans 11% Packaging 3% Manufacturing 5% Wholesale Dist. 5% Hospitality & Entertainment 6% Health Services 4% Other 5% 9 (At March 31, 2018, end of period balances) Other 4% Health Care 4% Industrial / Manufacturing 6% Finance & Insurance 16% Service 18% Manufacturing 15% Wholesale Dist. 14% Retail Trade 9% Transportation / Utility 29% Construction 13% Rental & Leasing 14% Service 10% Real Estate 10% Diversified Loan Portfolio by Product Commercial Real Estate: $10.8 billion
Commercial & Industrial: $8.6
billion Equipment Financing:
$3.9 billion Residential
Mortgage: $6.8 billion
Home Equity & Other Consumer: $2.0
billion Health
Services 8% Other 7% • Originated weighted average FICO score – 1Q 2018 – Residential mortgage: 756 – Home equity: 764 • Originated weighted average LTV – 1Q 2018 – Residential mortgage: 70% – Home equity: 61% • 63% of home equity originations during past 3 years in first lien position Fixed Rate 13% Adjustable Rate 87% Commercial Retail Home Equity Lines of Credit 87% Printing 5% Waste 5% Retail Trade 2% Residential (Multi-Family) 34% Retail 27% Office Buildings 19% Transportation/ Utility 3% Other 2% |
 10 Leveraging investments in the New York Metro and Greater Boston areas, while also strengthening multi-
product relationships across heritage markets and growing national
businesses Total Loan Portfolio:
$21.7 Billion December 31,
2012 Diversified Loan Portfolio by Geography
CAGR: 13% New York / Massachusetts $6.9 Billion / 31% New York / Massachusetts $12.8 Billion / 40% Total Loan Portfolio: $32.1 Billion
March 31, 2018 |
 c 11 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 0.18% PBCT Median, excluding PBCT = 0.90% Source: SNL Financial Sustained Exceptional Asset Quality Our conservative and well-defined underwriting approach will not be sacrificed to achieve growth as
maintaining exceptional asset quality is an important lever in building
long-term value Asset quality is owned by all levels of the
franchise Average Annual Net Charge-Offs / Average
Loans Peer Group 10-Year Comparison
(2008-2017) |
 12 High Quality Securities Portfolio ($ in billions, end of period balances) Agency MBS - AFS $2.6 / 36% Municipal - HTM $2.1 / 29% Agency MBS - HTM $1.5 / 21% Bonds, Notes & Debentures $0.7 / 10% 16.3% 15.8% 16.6% 16.6% 13.9% 15.2% % of Assets Note: Duration of the securities portfolio is ~5.1 years 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 Securities portfolio as a percentage of total assets remains
low relative to peers 15.4%
$4.7 $5.0 $5.0 $6.4 $6.7 $7.0 $7.2 2012 2013 2014 2015 2016 2017 Mar. 31, 2018 FHLB, Federal Reserve Bank Stock & Other $0.3 / 4% Agency MBS comprised of 10-year & 15-year pass-throughs and 6-year CMBS constitutes 56% of the portfolio Municipal bond portfolio has an underlying weighted credit rating above AA |
 13 Emphasizing Deposit Gathering Across the Franchise Strong deposit market positions across our footprint and significant growth opportunities in New York
Metro and Massachusetts
($ in billions, end of period balances)
Connecticut $17.3B / 52% New York $5.2B / 16% Massachusetts $4.2B / 13% Vermont $3.2B / 10% New Hampshire $1.6B / 5% Maine $1.4B / 4% 41bps 1 Source: SNL Financial; FDIC data as of June 30, 2017; excludes trust institutions; excludes non-retail branches
34bps 35bps 33bps 37bps 43bps Deposit costs Note: Acquisition of Suffolk Bancorp closed in 2017 50bps $21.8 $22.6 $26.1 $28.4 $29.9 $33.1 $32.9 2012 2013 2014 2015 2016 2017 March 31, 2018 CAGR: 8% Leading Deposit Market Shares 1 #4 in New England #3 in Connecticut (#1 in Fairfield County)
#1 in Vermont
#4 in New Hampshire |
 Net interest income in 2017 & 2018 benefited from higher yields on new
business and the upward repricing of floating rate loans, while
loan growth outweighed net interest margin compression in prior years
14 Focusing on Revenue Growth: Net-Interest Income $722 $762 $831 $877 $933 $1,071 $241 $290 $207 $127 $81 $55 $39 $29 $8 $6 2012 2013 2014 2015 2016 2017 1Q 2017 1Q 2018 CAGR: 3% (ex. Accretion: 8%) $929 $889 $912 $932 $972 $1,100 ($ in million) Net-Interest Income (ex. Accretion) Accretion 2.98% 2.88% 3.09% 3.31% 3.86% Net Interest Margin 2.80% 2.82% 3.05% $249 $296 Note: Acquisitions of Suffolk Bancorp & LEAF Commercial Capital & closed in 2017 |
