Attached files
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| 8-K - FORM 8-K - People's United Financial, Inc. | d343518d8k.htm |
EXHIBIT 99.1
Investor Presentation dated May 2012
 2 Quarter 2012 Investor Presentation
May 2012
Investor Contact:
Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com
nd |
 1
Certain statements contained in this release are forward-looking in nature. These include all
statements about People's United Financial's plans, objectives, expectations and other
statements that are not historical facts, and usually use words such as "expect,"
"anticipate," "believe" and similar expressions. Such statements represent
management's current beliefs, based upon information available at the time the statements are
made, with regard to the matters addressed. All forward-looking statements are subject to
risks and uncertainties that could cause People's United Financial's actual results or financial condition
to differ materially from those expressed in or implied by such statements. Factors of particular
importance to People’s United Financial include, but are not limited to: (1) changes in
general, national or regional economic conditions; (2) changes in interest rates; (3) changes
in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels
of income and expense in non-interest income and expense related activities; (6)
residential mortgage and secondary market activity; (7) changes in accounting and regulatory
guidance applicable to banks; (8) price levels and conditions in the public securities markets
generally; (9) competition and its effect on pricing, spending, third-party relationships
and revenues; (10) the successful integration of acquired companies; and (11) changes in regulation
resulting from or relating to financial reform legislation. People's United Financial does not
undertake any obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Forward Looking Statement |
 2
Corporate Overview
Snapshot, as of March 31, 2012
People’s United Financial, Inc.
NASDAQ (PBCT)
Headquarters:
Bridgeport, CT
Chief Executive Officer:
Jack Barnes
Chief Financial Officer:
Kirk Walters
Market Capitalization (4/25/12):
$4.4 billion
Assets:
$27.8 billion
Loans:
$20.5 billion
Deposits:
$21.3 billion
Branches:
361
ATMs:
569
Founded:
1842 |
 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)
Initial presence established via de novo expansion and acquisitions
Dividend yield of 5% in 2011*
Ability
to
maintain
pristine
credit
quality
–
no
credit
“events”
Efficiency ratio opportunity (63% targeting 55% in 2013)
High levels of liquidity
Capital deployment (organic growth, dividends, share repurchases, M&A) –
TCE/TA 12.0% vs. ~7.9% for peers
* Using average stock price in 2011 |
 4
Branch Footprint
Deepening Presence in the NYC to Boston Corridor
New York
Maine
Notes: Pro forma for the announced acquisition of 56 Citizens branches in Long
Island and New York City as well as certain locations in New York state’s
Westchester, Rockland, Putnam, Orange, Dutchess and Ulster Counties |
 5
Large and Attractive Markets
NYC-Northern NJ-LI
Population: 19.0MM
Median HH Income: $60,595
Businesses: 749,000
Population Density (#/sq miles): 2,058
Unemployment Rate (%): 9.3
$100K+ Households (%): 30.2
Boston, MA
Population: 4.6MM
Median HH Income: $67,887
Businesses: 186,000
Population Density (#/sq miles): 1,013
Unemployment Rate (%): 6.6
$100K+ Households (%): 33.2
Hartford, CT
Population: 1.2MM
Median HH Income: $64,098
Businesses: 50,000
Population Density (#/sq miles): 755
Unemployment Rate (%): 8.1
$100K+ Households (%): 30.0
Bridgeport-Stamford, CT
Population: 919,000
Median HH Income: $80,531
Businesses: 45,000
Population Density (#/sq miles): 1,097
Unemployment Rate (%): 7.7
$100K+ Households (%): 41.5
New Haven, CT
Population: 862,000
Median HH Income: $58,775
Businesses: 34,000
Population Density (#/sq miles): 1,000
Unemployment Rate (%): 8.4
$100K+ Households (%): 27.0
Burlington, VT
Population: 212,000
Median HH Income: $56,090
Businesses: 10,000
Population Density (#/sq miles): 141
Unemployment Rate (%): 4.3
$100K+ Households (%): 21.3
Notes: The current national unemployment rate is 8.3%
The population densities of NYC, Boston, Bridgeport and New Haven MSAs
are over ten times the national average |
 6
Strong Market Demographic Profile
Source: SNL Financial
2011 Weighted Average Median Household Income
$60,603
$53,648
$50,227
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
PBCT
Peer Median
US |
 7
Total Deposits ($MM)
5,652
3,233
2,500
1,881
1,750
1,102
Market Total Deposits ($MM)
31,329
110,562
542,034
24,842
16,923
3,954
Branch Count
65
57
90
45
34
15
17.9
2.9
7.6
10.3
27.9
0.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Bridgeport-
Stamford, CT
Boston, MA
NYC-Northern
NJ-LI
Hartford, CT
New Haven, CT
Burlington, VT
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
