Third Quarter 2018 Results

Transcription

1 Third Quarter 2018 Results October 18, 2018

2 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 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 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 chargeoff 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. 1

3 Third Quarter 2018 Overview (Comparisons versus second quarter 2018, unless noted otherwise) Record Quarterly Net income of $117 million, or $0.33 per Common Share Completed the acquisition of First Connecticut Bancorp on October 1 st Net interest income 1 of $306 million, an increase of $5 million or 2% Net interest margin of 3.15%, an increase of 5 basis points Average loan balances of $32.2 billion, an increase of $50 million or <1% Period-end balances of $32.2 billion, a decrease of $313 million or 1% Mortgage Warehouse Lending period-end balances declined $201 million Run-off of the transactional portion of the New York multi-family portfolio lowered period-end balances by $128 million Average deposit balances of $33.1 billion, an increase of $522 million or 2% Period-end balances of $33.2 billion, an increase of $742 million or 2% Non-interest income of $92 million, a decrease of $3 million or 3% Non-interest expense of $241 million, an improvement of $7 million or 3% Includes merger-related expense of $500,000 compared to $2.9 million in the 2 nd quarter Efficiency ratio of 56.7%, an improvement of 170 basis points Net loan charge-offs of 0.09%, an increase of 3 basis points 1 Net interest income on a fully taxable equivalent basis was $313 million, an increase of $5 million or 2%. 2

4 Net Interest Income 1 ($ in millions) Linked-Quarter Change +$5.2 or 2% $10.7 $1.9 $1.2 $0.5 ($9.1) $301.2 $ Q 2018 Loans Calendar Day Investments Borrowings Deposits 3Q Net interest income on a fully taxable equivalent basis for 2Q 2018 and 3Q 2018 was $307.8 million and $313.0 million, respectively. 3

5 Net Interest Margin Linked-Quarter Change +5 bps 10 bps 2 bps 1 bp 1 bp (9 bps) 3.10% 3.15% 2Q 2018 Loans Calendar Day Investments Borrowings Deposits 3Q

6 Loans: Average Balances ($ in millions) Linked-Quarter Change Commercial Real Estate Commercial & Industrial Equipment Financing Residential Mortgage Home Equity & Other Consumer $32,116 $197 $34 $27 $32,166 $1,977 ($162) ($46) $1,932 $6,854 $6,887 $3,924 $4,121 $8,558 $8,585 $10,803 $10,641 2Q 2018 Equipment Financing Residential Mortgage Commercial & Industrial Commercial Real Estate Home Equity & Other Consumer 3Q 2018 Linked-quarter change: +$50 million or <1% 5

7 Deposits: Average Balances ($ in millions) Linked-Quarter Change Interest-Bearing Checking & Money Market Non-Interest-Bearing Time Savings $32,536 $559 $152 $33,058 $4,253 ($157) ($32) $4,096 $5,442 $6,001 $7,873 $8,025 $14,968 $14,936 2Q 2018 Time Non-Interest Bearing Savings Interest-Bearing Checking & Money Market 3Q 2018 Linked-quarter change: +$522 million or 2% 6

8 Non-Interest Income ($ in millions) Linked-Quarter Change ($2.6) or (3%) $1.5 $0.6 ($1.5) ($1.2) ($2.0) $94.9 $92.3 2Q 2018 Insurance Bank Service Charges Commercial Banking Lending Fees Customer Interest Rate Swap Income Other 3Q

9 Non-Interest Expense ($ in millions) Linked-Quarter Change Ex. Merger-Related Expenses: Improved by $4.9 or 2% $0.8 $0.7 ($2.4) ($4.1) ($1.9) ($0.4) $248.6 $ Q 2018 Merger-Related Expenses Branch Closure Costs Professional & Outside Services Occupancy & Equipment Compensation & Benefits Other 3Q

10 Efficiency Ratio Quarterly Trend 59.4% 58.4% 57.3% 56.1% 56.7% 3Q Q Q Q Q 2018 Note: The efficiency ratio, beginning with the 1 st quarter of 2018, reflects the unfavorable impact of lower FTE adjustments on net interest income due to tax reform. 9