 c Strengthening non-interest income organically and via acquisition despite industry-wide headwinds related
to bank service charges
15 Focusing on Revenue Growth: Non-Interest Income $212 $235 $224 $242 $245 $265 $61 $66 $108 $107 $106 $101 $98 $98 $24 $24 2012 2013 2014 2015 2016 2017 1Q 2017 1Q 2018 CAGR: 3% (ex. Bank Service Charges: 5%) ($ in million) Aspire for 30% of total revenues to be derived from non-interest income Bank Service Charges $24 / 27% Operating Lease Income: $11 / 12% Other: $6 / 7% 1 st Quarter 2018 $320 $342 $330 $343 $343 $363 Non-Interest Income 1 1 Excludes: • Security losses of $10 million in FY 2017 incurred as a tax planning strategy in response to tax reform and deemed non-operating
given their non-recurring nature.
• One-time gains of $9 million in 2015 (payroll services sale) and $21 million in 2014 (merchant services joint venture).
Investment Management Fees: $18 / 20% Commercial Banking Lending Fees: $10/ 11% Insurance: $10 / 11% Cash Management: $7 / 8% Brokerage Commissions: $3 / 3% Customer Int. Rate Swaps: $1/ 1% Non-Interest Income (ex. Bank Service Charges) Bank Service Charges $90 $85 |
 16 Enhancing Wealth Management Business Acquired November 2016 • New York City-based investment management firm with over two decades of experience creating innovative solutions for clients. • Manages assets using a quantitative Multi-Factor® approach, which structures portfolios to overweight the factors that leading-edge academic research has identified as having the potential to deliver enhanced returns. Discretionary Assets Under Management ($ in billions, end of period deposit balances) Some of the country’s most attractive demographic markets for potential Wealth clients are within
People’s United footprint
Full Range of Wealth Services & Solutions
Financial planning
Trust & estate solutions
Investment management
Private banking
Self-directed investing
Retirement plan services
Institutional trust services
$4.5 $5.2 $5.5 $5.6 $8.0 $9.1 $9.0 2012 2013 2014 2015 2016 2017 March 31, 2018 CAGR: 14% |
 c 17 Deeply Ingrained Culture of Controlling Costs Thoughtfully managing expenses while continuing to make strategic investments in revenue producing
initiatives and cover heightened regulatory compliance costs
Note: Closed acquisitions of Suffolk Bancorp & LEAF Commercial Capital in
2017 $826
$838 $842 $861 $864 $930 $225 $244 2012 2013 2014 2015 2016 2017 1Q 2017 1Q 2018 CAGR: 2% ($ in millions) Continued emphasis on improving operating leverage has steadily lowered the efficiency ratio Compensation & Benefits: $141 / 58% Occupancy & Equipment: $41 / 17% Professional & Outside Services: $19 / 8% Other: $18 / 6% Non-Interest Expenses (Ex. merger-related and acquisition integration costs) 2012 2013 2014 2015 2016 2017
61.2% 62.3% 62.1% 61.5%
60.5% 57.7% Regulatory
Assessments: $11 / 5%
Operating Lease
Expense: $9 / 4% Amortization of Other Acquisition-Related Intangible Assets: $5/ 2% 1 st Quarter 2018 Merger-related and acquisition integration costs: 1Q 2017: $1 million; 2017: $31 million; 2016: $5 million; 2013: $1
million; 2012: $5 million. 1st Quarter
2017 2018
59.4% 59.4% |
 18 Preparing for the $50 Billion Asset Threshold Goal is to complete the process internally and avoid unusual one-time costs
• In 2015, People’s United formed a program, “B50B” or “Be $50 Billion”, designed to further drive the
organization to meet the heightened expectations with
predictability, sustainability and scalability. At the foundation of the program are the following core elements: – Corporate governance – Organizational structure / staffing – Policy / process / procedure – Control, model and data governance • Given the strategic priority of B50B, a steering committee was established to oversee the program’s success
– Committee is chaired by the CEO – Reports to the Executive Risk Oversight Committee and, at the Board level, the Enterprise Risk Committee