**
**
Large New Markets
Source: SNL Financial
* Excludes deposits from trust institutions and branches with over $750MM deposits ** Pro forma for
acquisition of Citizens branches; excludes five of the acquired Citizens branches located outside the NYC MSA |
 8
(23.3)
(57.7)
8.3
(80.0)
(60.0)
(40.0)
(20.0)
0.0
20.0
Substantial Progress in the Midst of a Financial Crisis
Total Shareholder
Return
-
Past
5
Years
Source: SNL Financial
PBCT
SNL Mid Cap U.S. Bank & Thrift
S&P 500
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
April 2007 we raised $3.4BN in our second step conversion
August 2007 the worst financial crisis since the Great Depression began
Our conservative credit culture and funding structure coupled with industry
leading capital levels provided significant strength throughout the crisis
|
 9
63.2
61.3
50
60
70
80
1Q07
1Q08
1Q09
1Q10
1Q11
1Q12
PBCT
Peers
4.01
3.59
2.50
3.00
3.50
4.00
4.50
1Q07
1Q08
1Q09
1Q10
1Q11
1Q12
PBCT
Peers
0.22
0.46
0.0
0.5
1.0
1.5
2.0
1Q07
1Q08
1Q09
1Q10
1Q11
1Q12
PBCT
Peers
Substantial Progress in the Midst of a Financial Crisis
Key Operating Performance Metrics -
Past 5 Years
We maintained a conservative stance throughout the financial crisis as we focused
on protecting our capital while building long-term franchise value
More recently, our margin has expanded as we thoughtfully deployed capital in
acquisitions and deepened our presence in the Boston and New York metro areas
Under new management we have made considerable progress on our efficiency ratio
Our
exceptional
credit
quality,
throughout
the
financial
crisis,
has
allowed
us to
manage our business with a long-term view
Efficiency Ratio (%)
NIM (%)
Net Charge-offs/Avg. Loans (%) |
 10
Substantial Progress in the Midst of a Financial Crisis
Growing Loans, Deposits, Tangible Book Value and Returning Capital to
Shareholders Growth has far outstripped peers on the key metrics of loans
per share,
deposits per share and tangible book value per share
All of this has occurred while we have returned $1.8BN to shareholders
during this period. Returns of capital were in the form of both
dividends ($984MM) and share repurchases ($792MM) which represents
nearly 40% of our current market capitalization
Line Item
PBCT
Peer
Median
PBCT Vs.
Peers
5-Year Loans Per Share CAGR
13.5%
-0.7%
+14.2%
5-Year Deposits Per Share CAGR
14.6%
1.3%
+13.3%
5-Year Tangible Book Value Per Share CAGR
16.2%
2.3%
+13.9%
Note: 5-Year CAGR figures based on 4Q 2006 and 4Q 2011 data in order to allow
for peer comparison |
 11
Strong Sources of Liquidity
PBCT maintains high levels of liquidity and is 97% funded by deposits,
retail repurchase agreements and common equity
Strong
branch
franchise
and
commercial
customer
base
fully
funds
loan
base
without use of wholesale or brokered borrowings
Citizens transaction will add $325MM in deposits and provides a significant
long-term opportunity to grow customer relationships in southern New
York, specifically on Long Island and in Westchester County
Additional liquidity of $1.4BN exists in the form of unpledged securities
Federal Home Loan Bank (FHLB) relationship enables up to $2.7BN of
additional borrowings
Because of strong capital and funding base we have not accessed debt
markets –
strong credit ratings imply we have ready access to funding at
the holding company and the bank if desired |
 12
Revenue Opportunities
Large new markets –
NYC and Boston MSAs
Under-represented asset classes ramping up
Asset-based lending: focused on in-footprint companies with sales of
$15MM-$250MM; credit needs range from $5MM-$25MM; $6BN market with
70% of the market located in the Northeast Mortgage Warehouse lending: ~$600MM
in commitments, and $325MM in outstandings Multifamily: hiring talent in the
New York metro area, which is a $30BN annual market with a population of
18.9MM, 6.9MM housing units, and 3.4MM rental units 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 as Senior Vice President and Chief Investment Officer
•
Previously Director of Investment Strategy and Alternative Investments at PNC
Increasing momentum in fee income penetration
Hired executive from TD to lead cash management business unit
Growing merchant and payroll services
Continue to attract and retain top talent
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 |
 13
Expense Opportunities
Estimated Cost Savings Analysis
Our Q1 2012 operating expense base of $206mm reflects $32MM ($128MM
annualized) savings from successfully-executed expense initiatives
Operating Noninterest Expense ($MM)
190
200
210
220
230
240
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
Pro Forma / Actual
Without Expense Initiatives
$32MM
Cost
Savings
Source: SNL Financial
Note: “Pro Forma / Actual”
represents PBCT operating noninterest expense and the actual expenses at the acquired
institutions. Target acquisition costs fall away as the acquisitions are completed.
