The Company's Board of Directors voted to increase the common stock dividend to an annual rate of $0.71 per share. Based on the closing stock price on April 17, 2019, the dividend yield on People's United Financial common stock is 4.1 percent. The quarterly dividend of $0.1775 per share is payable May 15, 2019 to shareholders of record on May 1, 2019.
People's United Bank, N.A. is a subsidiary of People's United Financial, Inc., a diversified, community-focused financial services company headquartered in the Northeast with more than $48 billion in assets. Founded in 1842, People’s United Bank offers commercial and retail banking through a network of over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management and insurance solutions. The company also provides specialized commercial services to customers nationwide.
1Q 2019 Financial Highlights
- Net income totaled $114.6 million, or $0.30 per common share.
- Net income available to common shareholders totaled $111.1 million.
- Operating earnings totaled $123.0 million, or $0.33 per common share (see page 13 of the Financial Schedule).
- Net interest income totaled $332.8 million in 1Q19 compared to $332.6 million in 4Q18.
- Net interest margin increased three basis points from 4Q18 to 3.20% reflecting:
- Higher yields on the loan portfolio (increase of 15 basis points).
- Higher yields on the securities portfolio (increase of one basis point).
- Higher rates on deposits and borrowings (net decrease of nine basis points).
- Two fewer calendar days in 1Q19 (decrease of four basis points).
- Provision for loan losses totaled $5.6 million.
- Net loan charge-offs totaled $5.1 million.
- Net loan charge-off ratio of 0.06% in 1Q19.
- Non-interest income totaled $94.6 million in 1Q19 compared to $88.7 million in 4Q18.
- Insurance revenue increased $3.8 million.
- Customer interest rate swap income decreased $4.0 million.
- Commercial banking lending fees decreased $1.8 million.
- Bank service charges decreased $1.7 million.
- Net security losses of $10.0 million in 4Q18 incurred in response to a tax reform-related benefit recognized in the period (see page 13 of the Financial Schedule).
- At March 31, 2019, assets under administration totaled $25.5 billion, of which $9.3 billion are under discretionary management, compared to $23.3 billion and $8.6 billion, respectively, at
December 31, 2018.
- Non-interest expense totaled $277.2 million in 1Q19 compared to $262.7 million in 4Q18.
- Operating non-interest expense totaled $262.2 million in 1Q19 (see page 13 of the Financial Schedule).
- Compensation and benefits expense, excluding $1.5 million and $3.5 million of merger-related expenses in 1Q19 and 4Q18, respectively, increased $5.9 million, primarily reflecting seasonally higher payroll and benefit-related costs in 1Q19.
- Professional and outside services expense, excluding $1.2 million and $3.7 million of merger-related expenses in 1Q19 and 4Q18, respectively, increased $1.1 million.
- Other non-interest expense includes merger-related expenses of $11.9 million and $0.2 million in 1Q19 and 4Q18, respectively.
- The efficiency ratio was 57.3% for 1Q19 compared to 55.1% for 4Q18 and 59.4% for 1Q18
(see page 13 of the Financial Schedule).
- The effective income tax rate was 20.8% for 1Q19 and 18.8% for the full-year of 2018.
- The rate in 2018 reflects a $9.2 million benefit recognized in connection with tax reform.
- Commercial loans totaled $25.4 billion at March 31, 2019, an increase of $334 million from December 31, 2018.
- The equipment financing portfolio increased $127 million.
- The mortgage warehouse portfolio increased $93 million.
- The New York multifamily portfolio decreased $27 million.
- Average commercial loans totaled $24.9 billion in 1Q19, an increase of $108 million from 4Q18.
- The average equipment financing portfolio increased $115 million.
- The average mortgage warehouse portfolio decreased $91 million.
- The average New York multifamily portfolio decreased $48 million.
- Commercial deposits totaled $13.5 billion at March 31, 2019 compared to $13.1 billion at December 31, 2018.
- The ratio of originated non-performing commercial loans to originated commercial loans was 0.45% at March 31, 2019 compared to 0.52% at December 31, 2018.
- Non-performing commercial assets, excluding acquired non-performing loans, totaled $111.1 million at March 31, 2019 compared to $126.1 million at December 31, 2018.
- For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.91% at March 31, 2019 compared to 0.93% at December 31, 2018.
- The originated commercial allowance for loan losses represented 202% of originated non-performing commercial loans at March 31, 2019 compared to 181% at December 31, 2018.
- Residential mortgage loans totaled $8.2 billion at March 31, 2019, an increase of $9 million from December 31, 2018.
- Average residential mortgage loans totaled $8.2 billion in 1Q19, a decrease of $12 million from 4Q18.
- Home equity loans totaled $1.9 billion at March 31, 2019, a decrease of $67 million from December 31, 2018.
- Average home equity loans totaled $1.9 billion in 1Q19, a decrease of $66 million from 4Q18.
- Retail deposits totaled $23.4 billion at March 31, 2019 compared to $23.1 billion at December 31, 2018.
- The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.52% at March 31, 2019 compared to 0.57% at December 31, 2018.
- The ratio of originated non-performing home equity loans to originated home equity loans was 0.81% at March 31, 2019 compared to 0.85% at December 31, 2018.
On April 18, 2019, at 5 p.m., Eastern Time, People's United Financial will host a conference call to discuss this earnings announcement. The call may be heard through www.peoples.com by selecting "Investor Relations" in the "About Us" section on the home page, and then selecting "Conference Calls" in the "News and Events" section. Additional materials relating to the call may also be accessed at People's United Bank's web site. The call will be archived on the web site and available for approximately 90 days.
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, 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 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.