• Within B50B, cross-functional readiness review teams were assigned to key requirements identified as critical to
crossing the $50 billion asset threshold
– Readiness review teams include seniors leaders from the impacted area as well senior leaders from Information
Technology, Legal, Compliance/Risk, and Audit
– These teams have completed gap analyses on each of these requirements – As a result of this analysis, the Company continues to build out modeling, data management and staff capabilities
• In recent years, the Company has made investments to its corporate infrastructure in areas such as enterprise risk
management, model development and validation, internal audit, compliance,
operational risk, and BSA/AML |
 19 Continuing to Enhance Profitability Our consistent, customer-centric approach to banking combined with a full range of products and services
differentiates People’s United and further enhances profitability
Income Per Common Share
1 2017 results were notably impacted by merger-related expenses of $30.6 million pre-tax ($22.0 million after-tax)
CAGR: 8% $1.04 Operating Earnings Per Common Share $0.72 $0.74 $0.84 $0.86 $0.92 $0.97 $0.22 $0.30 2012 2013 2014 2015 2016 2017 1Q 2017 1Q 2018 1 |
 c 20 One of the Company’s most important objectives is protecting the dividend as the franchise grows in size
$0.01 $0.07 $0.09 $0.11 $0.14 $0.18 $0.22 $0.25 $0.28 $0.30 $0.32 $0.36 $0.41 $0.46 $0.52 $0.58 $0.61 $0.62 $0.63 $0.64 $0.65 $0.66 $0.67 $0.68 $0.69 $0.70 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Consistent Return of Capital Our prudent management of capital has enabled us to grow the business organically and invest
strategically in the franchise, while also providing a consistent cash return of
capital to shareholders 25 Consecutive Years of
Increases Common Stock Dividend Per Share
|
 21 $46 $52 $60 $131 $194 $204 $218 $221 $218 $205 $197 $201 $206 $228 $200 $137 $124 $151 $138 $101 $83 $192 $245 $232 $252 $260 $279 $323 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Common Dividends Paid Net Income Available to Common Shareholders Second Step Conversion April 2007 ($ in millions) The common dividend per share was not adjusted despite the share count increase from the 2007 second
step conversion and led to an outsized common dividend payout ratio
Reducing Common Dividend Payout Ratio Through Earnings
Growth
23%
38% 48% 87%
141% 201% 264% 115%
89%
88%
78% 77% 74% 71%
Common Dividend Payout Ratio
Note: The Company repurchased 86 million
common shares from 2010-2013
1Q 2018 Common
Dividend Payout
Ratio: 56%
|
 c 22 Moving Forward Further expansion in New York Metro and Greater Boston areas, while continuing to
strengthen multi-product relationships across heritage markets and grow
national businesses
Build upon recent acquisitions of Suffolk Bancorp, LEAF and Gerstein
Fisher Expand commercial verticals e.g. Healthcare, SBA
Lending Leverage recently implemented customer relationship
management system Improve sales force effectiveness and
accelerate referral activity Broaden customer
relationships Enhance technology and marketing capabilities
Utilize technology to improve efficiencies and customer
experience Invest in digital marketing with new tools and usage
of data Improve customer acquisition and retention
Introduce new products and product enhancements to better serve customers and
further diversify revenue mix
Build-out syndications capability to compete on larger
transactions Continue to improve international
services Continue to enhance large-corporate and government
banking businesses Leverage recent selections to manage core
banking services for Massachusetts and Vermont
Further strengthen deposit gathering capabilities across the
franchise We are committed to provide superior service to clients
and remain confident in our ability to deliver value to
shareholders Prudential Center Branch –
Boston, Massachusetts
Park Avenue Branch –
Manhattan, New York |
 c Shareholder Focused Corporate Governance Structure 23 • Diverse Board of Directors with broad experience, expertise and qualifications