“Without Expense Initiatives”
represents PBCT operating noninterest expense and the actual expenses at the acquired
institutions in 4Q09, and then applies the peer median expense growth rate in each subsequent
quarter. |
 14
Operating Noninterest Expense ($MM)
238
206
7
25
$0
$40
$80
$120
$160
$200
$240
Without Expense
Initiatives
Announced Acquisition
Savings
Other Initiatives
Pro Forma / Actual
Expense Opportunities
Estimated Cost Savings Analysis
The $32MM in quarterly cost reductions is attributable to efforts related to
acquisition cost savings and other initiatives, such as freezing
the defined
benefit pension plan
Source: SNL Financial
Note: “Pro Forma / Actual”
represents PBCT operating noninterest expense and the actual expenses at the acquired
institutions. Target acquisition 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. |
 15
Non-Interest Expense
(in $ millions)
Non-Operating
Operating
Total
230.2
208.6
20.0
205.6
2.3
(0.9)
(3.7)
0.8
207.2
3.0
23.0
4Q 2011
Non-Operating
Comp &
Benefits
Professional &
Outside Svc
Occupancy &
Equipment
Other
1Q 2012 |
 16
Efficiency Ratio
Last Five Quarters
65.4%
64.9%
62.0%
61.8%
63.2%
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
Notes:
The
efficiency
ratio,
which
represents
an
approximate
measure
of
the
cost
required
by
People’s
United
Financial
to
generate
a
dollar
of
revenue, is the ratio of (i)
total non-interest expense (excluding goodwill impairment charges,
amortization of other acquisition-related intangibles,
losses
on
real
estate
assets
and
non-recurring
expenses)
(the
numerator)
to
(ii)
net
interest
income
on
a
fully
taxable
equivalent ("FTE") basis plus total non-interest income (including the
FTE adjustment on bank-owned life insurance ("BOLI") income,
and excluding gains and losses on sales of assets other than residential mortgage
loans, and non-recurring income) (the denominator). People’s
United Financial generally considers an item of income or expense to be non-recurring if it is not similar to an item of income
or expense of a type incurred within the last two years and is not similar to an
item of income or expense of a type reasonably expected to be incurred
within the following two years. |
 17
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 |
 18
Run rate goal of $800 to $830 million range for 2012, including the RBS
Citizens transaction
Recent Initiatives
Focused on Cost Reduction
Objectives
Status
Benchmarking business unit performance
Benchmarking initiatives complete
Right-sized our employee base following
acquisitions
Reduced full-time employee count by 281
Consolidating 15 branches
Consolidated 13 branches, announced the sale of
1 branch and scheduled to close another in 2Q12
Actively marketing unused facilities
20 properties identified (14 owned, 6 leased); 50%
of cost savings anticipated from 3 locations
Identify IT contractor and other consultant savings
$2 million of annual IT contractor and other
consultant savings will be realized in 2012
Lower than anticipated rent and depreciation
expense
Estimated $800,000 positive impact in 2012
Savings in check processing charges and courier
fees due to negotiated contract reductions
Estimated $872,000 positive impact in 2012
Other initiatives
Identified approximately $9 million of other annual
savings throughout the franchise |
 19
NPAs / Loans & REO (%)
3.29%
2.58%
2.00%
2.00%
3.4%
4.2%
17.7%
16.3%
0.0%
5.0%
10.0%
15.0%
20.0%
Top 50 Banks
by Assets -
Median
Peer Group
Median
PBCT -
Originated
PBCT - Total
4.7%
8.1%
16.1%
0.0%
5.0%
10.0%
15.0%
20.0%
Top 50 Banks by
Assets - Median
Peer Group
Median
PBCT - Total
Strong Loan & Deposit Growth and Credit Quality
One year loan and deposit growth* (%) –
12/31/10 to 12/31/11
Source: SNL Financial
* Includes acquisitions for peers and PBCT including Danvers
Citizens
transaction
will add
$325MM of
deposits.