11 Asset Quality 2.0 PBCT Peer Group (Median) Top 50 Banks (Median) Non-Performing Assets / Loans & REO (%) Q Q Q Q Q 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 Net Charge-offs / Average Loans PBCT Peer Group (Median) Top 50 Banks (Median) Q Q Q Q Q Ex. acquired loan charge-offs, PBCT s charge-off ratio was 0.07%, 0.03%, 0.04%, 0.06% & 0.05% in 3Q 2018, 2Q 2018, 1Q 2018, 4Q 2017& 3Q 2017, respectively Notes: Source: SNL Financial Top 50 Banks represents the largest 50 banks by total assets in each respective quarter. 10

12 Returns Return on Average Assets Return on Average Tangible Common Equity 0.96% 0.98% 1.00% 1.06% 13.8% 13.8% 13.9% 14.5% 0.84% 11.8% 3Q Q Q Q Q Q Q Q Q Q

13 Capital Ratios Sep. 30, 2017 Dec. 31, 2017 Mar. 31, 2018 Jun. 30, 2018 Sep. 30, 2018 People s United Financial, Inc. Tang. Com. Equity/Tang. Assets 7.1% 7.2% 7.3% 7.3% 7.6% Tier 1 Leverage 8.3% 8.3% 8.5% 8.6% 8.7% Common Equity Tier 1 9.5% 9.7% 10.1% 10.0% 10.3% Tier 1 Risk-Based 10.2% 10.4% 10.8% 10.8% 11.1% Total Risk-Based 12.0% 12.2% 12.6% 12.5% 12.8% People s United Bank, N.A. Tier 1 Leverage 8.6% 8.5% 8.6% 9.1% 9.2% Common Equity Tier % 10.7% 11.0% 11.4% 11.6% Tier 1 Risk-Based 10.6% 10.7% 11.0% 11.4% 11.6% Total Risk-Based 12.6% 12.6% 12.9% 13.4% 13.6% Note: Capital ratios beginning 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. 12

14 Interest Rate Risk Profile Sep. 30, 2018 Jun. 30, 2018 Net Interest Income (NII) Sensitivity Immediate Parallel Shock Est. Change in NII 3.3% 3.4% 6.3% 6.4% 9.1% 9.3% -4.2% -4.3% Down 100 Up 100 Up 200 Up 300 Yield Curve Twist 1 Est. Change in NII 1.8% 1.8% 1.5% 1.6% -2.3% -2.4% -1.7% -1.8% Short End -100 Short End +100 Long End -100 Long End 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. 13

15 Appendix 14

16 Loans By State ($ in millions, end of period balances) State Breakdown Connecticut New York Massachusetts Vermont New Jersey New Hampshire Maine Other $32,575 $32,199 $21,737 $3,605 $899 $1,340 $604 $1,824 $24,390 $3,917 $896 $1,327 $838 $1,827 $4,313 $26,592 $4,486 $931 $1,364 $904 $1,828 $4,728 $28,411 $5,014 $964 $1,346 $1,155 $1,854 $4,954 $29,745 $5,171 $956 $1,371 $1,503 $1,840 $5,363 $5,988 $949 $1,424 $1,649 $1,790 $5,616 $6,203 $900 $1,385 $1,716 $1,753 $5,757 $3,960 $2,874 $4,381 $5,146 $5,578 $5,762 $7,378 $6,947 $6,631 $6,891 $7,205 $7,546 $7,779 $7,781 $7,538 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Sep. 30,

17 Deposits By State ($ in millions, end of period balances) State Breakdown Connecticut New York Massachusetts Vermont New Hampshire Maine $21,751 $908 $1,370 $2,670 $3,174 $22,557 $889 $1,370 $2,694 $3,132 $26,138 $942 $1,395 $2,761 $3,067 $3,205 $28,417 $1,072 $1,531 $2,966 $3,299 $3,456 $29,861 $1,206 $1,616 $3,083 $3,357 $3,527 $33,056 $33,210 $1,338 $1,332 $1,679 $1,740 $3,191 $3,112 $4,013 $3,958 $5,195 $5,260 $2,525 $2,913 $11,104 $11,559 $14,768 $16,093 $17,072 $17,640 $17,808 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Sep. 30,

18 Asset Quality Originated Portfolio Coverage Detail as of September 30, 2018 ALLLs / Loans NPLs / Loans ALLLs / NPLs 0.94% 182% 0.78% 148% 0.52% 0.55% 0.53% 0.36% 66% Commercial Retail Total Commercial Retail Total Commercial Retail Total Note ALLLs: Commercial: $203 million, Retail: $31 million, Total: $234 million. 17

19 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 18

20 For more information, investors may contact: Andrew S. Hersom (203)