• Position of Chief Executive Officer separate from Chairman of the Board since 2008
• Ten of the Company’s twelve directors are independent Independent members of Board meet regularly in executive session Bylaws require non-executive Chairman of the Board be an independent director
Each member of Compensation, Nominating and Governance Committee is
independent •
All directors elected annually
Election of directors by majority vote, not plurality vote
• Board conducts annual self evaluation • Compensation program for senior executive officers aligned with pay for performance principles
Stock ownership guidelines (CEO 5X base salary, other senior executive
officers 3X base salary) Incentive compensation
clawback policy adopted
Prohibition on hedging and pledging |
 24 Helping communities where we live and work to grow and thrive is good for business
Community Partnership Matters
Community Development
Youth Development
Affordable Housing
Areas of Focus
$3.5 Million $4.5 Million Over 800 Workshops $98.4 Million Over 32,000 Hours In grants awarded by People’s United Community Foundations to over 500 nonprofit organizations In charitable contributions, sponsorships and volunteer impact from People’s United Bank Promoting financial literacy; reaching nearly 22,500 individuals In equity investments in affordable housing
& SBA loans
Contributed by employee volunteerism
Full Year 2017
Total Giving: $106.4 Million
Volunteer Hours and Workshops |
 First Quarter 2018 Results |
 4Q 2017 Loans Investments Calendar Days Borrowings Deposits 1Q 2018 26 Net Interest Income ($ in millions) $292.3 $295.8 1 Net interest income on a fully taxable equivalent basis for 4Q 2017 and 1Q 2018 was $304.1 million and $302.1 million,
respectively. +$3.5 or 1%
Linked-Quarter Change
$10.7 ($3.8) $2.7 ($3.8) ($2.3) 1 |
 27 Net Interest Margin 4Q 2017 Loans Calendar Days Deposits Investments Borrowings 1Q 2018 3.07% 3.05% (2 bps) Linked-Quarter Change 10 bps (4 bps) (4 bps) (2 bps) (2 bps) |
 Loans 28 $11,102 $10,934 $8,533 $8,419 $3,751 $3,871 $6,806 $6,837 $2,079 $2,035 4Q 2017 Equipment Financing Residential Mortgage Commercial Real Estate Commercial & Industrial Home Equity & Other Consumer 1Q 2018 Commercial Real Estate Commercial & Industrial Equipment Financing Residential Mortgage Home Equity & Other Consumer $32,096 ($ in millions, average balances) $32,271 Linked-quarter change: ($175) million or <1% Linked-Quarter Change $120 ($44) $31 ($114) ($168) |
 29 Deposits $15,115 $15,236 $7,855 $7,797 $5,418 $5,384 $4,490 $4,407 4Q 2017 Interest-Bearing Checking & Money Market Savings Non-Interest Bearing Time 1Q 2018 Interest-Bearing Checking & Money Market Non-Interest-Bearing Time Savings ($ in millions, average balances) $32,824 $32,878 Linked-quarter change: ($54) million or <1% Linked-Quarter Change $121 ($83) ($58) ($34) |
 30 Non-Interest Income ($ in millions) 4Q 2017 Net Security Gains / Losses¹
Insurance Revenue Commercial Banking Lending Fees Customer Interest Rate Swap Income Operating Lease Income Bank Service Charges Other 1Q 2018 $87.3 $90.4 ($3.7) $9.9 +$3.1 or 4% Linked-Quarter Change $2.9 $1.6 ($1.0) ($0.9) ($5.7) 1 4Q 2017 included $10.0 million of security losses incurred as a tax planning strategy in response to tax reform and deemed
non-operating given their non-recurring nature. |
 31 Non-Interest Expense ($ in millions) 4Q 2017 Merger-Related Expenses Compensation & Benefits Professional & Outside Services Amort. of Other Acquisition-related Intangible Assets Regulatory Assessments 1Q 2018 $243.5 $239.7 ($1.6) +$3.8 or 2% Linked-Quarter Change $8.6 $0.9 ($1.3) ($2.8) |
 32 Efficiency Ratio 59.4% 58.4% 57.3% 56.1% 59.4% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018¹ Quarterly Trend 1 The unfavorable impact of tax reform added approximately 90 basis points due to lower FTE adjustments on net interest
income. |
 33 Asset Quality Notes: Source: SNL Financial Top 50 Banks represents the largest 50 banks by total assets in each respective quarter.