Deposit Growth (%)
Loan Growth (%) |
 20
Net Interest Margin –
Decrease from 4Q 2011
Operating
Reported
Non-operating
4.16%
4.07%
4.01%
(0.09%)
0.06%
(0.09%)
(0.03%)
0.09%
4Q 2011 Margin
Bank of
Smithtown Cost
Recovery
Income
Lower Loan
Yields
One Less
Calendar Day
Reduced
Funding Rates
1Q 2012 Margin
4.01% |
 21
Net Interest Margin
4.00
4.09
4.11
4.07
4.01
4.16
4.13
4.11
4.16
4.01
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
Margin- Operating
Margin- Reported |
 22
Acquired Loan Portfolio
Actual Credit Experience vs. Expectations
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
Reassessments, reflecting better than anticipated credit performance, during the first quarter of 2012
were: FinFed: reclassified $11.7MM from nonaccretable to accretable based on better than
anticipated credit performance RiverBank: reclassified $1.8MM from nonaccretable to accretable
based on better than anticipated credit performance As of 3/31/2012
(in $ millions)
Carrying
Amount
a
Carrying Amount Component
NPLs
b
Non-Accretable
Difference/NPLs
Charge-offs
Incurred Since
Acquisition
Accretable
Yield
Non-Accretable
Difference
FinFed (2/18/10)
$255.2
$21.8
$7.8
$41.5
19%
$11.5
Butler (4/16/10)
69.4
22.8
28.1
12.9
218%
5.9
RiverBank (11/30/10)
373.9
111.2
11.2
17.6
64%
3.8
Smithtown
(11/30/10)
1,114.4
555.4
148.2
137.3
108%
110.9
Danvers (7/1/11)
1,564.0
562.6
32.3
37.9
85%
3.8
Total
$3,376.9
$1,273.8
$227.6
$247.2
(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)
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.
(c)
Smithtown carrying amount and related components reflect loan sale, settlement and payoff activity
which have occurred since acquisition.
c |
 23
Acquired Loan Portfolio
Amortization of Original Discount on Acquired Loan Portfolio
$ in millions, except per share data
Impact on Net Interest Margin
Impact on 1Q12 Earnings Per Share
1Q12 Total Accretion (All interest income on acquired loans)
60.0
Interest Income from Amortization of Original Discount on Acq. Loan
Portfolio 11.2
4Q11 Acquired Loan Portfolio Carrying Amount
3,601
Tax Rate
33%
1Q12 Acquired Loan Portfolio Carrying Amount
3,377
1Q12 Average Acquired Loan Portfolio
3,489
1Q12 Earnings from Amortiz. of Original Discount on Acq. Loan Portfolio
7.5
Effective Yield on Acquired Loan Portfolio
6.88%
1Q12 Weighted Average Shares Outstanding
345.0
Weighted Average Coupon on Acquired Loan Portfolio
1
5.60%
1Q12 EPS Impact from Amortiz. of Discount on Acq. Loan Portfolio
$0.02
Incremental Yield Attributable to Amortiz. of Discount on Acq. Loan Portfolio
1.28%
Incremental Interest Income from Amortiz. of Discount on Acq. Loan Portfolio
11.2
1Q12 Average Earning Assets
23,733
Add: Average unamortized loan discount
2
130
Adjusted 1Q12 Average Earning Assets
23,863
Impact on Overall Net Interest Margin (bps)
19
Reported Net Interest Margin
4.01%
Adjusted Net Interest Margin
3.82%
Amortization of Original Discount on 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 5.30%.
2.