0.63 0.67 0.64 0.56 0.58 1.37 1.41 1.36 1.20 1.35 1.26 1.21 1.14 0.5 1.0 1.5 2.0 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 0.03 0.09 0.06 0.08 0.06 0.19 0.21 0.20 0.22 0.22 0.21 0.20 0.22 0.0 0.1 0.2 0.3 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2 Ex. acquired loan charge-offs, PBCT’s charge-off ratio was 0.04%, 0.06%, 0.05%, 0.06% & 0.03% in 1Q 2018, 4Q 2017, 3Q
2017, 2Q 2017 & 1Q 2017, respectively PBCT
Peer Group (Median)
Top 50 Banks (Median)
PBCT Peer Group (Median) Top 50 Banks (Median) Non-Performing Assets / Loans & REO (%)¹
Net Charge-offs / Average
Loans² 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 |
 34 Returns 0.70% 0.65% 0.84% 0.96% 0.98% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 9.6% 8.7% 11.8% 13.8% 13.8% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 Return on Average Assets Return on Average Tangible Common Equity 0.77% 10.9% Returns calculated on an operating basis 2nd quarter 2017 returns were significantly impacted by merger-related expenses of $24.8 million ($16.8 million after-tax). |
 35 Capital Ratios Mar. 31, 2017 Jun. 30, 2017 Sep. 30, 2017 Dec. 31, 2017 Mar. 31, 2018 People’s United Financial, Inc. Tang. Com. Equity/Tang. Assets 7.4% 7.5% 7.1% 7.2% 7.3% Tier 1 Leverage 8.5% 8.6% 8.3% 8.3% 8.5% Common Equity Tier 1 10.0% 10.1% 9.5% 9.7% 10.1% Tier 1 Risk-Based 10.8% 10.9% 10.2% 10.4% 10.8% Total Risk-Based 12.7% 12.6% 12.0% 12.2% 12.6% People’s United Bank, N.A. Tier 1 Leverage 8.9% 9.0% 8.6% 8.5% 8.6% Common Equity Tier 1 11.3% 11.3% 10.6% 10.7% 11.0% Tier 1 Risk-Based 11.3% 11.3% 10.6% 10.7% 11.0% Total Risk-Based 13.4% 13.3% 12.6% 12.6% 12.9% 1 Capital ratios at March 31, 2018 reflect the reclassification of approximately $38 million from AOCI to retained earnings representing
the stranded tax effects arising as a result of the enactment of
the Tax Cuts and Jobs Act. The reclassification favorably impacted
capital ratios by approximately 11 basis points.
1 |
 36 Interest Rate Risk Profile 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.
-4.4% 3.3% 6.1% 8.8% -4.9% 3.4% 6.5% 9.3% Down 100 Up 100 Up 200 Up 300 -2.7% 1.9% -1.7% 1.5% -2.5% 1.7% -2.3% 1.8% Short End -100 Short End +100 Long End -100 Long End +100 Immediate Parallel Shock Est. Change in NII Yield Curve Twist Est. Change in NII Mar. 31, 2018 Dec. 31, 2017 Net Interest Income (NII) Sensitivity 1 |
 Appendix |
 38 Loans $6,631 $6,891 $7,205 $7,546 $7,779 $7,781 $7,631 $2,874 $4,381 $5,146 $5,578 $5,762 $7,378 $7,071 $3,960 $4,313 $4,728 $4,954 $5,363 $5,616 $5,673 $1,824 $1,827 $1,828 $1,854 $1,840 $1,790 $1,793 $604 $838 $904 $1,155 $1,503 $1,649 $1,647 $1,340 $1,327 $1,364 $1,346 $1,371 $1,424 $1,418 $899 $896 $931 $964 $956 $949 $915 $3,605 $3,917 $4,486 $5,014 $5,171 $5,988 $5,956 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Mar. 31, 2018 Connecticut New York Massachusetts Vermont New Jersey New Hampshire Maine Other $21,737 $24,390 $26,592 $29,745 $32,575 $28,411 ($ in millions, end of period balances) State Breakdown $32,104 |
 39 Deposits $11,104 $11,559 $14,768 $16,093 $17,072 $17,640 $17,281 $2,525 $2,913 $3,205 $3,456 $3,527 $5,195 $5,219 $3,174 $3,132 $3,067 $3,299 $3,357 $4,013 $4,181 $2,670 $2,694 $2,761 $2,966 $3,083 $3,191 $3,203 $1,370 $1,370 $1,395 $1,531 $1,616 $1,679 $1,641 $908 $889 $942 $1,072 $1,206 $1,338 $1,369 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Mar. 31, 2018 Connecticut New York Massachusetts Vermont New Hampshire Maine $21,751 $22,557 $26,138 $29,861 $33,056 $28,417 ($ in millions, end of period balances) State Breakdown $32,894 |
 40 Asset Quality Originated Portfolio Coverage Detail as of March 31, 2018 Note – ALLLs: Commercial: $200 million, Retail: $31 million, Total: $231 million.