Represents the difference between the outstanding balance of the acquired loan portfolio and the
carrying amount of the acquired loan portfolio.
|
 24
Loans
Linked Quarter Change
(in $ millions)
Annualized linked QTD change
6.5%
9.7%
-25.0%
Annualized linked QTD change-
Originated
7.5%
Annualized Linked QTD change-
Total
1.7%
187
(225)
127
20,400
20,489
Dec 31, 2011
Commercial
Banking
Retail
Acquired
Mar 31, 2012 |
 25
Deposits by Business Line
Linked Quarter Change
(in $ millions)
Total
20,816
21,268
Commercial
Retail *
Annualized linked QTD change
7.9%
11.0%
Annualized Linked QTD change-
Total
8.7%
15,649
15,959
5,309
5,167
310
142
Dec 31, 2011
Retail
Commercial
Mar 31, 2012
*
includes
Private
Banking
deposits
of
$79MM
at
12/2011
and
$72MM
at
3/2012
Retail |
 26
Non-Interest Income
(in $ millions)
71.7
72.4
(0.1)
(1.9)
(1.3)
0.9
1.2
1.9
4Q 2011
Loan
Prepayment
Fees
Bank Service
Charges
Gain on Loan
Sales
Insurance
Trust &
Brokerage
Other
1Q 2012 |
 27
Asset Quality
NPAs / Loans & REO* (%)
Notes:
* 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
our
estimate of acquisition-date fair value and/or the existence of an FDIC loss
sharing agreement. Only 10 of 20 peers reporting for this metric.
Source:
SNL Financial and Company filings
Non-performers remain well below peers
1.85
2.76
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
PBCT
Peers |
 28
0.22
0.46
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
PBCT
Peers
Asset Quality
Net Charge-Offs / Avg. Loans (%)
Source: SNL Financial and Company filings
Charge-offs remain significantly below peers |
 29
Historical Charge-off Experience
Net charge-offs as a percent of average loans have remained low
0.10%
0.10%
0.29%
0.40%
0.28%
0.22%
0.0%
0.5%
1.0%
1.5%
2.0%
2007
2008
2009
2010
2011
1Q12 |
 30
0.88
0.84
0.00
0.20
0.40
0.60
0.80
1.00
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
PBCT
Peers
Return on Assets
Operating ROAA (%)
Return on assets has continued to improve relative to peers,
supported by organic loan and deposit growth and the integration
of recent acquisitions |
 31
8.0
11.6
11.1
0
3
6
9
12
15
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
PBCT
Peers
PBCT - Normalized Equity
High levels of equity produce below industry ROATE. Normalizing
our
equity base shows that the core bank is performing in-line with peers. As
we continue to efficiently deploy capital actual ROATE will improve further
Return on Tangible Equity
1
Operating ROATE (%)
Notes:
1.
PBCT –
Normalized Equity shows Operating ROATE pro forma for normalized Tangible
Common Equity of 8.0%, in line with peers (see Appendix) and excludes the income related
to cash & securities above the normalized 8.0% TCE/TA level |
 32
Operating Dividend Payout Ratio
Last Five Quarters
101%
95%
85%
93%
91%
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012 |
 33
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
People’s United Financial
Tang. Com. Equity/Tang. Assets
13.9%
13.9%
12.5%
12.0%
11.7%
Leverage Ratio
1, 5
14.6%
14.3%
12.7%
12.5%
12.2%
Tier 1 Common
17.2%
17.0%
15.0%
14.3%
14.0%
Tier 1 Risk-Based Capital
3, 5
17.7%
17.6%
15.2%
14.8%
14.6%
Total Risk-Based Capital
4, 5
19.4%
19.1%
16.7%
16.2%
16.1%
People’s United Bank
Leverage Ratio
1, 5
11.5%
11.6%
11.8%
11.1%
11.1%
Tier 1 Risk-Based Capital
3, 5
13.9%
14.2%
14.1%
13.1%
13.2%
Total Risk-Based Capital
4,5
14.8%
15.0%
14.9%
14.0%
14.2%
Capital Ratios
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%
2 |
 34
Summary
Premium brand built over 170 years
High quality Northeast footprint characterized by wealth, density and
commercial activity
Strong leadership team
Solid net interest margin
Superior asset quality
Focus on relationship-based banking
Moving to a 55% efficiency ratio
Returning capital to shareholders
Strong capital base as evidenced by robust Tangible Common Equity and
Tier 1 Common ratios
Returned $1.8BN to shareholders over the last five years, which represents
approximately 40% of our current market capitalization
Sustainable Competitive Advantage
Growing loans and deposits within footprint - in two of the largest MSAs in
the country (New York City, #1 and Boston, #10)
|
 35
Loans
Deposits
Growing Future Earnings Per Share
Loans and Deposits per Share
$59.39
$14
$15
$16
$17
$18
$19
$20
$21
$22
2010Q1
2010Q3
2011Q1
2011Q3
2012 Q1
$40
$45
$50
$55
$60
Gross Loans ($BN)
Loans per Share
$61.65
$14
$15
$16
$17
$18
$19
$20
$21
$22
2010Q1
2010Q3
2011Q1
2011Q3
2012 Q1
$40
$45
$50
$55
$60
Deposits ($BN)
Deposits per share |
 Appendix |
 37
1Q12 Total Loan Portfolio ($BN)
Loans by Geography
Excluding equipment finance loans, approximately 95% of our 1Q12
loan
portfolio is within the Northeast
Connecticut
$6.50
31%
Massachusetts
$3.87
19%
New York
$2.54
12%
Vermont
$1.82
9%
New Hampshire
$1.37
7%
New Jersey
$0.43
2%
Other
$2.73
13%
Pennsylvania
$0.19
1%
Maine
$0.93
5%
Maryland
$0.11
1%
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.
|
 38
Allowance for Loan Losses
Originated Portfolio Coverage Detail
(in $ millions)
1.70%
1.34%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Commercial
Banking
1.59%
0.34%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Retail Banking
Commercial ALLL -
$157.5 million
79% of Commercial NPLs
Retail ALLL -
$18.0 million
21% of Retail NPLs
Total ALLL -
$175.5 million
61% of Total NPLs
1.67%
1.03%
0.00%
0.50%
1.00%
1.50%
2.00%
NPLs:Loans
ALLL:Loans
Total |
 39
Strong Deposit Market Positions
Connecticut
Massachusetts
Vermont
New York
New Hampshire
Maine
#1 in Fairfield County, CT, 65 branches, $5.7BN, 17.7% market share
#2 in Essex County, MA, 23 branches, $2.0BN, 11.6% market share
Source: SNL Financial
* Pro forma for acquisition of Citizens branches
*
Branches
$BN
%
1
B of A
166
24.2
24.0
2
Webster
124
11.4
11.3
3
People's United
166
10.1
10.0
4
Wells Fargo
75
8.0
7.9
5
TD Bank
80
5.5
5.4
6
First Niagara
84
5.0
5.0
7
JPM Chase
54
4.0
4.0
8
Citi
20
2.8
2.8
9
Liberty
45
2.7
2.7
10
RBS
51
2.5
2.4
Branches
$BN
%
1
B of A
276
52.7
22.9
2
RBS
257
28.4
12.4
3
Santander
230
15.4
6.7
4
TD Bank
157
9.7
4.2
5
Eastern Bank
94
6.2
2.7
6
Independent Bank
67
3.8
1.7
7
People's United
58
3.5
1.5
8
Middlesex
33
3.4
1.5
9
Boston Private
12
2.7
1.2
10
Salem Five
30
2.2
1.0
Branches
$BN
%
1
People's United
45
2.4
22.4
2
TD Bank
37
2.3
21.5
3
Merchants
33
1.1
10.0
4
RBS
22
0.8
7.0
5
KeyCorp
13
0.7
6.5
6
Northfield
13
0.5
4.7
7
Community
14
0.4
3.9
8
Union
13
0.4
3.4
9
Passumpsic
7
0.3
3.0
10
Berkshire Hills
7
0.3
3.0
Branches
$BN
%
1
JPM Chase
849
351.2
35.6
2
B of A
376
65.8
6.7
3
Citi
261
64.6
6.5
4
HSBC
184
53.9
5.5
5
Capital One
287
35.9
3.6
6
M&T
272
24.1
2.4
7
TD Bank
210
20.4
2.1
8
Wells Fargo
86
19.2
1.9
9
First Niagara
244
18.7
1.9
10
KeyCorp.
269
18.3
1.9
36
People's United
95
2.6
0.3
Branches
$BN
%
1
RBS
81
6.8
27.7
2
TD Bank
73
5.2
21.1
3
B of A
32
2.2
9.1
4
People's United
32
1.3
5.3
5
LSB Financial
23
0.9
3.6
6
Santander
20
0.8
3.4
7
NH Thrift
19
0.6
2.6
8
Northway
17
0.6
2.4
9
Centrix
6
0.6
2.4
10
Meredith Village
11
0.5
2.0
Branches
$BN
%
1
TD Bank
56
12.5
40.6
2
KeyCorp
61
2.5
8.0
3
Camden National
52
1.9
6.3
4
Bangor Bancorp
58
1.8
6.0
5
B of A
20
1.3
4.2
6
First Bancorp
14
1.0
3.3
7
Machias
14
0.8
2.6
8
People's United
30
0.8
2.5
9
Bar Harbor
13
0.7
2.4
10
Norway
20
0.7
2.3
Leading market position in the best commercial banking market in the
US |
 40
We do not expect short-term interest rates to rise any time soon
For 4Q 2011 we were about twice as asset sensitive as the estimated median of
our peer group, depending on the scenario
For an immediate parallel increase of 100bps, our net interest income is projected
to increase by ~$50MM 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 12/31/11 filings
2.