0.94% 0.36% 0.78% Commercial Retail Total 0.49% 0.60% 0.52% Commercial Retail Total 194% 60% 149% Commercial Retail Total ALLLs / Loans NPLs / Loans ALLLs / NPLs |
 41 Peer Group Firm Ticker City State 1 Associated ASB Green Bay WI 2 Citizens CFG Providence RI 3 Comerica CMA Dallas TX 4 Cullen/Frost CFR San Antonio TX 5 East West EWBC Pasadena CA 6 First Horizon FHN Memphis TN 7 Huntington HBAN Columbus OH 8 KeyCorp KEY Cleveland OH 9 M&T MTB Buffalo NY 10 New York Community NYCB Westbury NY 11 Signature SBNY New York NY 12 Synovus SNV Columbus GA 13 Umpqua UMPQ Portland OR 14 Webster WBS Waterbury CT 15 Zions ZION Salt Lake City UT |
 42 Non-GAAP Financial Measures and Reconciliation to GAAP In addition to evaluating People’s United Financial Inc. ("People's United") results of operations in accordance with U.S.
generally accepted accounting principles (“GAAP”),
management routinely supplements its evaluation with an analysis of
certain non-GAAP financial measures, such as the efficiency and tangible
common equity ratios, tangible book value per common share and
operating earnings metrics. Management believes these non-GAAP financial measures provide information useful to investors in understanding People’s United’s underlying operating performance and trends, and
facilitates comparisons with the performance of other financial
institutions. 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 common equity ratio and tangible book value per common share are used to analyze the relative strength of People’s United’s capital position.
The efficiency ratio, which represents an approximate measure of the cost required by People’s United to generate a
dollar of revenue, is the ratio of (i) total non-interest expense
(excluding operating lease expense, 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, the netting of operating lease
expense and excluding gains and losses on sales of assets other than
residential mortgage loans and acquired loans, and
non-recurring income) (the denominator). People’s United 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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 43 Non-GAAP Financial Measures and Reconciliation to GAAP Operating earnings exclude from net income available to common shareholders 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’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: (i) non-recurring gains/losses; (ii) merger-related expenses, including
acquisition integration and other costs; (iii) writedowns of
banking house assets and related lease termination costs; (iv)
severance-related costs; and (v) charges related to executive-level
management separation costs, are generally also excluded when
calculating the efficiency ratio. Effective in 2016, recurring writedowns of banking house assets and certain severance-related costs are no longer considered to be non-operating expenses. Operating earnings per common share is
derived by determining the per common share impact of the
respective adjustments to arrive at operating earnings and adding
(subtracting) such amounts to (from) earnings per common share, as reported. Operating return on average assets is calculated by dividing operating earnings (annualized) by average total assets. Operating return on average tangible
common equity is calculated by dividing operating earnings (annualized) by
average tangible common equity. The operating common dividend
payout ratio is calculated by dividing common dividends paid by operating earnings for the respective period. The tangible common equity ratio is the ratio of (i) tangible common equity (total stockholders’ equity less preferred
stock, 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 common share is calculated
by dividing tangible common 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 for determining the
non-GAAP financial measures discussed above may differ from those used by other financial institutions. |
 For more information, investors may contact:
Andrew S. Hersom
(203) 338-4581
andrew.hersom@ peoples.com |