Data as of 12/31/11 SEC filings, where exact +100bps shock up scenario data was not provided PBCT
interpolated based on data disclosed 3.
Data as of 12/31/11 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
-4.9%
5.6%
3.0%
1.8x
Shock Up
200bps
3
-8.7%
12.3%
5.1%
2.4x |
 41
Unique opportunity based on People’s United’s excellent in-store
branch banking track record, longstanding relationship with Stop & Shop
and strong traditional branch network in the market
–
In each of the past 14 years, People’s United has ranked as the #1
in-store branch operator in the U.S.
*
–
Becomes the exclusive provider of banking services to Stop & Shop on Long
Island, Southern New York and Connecticut
–
Pro forma for this transaction, we will operate 139 in-store Stop & Shop
branches Strong traditional branch network is crucial for successful
in-store branch banking –
37 traditional branches on Long Island and Westchester County
–
Our traditional branches offer the full suite of services
–
Provides a lift to traffic in both in-store and traditional branches
–
Opportunity to bring average acquired in-store deposit balances up from $4MM to
our average in- store deposit balances of $29MM
Adds additional source of core deposit funding
–
Expected core deposit growth within acquired in-store branches and surrounding
traditional branches will help fund continued strong loan growth
Acquisition of Select Citizens Bank Branches
Transaction Rationale
* Source: SNL Financial. As measured by average deposits per in-store branch
among active banks with at least $500MM of in-store deposits Transaction
deepens People’s United’s presence on Long Island and in Westchester County |
 42
Acquisition of Select Citizens Bank Branches
Expanding Long Island, NY and Hudson Valley Footprint
People’s United Bank branches (includes 38 traditional branches in NY)
Citizens, in-store branches (52)
Source: SNL Financial
Citizens, traditional branches (4) |
 43
Deposits Acquired
Source: Company financials; financial data as of 12/31/2011
Cost of Deposits: 0.42%
Total Deposits: $325MM
CD
$64MM
20%
Demand
$58MM
18%
Savings
$33MM
10%
Money Market
$170MM
52%
Acquisition of Select Citizens Bank Branches
Attractive Deposit Base |
 44
Name
Position
Years in
Banking
Professional
Experience
Jack Barnes
President & CEO, Director
30+
People’s United Bank (SEVP, CAO),
Chittenden, FDIC
Kirk Walters
SEVP & CFO, Director
25+
People’s United Bank, Santander, Sovereign,
Chittenden, Northeast Financial
Jeff Tengel
SEVP Commercial Banking
30+
People’s United Bank, PNC, National City
Bob D’Amore
SEVP Retail & Business Banking
30+
People’s United Bank
Louise Sandberg
SEVP Wealth Management
30+
People’s United Bank, Chittenden
Lee Powlus
SEVP & Chief Administrative Officer
25+
People’s United Bank, Chittenden, Alltel
Chantal Simon
SEVP & Chief Risk Officer
20+
People’s United Bank, Merrill Lynch US Bank,
Lazard Freres & Co.
Dave Norton
SEVP & Chief HR Officer
2+
People’s United Bank, New York Times,
Starwood, PepsiCo
Bob Trautmann
SEVP & General Counsel
20+
People’s United Bank, Tyler Cooper & Alcorn
Management Committee |
 45
Peer Group
Firm
Ticker
City
State
1
Associated
ASBC
Green Bay
WI
2
BancorpSouth
BXS
Tupelo
MS
3
City National
CYN
Los Angeles
CA
4
Comerica
CMA
Dallas
TX
5
Commerce
CBSH
Kansas City
MO
6
Cullen/Frost
CFR
San Antonio
TX
7
East West
EWBC
Pasadena
CA
8
First Niagara
FNFG
Buffalo
NY
9
FirstMerit
FMER
Akron
OH
10
Fulton
FULT
Lancaster
PA
11
Huntington
HBAN
Columbus
OH
12
M&T
MTB
Buffalo
NY
13
New York Community
NYB
Westbury
NY
14
Signature
SBNY
New York
NY
15
Susquehanna
SUSQ
Lititz
PA
16
Synovus
SNV
Columbus
GA
17
Valley National
VLY
Wayne
NJ
18
Webster
WBS
Waterbury
CT
19
Wintrust
WTFC
Lake Forest
IL
20
Zions
ZION
Salt Lake City
UT |
 46
In addition to evaluating People’s United Financial’s results of operations in accordance
with U.S. generally accepted accounting principles (“GAAP”), management routinely
supplements this evaluation with an analysis of certain non-GAAP financial measures, such
as the efficiency and tangible equity ratios, tangible book value per share and operating
earnings metrics. Management believes these non-GAAP financial measures provide information
useful to investors in understanding People’s United Financial’s underlying operating performance
and trends, and facilitates comparisons with the performance of other banks and thrifts. Further, the
efficiency ratio and operating earnings metrics are used by management in its assessment of
financial performance, including non-interest expense control, while the tangible equity
ratio and tangible book value per share are used to analyze the relative strength of
People’s United Financial’s capital position. The
efficiency
ratio,
which
represents
an
approximate
measure
of
the
cost
required
by
People’s
United
Financial
to
generate
a
dollar
of
revenue,
is
the
ratio
of
(i)
total
non-interest
expense
(excluding
goodwill
impairment charges, amortization of other acquisition-related intangibles, losses on real estate
assets and non-recurring
expenses)
(the
numerator)
to
(ii)
net
interest
income
on
a
fully
taxable
equivalent
("FTE")
basis
plus total non-interest income (including the FTE adjustment on bank-owned life insurance
("BOLI") income, and excluding gains and losses on sales of assets other than
residential mortgage loans, and non-recurring income) (the denominator). People’s
United Financial generally considers an item of income or expense to be non-recurring if it
is not similar to an item of income or expense of a type incurred within the last two years and
is not similar to an item of income or expense of a type reasonably expected to be incurred within the
following two years.
Non-GAAP Financial Measures and Reconciliation to GAAP |
 47
Operating earnings exclude from net income those items that management considers to be of such a
non- recurring or infrequent nature that, by excluding such items (net of income taxes),
People’s United Financial’s results can be measured and assessed on a more consistent
basis from period to period. Items excluded from operating earnings, which include, but are not
limited to, merger-related expenses, charges related to executive-level management
separation costs, severance-related costs and writedowns of banking house assets, are
generally also excluded when calculating the efficiency ratio. Operating earnings per share is
calculated by dividing operating earnings by the weighted average number of dilutive common shares
outstanding for the respective period. Operating return on average assets is calculated by
dividing operating earnings (annualized) by average assets. Operating return on average
tangible stockholders' equity is calculated by dividing operating earnings (annualized) by
average tangible stockholders' equity. The operating dividend payout ratio is calculated by
dividing dividends paid by operating earnings for the respective period. Operating net interest
margin excludes from the net interest margin those items that management considers to be of
such an infrequent 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, but are not limited to, cost recovery income on acquired
loans and changes in the accretable yield on acquired loans stemming from periodic cash flow
reassessments. Operating net interest margin is calculated by dividing operating net interest
income (annualized) by average earning assets.
Non-GAAP Financial Measures and Reconciliation to GAAP |
 48
The
tangible
equity
ratio
is
the
ratio
of
(i)
tangible
stockholders’
equity
(total
stockholders’
equity
less
goodwill
and other
acquisition-related
intangibles)
(the
numerator)
to
(ii)
tangible
assets
(total
assets
less
goodwill
and
other acquisition-related intangibles) (the denominator). Tangible book value per share is
calculated by dividing tangible stockholders’
equity by common shares (total common shares issued, less common shares
classified as treasury shares and unallocated Employee Stock Ownership Plan ("ESOP")
common shares). In light of diversity in presentation among financial institutions, the
methodologies used by People’s United Financial for determining the non-GAAP financial
measures discussed above may differ from those used by other financial institutions.
Non-GAAP Financial Measures and Reconciliation to GAAP |
 For
more information, investors may contact: Peter Goulding, CFA
203-338-6799
peter.goulding@peoples.com |